Rules on when a hydrocarbon privilege ends, and what a notified purchaser or claimant may do after notice.
§4869. Purchaser of hydrocarbons; effect of privilege and notices required A. The privilege established by R.S. 9:4863(A)(3) and (4) over hydrocarbons, the amount due for their price, and their proceeds is extinguished or becomes ineffective as to a third person in the manner provided in R.S. 9:4864, 4865, and 4867, and also in the following ways: (1)(a) The privilege is extinguished as to hydrocarbons that are sold or otherwise transferred in a bona fide onerous transaction by the lessee or other person who severed or owned them at severance if the transferee pays for them before he is notified of the privilege by the claimant. (b) After the transferee is notified of the privilege, the claimant may either enforce his privilege against hydrocarbons in the hands of the transferee or against the amount owed for their price, as he so elects. (2) The privilege over hydrocarbons is extinguished when the hydrocarbons have become so commingled with, processed with, or transformed into other hydrocarbons or substances not subject to the privilege as to no longer be reasonably identifiable. (3) The privilege over the proceeds from the disposition of hydrocarbons attributable to an interest of the lessee is extinguished when the proceeds have become so commingled with other funds not subject to the privilege as to no longer be reasonably identifiable. B. A purchaser of hydrocarbons who is notified of the claim to a privilege over them may retain the amounts owed for them without liability to the claimant or the transferor from whom he received them until he is: (l) Directed in writing by the claimant to release them or is advised by the claimant that the claimant no longer asserts a privilege over them. (2) Directed in writing to deliver them to the claimant by the person to whom the purchaser owes the obligation. (3) Directed in writing by the claimant and the person to whom the purchaser owes the obligation to deliver them to a third person or otherwise to dispose of them. (4) Ordered to make some disposition of them by the judgment of a court in an action in which the claimant and the person to whom the purchaser owes the obligation are parties. Acts 1995, No. 962, §1.