Agreement may open up drilling on indian reservations

Posted by bakken

Tribal chairman Marcus Wells Jr. and Gov. John Hoeven met in the tribal chambers at New Town Tuesday to sign an agreement that will lighten tribal and state oil taxes into one and open drilling in North Dakota Bakken region where more than 70 rigs currently operate. Currently, taxes were owed to both tribal and state governments which slowed funding for any drilling projects due to diminished ROI. It’s estimated more than 500 new Bakken wells could be drilled on the reservation and the tribe’s share could be in excess of $10 million annually. In addition, there is an 18 percent revenue stream based on the value of each barrel produced on tribal trust acres.

It will be interesting to see which Bakken companies end up partnering with the tribe to build out the vast array of rigs. Currently the major partner in the region located in Mountrail County is Marathon Oil (MRO). It could be a boon to companies involved as the terms could be favorable when compared to collaboration with other entities in the region. The proceeds look like they will be allocated for social infrastructure (healthcare, schools etc) and so this could also be a PR play for whatever companies are involved. I’m sure there is a line forming already……

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Tags: bakken indian reservation indian tribe MRO north dakota taxes