Tribal Oil Company Partners with Energy Educators
Article by Jessica Holdman
A tribal-owned oil and gas company is partnering with San Juan College in Farmington, N.M., to help Native American students interested in energy and business careers.
Dave Williams, CEO of Three Affiliated Tribes’ Missouri River Resources LLC in New Town, said despite the current downturn in oil and natural gas prices, there is a good future in the energy industry. (Read More)
Tribe asserts oil presence
May 28, 2016
At 4:30 a.m. on June 27, 2015, Missouri River Resources CEO Dave Williams received a call.
“It was a Saturday,” he said. “They said, ‘Dave, she’s coming in.”
MRR produced its first barrel of oil that day and now, almost a year later, it has put about 1,000 barrels a day away for the MHA Nation.
The Three Affiliated Tribes are working to reclaim its oil production on the reservation by picking up new and expiring leaseholds.
Tribally-owned oil company Missouri River Resources drilled four wells last year. It also has plans for three four-well projects in 2016 and a 32-well project in 2017, said Chairman of the Board Ken Hall
“It’s a new day for us,” he said.
In 2007 and 2008, before Missouri River Resources came to be, the tribe leased the majority of tribal lands to private companies. When that happened, the tribe became a working partner, making them minimal participants. Williams said he would have liked to stop it at the time but didn’t have the means.
But he’s not one to dwell on the past and the things he cannot change. Instead, he learns from it and is looking to the future. The company is working to pick up any leaseholds that become available on the reservation.
“We just picked up over 3,000 acres along the Little Missouri,” Williams said.
The tribe benefits more by drilling its own oil, as 26 percent of the royalties are paid back to the tribe, compared to 18 percent when private companies do the drilling. Hall said the funding can then be used by the tribe to pay for things like infrastructure, education and law enforcement.
The remaining revenue is reinvested into the oil company. As a tribal company, MRR also does not have to pay taxes on oil produced, which gives the company a 10 percent advantage off the top.
The company’s first four wells were drilled on land the company inherited when another company, Red Willow Production Co., left. All they can do now is stay diligent.
“There’s a lot of opportunity still out there,” Williams said. "It’s been working because we do have 50 wells of progress ahead of us .… If we drill 50 wells, what’s to stop us from drilling 100?”
U.S. Bureau of Indian Affairs permitting takes a long time, which keeps some companies from choosing to operate on the reservation, Williams said. Also, those with leases would prefer not to drill while the cost of oil is so low but contractual obligations require it within a certain time period.
They must drill or pay millions to renew the leasehold, said Director of Mineral Resources Lynn Helms. Many are choosing to drill.
In addition to tribal trust land leaseholds, MRR is getting close to 800 acres of allottee land owned by individuals, which equates to 12 wells, according to Williams.
Helms said much of this allottee land is in the lower producing, southeast corner of the oil play. But MRR wants what tribal land it can get.
“We have a great land man, Jason Kreuger. He knows the people,” he said.
It’s not that they’re knocking on doors, creating animosity among other oil companies. The people just tend to feel good about signing leases with a tribal company, Williams said.
“People now know they have a choice on the reservation to work with Missouri River Resources as their own tribal company,” he said.
Williams is also meeting with leaders of companies such as Whiting, Marathon and Hess.
“So they know we’re here even though we’re the little guy on the block,” Williams said. “If they want to leave and sell their interests on tribal lands, we’re there to pick them up.”
Hall said the state and industry need to do a better job of recognizing the tribe's position as a nation and an oil powerhouse.
“We’re big players in the whole scheme of things,” he said.
Williams said MRR is also "very futuristic" about the tribal oil industry 10 to 20 years from now. The company is working to help train native youth to work in the oil industry so MRR will be able to continue operations for years to come.
‘Drilling Native oil on Native soil’
Missouri River Resources makes history with first four wells
Story by Gary Bégin
MHA Times Editor
Last year at this time it was still a “pipe dream”, but now the pipes are flowing with “Texas Tea” and the Three Affiliated Tribes’ Missouri River Resources (MRR) oil company is flowing with pride and profits.
Thanks to all this in great part to Dave Williams, a professional oil man who went out and recruited an equally professional team to work with him and establish the only 100 percent Native owned and operated oil company in North Dakota.
He reports a “natural flow” of 3,000 barrels per day and has jobbed-out $4 million to Native contractors as well. “Natural flow” meaning that sheer pressure alone is forcing the oil up and no pump jacks are being used. Williams said maybe in the spring of 2016 they will be installed.
In the meantime Native employees are learning the oil business and there are plans in the works to establish a Native American Petroleum Academy (NAPA) to teach many more all about the oil business.
MRR was established in 2011 and has a “first-right-of-refusal” on Tribal trust land, which could potentially yield much more oil producing acreage. MRR also has a working interest (WI) partnership with Enerplus, Conoco Phillips, Marathon and Halcon and is currently participating in 51 wells as a WI Partner.
MRR is also working on the Sacagawea pipeline project and is planning on two more four-well projects and a massive 32-well project by the Little Missouri River next year. MRR also partners with Grey Wolf Midstream, Paradigm Energy Partners and Phillips 66 Partners in “midstream opportunities” thus creating another great revenue potential for the TAT, which is now receiving 26 percent royalties on oil production from the four wells.
Williams said the royalty percentage is about eight percent above the industry average. His dream is to actualize the writings in his favorite book, “Rebuilding Native Nations” by creating a self-sustaining Tribally owned and operated oil company and that one day he hopes all the oil being produced on the Fort Berthold Reservation is done by MRR.
“There is no ‘1-800-petroleum engineer’ phone number to call when we need something done,” Williams said. He is looking for team players, including board members, who share his vision as MRR being “the people’s company”.
In the mean time he is saving “30 – 35 percent” on work crews that he recruits from other well projects after they are done and are ready to leave town. He negotiates cheaper salaries and the crews are happy to still be employed at a fair wage without having to leave the area.
Williams will have plenty of work for whoever wants it as he says there is around two million barrels of oil that can be harvested from these first four historic wells over the next 20-25 years. That figure could rise with the advent of future technologies.
Well before that time Williams will have established “a true Native work force”.
“We are only recovering seven percent of the 13 billion barrels of oil possible,” he said. Once NAPA is up and running, mastering subjects like math, science and geology will allow high school graduates to possibly earn $100,000 a year in the oil business and help realize Williams’ dream of self-sustainability and wealth for all Tribal members via oil operations.
His new slogan says it all, “drilling Native oil on Native soil.” Once an educated workforce and solid company create the foundation Williams says, “even if the tribe decides to sell MRR in the future, everyone will benefit.”