If oil or gas covered by more than one lien is mixed with other oil or gas and its identity is lost, the lien continues in the mixed product and may be automatically perfected, with priority and ranking rules for competing liens.
Sec. 67.005. COMMINGLING. (a) If oil or gas in which there exists more than one oil and gas lien is commingled with other oil or gas in a manner that the identity of the specific oil or gas is lost, the oil and gas lien: (1) continues without interruption into and attaches to any resulting commingled product; and (2) is perfected automatically on the date of the oil and gas lien's original perfection but only for the volume of the commingled product that is equal to the volume of product to which the oil and gas lien originally attached. (b) If commingling described by Subsection (a) occurs, the oil and gas lien in the commingled product has priority over any security interest or other lien that is not an oil and gas lien or permitted lien, regardless of whether the security interest or other lien has been properly perfected. (c) If more than one oil and gas lien attaches to the commingled product, the oil and gas liens rank equally in the proportion that the respective sales prices secured by each oil and gas lien bears as a percentage of the total of the sales prices secured by all oil and gas liens applicable to the production at the time the production was commingled. (d) This section is intended to recognize the continuation of oil and gas lien rights of an interest owner in the commingled product stream only as to a volume of oil or gas proportionate to the volume of oil or gas that originated from the interest owner, with that volume of the commingled product being considered to have maintained a distinct identity as being available for sale or transportation under the specific contractual arrangements applicable to the production at the time the oil or gas entered the commingled product stream. Added by Acts 2021, 87th Leg., R.S., Ch. 284 (H.B. 3794), Sec. 4, eff. September 1, 2021.