In All Am. Oilfield, LLC v. Cook Inlet Energy, LLC,[1] the supreme court ruled that a contractor was not entitled to a mineral dump lien on natural gas that had not been extracted, hoisted, and raised from its natural reservoir. Cook Inlet controlled oil and gas wells in southcentral Alaska and contracted with All American to “‘drill, complete, engineer, and/or explore three wells.’” All American established the wells, but it never extracted any of the natural gas. When Cook Inlet was unable to pay for the work, All American asserted both mine and mineral dump liens in order to secure payment. After an appeal from the federal bankruptcy proceeding against Cook Inlet in which the bankruptcy court only found All Americans had a mine lien, the federal district court certified a question to the supreme court about whether a mineral dump lien could exist if the gas was stored in its natural reservoir. The supreme court answered no to the certified question; a mineral dump lien did not exist if the gas was stored in its natural reservoir. First, the plain language of the statute establishing mineral dump liens excluded from the liens’ coverage gas in its natural reservoir that had never been extracted. Second, the legislative history and policy underlying the statute did not counsel a result contrary to the plaint language. Answering “no” to the certified question, the supreme court ruled a contractor was not entitled to a mineral dump lien on natural gas that had not been extracted, hoisted, and raised from its natural reservoir.
[1] 446 P.3d 767 (Alaska 2019).
