If the borrower does not operate the properties on a day-to-day basis, these duties are usually delegated to an operator under an operating agreement. The standard form of operating agreement grants the operator a lien and security interest to secure the borrower’s payment to the operator. (A correlative lien is also granted by the operator in favor of the non-operator(s).) A Texas court has held the operating agreement does not have to be filed to perfect the operator’s lien but actual constructive notice should be given such as filing a Memorandum of Operating Agreement. Additionally, the operator should file a UCC-1 Financing Statement on equipment. The Bank, if possible, should monitor and verify the borrower’s payments to the operator (monthly) or obtain a subordination from the operator.