Two deeds can use almost the same words and produce royalties that differ by a factor of four. The words are usually "one-half of one-eighth," and whether that means a fixed one-sixteenth or a floating one-half of whatever the lease pays is the most valuable sentence in your chain of title.
A fixed NPRI is a set fraction of everything produced. A floating NPRI is a fraction of whatever royalty the lease happens to reserve. When leases paid one-eighth, the two were identical. Leases now routinely pay a fifth or a quarter, and the two have not been identical for a long time.
Say a deed carved out a non-participating royalty and the modern lease on the tract reserves a 25 percent royalty.
| Fixed | Floating | |
|---|---|---|
| What the deed means | 1/16 of gross production, full stop | 1/2 of the lease royalty, whatever it is |
| Under an old 1/8 lease | 1/16 = 6.25% | 1/2 × 1/8 = 6.25% |
| Under a modern 1/4 lease | 1/16 = 6.25% | 1/2 × 1/4 = 12.5% |
| Under a 1/5 lease | 1/16 = 6.25% | 1/2 × 1/5 = 10% |
Same words on the page, double the money. On a producing tract that difference compounds every month for the life of the wells, which is why these end up in front of supreme courts rather than being settled in a phone call.
Because for most of the twentieth century the one-eighth royalty was so universal that landmen and lawyers stopped treating it as a variable. "One-eighth" drifted from being a number to being shorthand for "the royalty," and eventually for the mineral estate itself. Courts call this the estate misconception: the widespread belief that a mineral owner who leased retained only one-eighth, because that was the part that paid.
So a drafter in 1935 who wrote "one-half of the one-eighth royalty" very often meant "half the royalty," and wrote the 1/8 in the way you might write a unit rather than a quantity. Reading that deed with a calculator in 2026 gives you 1/16 and quite possibly the wrong answer.
Texas has done the most work here, and Texas reasoning gets borrowed elsewhere.
What has not changed is that these are questions of the specific document. A clearly drafted modern deed saying "a perpetual non-participating royalty equal to 1/16 of gross production, regardless of the royalty provided in any lease" is fixed, and no presumption is going to rescue it into floating.
Get the deed that created the interest. Not the division order, not the check stub, not what your family has always said. Then read for these signals:
Signs of floating:
Signs of fixed:
Two reasons, and they cut in opposite directions.
If your interest is floating and the buyer priced it as fixed, they have underpaid you, possibly by half. Volume buyers working from purchased data almost always assume the conservative reading, because their formula has no way to open a deed.
If your interest is genuinely ambiguous, a careful buyer will price the ambiguity, and you may do better resolving it first. Sometimes that is a title opinion. Sometimes it is a ratification or a stipulation of interest with the other owners. It is worth knowing which before you accept a discount for uncertainty that could have been cleared up.
Either way, an offer letter that arrives with a number on it has not read your deed. See the offer checker and questions to ask a buyer.
Free, no obligation, and the answer is the same whether or not you ever sell anything to us. If it is genuinely ambiguous we will say so rather than guessing in our own favor, and we will tell you what it would take to clear it up.
Ask a Landman Get a Free ValuationBerlin Royalties is a mineral buyer and a landman shop in Tulsa, not a law firm. Case law described here is summarized in general terms, applies in the jurisdiction that decided it, and turns on the specific instrument in every real dispute. Get a title attorney in the state where the minerals sit before acting on any of it.