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Arkansas Code Title 15. Natural Resources and Economic Development § 15-72-1103. Nature, extent, and duration of oil and gas lien

Current as of March 28, 2024 | Updated by Findlaw Staff

(a) To secure the obligations of a first purchaser to pay the sales price, each interest owner is granted an oil and gas lien to the extent of the interest owner's interest in an oil and gas right that exists as part of and incident to the ownership of an oil and gas right.

(b) An oil and gas lien:

(1) Exists in and attaches immediately to all oil and gas as of July 28, 2021;

(2) Continues uninterrupted and without lapse in all oil and gas upon and after severance; and

(3) Continues uninterrupted and without lapse in and to all proceeds.

(c)(1) An oil and gas lien exists until the interest owner or representative first entitled to receive the sales price has received the sales price.

(2)(A) Notwithstanding subdivision (c)(1) of this section, as between an interest owner and a representative or a 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.

(B)(i) When a first purchaser, in good faith, pays the sales price to an interest owner or a representative otherwise apparently entitled to receive the sales price and the first purchaser is without actual knowledge that the interest owner or representative is not entitled to receive the sales price so paid, then the first purchaser takes free of the oil and gas lien otherwise applicable to the oil or gas for which the payment was made.

(ii) Notwithstanding subdivision (c)(2)(B)(i) of this section, the oil and gas lien shall continue uninterrupted in the proceeds paid to or otherwise due the interest owner or representative.

(d)(1) The validity of an oil and gas lien shall not be dependent on possession of the oil or gas by an interest owner or representative.

(2) An oil and gas lien shall not become or be deemed to be void or expired by reason of a change or transfer of the actual or constructive possession of or title to the oil or gas from the interest owner or representative to a first purchaser or purchaser.

(e) On the conveyance or transfer of an oil and gas right by a transferor interest owner, the oil and gas lien vested in the transferor interest owner immediately before the conveyance or transfer shall remain with the transferor interest owner to the extent of the oil and gas right retained by the transferor interest owner.

(f) On the conveyance or transfer of an oil and gas right by a transferor interest owner, the oil and gas lien vested in the transferor interest owner immediately before the conveyance or transfer shall be transferred to and attach automatically to the oil and gas right acquired by the transferee interest owner uninterrupted and without lapse and as part of and incident to the oil and gas right transferred or conveyed.

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Cite this article: FindLaw.com - Arkansas Code Title 15. Natural Resources and Economic Development § 15-72-1103. Nature, extent, and duration of oil and gas lien - last updated March 28, 2024 | https://codes.findlaw.com/ar/title-15-natural-resources-and-economic-development/ar-code-sect-15-72-1103/

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