High energy prices and promising oil and natural gas reserves have prompted the Northern Ute Indian Tribe to form an integrated energy company, with plans to develop 236,000 acres of the Uintah-Ouray Indian Reservation in Utah's Uinta Basin.
The company, known as Ute Energy, was formed in May and is a privately-owned corporation of the Ute tribe.
John Jurrius, interim chief executive officer of Ute Energy, said the company's formation has been four years in the making.
"This basin has notoriously held a great deal of oil reserves," Jurrius said. "I would say within the matrix of basins within the Rocky Mountains that the Uinta Basin is certainly one of the most active basins."
Jurrius said the tribe feels a great deal of patriotism in helping to provide more domestic energy resources at a time of growing U.S. dependence on foreign energy sources.
Four distinct areas will be developed, Jurrius said, with partnerships already in place with Salt Lake-based Questar Corp., Boston-based Fidelity Investors Management, Denver-based Bill Barrett Corp. and Berry Petroleum Co. of Bakersfield, Calif.
The Ute Indian Tribe has the right, but not the obligation, to participate in the wells with up to a 50 percent working interest.
The land already has 30 producing oil and natural gas wells. Jurrius said he anticipates about 60 producing wells by the end of this year, a $60 million investment.
Currently, the wells are producing 500 barrels of oil and 7.5 million cubic feet of natural gas per day.
The formation of the energy company, according to Maxine Natchees, chairwoman of the Tribal Business Committee, has moved the 3,164-member tribe to a more active role in managing its land.
"Since they own it they're now involved in every facet of developing the resources," Jurrius said. "Economically, it's one more slice of the profit center. For every dollar the tribe makes it goes into their economy, which goes into the local economy."
In the past, the tribe has been prohibited from offering leases to drilling companies in return for royalty payments.
Gayle McKeachnie, adviser to Utah Gov. Jon Huntsman Jr., said in a prepared statement that Ute Energy was important to the state's economic development. McKeachnie praised the company for "seizing the opportunity to tap into the area's wealth of resources."
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