Fort Apache Energy, Inc. v. Houston Energy, L.P. 2015 Tex. App. LEXIS 9024 (Tex.App. Beaumont)

This dispute concerns the meaning of a retained overriding royalty interest. Houston Energy assigned its interest, which was less than 100% of the assigned leases, to Fort Apache in exchange for an override “of 1.501981% of 8/8ths in and to all of the oil, gas and other minerals produced, saved and marketed pursuant to the terms and provisions of the Subject Leases, covering the lands described herein.” Fort Apache argued that the override should be proportionately reduced to the percentage of acreage held under the leases, which was only 6.8%. The court held that the quoted clause was not ambiguous and that Houston Energy’s override was not to be proportionately reduced.