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North Dakota tribe to drill its own oil wells

WILLISTON, N.D. (AP) — The Mandan, Hidatsa and Arikara Nation is planning to drill the first tribe-owned oil wells on its North Dakota reservation next year.

While the 1,300 plus wells currently on the Fort Berthold Indian Reservation produce roughly a third of North Dakota’s daily output, the tribe only receives a fraction of money generated through royalties and a tax-sharing agreement with the state. That’s why the four new wells will be important, says tribal councilman Ken Hall: The nation will take in 82 percent of the money generated by them.

It “presents a huge opportunity for the tribe to get involved rather than be passive royalty owners,” said Hall, who is also the board chairman of the tribal energy company Missouri River Resources. “That’s how you get the lion’s share of the pie, and that’s what we’re doing.”

The wells will be located near the small reservation town of Mandaree. Two will target the Bakken — the formation that has driven North Dakota’s recent oil boom. The other two wells will target the Three Forks formation, which lies beneath the Bakken.

Company CEO Dave Williams said he hopes to begin drilling on the 320 acres in February. He said that, currently, money earned by Missouri River Resources goes back into developing the company, but they will work with the tribes’ elected body to share earnings.

The company’s growth opportunities are limited. Struggling to get out of debt at the start of the oil boom, the tribes leased out most of their oil rights to companies, leaving little land to be leased now.

“If everything’s leased out, I don’t know how I can find more land unless I go off the reservation,” he said.

That’s what the Southern Ute tribe of Colorado and New Mexico did. That tribe’s energy company, Red Willow Production Company, is the national model for tribal resource development. Williams said when he was getting Missouri River Resources going, he examined Red Willow’s business plan — which has operations in Texas, Oklahoma, the Bakken and offshore in the Gulf of Mexico —and looked to emulate it.

Beyond their immediate drilling plans, Hall and Williams said they hope to start a workforce development program on the reservation that can attract Native Americans from across the country who want to work in oil and gas. The project is still in the development phase, but Williams said they hope to break ground sometime next year.

“We just want people in Native America to have the ability or option to make a great living,” he said.

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