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Avoiding and Curing Ambiguity in Mineral and Royalty Conveyances and Reservations

Fred Moulton, Proceedings of 3rd Annual Rocky Mountain Mineral Law Institute (1957)

It is my intention to deal with each of the following:

1. Conveyances that are ambiguous as to whether a mineral or a royalty interest was granted or reserved.

2. Conveyances clearly either mineral or royalty, but ambiguous within themselves as to the quantum of interest conveyed or reserved, and

[2] . Curative methods to render the title free of ambiguity.

INCIDENTS OF OWNERSHIP

Although the nature and the incidents of minerals and royalty ownership are well known to all of you, a brief statement of the nature of each is a necessary preface to a consideration of the problems covered. The owner of the minerals, or a portion thereof, has the right to explore and develop the premises for oil and gas. Almost universally, however, he will accomplish or attempt to accomplish exploration and development by entering into an oil and gas lease as lessor. The nature of the rights granted by an oil and gas lease varies with the laws of the different states, but while based on different theories, the effect of the lease is generally very much the same. Attendant upon the ownership of the minerals, the lessor has the right to receive the consideration or “bonus” which is paid to him for entering into the lease, and he will also receive the delay rentals paid by the lessee for the privilege of deferring the drilling of a well. In the event of pr