"Floating" Beats "Fixed " In Texas Royalty Reservation

Co-author Katherine Sartain*

If you are scoring at home, count Permico Royalties LLC v. Barron Properties, Ltd., as a win for "floating" in the fixed-or-floating royalty battles. Permico, successor to grantors in a 1937 Deed for a tract in Ward County, argued that a mineral reservation was of a ½ floating royalty interest. Barron, successor to grantee and owner of the mineral estate subject to the reservation, claimed that the deed reserved a 1/16 fixed royalty. Grantors reserved:

"... a one-sixteenth (1/16) free royalty interest (being ½ of the usual 1/8^th free royalty) ... And the Grantors, .... shall be entitled to receive 1/16^th of the oil and/or gas produced, saved and sold from said land, being ½ of the usual 1/8^th royalty therein."