| 7. Oil, Gas and Other Minerals. Under subsection (d) [Maine |
cite subsection (4)], a buyer in ordinary course of business of |
minerals at the wellhead or minehead or after extraction takes |
free of a security interest created by the seller. Specifically, |
it provides that qualified buyers take free not only of Article 9 |
[Maine cite Article 9-A] security interests but also of interests |
"arising out of an encumbrance." As defined in Section 9-102 |
[Maine cite section 9-1102], the term "encumbrance" means "a |
right, other than an ownership interest, in real property." |
Thus, to the extent that a mortgage encumbers minerals not only |
before but also after extraction, subsection (d) [Maine cite |
subsection (4)] enables a buyer in ordinary course of the |
minerals to take free of the mortgage. This subsection does not, |
however, enable these buyers to take free of interests arising |
out of ownership interests in the real property. This issue is |
significant only in a minority of states. Several of them have |
adopted special statutes and nonuniform amendments to Article 9 |
to provide special protections to mineral owners, whose interests |
often are highly fractionalized in the case of oil and gas. See |
Terry I. Cross, Oil and Gas Product Liens--Statutory Security |
Interests for Producers and Royalty Owners Under the Statutes of |
Kansas, New Mexico, Oklahoma, Texas and Wyoming, 50 Consumer Fin. |
L. Q. Rep. 418 (1996). Inasmuch as a complete resolution of the |
issue would require the addition of complex provisions to this |
Article, and there are good reasons to believe that a uniform |
solution would not be feasible, this Article leaves its |
resolution to other legislation. |