| 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. |