A. To secure payment from the first purchaser of the purchase price of the product, state royalty and all taxes which are required to be or are withheld and paid or to be paid by the first purchaser, an interest owner, subject to Section 48-9-5 NMSA 1978, shall have a continuing purchase money security interest in and a lien upon his interest in or share of the unpaid for product severed from a production unit in which he owns an interest or the proceeds of product if such unpaid for product has been sold by the first purchaser, until the purchase price, state royalty and taxes have been paid to the person entitled to receive payment therefor.

B. In the event of a bona fide dispute as to the amount due the interest owner, the purchase money security interest and the lien herein provided shall not accrue if the first purchaser tenders to the interest owner the amount which the first purchaser in good faith believes to be due and payable.

C. Any purchaser who pays the purchase price for products to the person from whom the products are acquired or to a person who is authorized to receive payment for an interest owner shall be deemed a buyer in ordinary course of business, as defined in Section 55-1-201(9) NMSA 1978, and take the products free of the purchase money security interest and lien of the interest owner, and the purchaser who makes such payment and all of his property shall be free from and not subject to the claims or purchase money security interest and lien of an interest owner.

History: 1953 Comp., § 61-10-3, enacted by Laws 1973, ch. 100, § 3.

Am. Jur. 2d, A.L.R. and C.J.S. references. — Assertion of statutory mechanic's or materialman's lien against oil and gas produced or against proceeds attributable to oil and gas sold, 59 A.L.R.3d 278.

58 C.J.S. Mines and Mining § 220.