Non-Participating Royalty Interest (NPRI) vs. Mineral Interest in Texas

The five attributes of a Texas mineral estate

When a deed grants or reserves an interest "in and to all of the oil, gas and other minerals in and under" a tract, it creates a mineral interest unless other clauses strip away four of the five attributes. Compare a full mineral interest, a non-executive mineral interest, and an NPRI:

Fixed vs. floating NPRIs and how the math changes

When mid-20th-century deeds were drafted, the customary landowner's lease royalty was $\frac{1}{8}$ ($12.5\%$). Modern Texas oil and gas leases routinely provide a $\frac{1}{5}$ ($20\%$) or $\frac{1}{4}$ ($25\%$) lease royalty. Whether a deed created a fixed NPRI or a floating NPRI determines who receives the benefit of a higher modern lease royalty:

• Fixed NPRI ("a $\frac{1}{16}$ royalty in all oil, gas and minerals produced"): The NPRI owner receives a flat $\frac{1}{16}$ ($0.06250000$) of gross production regardless of whether the lease royalty is $\frac{1}{8}$ or $\frac{1}{4}$. Under a $\frac{1}{4}$ ($0.25000000$) lease, the fixed $\frac{1}{16}$ NPRI owner takes $0.06250000$ and the mineral lessor keeps the remaining $0.18750000$ ($\frac{3}{16}$).
• Floating NPRI ("an undivided $\frac{1}{2}$ of the royalty on all oil, gas and minerals"): The NPRI floats with the lease royalty. Under a $\frac{1}{8}$ lease, $\frac{1}{2}$ of the royalty is $\frac{1}{16}$ ($0.06250000$). Under a $\frac{1}{4}$ lease, $\frac{1}{2}$ of the royalty is $\frac{1}{8}$ ($0.12500000$), splitting the $0.25000000$ lease royalty equally ($0.12500000$ to the NPRI owner and $0.12500000$ to the mineral lessor).

Double fractions, Hysaw v. Dawkins, and Van Dyke v. Navigator

Many older Texas deeds contain "double fractions" that use $\frac{1}{8}$ in describing a grant or reservation (for example, "one-half of the one-eighth ($\frac{1}{2}$ of $\frac{1}{8}$) royalty"). Two landmark Texas Supreme Court decisions govern how examiners read those deeds today:

• Holistic four-corners construction (Hysaw v. Dawkins, 483 S.W.3d 1 (Tex. 2016); U.S. Shale Energy II, LLC v. Laborde Properties, L.P., 551 S.W.3d 148 (Tex. 2018)): Rejecting mechanical multiplication rules, the Court held that a deed must be read as a whole from its four corners, considering whether the drafter used "$\frac{1}{8}$" as a shorthand proxy for the entire landowner's royalty estate.
• Rebuttable presumption for $\frac{1}{8}$ in double fractions (Van Dyke v. Navigator Group, 668 S.W.3d 353 (Tex. 2023)): In construing an antique mineral reservation of "one-half of one-eighth of all minerals and mineral rights," the Texas Supreme Court adopted a rebuttable presumption that the party who used $\frac{1}{8}$ in a double-fraction instrument used $\frac{1}{8}$ as a placeholder for the entire mineral estate (or entire landowner's royalty) because of the historical estate misconception, so that "$\frac{1}{2}$ of $\frac{1}{8}$" is presumed to mean a full $\frac{1}{2}$ interest unless other language within the instrument rebuts that presumption.

Executive duty and pooling an NPRI

Two additional rules show up regularly on Texas runsheets where an NPRI burdens a tract:

• Duty of utmost good faith: The holder of the executive right owes the NPRI owner a duty of utmost good faith and fair dealing when negotiating an oil and gas lease, and may not self-deal by taking an inflated bonus in exchange for a depressed lease royalty (Manges v. Guerra, 673 S.W.2d 180 (Tex. 1984); KCM Financial LLC v. Bradshaw, 457 S.W.3d 70 (Tex. 2015)). See Curative Index No. 11.
• Ratification required to pool an NPRI: In Texas, the executive owner has the power to lease an NPRI, but does not have the power to pool or unitize the NPRI without the NPRI owner's consent (Montgomery v. Rittersbacher, 424 S.W.2d 210 (Tex. 1968)). Operators therefore obtain a recorded Ratification of Oil and Gas Lease or Pooling Agreement from NPRI owners when forming a pooled unit.

Sources

1. Altman v. Blake, 712 S.W.2d 117 (Tex. 1986).
   The five attributes of a severed mineral estate and distinction between a mineral interest and a royalty interest. Referenced October 13, 2026.
2. Hysaw v. Dawkins, 483 S.W.3d 1 (Tex. 2016); U.S. Shale Energy II, LLC v. Laborde Properties, L.P., 551 S.W.3d 148 (Tex. 2018). https://www.txcourts.gov/media/1277001/140984.pdf
   Holistic construction of fixed vs. floating NPRI clauses in Texas deeds and wills. Opened October 13, 2026.
3. Van Dyke v. Navigator Group, 668 S.W.3d 353 (Tex. 2023). https://www.txcourts.gov/media/1455866/210146.pdf
   Rebuttable presumption that 1/8 in an antique double-fraction deed served as a proxy for the entire mineral estate. Opened October 13, 2026.
4. KCM Financial LLC v. Bradshaw, 457 S.W.3d 70 (Tex. 2015); Montgomery v. Rittersbacher, 424 S.W.2d 210 (Tex. 1968).
   Executive duty of utmost good faith and requirement of NPRI owner consent/ratification for pooling. Referenced October 13, 2026.