Historically, royalty was the portion of the product of the land which was reserved by the king in return for the use of his lands. The term is still in use today, but in place of a monarch are private individuals, corporations, and the government.
Royalty is that portion of production from an oil or gas well which is paid to the royalty owner.
The royalty owner does not pay any portion of the operating costs of the well or wells which produce his oil or gas. Royalty is real property , and as such it can be bought, sold, and traded just as can any other property. The terms minerals and royalty are often used interchangeably, but there is an important distinction. In most cases, a royalty owner in the same tract will not share in the bonus. Therefore, if the property is not producing, the value of the minerals can be greater than the value of the royalty, because of the mineral owners right to collect bonuses.