When energy companies file for bankruptcy, several complex issues arise that need to be addressed by secured and unsecured creditors. The United States Bankruptcy Code and the states’ statutory lien laws may have considerable impact on a party’s rights in bankruptcy proceedings with respect to oil and gas agreements. statutory liens can take the form of mechanic’s liens, oil and gas liens, mineral liens, and possessory liens. State laws will determine the circumstances in which these liens arise, how they are perfected, and the priority or priming effect of such liens. Most states have enacted statutes for the creation of statutory liens in oil and gas properties for laborers and suppliers of goods and services. State law will determine the means in which the liens arise; however, the statutory framework surrounding oil and gas liens varies significantly among the states with respect to attachment, perfection, notice requirement, enforcement, and priority. Therefore, it is important that the operators and service providers understand and comply with the relevant laws of each state in which they work.
ML has extensive experience with oil and gas leases and associated security instruments. As such, our attorneys are called upon to provide effective and efficient assistance to Bankruptcy and Restructuring firms with lien testing, asset identification and recovery, and mechanic’s and materialman’s lien analysis. We have served as Efficiency Counsel to Official Committees in Chapter 11 proceedings for Oil and Gas Bankruptcies. Additionally, ML has often provided expert opinions on federally-owned lands (including onshore Bureau of Land Management leases and offshore Bureau of Ocean Energy Management leases) in support of litigation, and regularly advises clients on lien perfection issues.