38-10-109 - Limitation on liability for other owners in production unit if notice provided -- Contents of notice -- Filing of notice -- Time for filing -- Failure to file does not affect other defense
38-10-109. Limitation on liability for other owners in production unit if noticeprovided -- Contents of notice -- Filing of notice -- Time for filing -- Failure to file does notaffect other defenses.
(1) Where work is performed or materials or equipment are furnished for any productionunit under a contract with an owner of an interest in the production unit, any interest of any otherowner in the production unit shall not be subject to a lien under this chapter, if such other ownergives written notice that he will not be responsible for work performed or materials or equipmentprovided.
(2) Written notice shall be:
(a) in recordable form;
(b) filed with the county recorder of the county where the production unit is located; and
(c) filed within 10 working days after the latter of:
(i) the owner obtaining knowledge of the performance of such work or the providing ofsuch materials or equipment; or
(ii) the execution by the last party of:
(A) a farmout agreement;
(B) a lease or sublease;
(C) an operating agreement;
(D) an assignment of less than 100% of the lessee's interest or operating rights under alease;
(E) a sales contract; or
(F) an option agreement.
(3) Failure to file under this section shall not impair any other defense available to suchowner.
Enacted by Chapter 170, 1987 General Session