Supreme Court of Texas hears dispute over whether deed phrase 'free of cost forever' bars post‑production charges

The Supreme Court of Texas heard oral arguments in Faskin Oil v. Queen over whether a deed provision that royalties are "free of cost forever" prevents royalty owners from bearing post‑production costs such as processing, transportation and fractionation.

Petitioner counsel Alexander told the court the parties never agreed to "liberate" the royalty owner from post‑production costs and urged the justices to construe the deed language in context. "If you view it in isolation, 'free of cost forever' sounds like… production and post‑production costs," Alexander said, adding that established authority defines a nonparticipating royalty interest (NPRI) as entitling the owner to a share of production proceeds "free of expenses of exploration and production." He argued that, in the absence of an express agreement otherwise, the general rule from Hyder and related cases applies:…