Royalty and Royalty Interests: Reservation

摘要

Raymond and Jewell Dockter ("Dockters") owned 100 percent of the oil and gas interests in the subject property. In 1954, the Dockters execute a royalty deed, conveying an undivided 64/160ths interest in "all of the oil royalty, gas royalty, and royalty in casinghead gas, gasoline, and royalty in other minerals in and under" the subject property. In 1957, the Dockters execute a warranty mineral deed conveying an undivided 1/2 interest in "all of the oil, gas and other minerals in and under" the subject property to Wm. F. Grinnan. QEP Energy Company ("QEP") is the successor to the mineral interest owned by Grinnan, and Wenco is the successor in interest to Dockters' interest. Wenco received its interest subject to "prior mineral reservations . . . now of record." Wenco's interest is leased in 2006, and this leasehold interest is now owned by EOG Resources, Inc. ("EOG"). EOG and QEP enter into a joint operating agreement after drilling a well on the property. After a compulsory pooling order is issued, a division order title opinion is prepared, which incorporates the drilling title opinion; however, the division order is not signed by Wenco or QEP. QEP contacts EOG to question the division order's division of royalty. QEP believes its interest has been improperly burdened by the royalty deed interest. A revised royalty interest opinion is issued to reflect the royalty interest burdening Wenco's interest only. EOG then withholds payments from Wenco to recover the overpayment and later begins paying them at the revised rate.