The ruling would have “a significant impact on the governance of the oil and gas industry in Oklahoma,” Edmondson said in a statement.

The amicus brief, filed Tuesday in the U.S. Third Circuit Court of Appeals, argued for the Oklahoma Supreme Court to decide whether producers have “an implied trust” guaranteeing them payment for oil and natural gas sold to SemGroup’s SemCrude subsidiary on credit prior to bankruptcy.

SemGroup LP filed for Chapter 11 bankruptcy protection in Delaware last July. The Tulsa-based midstream company owed as much as $1 billion to producers, but U.S. Bankruptcy Judge Brendan L. Shannon ruled this summer that secured creditors, such as banks, had the lien priority over producers.

The amicus brief, supporting a Third Circuit appeal by producers, also noted that Shannon’s decision was at odds with a previous opinion by Edmondson’s office. In November, the attorney general wrote that SemCrude was legally bound to fully pay producers.

“This conflict has created uncertainty in the law,” the brief reads. “It is important for the Oklahoma Supreme Court to rule on these questions to give certainty to future transactions initiated under the Oklahoma Production Revenue Standards Act, to avoid needless litigation in the future and to promote

In other words, Edmondson spokesman Charlie Price said the state, which developed the implied trust governing production, should also decide what it means. The “implied trust” law reportedly indicates that proceeds owed producers should be set aside and protected from other funds owed to creditors in the bankruptcy.

“We think it’s appropriate for a state court to do that and not a federal court,” Price said.

Ultimately, producers from several states asked the court for about $414 million in payments for the oil and gas sold on credit shortly before and after the bankruptcy petition. Shannon, however, sided with secured creditors and approved a proposed reorganization plan going forward to a vote of creditors.

The amended reorganization plan, if approved, would pay producers about 8 cents on the dollar, according to reports. The original reorganization called for only 4 cents payback on the dollar.

Unsecured creditors, such as producers, also would get a total 5 percent of equity in the reorganized SemGroup if it emerges from Chapter 11 as a publicly traded company by October, according to court records. Opposition from producers caused SemGroup to amend its plan.