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..
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1LEQI:bb:wb:jt
Untitled Texas Attorney General Opinion
Combined Opinion