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 or indirectly, a first purchaser.

"Control" or "controlled by" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether 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 through 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 relevant date or a comparable 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 sell;

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 interest of any kind or nature in oil and gas rights before the acquisition thereof by a first purchaser. Interest owner includes a representative and a transferee interest owner;

7. “Oil” means oil and condensate and all constituent parts thereof whether before or after processing but prior to the time at which a first purchaser transfers title, possession or control thereto to a purchaser;

8. “Oil and gas lien” means the lien granted by this act;

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:

(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 severance,

(2)oil or gas production, or the right to receive a portion of the proceeds, upon severance,

(3) any interest or estate in, by, through or under an oil and gas lease,

(4)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)a legal or equitable right to receive consideration of whatsoever nature under an agreement to sell, or

(6)a mortgage lien or security interest in any of the foregoing;

10. “Operator” means a person engaged in the severance 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 purchaser 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 this act with a principal amount and a fixed maturity stated therein; provided, however, a permitted lien does not include a mortgage lien or security interest which:

(1)secures payment of any indebtedness incurred from and after the effective date of this act,

(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,

(3)secures payment under a written instrument of indebtedness modified, amended or restated from or after the effective date of this act which modification, amendment or restatement increases the principal amount which was owing at the effective date of this act,

(4)secures payment under a written instrument of indebtedness modified, amended or restated from or after the effective date of this act which modification, amendment or restatement extends the stated maturity thereof which was in effect at the effective date of this act, or

(5)is not validly perfected with a first priority against the claims of all persons under applicable law other than persons holding a statutory or regulatory lien as to which first priority is granted by statute or regulation, or

b.a validly perfected and enforceable lien created by statute or by rule or regulation 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; provided, 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 ninety (90) days from the time the first purchaser delivers such oil or gas for such storage or transportation;

12. “Person” means any individual, executor, administrator, estate, agent, trust, trustee, institution, receiver, business trust, firm, corporation, partnership, limited liability company, cooperative, joint venture, governmental entity or agency, association or any other group or combination acting as a unit;

13. “Pooling order” means an order issued by the Corporation Commission that requires the owners 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 consequence of, the sale of oil or gas under an agreement to sell: oil or gas on or after severance; inventory of raw, refined or manufactured oil or gas after severance; rights to or products of any of the foregoing; cash proceeds; accounts; chattel paper; instruments; documents; or payment intangibles with respect to any of the foregoing;

15. “Purchaser” means a person which is not an affiliate of a first purchaser and which takes, receives or purchases oil or gas from a first purchaser;

16. “Representative” means any person who is authorized, either expressly or by implication, including, without limitation, an operator or a broker so authorized, to sell oil or gas on behalf of, or for the benefit of, an interest owner under an agreement to sell or to receive on behalf of an interest owner the consideration under an agreement to sell;

17. “Sales price” means the proceeds a first purchaser agrees to pay an interest owner or representative 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 transferor interest owner.

Added by Laws 2010, c. 142, § 2, emerg. eff. April 19, 2010.