Untitled Texas Attorney General Opinion

Jnnuary 13, 1948 Hon. BamOIn OIL38 .~ Oplnlon no. v-475 Co,&mnlsaloner OS the. .~ - General Land Offlae. lea80 with Austin, Texas a reseryar;lonof '7/48th of the gross pmdrurtlon of gas, or the valu@ of same" reserve royalty ::' from the gross prodlmtlon of gas or royalty only,~ from that portion of the gas prodmed and sold off the lease? And a mlatdd que+loa. Dear Sir: .: '.Yo@reoent lette$ kquest$ng the oplaloa of.' ttlisdepartma+ reads as foll6ws:~ i.. *Phere Is attaohed hereto a photo- oated la Chambers and Oslveaton Cot&ion. ..~ loo. 3 of said lease reads ,?Prdvl8~~~a ss follovrr. “3. When prodmtlon of 011, gas br other mlnerala owered by thla lease Ia ee- cured the owner ~shallpar to the Coml8sloQ- er.of the Gener@ Land Offloe, at Awstla,.,; Texas,,for the use and benefit of the.State of Texas,m7/48the.of the.'gWs produotlon of.011, .orth6 value of mame;'~bs~ ~gf,be' produoed and #Wed, and 7/48ths..of the the'Palu8 c$' the gross productioa,of of aanm, ,tbatBlay'be the'area;:and 0ae.v~ of sll other lain- erals,'th&tmay bd’ rglwed.and~aa ad&i- * tlonal mymeat .ofs$$iOO.OO~ out of the /Yth, of 41148th a the ccroas011 ore- &xed,and aimed from said traat. ._ b .$ \J, . . . Hon. Bascom Glles - ', Page 2 v-475 "Y&r .offlcla$&nlon 28 respeotfully 'requestedas to: "1. Do thd ~irloas~ckllned above entitle ttiaii tat, t$reoelve~royalty from the gross ~prod&tion of gas, or Is the State's royal3y dueto be oal- .aulatedon that portion of the,gas pro- 'duaed,andsold ofFthe lease?, L&y “2. 'Isthb ~operatiiIndebted to 'the State'of Texas for royalty on,gas used on the,premises,or In the development of ttvslease?" / The mlderai lease referred to "w#~duly a&r- tlsed under pro~lsloti of Chapter -1, Aot apprwed May 29, 1931." Thls.~Aatl:s'fI. lulature;Regular Sss8loa, p. ztg,g~;;3tl;~~=~uf; 3. V.C;S.) and provides In Section 16'thkeof that; .~ '"Sec.~ 10. Teinr of Leasa.--The ireas Included hereln.shallbe leased ior a coasld- eratfon~;$n addition to tiheease amount:bld therefo%, bf not less.than on&-eighth (l/8) of the gross prodw*io.a of oil,,oti.thevalus of SW, that spay, be odwed and saved, and not less than,oti-e$ghrW(l/e),of the gross p&v- duotlon of pa, or the value of same, and not less thdn 'one-elghth'(1/8), of the gross produs- tlon of sulphur :or the value of sams that may be prodwed and sold off the area, and aot less ,- than one-slxte6nth (l/X6) of the value of.all other~mlner@Xsthat rpy be produoed,.andan ad-. dltlonal sumo$ ~ttienty-five oents aa aare per year for each year thereafter'UN1 production Is scoured. o e..". The mineral lease..yousubmit ,&bodles mineral reservationsldentloal in terms (eroept for,the amount) to those miaimrrmmlr?sralreservatioaskequlred by the Statute, sup-, We Shall eonstrue the mineral reserva-, tlons of this lease.,thereforei~bycoastruing those mia- fmuiPmineral reservatloas la the Statute. For 10 this ease ttm provisions of tb.lease.,. parallellng~thosemla- '. lmum mineral reservations,of~$heStatute, 8hould be gov- erned ,by the Statute, Seotlon 10, suprF,,provldesdlstlnat and lnde- pendaat~mln&m~ royalty WsemFtions, for each type of .