An Act
ENROLLED SENATE
BILL NO. 632 By: Taylor of the Senate
and
McEntire of the House
An Act relating to the Oil and Gas Owners ’ Lien Act
of 2010; amending 52 O.S. 2011, Sections 549.2 and
549.3, which relate to definitions and oil an d gas
liens; modifying definition; granting lien right to
secure obligation to pay cert ain proceeds; specifying
duration of certain lien; and providing an effective
date.
SUBJECT: Oil and gas
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAH OMA:
SECTION 1. AMENDATORY 52 O.S. 2011, Section 549.2, is
amended to read as follows :
Section 549.2.
DEFINITIONS
As used in the Oil and Gas Owners’ Lien Act of 2010:
1. “Affiliate” means any person:
a. who is controlled, directly or indirectly, by a first
purchaser, or
b. who controls, directly o r indirectly, a firs t
purchaser.
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“Control” or “controlled by” means the possession, directly or
indirectly, of the power to di rect or cause the direction of the
management and policies of a person, whethe r through ownership, by
contract, or otherwise;
2. “Agreement to sell” means any enforceable agreement, whether
express or implied, whether oral or written, by which an interest
owner, either directly or t hrough a representative, agrees to sell
or is deemed by applicable contract or law to have agreed to sell
oil or gas upon or after severance to a first purchaser;
3. “Article 9” means Article 9 of the Oklahoma Uniform
Commercial Code in effect as of the r elevant date or a compa rable
article under the uniform commercial code of another state to the
extent applicable;
4. “First purchaser” means the first person that purchases oil
or gas from an interest owner , either directly or through a
representative, under an agreement to se ll;
5. “Gas” means natural gas and casinghead gas and all
constituent parts thereof both before and after processing but prior
to the time at which a first purchaser transfers title, possession
or control thereof to a purchaser ;
6. “Interest owner” means a person owning an int erest of any
kind or nature in oil and gas rights before the acquisition ther eof
by a first purchaser. Interest owner includes a representative and
a transferee interest owner ;
7. “Oil” means oil and condensat e and all constituent parts
thereof whether before or after processing but prior to the time at
which a first purchaser tr ansfers title, possession or control
thereto to a purchaser;
8. “Oil and gas lien” means the lien granted by this act the
Oil and Gas Owners’ Lien Act of 2010;
9. a. “Oil and gas rights” means, as to any lands within the
State of Oklahoma, any right, title or interest,
whether legal or equitable , in and to:
ENR. S. B. NO. 632 Page 3
(1) oil,
(2) gas,
(3) proceeds,
(4) an oil and gas lease,
(5) a pooling order, and
(6) an agreement to sell.
b. By way of illustration and not limitation, oil and gas
rights include, but are not limited to:
(1) oil or gas in place prior to sev erance,
(2) oil or gas production, or the right to receive a
portion of the proceeds, upon severance ,
(3) proceeds owed for oil and gas drilling and
development,
(4) proceeds from the acquisition of oil and gas
rights including but not limited to a lease bonus
or pooling bonus,
(5) proceeds from an unful filled contract or
agreement for the purchase of mineral rights,
(6) any interest or estate in, by, through or under
an oil and gas lease,
(4)
(7) rights acquired under a pooling order insofar as
such rights relate to: ownership of oil and gas,
the right to proceeds, or the right to enter into
an agreement to sell,
(5)
ENR. S. B. NO. 632 Page 4
(8) a legal or equitable right to receive
consideration of whatsoever nature under an
agreement to sell, or
(6)
(9) a mortgage lien or securi ty interest in any of
the foregoing;
10. “Operator” means a person engaged in the severanc e of oil
or gas for that person alone, for other persons only, or for that
person and others;
11. “Permitted lien” means any of the following liens or
security interests:
a. a mortgage lien or security interest granted by a
first purchaser in favor of a person not an affiliate
of the first purchase r which mortgage lien or security
interest secures payment under a written instrument of
indebtedness signed by the first purchaser and
accepted in writing by the payee thereof prior to the
effective date of th is act April 19, 2010, with a
principal amount and a fixed ma turity stated therein;
provided, however, a permitted lien does not include a
mortgage lien or security interest which:
(1) secures payment of an y indebtedness incurred from
and after the effective date of this act April
19, 2010,
(2) secures payment under a written instrument of
indebtedness not signed by a first purchaser and
accepted in writing by the payee thereof prior to
the effective date of this act April 19, 2010,
(3) secures payment under a written instrument of
indebtedness modified, amended or r estated from
or after the effective date of this act April 19,
2010, which modification, amendment o r
restatement increases the principal amount which
ENR. S. B. NO. 632 Page 5
was owing at the effective date of this act on
April 19, 2010,
(4) secures payment under a written instrument of
indebtedness modified, amended or restated from
or after the effective date of this act April 19,
2010, which modification, am endment or
restatement extends the stated maturity thereo f
which was in effect at the effective date of this
act on April 19, 2010, or
(5) is not validly perfected with a first priority
against the claims of all persons u nder
applicable law other than persons holding a
statutory or regulatory lien as to which f irst
priority is granted by statute or regulation, or
b. a validly perfected and enforceable lien created by
statute or by rule or regula tion of a governmental
agency for storage or transportation charges,
including terminal charges, tariffs, demurrage,
insurance, labor or other charges, owed by a first
purchaser in relation to oil or gas originally
purchased under an agreement to sell; pro vided,
however, a permitted lien does not include any such
lien:
(1) which is in favor of an affiliate of a first
