Opinion ID: 2448635
Heading Depth: 1
Heading Rank: 5

Heading: Royalty

Text: Royalty is commonly defined as the landowner's share of production, free of expenses of production. See Delta Drilling Co. v. Simmons, 161 Tex. 122, 338 S.W.2d 143, 147 (1960); Alamo Nat'l Bank v. Hurd, 485 S.W.2d 335, 338 (Tex.Civ.App.-San Antonio 1972, writ ref'd n.r.e.); 8 WILLIAMS & MEYERS, OIL & GAS LAW, 856-57 (1987); 3 KUNTZ, OIL & GAS LAW, § 42.2 (1989). Although it is not subject to the costs of production, royalty is usually subject to post-production costs, including taxes, treatment costs to render it marketable, and transportation costs. Martin v. Glass, 571 F.Supp. 1406, 1410 (N.D.Tex.1983), aff'd, 736 F.2d 1524 (5th Cir.1984); WILLIAMS & MEYERS, supra, p. 857. However, the parties may modify this general rule by agreement. Martin, 571 F.Supp. at 1410.