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Introduction To Creation Of Severed Mineral Interests
Alabama courts have long recognized the right of an owner of the fee simple absolute interest in land to sever mineral interests from the fee simple absolute in land. See Earle v. International Paper Co., 429 So. 2d 989 (Ala. 1983). The severance or separation can be done by deed grant or by deed reservation. See Edward G. Hawkins, Pitfalls of Preparing Deeds Conveying Oil and Gas Interests, 46 ALA. LAW. 236 – 243 (1985), reprinted in 23 THE PUBLIC LAND AND RESOURCES DIGEST (1986).
The severed mineral interest can be split into concurrent interests that entitle the holders to different shares of the oil and gas production or to different shares of the proceeds from the sale of the oil and gas production. These concurrent interests bear names such as “mineral interest,” “royalty interest,” “non-participating royalty interest,” “overriding royalty interest”, and other names. Unfortunately, deeds often contain ambiguous descriptions of the exact severed interest that is being granted or reserved by the deed. Also, warranty covenants in deeds often produce results never wanted or anticipated by the lawyer drafting the deed, the grantor, and the grantee.
Copyright 2011 by Edward G, Hawkins. All rights reserved.