Texas Supreme Court Decides What "One-Half Of One-Eighth" Means In 1924 Oil And Gas Deed

• Published date: 07 September 2023
• Subject Matter: Energy and Natural Resources, Energy Law, Oil, Gas & Electricity
• Law Firm: Foley & Lardner
• Author: Mike Seely

Simple math isn't always simple. As the Texas Supreme Court recently put it, "[o]nly in a legal text could the formula 'one-half of one-eighth' mean anything other than one-sixteenth." No. 21-0146, 2023 WL 2053175 (Tex. 2023). Earlier this year, in Van Dyke v. Navigator Group, the Court grappled with a simple math problem that one might easily find in an elementary school classroom:

In the context of an oil and gas mineral reservation, what is "one-half of one-eighth"?

Answer: ____________

If your answer is "one-sixteenth," you should keep reading.

The foregoing "math problem" is often referred to as the infamous "double fraction," which was not uncommon in antique mineral conveyances entered into at the turn of the last century. The proper construction of instruments containing double-fraction language is a dilemma of increasing concern in the oil and gas industry as uncertainty grows, disputes proliferate, and courts apply varied approaches to this complicated issue. Hysaw v. Dawkins, 483 S.W.3d 1, 4 (Tex. 2016).

The dispute before the Court in Van Dyke v. Navigator Group arose out of an instrument executed in 1924, whereby George H. Mulkey and Frances E. Mulkey conveyed their ranch and the underlying minerals to G.R. White and G.W. Tom with the following reservation:

It is understood and agreed that one-half of one-eighth of all minerals and mineral rights in said land are reserved in grantors, Geo. H. Mulkey and Frances E. Mulkey, and are not conveyed herein.

For nearly ninety years, the parties and their predecessors treated the foregoing reservation as vesting both the grantors and the grantees each with one-half of the mineral interests. However, in 2013, a dispute arose putting at stake more than $44 million in accumulated royalties.

The ownership of these royalties turned on the answer to the question, what is "one-half of one-eighth"? The grantees' successors asserted that the double fraction was merely an elementary arithmetic formula with no additional meaning, so that only a one-sixteenth interest was reserved. The grantors' successors contended that the double fraction reflected a term of art common at the time the deed was drafted, and that the use of this term of art reserved one-half of the mineral interest to the grantor. The correct answer to this particular "math problem" didn't just garner a passing grade, but was worth nearly $20 million.

The trial court sided with the grantees' successors holding that one-half of one-eighth...