By Keith Hall
LSU Law Center

In Nicholson v. Severin POA Group, LLC, 2023 WL 7487311 (W. Va. Ct. App.), the West Virginia Intermediate Court of Appeals reverse a circuit court and held that a 1902 deed reserved a one-sixteenth mineral interest, not a one-half mineral interest.

In the deed at issue, F.W. Severin conveyed a little over 117 acres of land in Doddridge County, West Virginia to the Nicholsons’ predecessors in interest.  In the deed, Severin reserved “one-sixteenth of all the oil and gas in and under said land.”  In 2017, Antero Resources Corporation began to produce oil and gas from the property.  Antero began paying royalties to the Nicholsons, but a dispute arose regarding the extent of the Nicholsons’ mineral interest.  The Nicholsons asserted that Severin had reserved a one-sixteenth mineral interest and that Severin’s successor-in-interest, the Severin POA Group, LLC (POA), owned a one-sixteenth mineral interest.  The Nicholsons argued that they owned the remaining fifteen sixteenths mineral interest.

POA argued that Severin had reserved a one-half mineral interest and that POA now owned that one-half interest.  According to POA, the Nicholsons owned the other one-half interest.  POA contended that, in 1902, oil and gas leases typically paid a one-eighth royalty to the lessors.  For this reason, parties often used “one-sixteenth” when referring to a one-half interest in minerals, based on their assumption that the owner of a one-half mineral interest would receive one-half of the one-eighth lessor’s royalty.  The circuit court agreed with POA and ruled in its favor.  The Nicholsons appealed.

The West Virginia Intermediate Appellate Court acknowledged that West Virginia courts had interpreted deeds that referred to the reservation of “one-sixteenth” of minerals as being a reservation of a one-half mineral interest.  But in those cases, the deeds at issue had included both a reference to a reservation of one-sixteenth of minerals and a reference to the reservation being one-half of a one-eighth royalty.

For example, in Lockhart v. United Fuel Gas Co., 105 W. Va. 69, 141 S.E. 521 (1928), a party granted to the other party “a one undivided sixteenth interest in and to all the oil in and under that certain tract of land,” and the West Virginia Supreme Court had interpreted the grant as being a grant of a one-half mineral interest.  But the same paragraph of the deed that referred to the grant of a “one-sixteenth” interest in minerals also stated that “the true intention of the grantor herein [is] to convey to the said party of the second part the one-half of the one-eighth of the oil reserved, or to be reserved, in any oil or gas lease that has been executed, and which may be executed.”  Further, there was an existing lease that required the lessee to pay the lessor a one-eighth royalty on oil.  Further, other cases in which West Virginia Courts had interpreted a grant or reservation of “one-sixteenth” of minerals as being a grant or reservation of a one-half mineral interest likewise contained both the reference to “one-sixteenth” and a reference to “one-half” of “one-eighth.”

But the 1902 deed at issue in this case never referred to one-half.  The West Virginia Intermediate Appellate Court held that the 1902 deed unambiguously reserved a one-sixteenth interest in minerals, not a one-half interest.  Therefore, the Appellate Court reversed the lower court’s decision and ruled in favor of the Nicholsons.