purchaser unless such lien is authorized by the
statute, rule or regulation creating such lien,
or
(2) which is for charges in excess of ninet y (90)
days from the time th e first purchaser delivers
such oil or gas for suc h storage or
transportation;
12. “Person” means any individual, executor, administrator,
estate, agent, trust, trustee, institution, receiver, business
trust, firm, corporation, partnership, limited liabil ity company,
cooperative, joint venture, governmental entity or agency,
association or any other group or combin ation acting as a unit;
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13. “Pooling order” means an order issued by the Corporation
Commission that requires the o wners of the right to drill for oil or
gas in a drilling and spacing unit to pool their interests for the
development of such drilling and spacing unit;
14. “Proceeds” means any of the following when paid or to be
paid in consideration of, or as a consequ ence of, the sale of oil or
gas under an agreement to sell: oil or gas on or aft er severance;
inventory of raw, refined or manufactured o il or gas after
severance; rights to or products of any of the foregoing; cash
proceeds; accounts; chattel paper; inst ruments; documents; or
payment intangibles with respect to any of the foregoing ;
15. “Purchaser” means a person which is not an affiliat e of a
first purchaser and which ta kes, receives or purchases oil or gas
from a first purchaser ;
16. “Representative” means any person who is auth orized, either
expressly or by implication, including , without limitation, an
operator or a broker so author ized, to sell oil or gas on behalf o f,
or for the benefit of, an interest owner under an agreement to sell
or to receive on behalf of an interest ow ner the consideration under
an agreement to sell ;
17. “Sales price” means the proceeds a first purchaser a grees
to pay an interest owner or rep resentative under an agreement to
sell;
18. “Security interest” means a security interest governed by
Article 9;
19. “Severance” means that point in time at which oil or gas is
reduced to possession at the mouth of the wellbore of an oil and gas
well;
20. “Transferor interest owner” means an interest owner that
transfers or conveys oil and gas rights, in whole or in part; and
21. “Transferee interest owner ” means a person that acquires
oil and gas rights from a t ransferor interest owner.
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SECTION 2. AMENDATORY 52 O.S. 2011, Section 549.3, is
amended to read as follows:
Section 549.3.
NATURE, EXTENT AND DURATION OF OIL AND GAS LIEN
A. To secure the obligations of a first purchaser to p ay the
sales price, and to secure the obligation of any person to pay any
proceeds, as defined in Section 549.2 of this title, for the
acquisition of oil and gas rights, each interest owner is hereby
granted an oil and gas lien to the extent of the interes t owner’s
interest in oil and gas rights. The oil and gas lien granted by
this act the Oil and Gas Owners’ Lien Act of 2010 is granted and
shall exist as part of and incident to the ownership of oil and gas
rights.
B. An oil and gas lien:
1. Exists in and attaches immediately to all oil and gas on the
effective date of this act April 19, 2010;
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. An oil and gas lien exists until the interest owner or
representative first entitled to receive the sales price or any
proceeds, as defined in Section 549.2 of this title , for the
acquisition of oil and gas rights, has received the sales price or
any proceeds, as defined in Section 549.2 of this title , for the
acquisition of oil and gas rights. Notwithstanding the immediately
preceding sentence, as between an interest owner and a
representative of an interest owner or an y person claiming adverse ly
to such interest owner or representative, such interest own er’s oil
and gas lien continues uninterrupted an d without lapse in proceeds
in the possession or control of a representative until the interest
owner on whose behalf suc h representative acts rec eives such
proceeds in full. When a first purchaser, in good faith, pays the
sales price to an interest owner or a representative otherwise
ENR. S. B. NO. 632 Page 8
apparently entitled to receive the sales price and the first
purchaser is without actual k nowledge that such intere st owner or
representative is not entitled to receive the sale s price so paid,
then such first purchaser takes free of the oil and gas lien
otherwise applicable to the oil or gas for which such payment was
made. Notwithstanding th e immediately preceding s entence, the oil
and gas lien will continue uninterrupted in t he proceeds paid to or
otherwise due the interes t owner or representative.
D. The validity of an oil and gas lien shall not be dependent
on possession of the oil or ga s by an interest owner or
representative. No oil and gas lien shall 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 representativ e to a first purchaser or purchaser.
E. On the conveyance or transfer of any oil and ga s rights 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 t he transferor interest owner to the
extent of any oil and gas rights retained by the tran sferor interest
owner.
F. On the conveyance or transfer of any oil and gas rights 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 rights acquire d by the transferee interest owner
uninterrupted and without lapse and as part of and incident to the
oil and gas rights so transferred or conveyed.
SECTION 3. This act shall become effective November 1, 2021.
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Passed the Senate the 10th day of March, 2021.
Presiding Officer of the Senate
Passed the House of Representatives the 13th day of April, 2021.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this _______ _____________
day of _________________ __, 20_______, at _______ o'clock _______ M.
By: _______________________________ __
Approved by the Governo r of the State of Oklahoma this _____ ____
day of _________________ __, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this _______ ___
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _______________________________ __