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Money Making for Texas Royalty Owners

Posted on 5/30/2014 by with 0 comments

At the front of a cramped classroom at the Alamo University Center, George Wilson, in a singsong voice, lectured about two dozen students on the finer points of the state’s laws on oil and gas royalties, spouting terms like “Mother Hubbard clause,” “habendum clause“ and “force majeure.”

When an energy company representative inquires about leasing and throws one of these clauses out, you need to know how to respond, Wilson said. He then followed with one of his “No. 1” rules for royalty owners learning about their rights: “Everything in an oil and gas lease is negotiable.”

Wilson, a Dallas-based consultant and instructor for the Texas Christian University Energy Institute’s Royalty Owner Program, had no trouble keeping the class’ attention. The students — some in their 30s, others twice that age and each with a different level of experience with drilling matters — knew they would eventually be tested, and their monthly royalty checks would serve as report cards. “Make the best deal you can, since you’re going to have to live with it,” Wilson said, “hopefully for up to 80 years.”

For landowners and mineral owners in Texas’ hottest drilling plays, the state’s surge of oil and gas production means long-lasting windfalls — if those lessors know how to deal with companies looking to protect their bottom lines. That is not always simple in a state whose laws can seem to protect energy producers at the expense of property owners.


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