Texas § PR.67.002 - OIL AND GAS LIEN

§ PR.67.002. OIL AND GAS LIEN

OIL AND GAS LIEN. (a) To secure the obligations of a first purchaser to pay the sales price, each interest owner has an oil and gas lien to the extent of the interest owner's interest in oil and gas rights. The oil and gas lien exists as part of and incident to the ownership of oil and gas rights. (b) An oil and gas lien: (1) exists in and attaches to all oil and gas before severance; (2) continues uninterrupted and without lapse in all oil and gas on and after severance; and (3) continues uninterrupted and without lapse in and to all proceeds from the sale of the oil or gas. (c) Except as provided by Subsection (d), an oil and gas lien exists until the interest owner or representative first entitled to receive the sales price has received the sales price for the oil or gas production, but the lien does not continue to attach to the production after the production is sold by the first purchaser, unless the first subsequent purchaser: (1) is an affiliate of the first purchaser; or (2) has actual knowledge, not constructive notice or inquiry notice, that the first purchaser has not paid the interest owner or representative first entitled to receive the sales price. (d) As between an interest owner and a representative of an interest owner or any person claiming adversely to the interest owner or representative, the interest owner's oil and gas lien continues uninterrupted and without lapse in proceeds in the possession or control of a representative until the interest owner on whose behalf the representative acts receives the proceeds in full. (e) Except as provided by Subsection (f), a first purchaser takes free of an oil and gas lien if the first purchaser: (1) in good faith, paid the sales price for the oil or gas to an interest owner or representative otherwise apparently entitled to receive the sales price; and (2) is without actual knowledge that the interest owner or representative is not entitled to receive the sales price paid. (f) Notwithstanding Subsection (e), the oil and gas lien continues uninterrupted in the proceeds paid to or otherwise due the interest owner or representative. Added by Acts 2021, 87th Leg., R.S., Ch. 284 (H.B. 3794 ), Sec. 4, eff. September 1, 2021.