Background

• In 1988 Vyvjala and Novak reserved a total l/4 NPRI out of the mineral estate in the land later conveyed to appellants, creating a fractional royalty burden.
• The 1988 Deed reserved an undivided l/4 interest in all oil, gas, and other minerals for 25 years and applied pro rata to future leases.
• In 2003 appellants conveyed the property to the Ealys while reserving 3/8 of the minerals to themselves and granting 5/8 to the Ealys.
• The 2003 Deed stated a 3/8 reservation for appellants and an exception referencing Vyvjala/Novak’s l/4 NPRI, with allocation guidance for existing leases.
• In 2011 the parties executed an oil and gas lease and the Ealys leased their mineral share; in 2013 appellants sought a declaratory judgment that they own 3/8 of minerals free of the NPRI.
• The trial court granted summary judgment for the Ealys, holding the NPRI burden would be shared pro rata by the 3/8 and 5/8 interests.

Issues

Key Cases Cited

• KCM Fin. LLC v. Bradshaw, 457 S.W.3d 70 (Tex. 2015) (NPRI is a floating royalty carved out of the mineral estate)
• Plainsman Trading Co. v. Crews, 898 S.W.2d 786 (Tex. 1995) (NPRI is a non-possessory royalty entitlement from production)
• Pick v. Lankford, 302 S.W.2d 645 (Tex. 1957) (default rule: royalties are carved proportionately from mineral ownerships)
• Duhig v. Peavy-Moore Lumber Co., 144 S.W.2d 878 (Tex. 1940) (doctrine: grantor cannot convey what grantor does not own; reservation controls)
• Day & Co. v. Texland Petroleum, Inc., 786 S.W.2d 667 (Tex. 1990) (treatises on conveyance of interests; reservations vs. exceptions)
• Range Res. Corp. v. Bradshaw, 266 S.W.3d 490 (Tex.App.—Fort Worth 2008) (royalty fraction floats with landowner's royalty in leases)