Statutory Oil And Gas Producers’ Liens: Oklahoma Producers Take Comfort And Texas Producers Take Care

LexisNexis (March 15, 2021, 11:28 AM EDT) -- For the second time since 2017, a federal appeals court has weighed in on whether special statutory lien provisions designed to help ensure that owners of oil and gas interests receive payment from the first purchasers of the hydrocarbons actually provide interest owners with the protection they hope for. This time, an appeal from an adversary proceeding related to the First River Energy, L.L.C. bankruptcy provided the Fifth Circuit Court of Appeals with the opportunity to consider the oil and gas lien provisions. As anticipated, the Fifth Circuit ruled that Oklahoma’s Oil and Gas Owners’ Lien Act of 2010 provided solid protection to interest owners in Oklahoma, while Texas’s non-standard UCC 9.343 once again failed to provide the automatic protection that Texas interest owners undoubtedly wish it did. The case is Deutsche Bank Trust Co. Ams. v. U.S. Energy Dev. Corp. (In re Fist River Energy, L.L.C.), ___ F.3d ___, 2021 U.S. App. LEXIS 3032....