Citations
- 324 S.W.2d 279
Full opinion text
GRISSOM, Chief Justice.
Harry McLachlan and others sued H. R. Stroube and others for the purpose of having construed a royalty reservation in an assignment of an oil and gas lease from the McLachlans to the Stroubes, to have determined the effect of commitment of the tract to a unit operation and water flooding program and to recover engineering expenses alleged to have been required by improper conduct of defendants. The McLachlans asserted a right to recover royalty from oil produced by a water flood unit and allocated to the tract in which they own royalty based on %eths of the oil which was being produced from fourteen wells and a %2nds from two other wells when said unit began water flooding. The court disregarded certain answers of a jury and rendered judgment that the McLachlans recover nothing on their claim for engineering expenses; that they recover nothing on their claim for an additional %2nds overriding royalty on well number 8 from June 1, 1955, to January 1, 1957 and that the McLachlans recover after January 1, 1957, when the McLachlans joined the unit, only %2nds of the oil produced from the unit and allocated to “Tract 5”, (on which the Mc-Lachlans had assigned an oil and gas lease to the Stroubes,-) until the gross monthly production allocated to Tract 5 is less than 14,400 barrels, when the McLachlans will recover only %4ths thereof. The McLach-lans have appealed.
In December, 1949, the McLachlans assigned to the Stroubes an oil and gas lease on “Tract 5” for a consideration of $125,-000.00 cash, a development contract and a royalty exception in the assignment as follows :
“There is, however, reserved unto the Assignor, Leonard McMahon, Trustee, his successors and assigns, and excepted from this assignment and not conveyed hereby:
“(a) Seven-sixteenths (%6ths) overriding royalty from the total eight-eighths (%ths) production of oil from the lands in said lease described if, as and when produced, saved and marketed, but subject to the other provisions herein contained.
“I (b) If at any time any well on said lands does not by its natural flow produce its oil allowable after a thirty-day test period, then the seven-sixteenths (%eths) over-riding royalty herein reserved shall be reduced and there shall then only be reserved by and payable to assignor hereunder from such well or wells a seven-thirty-seconds (%2nds) over-riding royalty; I and provided any well on said lands produces less than thirty (30) barrels per day for thirty (30) consecutive days, then in such event the over-riding royalty reserved by and payable to assignor from any such well or wells shall be reduced and there shall only be reserved by and payable to assignor hereunder from any such well or wells a seven sixty-fourths (%