Arkansas Code of 1987 (2023) › Title 15 - NATURAL RESOURCES AND ECONOMIC DEVELOPMENT (§§ 15-1-101 — 15-76-324) › Subtitle 6 - OIL, GAS, AND BRINE (§§ 15-71-101 — 15-76-324) › Chapter 72 - OIL AND GAS PRODUCTION AND CONSERVATION (§§ 15-72-101 — 15-72-1112) › Subchapter 11 - OIL AND GAS OWNERS' LIEN ACT OF 2021 (§§ 15-72-1101 — 15-72-1112) › Section 15-72-1102 - Definitions

As used in this subchapter:
(1)
"Affiliate" means a person that directly or indirectly:
(A)
Is controlled by a first purchaser; or
(B)
Controls a first purchaser;
(2)
"Agreement to sell" means an enforceable agreement that is express or implied or oral or written, by which an interest owner, 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 the Uniform Commercial Code - Secured Transactions, §
4-9-101
et seq., or a comparable article under the uniform commercial code of another state to the extent applicable;
(4)
"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;
(5)
"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;
(6)
"Gas" means natural gas and casinghead gas and all constituent parts before and after processing but before the time at which a first purchaser transfers title, possession, or control to a purchaser;
(7)
"Integration order" means an order issued by the Oil and Gas Commission that requires the owners of the right to drill for oil or gas in a drilling unit to pool their interests for the development of the drilling unit;
(8)
(A)
"Interest owner" means a person owning an interest in an oil and gas right before the acquisition by a first purchaser.
(B)
"Interest owner" includes a representative and a transferee interest owner;
(9)
"Oil" means oil and condensate and all constituent parts whether before or after processing but before the time at which a first purchaser transfers title, possession, or control to a purchaser;
(10)
"Oil and gas lien" means a lien granted by this subchapter;
(11)
(A)
"Oil and gas right" means a right, title, or interest, whether legal or equitable, in and to:
(i)
Oil;
(ii)
Gas;
(iii)
Proceeds;
(iv)
An oil and gas lease;
(v)
An integration order; or
(vi)
An agreement to sell.
(B)
"Oil and gas right" includes without limitation:
(i)
Oil or gas in place before severance;
(ii)
Oil or gas production or the right to receive a portion of the proceeds upon severance;
(iii)
An interest or estate in, by, through, or under an oil and gas lease;
(iv)
Rights acquired under an integration order insofar as the rights relate to ownership of oil and gas, the right to proceeds, or the right to enter into an agreement to sell;
(v)
A legal or equitable right to receive consideration of any nature under an agreement to sell; or
(vi)
A mortgage lien or security interest in an item listed in subdivisions (11)(B)(i)-(v) of this section;
(12)
"Operator" means a person engaged in the severance of oil or gas for that person or for other persons, or both;
(13)
(A)
"Permitted lien" means the following liens or security interests:
(i)
A mortgage lien or security interest granted by a first purchaser in favor of a person that is not an affiliate of the first purchaser that secures payment under a written instrument of indebtedness signed by the first purchaser and accepted in writing by the payee before July 28, 2021, with a principal amount and a fixed maturity date stated in the written instrument of indebtedness; or
(ii)
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.
(B)
"Permitted lien" does not include:
(i)
A mortgage lien or security interest that:
(a)
Secures payment of indebtedness incurred on and after July 28, 2021;
(b)
Secures payment under a written instrument of indebtedness not signed by a first purchaser and accepted in writing by the payee before July 28, 2021;
(c)
Secures payment under a written instrument of indebtedness modified, amended, or restated on or after July 28, 2021, that increases the principal amount that was owed as of July 28, 2021;
(d)
Secures payment under a written instrument of indebtedness modified, amended, or restated on or after July 28, 2021, that extends the maturity date that was in effect as of July 28, 2021; or
(e)
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, rule, or regulation;
(ii)
A lien that is in favor of an affiliate of a first purchaser unless the lien is authorized by the statute, rule, or regulation creating the lien; or
(iii)
A lien that is for charges in excess of ninety (90) days from the time the first purchaser delivers the oil or gas for storage or transportation;
(14)
"Person" means an 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 other group or combination acting as a unit;
(15)
"Proceeds" means 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:
(A)
Oil or gas on or after severance;
(B)
Inventory of raw, refined, or manufactured oil or gas after severance;
(C)
Rights to or products of items listed in subdivisions (15)(A) and (B) of this section;
(D)
Cash proceeds;
(E)
Accounts;
(F)
Chattel paper;
(G)
Instruments;
(H)
Documents; or
(I)
Payment intangibles with respect to items listed in subdivisions (15)(A)-(H) of this section;
(16)
"Purchaser" means a person that is not an affiliate of a first purchaser and that takes, receives, or purchases oil or gas from a first purchaser;
(17)
"Representative" means a person, including without limitation an operator or a broker that is authorized, either expressly or by implication, 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;
(18)
"Sales price" means the proceeds that a first purchaser agrees to pay an interest owner or representative under an agreement to sell;
(19)
"Security interest" means a security interest governed by Article 9;
(20)
"Severance" means the point in time at which oil or gas is reduced to possession at the mouth of the wellbore of an oil and gas well;
(21)
"Transferee interest owner" means a person that acquires an oil and gas right from a transferor interest owner; and
(22)
"Transferor interest owner" means an interest owner that transfers or conveys an oil and gas right, in whole or in part.
Added by Act 2021, No. 275,§ 1, eff. 7/28/2021.