Written by attorneys · grounded in primary & secondary sources — see below
The removal of minerals or other substances from the earth. Under the UCC, oil gas or other minerals qualify as goods once this removal occurs and no longer fall within the exclusion for items before extraction.
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Empire Logistics holds a security interest in oil reserves on land owned by Ewan Eckhart. After Ewan extracts the oil and stores it in tanks, Empire's interest attaches to the oil as goods under the UCC definition.
Edgewater Capital takes a security interest in Eric Espinoza's mineral rights. Because the oil remains in the ground, it stays classified as a general intangible rather than goods.
A lender holds a security interest in mineral rights owned by a debtor. After the debtor extracts the minerals and sells them at the wellhead, the lender's interest attaches to the extracted minerals as goods under the UCC.
A bank perfects a security interest in a debtor's unextracted oil reserves. Once extraction occurs and the oil is stored above ground, the interest must be re-perfected in the goods category.
A secured party claims an interest in gas reserves. After the debtor extracts the gas and it becomes movable, the interest attaches to the gas as goods rather than remaining a general intangible.
A royalty owner holds rights tied to mineral extraction on leased land. Once the minerals are extracted and sold, they qualify as goods and the royalty interest is governed by UCC rules for goods.
Minerals become goods once extraction removes them from the ground. Before extraction they are excluded from the definition of goods and treated instead as general intangibles.
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Yes. A security interest in unextracted minerals is perfected as a general intangible. After extraction the interest must be perfected as goods under the applicable rules for that category.
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UCC extraction determines when minerals shift from general intangibles to goods. In evidence cases extraction refers to the physical removal of DNA or blood samples for laboratory testing.
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…to indicate that conception is a "process" over time, rather than an event, and by new medical techniques such as menstrual extraction, the "morning-after" pill, implantation of embryos, artificial insemination, and even artificial wombs.[^maj-62] In areas other than criminal abortion, the law has been reluctant to…