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Non-Participating Royalties in Oil & Gas: Key Contract Provisions, Fixed vs. Floating Interests, Avoiding Litigation

Negotiating Lease Terms, Duties of the Executive Rights Owner, Assignments, Calculating Royalties and More

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Thursday, January 31, 2019

Recorded event now available

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This CLE course will guide counsel on critical issues and planning methods regarding non-participating royalties in oil and gas. The panel will discuss fixed versus floating royalties and recent court decisions, key contract provisions to consider, and best practices to avoid litigation.

Description

Oil and gas land developments burdened by nonparticipating royalty interests (NPRI) face a variety of obstacles. Any leasing or subsequent development of such lands must involve an analysis by counsel of the differences between fixed and floating royalties, and duties owed to NPRI holders by executive rights owners, among other factors in negotiating land transactions.

Ownership of the mineral estate includes the right to the use of the surface, convey mineral rights, and receive bonuses and royalties. An NPRI is a royalty interest carved out of the mineral estate distinct from other royalty interests in that it participates in the gross production of minerals that have been separated from the fee estate, but does not hold any executive rights.

The increase in litigation over the past few years stemming from the conveyance of land with attached NPRI forces counsel to ensure that any transfer is clear regarding how the royalty interest is structured and the obligations thereof.

Listen as our panel provides an analysis of the impact of NPRIs on land transactions, fixed vs. floating in the conveyance of royalties, key contract provisions, duties of the executive rights holder, and best practices in negotiating leases.

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Outline

  1. Overview of NPRI in land transactions
  2. Fixed vs. floating royalties
  3. Negotiating a nonparticipating royalty interest
  4. Change of ownership and assignment of NPRI
  5. Best practices and key contract provisions to avoid litigation and secure client interests

Benefits

The panel will review these and other challenging issues:

  • Understanding nonparticipating royalty interests in land transactions
  • Duties of the executive rights owner to the nonparticipating royalty interest holder
  • Effectively using nonparticipating royalty interests as a negotiation tool
  • Fixed vs. floating royalties and impact on land transactions
  • Change of ownership and assignments of NPRI and critical considerations
  • Principal provisions and best practices in negotiating leases and other deals involving NPRI

Faculty

Gibbs, D. Bradley
D. Bradley (Brad) Gibbs
Partner
Kiefaber & Oliva

Mr. Gibbs practice involves advising clients regarding due diligence, complex mineral titles, pooling issues, lease...  |  Read More

Kiefaber, Robert
Robert W. (Eli) Kiefaber
Partner
Kiefaber & Oliva

Mr. Kiefaber focuses his practice on mineral title issues, oil and gas transactions and litigation, real estate matters...  |  Read More

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