In the oil and gas industry, ensuring payment for work performed and materials furnished is critical to maintaining a successful operation. While Joint Operating Agreements (“JOAs”) offer lien rights among participating parties, the Texas Property Code provides an additional, often underutilized, statutory mechanism for securing payment—mineral liens. These statutory liens allow Mineral Contractors and Subcontractors to secure debts without initiating litigation, offering a powerful tool to mitigate financial risk.

Under a standard form JOA, each party typically has a lien against the real property interests—including oil, gas, and mineral rights—of the other parties. However, statutory lien rights under Chapter 56 of the Texas Property Code go a step further by allowing contractors and subcontractors who perform mineral-related activities to file a lien directly against the mineral property itself.

Section 56.001 of the Texas Property Code defines a Mineral Contractor as a person who performs labor or furnishes or hauls materials, machinery, or supplies used in mineral activities under an express or implied contract with the mineral property owner or their agent. A Subcontractor is defined as one who performs similar activities under contract with a mineral contractor or another subcontractor, including artisans or day laborers.

Most importantly, Section 56.002 grants both Mineral Contractors and Subcontractors the right to establish a lien on mineral property to secure payment for their contributions to mineral activities. Texas courts have consistently upheld the validity of these liens to protect the rights of those furnishing labor and materials. See In re Heritage Consol., L.L.C., 765 F.3d 507, 511 (5th Cir. 2014); Bandera Drilling Co., Inc. v. Lavino, 824 S.W.2d 782, 784 (Tex. App.—Eastland 1992, no writ).