The swiftness with which paperwork has been completed, permits have been issued and ten wells have been drilled for a multimillion dollar project undertaken on Ute Tribe trust lands by Conoco Inc. has sparked renewed interest in oil and gas development on the Uintah-Ouray Reservation.
Preliminary work on the project began the first of last year.Actual negotiations between the Midland, Texas-based company and the Ute Tribe got underway just seven months ago. As of last week, the last of the ten gas wells was being drilled in the Ouray field and two wells are already online as producers.
Previously, several natural resource development projects proposed on tribal trust lands became so bogged down with paperwork and unanticipated delays that oil and gas companies began shying away from investing their time and money on the reservation.
But it appears economic opportunities for the tribe may be returning as the scenario improves.
The success of the project with Conoco has encouraged others.
The word is out in the industry that in a seven-month period the deal went from concept to production. The speed of the project is impressive, said Fred Payne, an independent land man who works as consultant to oil and gas companies in the Uintah Basin. "It sends a message to the industry that things are looking up."
Payne says he's had several people contact him recently to question the new business climate within tribal government, as well as between the tribe and state. And he says Pennzoil has just negotiated new leases with the tribe.
"We've seen an improved situation with the Ute Tribe and there's the attention of the Business Committee to these projects.
"There's the attention of Gov. (Mike) Leavitt as far as working with the tribe on agreements, and the Memorandum of Understanding (adopted by the tribe, counties and State) is showing positive results," Payne said.
Conoco had dealings in the past with the tribe but had become discouraged by delays and had begun downsizing their operations locally, Payne said. "But we're encouraged by the improving political atmosphere, and with all of the changes comes an improved atmosphere for investments."