Opinion ID: 4575698
Heading Depth: 2
Heading Rank: 1

Heading: The 1986 Lease and ORRI

Text: Aikman Oil Corporation leased the mineral rights in a section of land in Wheeler County in 1986 (1986 Lease). Aikman later assigned its interest in the 1986 Lease to Jay Haber, reserving an ORRI1 for itself. The ORRI reservation was subject to an anti-washout provision that purported to cover any extension, renewal, or new lease executed by Haber or his successors in interest. Through a series of conveyances, petitioners (collectively, the Yowells) obtained Aikman’s reserved ORRI in the 1986 Lease, and Upland Resources Inc. obtained Haber’s leasehold interest in the 1986 Lease. 1 An ORRI is a non-possessory “share of either production or revenue from production (free of the costs of production) carved out of a lessee’s interest under an oil-and-gas lease.” Overriding Royalty, BLACK’S LAW DICTIONARY (11th ed. 2019). “An overriding royalty interest is a non-participating interest. A royalty owner has no right and thus no ability to go onto the underlying property and drill or otherwise take action to perpetuate a lease.” Ridge Oil Co. v. Guinn Invs., Inc., 148 S.W.3d 143, 155 (Tex. 2004). 2