-,. - -’ Y. .,.I . . 1. Hon. Bascom Olle,s - Page 3 v-475 mineral reserved. These mialmum mlae*l reserYatloas are 6s rollowsI' ,l. -"Oae-elghth(l/8) of the gross pro- duatloa of dll, or the value of SW, that may be ~proqmed aad saved, aad not less thsn .:. "Oti-elghth'(1/8)of t-@igross pro- duotlk of sulphur,-or the valu&of 88me thsit ~_ m8y bq predw6d: and sold -offthe area,.:and aot less.~th8n~ 4k ~"Oae~slxteeath' (l/16) of the value . of al+ otbsF4Maerals thst ms$~be produced . . l o m++* -ea ‘.. The pi?tiouiai pts&u8tlo~.aad wordlag of this provlslon of t&s St;stgte0,learlyiudloates tbst the ooa-. dltloa "aad sold eH.the area” embOdIed la the royalty re8sr4atloa of "nulphur" is not lntdaded,~aSa like qoa- dltloa oa t,heroyalty rese~atlon~of "gas." Thp royalty reservatloa8:arelad@eadeat aad dlstlaat. This oon- stru&+oa 18 empb8818ed bp the dlffereatlatlngcoadl- tloas proHde& ia each miners1 rbse,rvatlon. 8% $Bb pEovl8loa of the express ooadltloctla the reservatioa of "oil," that It ls'to be a royslty w- servatloa of "oll"'prodr~~edsad "savedd";Sad similarly by the provisloa of the express~oopditloainthe reser- vation of '8tiphur~"thpt it Is to be-a realty rese;- vatloa of "8ulphur produced "and sold off the area, we m&y Infer that it was the la$eatloa of th8 LeglSlature to reserve tomthe State:ia ths oa8e of "pa" a mlnlmua A. 'of "(l/8) of the gros8',productloaof gas without coa- dltlon that it be of'th8t gas "sold d f the area or of that gas 'kved. " The expn,s8ed:ooaditloala the "sul- phur" sad !oii" re8ervatlonspreolrds'thelmplioatloa OS like ooadltioa8 .lnthe ."gas"i98WY@tioa. See City of. co us airlstl Y. MoMurrey.'(clY.,npp. .X936),go s. If. (2&68,.870.,, ., Furthqmoro; worbs used Id a'dtatutory &mot- meat should be given their ordinary meaalag, as the Leg- islature must’be presumed to have used them In thnt sense la whloh-thby are ordln8rlly,uad~rstood.Turner v. Cross Eon; Bascom Olles - Page 4. .~ v-475 ‘. (Sup. Cf. 18$?), 18 S. W. 579; Oreenwqod Y. city .of El Paso'(Civ,App. S. W. (26)~1015, 1017. Debate as.to,the intentlon.~oithe Leglslatur& Is concluded by the @e.and meaning of the word ~gross." In t@ royalty reservationof ngas." Uebs.$erlsHew-In- ternationalDi+$onaq;.Second BdltlOn, Unabridged (19~8)'deflnqk. "grq88..a8the:"whole; entire; total . opposed ko nb$i,'~ The.grorjsearnings. ~cklpt.8 or the like . e .o'withoutany~deductlons." Thbre oan be no amblgult7 thqtiefoewith respect to the meaning of the phrase ‘gross prodtitlon." The State I? to re- ceive "7/48$hs"of the,-"entire!'production of gas, '?e: gardless of'what.$b aold !'Offthe,.are.a,";+nd "wlthou$ any deductions",forgs$ v6d'oaonthoptinlses.or la the ' development.ofthe,-le+se.~:: :~ .~ .~ .' -mJMMARY . Where 'aStat'elease reberves '7/48thsof the (gross~~odu+lon of gas, or the value of :. same as roy+lty,~the State 18 to receive "7/48thsn.,ofth6 entire pro.du+lon of.gas, regardless of Lha~.ls s,oldoSf the area, and . wlthout.any deductlons~. toti,gasved~~on the .premlsesor In the.developmeatoi~the leasei ., YOUr;q.ve~~trhly i&ORREY. GHRHRAL OF.TEXAS.. : : 1LEQI:bb:wb:jt