Alaska Supreme Court June 10, 2011, S-13771 (Marathon Oil Co. v. State, Department of Natural Resources)

OPINION

FABE, Justice.

I. INTRODUCTION

Gas producers that lease land from the State of Alaska must pay royalties calculated on the value of the gas produced from the leased area. This royalty payment can be calculated under one of two methods: (1) "higher of" pricing or (2) contract pricing. "Higher of" pricing is the default.