By Brad Caponigro · Founder, Pointer Petroleum LLC · Reservoir engineer
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Picture a Texas grandmother in 1973 who deeds her family's 200-acre tract to her son with a handwritten reservation of "one-half of the minerals." She intends, in her own mind, to keep half her minerals for herself. What she does not realize is that her late husband had already sold half the minerals to a neighbor in 1958. The deed she signs is silent on that prior sale. Forty years later, when shale wells start to come in, her grandchildren discover that under the Duhig rule, grandma's reservation was wiped out — the prior sale she did not mention swallowed the half she meant to keep, and her son's heirs got the entire surviving mineral estate. The lesson: in a deed, what you do not say can cost you everything you meant to keep.
The words "reserve" and "except" look similar in a deed but have materially different legal meanings. A reservation creates a new property right in the grantor by carving it out of what would otherwise have been conveyed. An exception removes something from the grant that the grantor did not own in the first place.
Example of a reservation: "Grantor conveys the surface and minerals, reserving unto grantor an undivided one-half (1/2) of the mineral estate." Here, the grantor owned 100% of the minerals going in, conveyed 50% to the grantee, and kept 50% as a newly created reservation.
Example of an exception: "Grantor conveys the surface and minerals, except for the prior outstanding one-fourth (1/4) mineral interest conveyed to John Smith by deed recorded at Volume 150, Page 23." Here, the grantor does not own the Smith 1/4 — it is outstanding in a third party — so the exception simply notes this fact and clarifies what the grantee is receiving.
Deeds often use both. A deed might read: "Grantor conveys the minerals, except for the outstanding 1/4 owned by Smith, and reserving 1/4 unto grantor." This conveys 1/2 of the minerals (100% - 1/4 excepted - 1/4 reserved = 1/2) to the grantee.
The Duhig rule — from Duhig v. Peavy-Moore Lumber Co., 135 Tex. 503, 144 S.W.2d 878 (1940) — is the most important mineral title rule in Texas and a trap for unwary grantors. Variations of the rule have been adopted by courts in Oklahoma, New Mexico, North Dakota, and several other producing states; Louisiana applies a different civil-law analysis that can reach a similar result. Practitioners should confirm the state-specific treatment before relying on a Duhig analogy outside Texas.
The rule: if a deed purports to convey a larger mineral interest than the grantor actually owns, and reserves less than 100% of the minerals, the deed is construed against the grantor. The grantee takes what the deed says they take, even if that means the grantor gives up their reservation.
The classic example: A grantor owns 1/2 the minerals (the other 1/2 is outstanding in a third party). The grantor deeds the tract to a grantee with a reservation of "one-half of the minerals." The deed does not mention the outstanding third-party 1/2.
How many minerals does the grantee get? Under Duhig, the grantee takes 1/2 — because the deed implicitly represents that the grantor is conveying 1/2 (the remainder after the 1/2 reservation). The grantor loses their entire mineral reservation: the third-party outstanding 1/2 is unaffected, the grantee gets 1/2, and the grantor ends up with zero.
The fix is to carefully draft the deed to except the outstanding third-party interest. "Grantor conveys the tract, excepting the outstanding 1/2 owned by [third party] and reserving 1/2 unto grantor" gives the grantor what they intended — zero conveyed, 1/2 retained — because the exception accounts for what the grantor does not own.
A fee reservation keeps the reserved interest forever (or until the reserved interest is itself conveyed or lost). A term reservation keeps the interest only for a specified period or until a specified event.
Term reservations are often drafted like: "Grantor reserves one-half of the minerals for a term of 25 years from the date of this deed, and so long thereafter as oil, gas, or other minerals are produced from the land." This language creates a defeasible fee — the reservation lasts for the primary term, and extends indefinitely if production exists at the end of the term.
Term reservations have caught many grantors by surprise. A grantor who reserves minerals for "25 years and so long thereafter as production continues" and expects to keep their minerals forever may find, 25 years later, that production has ceased and the minerals automatically revert to the grantee (or the grantee's heirs and assigns). Similarly, a grantee who believed they would receive the minerals in 25 years may find that ongoing production has extended the grantor's term indefinitely.
If a term reservation is intended to have a definite end date, it should be drafted cleanly: "for a term of 25 years from the date of this deed" without the production-continuation language. If the intent is permanent retention, a straightforward fee reservation is simpler: "Grantor reserves one-half of the minerals." Clarity in drafting avoids decades of litigation later.
Beyond the Duhig problem, several recurring drafting errors can create or destroy mineral interests unexpectedly:
"One-half of the minerals in the land" vs. "one-half of the minerals conveyed by this deed." The first refers to the fraction of total ownership; the second refers to the fraction of what is passing through this deed. The difference matters when the grantor owns less than 100%.
Reservations of royalty vs. reservations of minerals. "One-eighth royalty" and "one-eighth of the minerals" are different interests. A royalty interest is non-possessory and entitles the holder to a share of production; a mineral interest carries executive rights (the right to lease) and bonus rights. Courts have consistently held that these are distinct, and a reservation of one does not accidentally convey or retain the other.
References to "the customary one-eighth." Some old deeds reserve "one-half of the royalty, it being understood that royalty is one-eighth." This can create confusion when actual royalty rates exceed 1/8 (most modern leases are 1/5 to 1/4). Does the reservation mean 1/2 times 1/8 (= 1/16) regardless of the actual lease royalty, or 1/2 of whatever the lease royalty turns out to be? Texas courts have split on this in various fact patterns and the "estate misconception" doctrine has been applied to cure some errors, but careful drafting avoids the issue.
Many Texas and Oklahoma families hold mineral interests traceable to deeds signed in the 1920s through 1960s. These deeds often contain ambiguous reservations, Duhig problems, or references to "customary royalty" that predate modern practice.
If you inherited an interest based on one of these deeds, the practical steps are: obtain a copy of the original deed from the county clerk; run the chain of title through all subsequent transactions; identify any other deeds in the chain that may have modified the original reservation; and consult with a mineral title attorney to determine your current ownership.
For interests where the title is ambiguous or disputed, Pointer Minerals can evaluate the chain of title and make an offer that accounts for the title risk. We handle curative work at closing and can provide a firm offer based on our title research even where the original deed language is unclear. If you prefer to resolve the ambiguity before selling, we can provide an offer contingent on a specific title outcome.
A reservation creates a new interest in the grantor by carving it out of what would otherwise be conveyed — the grantor retains the reserved interest. An exception simply notes that a portion of the property was already owned by a third party before the current deed and is not being conveyed to the grantee. Reservations create; exceptions clarify.
The Duhig rule applies when a deed reserves minerals but fails to properly except outstanding third-party mineral interests. In that case, the deed is construed against the grantor — the grantee gets what the deed says they get, and the grantor may lose some or all of their intended reservation. The rule applies in Texas, Oklahoma, New Mexico, North Dakota, Louisiana, and other states. To avoid a Duhig problem, a deed must clearly except any outstanding third-party interests in addition to making the desired reservation.
A term reservation retains minerals only for a specified period — typically a fixed number of years plus "so long thereafter as production continues." At the end of the term, if production has ceased, the reserved minerals revert to the grantee or their successors. Term reservations are common in older conveyances and can cause surprise when the grantor's heirs discover the interest terminated decades ago.
Primary sources used in writing this article. These are not legal or tax advice — they are the public statutes, regulations, and authoritative materials the article draws from. Consult a qualified attorney or CPA before acting on any of them.
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