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Current Developments in the Law of Mechanics' and Materialmen's Liens on Oil and Gas Leases

William F. Drew, Proceedings of 21st Annual Rocky Mountain Mineral Law Institute (1975)

It is the purpose of this paper to review recent decisions and relating to statutory mechanics' and materialmen's liens against oil and gas leasehold estates. This paper will consider those decisions that have been rendered since 1960 when this subject was discussed at a Rocky Mountain Mineral Law Foundation Conference in an excellent paper by James Voorhees.1

STATUTORY LIENS FOR LABOR AND MATERIALS

Operators of oil and gas leasehold estates in most instances obtain labor and materials on credit without security. Having supplied labor and materials on credit, the unpaid laborer or materialman on occasion must resort to claiming a statutory mechanics' or materialmen's lien on the oil and gas leasehold estate.

In addition to the general mechanics' and materialmen's lien statutes, the oil and gas producing states have enacted oil and gas lien statutes. Although each state has its own statute, the statues have many similarities. The purpose of these oil and gas lien statutes was discussed by Judge Barrett of the Tenth Circuit Court of Appeals in [308] the case of Permian Corporation v. Armco Steel Corporation,2 as follows:

[T]he basic purpose of lien statutes...is to create a new means of securing claims of particular classes of creditors and to prevent unjust enrichment of property from which work and materials expended thereon would otherwise