Contractors and subcontractors can in certain circumstances obtain statutory liens against oil and gas properties which have priority over the Bank’s lien [TPC § 56.001 et seq.]. The Bank should obtain firm and independently verified assurances from the borrower that all contractors and subcontractors have been, are and will be punctually and completely paid.
Example: Oilfield service company contract to drill well for leaseholder.
Liens cover “mineral activities” which include “digging, drilling, torpedoing, operating, completing, maintaining, or repairing an oil, gas or waterwell, an oil and gas pipeline, or a mine or quarry.”
A lien can cover all wells on the lease not just the well for which materials and services were provided. Liens can also cover all contiguous acreage operated as a single unit.