HB 1273 - Oil and Gas Owners' Lien Act of 2021

• Creates a new oil and gas lien that automatically attaches to all oil and gas as of the effective date, securing an interest owner's right to receive payment from a first purchaser under a sales agreement.

• The lien continues uninterrupted through severance and into all proceeds, exists without requiring filing or documentation, and takes priority over all other liens except "permitted liens" (certain pre-existing debts and statutory/regulatory liens).

• An oil and gas lien expires 5 years after the last day of the month when proceeds are required to be paid, unless enforcement action is filed in circuit court; bankruptcy or insolvency proceedings toll this 5-year period.

• Interest owners cannot be required to waive lien rights as a condition of sale agreements, except when the first purchaser posts a letter of credit or agrees to prepay/escrow the sales price.

• A purchaser takes free of the lien only if they are a buyer in the ordinary course of business or have paid all consideration due the first purchaser; operators' rights to set-off or withhold funds are preserved, and all rights granted are cumulative with other legal remedies.