DEFINITIONS.

In this chapter:

(1) "Affiliate" means any person who:

(A) is controlled, directly or indirectly, by a first purchaser; or

(B) controls, directly or indirectly, a first purchaser.

(2) "Agreement to sell" means an enforceable agreement by an interest owner, directly or through a representative, to sell oil or gas on or after severance to a first purchaser. The term includes an agreement that is express or implied, whether oral or written.

(3) "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through ownership, by contract, or otherwise.

(4) "First purchaser" means the first person that purchases oil or gas from an interest owner, under an agreement to sell.

(5) "Gas" means natural gas, casinghead gas, and all constituent parts of natural gas and casinghead gas before and after processing but before a first purchaser transfers title, possession, or control of the gas to a purchaser.

(6) "Interest owner" means a person, including a transferee interest owner, owning an interest of any kind in oil and gas rights before acquisition by a first purchaser.

(7) "Oil" means oil, condensate, and all constituent parts of the oil, before or after processing but before a first purchaser transfers title, possession, or control of the oil to a purchaser.

(8) "Oil and gas lien" means the lien described by Section 67.002.

(9) "Oil and gas rights" means any legal or equitable right, title, or interest in or to oil or gas from land in this state. The term includes:

(A) oil or gas in place before severance;

(B) oil or gas production, or the right to receive a portion of the proceeds, on severance;

(C) any interest or estate in, by, through, or under an oil and gas lease;

(D) a right acquired under a pooling order relating to:

(i) ownership of oil or gas;

(ii) the right to proceeds; or

(iii) the right to enter into an agreement to sell;

(E) a right to receive consideration under an agreement to sell oil or gas; and

(F) a mortgage lien or security interest in oil and gas rights.

(10) "Operator" means a person engaged in the severance of oil or gas for that person only, for other persons only, or for that person and others.

(11) "Permitted lien" means a perfected and enforceable lien created by statute or rule of a governmental agency for storage or transportation charges, including terminal charges, tariffs, demurrage, insurance, labor, or other charges, owed by a first purchaser in relation to oil or gas originally purchased under an agreement to sell. The term does not include a lien that is:

(A) in favor of an affiliate of a first purchaser unless the lien is authorized by the statute or rule creating the lien; or

(B) for charges incurred after the 90th day after the date the first purchaser delivers the oil or gas for storage or transportation.

(12) "Pooling order" means an order issued by the Railroad Commission of Texas that requires the owners of the right to drill for oil or gas in a drilling and spacing unit to pool the owner's interests for the development of the drilling and spacing unit.

(13) "Proceeds" means, when paid or to be paid in consideration of, or as a consequence of, the sale of oil or gas under an agreement to sell:

(A) oil or gas on or after severance;

(B) inventory of raw, refined, or manufactured oil or gas after severance;

(C) rights to or products of any of the oil or gas described by Paragraph (A) or inventory described by Paragraph (B);

(D) cash proceeds;

(E) accounts;

(F) chattel paper;

(G) instruments;

(H) documents; or

(I) payment intangibles with respect to any of the preceding.

(14) "Purchaser" means a person who:

(A) is not an affiliate of a first purchaser; and

(B) takes, receives, or purchases oil or gas from a first purchaser.

(15) "Representative" means a person who is authorized, expressly or by implication, including an operator or an authorized broker, to:

(A) sell oil or gas on behalf of, or for the benefit of, an interest owner under an agreement to sell; or

(B) receive on behalf of an interest owner the consideration under an agreement to sell.

(16) "Sales price" means the proceeds a first purchaser agrees to pay an interest owner or representative under an agreement to sell.

(17) "Security interest" means a security interest governed by Chapter 9, Business & Commerce Code.

(18) "Severance" means the point in time oil or gas is possessed at the mouth of the wellbore of an oil and gas well.

(19) "Transferee interest owner" means a person that acquires oil and gas rights from a transferor interest owner.

(20) "Transferor interest owner" means an interest owner that transfers or conveys oil and gas rights, wholly or partly.