Watkins v. Slaughter (1945)

“The word ‘royalty’ has a well understood meaning in the oil and gas industry.” Watkins v. Slaughter, 189 S.W.2d 699, 700 (Tex. 1945).

Rather, it is clear the l/16th royalty interest is a fixed or “fractional” royalty interest entitling Prochaska to “an absolute fraction of production — it is not affected by the amount of the landowner’s royalty.” Luckel, 819 S.W.2d at 464 ; Watkins v. Slaughter, 144 Tex. 179 , 189 S.W.2d 699, 699-700 (Tex.1945) (holding reservation of “a l/16th in and to all of the oil, gas and other minerals” is fixed royalty interest).

Devon Energy relies on the long-standing principle proclaimed by the Texas Supreme Court that a conveyance or reservation of a fractional interest in the oil, gas or other minerals “in and under” the property that “may be produced” refers to a mineral interest rather than a royalty interest. 3 See, e.g., Altman, 712 S.W.2d at 118 (recognizing that the language in a 1938 deed conveying “an undivided one-sixteenth (1/16) interest in and to all the oil, gas and other minerals i…

The Neels focus on the Supreme Court’s language in Watkins that the deed “announced unequivocally in the last clause” of the reservation sentence “that the grant- or ‘shall receive the royalty retained herein only from actual production of oil, gas or other minerals on said land.’ (Emphasis supplied.)” Id. at 700.

Regarding the first question of whether the deed reserved a non-participating royalty interest or a stripped mineral interest including executive and development rights, we conclude that the reservation language as a whole more closely resembles language the Supreme Court has construed as creating or reserving stripped mineral interests, Altman, 712 S.W.2d at 118 (1939 deed reserving “minerals” stripped of rentals and executive rights); French, 896 S.W.2d at 796 (1943 deed c…

Id. (finding deed that conveyed “an undivided one-sixteenth (1/16) interest in and to all of the oil, gas and other minerals in and under and that may be produced from” the land conveyed a mineral interest); Reed v. Maltsberger/Storey Ranch, LLC, 534 S.W.3d 51 (Tex. App.—San Antonio 2017, pet. denied) (recognizing that the language used to create an interest in the mineral estate—as opposed to merely an interest in the royalties—is a reference to the oil, gas, and other mine…

The court noted “the grantor was careful to express his intention and meaning in - a single sentence, consisting of four parts, separated by semicolons;” Id. at 700.

Id. at 700.

Watkins v. Slaughter, 144 Tex. 179 , 189 S.W.2d 699, 700 (1945); Barker v. Levy, 507 S.W.2d 613, 617 (Tex.Civ.App—Houston [14th Dist.] 1974, writ ref'd n.r.e.) (“[T]here is no requirement m Texas law that a lease be in effect before a royalty interest can be created.”).

Watkins v. Slaughter , 189 S.W.2d 699, 700 (Tex. 1945); Barker v. Levy , 507 S.W.2d 613, 617 (Tex. Civ.

That court held that the reserved interest was a one-sixteenth (1/16th) royalty interest, and, in so doing, focussed specifically on the language in the Deed, subsequent to the granting clause, which, in "plain and definite terms" identified the nature of the interest reserved as a "royalty interest." Watkins v. Slaughter, 144 Tex. 179 , 189 S.W.2d 699, 700 (1945).

That court held that the reserved interest was a one-sixteenth (⅜6&) royalty interest, and, in so doing, focussed specifically on the language in the Deed, subsequent to the granting clause, which, in “plain and definite terms” identified the nature of the interest reserved as a “royalty interest.” Watkins v. Slaughter, 144 Tex. 179 , 189 S.W.2d 699, 700 (1945).

Id., 189 S.W.2d at 699 (emphasis added).

Id. at 699 (emphasis added).

Watkins v. Slaughter, 144 Tex. 179 , 189 S.W.2d 699, 700 (1945).

Watkins v. Slaughter, 144 Tex. 179 , 189 S.W.2d 699, 700 (Tex.1945); Barker v. Levy, 507 S.W.2d 613, 617 (Tex.Civ.App.—Houston [14th Dist.] 1974, writ ref’d n.r.e.).

Watkins v. Slaughter, 144 Tex. 179 , 189 S.W.2d 699, 700 (1945).

Sullivan, Handbook of Oil and Gas Law, page 218; see also Watkins v. Slaughter, 144 Tex. 179 , 189 S.W. (2d) 699 ; Palmer v. Crews, 203 Miss. 806 , 35 So. (2d) 430, 4 .

See, e.g., Watkins v. Slaughter, 183 S.W.2d 474, 475, 477 (Tex.Civ.App.-Amarillo 1944), aff'd, 144 Tex. 179 , 189 S.W.2d 699 (1945) (deed was construed to reserve a 1/16 royalty interest, where the deed initially stated it was conveying an undivided fifteen-sixteenths interest in “all the oil, gas and other minerals in . and under and that may be produced from said land and the grantor retains title to a 1/16 interest in and to all of the oil, gas and other minerals in and u…

See Watkins v. Slaughter, 144 Tex. 179, 182 , 189 S.W.2d 699, 700 (1945) (“Ha[d] the forego ing [clause stating to grantee, ‘Together with a 15/16 interest in and to all the oil, gas and other minerals in and under and that may be produced from said land and the grantor retains title to a 1/16 interest in and to all of the oil, gas and other minerals in and under and that may be produced from said land’] been the whole of what, the deed contained as to the mineral interest c…

See Watkins, 189 S.W.2d at 700 .

The Puig Deed employs language traditionally used to create a mineral interest, and the cost-free term in the granting clause distinguishes the royalty interest reserved from a mineral interest that typically bears such costs. 33 See id. (explaining that anti-deduction language does not relieve a royalty valued at the well of postproduction costs “for the simple—and mathematical—reason that there aren’t any postproduction costs to ‘deduct’ when value is determined at the wel…

See Watkins v. Slaughter, 189 S.W.2d 699, 700 (Tex.1945); Elick v. Champlin Petroleum Co., 697 S.W.2d 1, 4 (Tex.App.—Houston [14th Dist.] 1985, writ ref'd n.r.e.).