## Facts

- In 1951, J.E. and Minnie Bryan conveyed a tract in Karnes County, Texas, reserving “an undivided one-half (1/2) interest in and to the Oil Royalty, Gas Royalty and Royalty in other Minerals,” followed by an “equal to one-sixteenth (1/16) of the production” phrase and identifying the interest as a nonparticipating royalty reservation.
- Decades later, the land was leased for oil and gas development with a 1/5 (20%) lessor’s royalty.
- A dispute arose over whether the Bryan reservation entitled the reserved interest holders to a fixed 1/16 of production or a floating one-half of the lease royalty.
- The royalty holders sought a declaratory judgment construing the reservation as a floating one-half royalty; the trial court granted summary judgment for the royalty holders.
- The court of appeals reversed, construing the reservation as a fixed 1/16 royalty.
- The Texas Supreme Court granted review.

## Issues

1. Whether the 1951 reservation created a fixed fractional royalty (1/16 of production) or a floating fraction of royalty (1/2 of whatever lease royalty applies).
2. How to reconcile deed language reserving “one-half … in and to the … Royalty” with a subsequent “equal to 1/16 of the production” statement.

## Decision

- The Texas Supreme Court reversed the court of appeals and reinstated the trial court’s judgment.
- The Court held the deed unambiguously reserved a floating one-half interest in the royalty, not a fixed 1/16 of production.
- Under a 1/5 lease royalty, the reserved interest entitled the holders to 1/10 of production (one-half of 1/5).

## Legal Principles

- Deed construction seeks the parties’ intent from the instrument’s text, read as a whole, giving effect to all provisions where possible.
- A royalty interest may be conveyed or reserved as either (a) a fixed fraction of total production (fractional royalty) or (b) a fraction of the lease royalty (fraction of royalty), which “floats” with the royalty rate.
- Language reserving a fraction “in and to the … Royalty” generally indicates a fraction of royalty, not a fixed fraction of production.
- When an instrument includes both “fraction of royalty” language and an “equal to” fraction of production, courts should attempt to harmonize them; an “equal to” phrase may function as an explanatory equivalence reflecting then-prevailing lease terms rather than a rigid cap.
- Historical context may inform meaning without contradicting the text; mid-20th-century references to 1/8 (and mathematically related fractions like 1/16) may reflect the common lessor’s royalty at the time rather than a fixed numerical limitation when other language points to a fraction of royalty.

## Conclusion

The Court construed the reservation’s primary grant of “one-half … in and to the … Royalty” as controlling and treated the “equal to 1/16 of the production” language as a contemporaneous equivalence tied to the then-common 1/8 royalty, resulting in a floating one-half royalty interest that increases or decreases with the lease royalty rate.


U.S. Shale Energy II, LLC v. Laborde Props., L.P., 551 S.W.3d 148 (Tex. 2018)