Learn About The Law
Get help with your legal needs
FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.
Current as of January 01, 2024 | Updated by Findlaw Staff
(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.
Cite this article: FindLaw.com - Texas Property Code - PROP § 67.002. Oil and Gas Lien - last updated January 01, 2024 | https://codes.findlaw.com/tx/property-code/prop-sect-67-002/
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature before relying on it for your legal needs.
A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes, visit FindLaw’s Learn About the Law.
Get help with your legal needs
FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.
Search our directory by legal issue
Enter information in one or both fields (Required)