If you provide services or supplies in the oil field, you should have at least a basic understanding of Texas mineral liens because filing a mineral lien may help your bottom line someday.
Who can file a mineral lien?
A mineral contractor or subcontractor may file a lien to secure payment for labor or services related to the mineral activities. These terms are defined broadly.
“Mineral activities” means digging, drilling, torpedoing, operating, completing, maintaining, or repairing an oil, gas, or water well, an oil or gas pipeline, or a mine or quarry.
“Mineral contractor” means a person who performs labor or furnishes or hauls material, machinery, or supplies used in mineral activities under a contract with a mineral property owner.
“Mineral subcontractor” means one who furnishes or hauls material, machinery, or supplies used in mineral activities under contract with a mineral contractor or with a subcontractor; performs labor used in mineral activities under contract with a mineral contractor; or performs labor used in mineral activities as an artisan or day laborer employed by a subcontractor.
What does the lien cover?
- the material, machinery, and supplies furnished or hauled by the lien claimant;
- the land, leasehold interest, oil or gas well, water well, oil or gas pipeline and its right-of-way, and lease for oil and gas purposes for which the labor was performed or material, machinery, or supplies were furnished or hauled, and the buildings and appurtenances on this property;
- other material, machinery, and supplies used for mineral activities and owned by the owner of the property listed in 2; and
- other wells and pipelines used in operations related to oil, gas, and minerals and located on the property listed in 2.
How to perfect a mineral lien:
Notice – mineral contractors do not need to send notice, however mineral subcontractors must serve written notice on the property owner that the lien is claimed no later than the 10th day before the day the affidavit is filed.
Lien Affidavit – you must record a lien affidavit with the county clerk of the county in which the property is located no later than 6 months after the day the indebtedness accrues. The day indebtedness accrues is based on the last day you furnished labor, service, or materials.
How to enforce a mineral lien:
Mineral liens are to be enforced in the same manner and in the same time as mechanic’s and materialmen’s liens under Chapter 53 of the Texas Property Code.