(a) An association may make loans or purchase participations in loans secured by a first and prior lien on proven reserves of oil and gas and other minerals in place and before they have been extracted from the ground, in an amount not to exceed 90% of the value of the proven reserves which act as security, as reasonably estimated by competent reserve evaluation specialists; or on producing oil and gas properties and an assignment of the proceeds of the sale of the portion of the total production attributable to the interest securing the loan, but no such loan shall exceed three times the annualized net revenue accruing to the interest securing the loan at the time the loan is made. (b) The aggregate amount of any such loans to one borrower shall not exceed $100,000 or 10% of the association's net worth, whichever is greater. (c) Any such loan must mature and become payable within 60 months from the date the loan is made, and
shall be repayable in installments of principal and interest, payable no less often than semiannually. (d) A loan made under this section may include amounts to pay interest on the loan, and other fees, if the loan amount conforms to this section, and provided a detailed, narrative underwriting report is prepared and filed in the loan file explaining the reasons and justifications the association relied upon to include such amounts to pay interest on the loan, unless the association has full recourse against the borrower for repayment of the loan and the total amount of the loan including any amounts to pay interest and fees, does not exceed 80% of the appraised value of the security property. Any amount of the loan which represents interest shall not be disbursed until earned. (e) Prior to funding a loan under this section, an association shall comply with the requirements of §65.17(a) of this title (relating to Loan Documentation).
(f) No other provision of this chapter other than §65.1(a) of this title (relating to Types of Loans, Letters of Credit, and Investments Authorized) or §65.12 of this title (relating to Unsecured Loans) shall be utilized to make loans or purchase participations in loans secured by oil and gas and other minerals before they have been extracted from the ground.


Source Note: The provisions of this §65.9 adopted to be effective December 27, 1985, 10 TexReg 4795; amended to be effective January 17, 1989, 14 TexReg 53.