Ute Energy LLC on Thursday unveiled what is intended to be the first stage of a four-year oil and gas exploration and drilling effort targeting 236,000 acres of the Uintah and Ouray Reservation, 150 miles east of Salt Lake City. Plans call for a $60 million investment, hopefully doubling the number of producing oil and gas wells to about 60 by year's end.
While the company itself expects to employ 10, there is a potential for hundreds of more new jobs being generated by the work, depending on initial results from drilling sites. Tribe members will enjoy preference in hiring and training opportunities, both with Ute Energy and contractors drilling on reservation sites.
Northern Ute Chairwoman Maxine Natchees hailed the endeavor as "the beginning of a great movement" toward bettering the 3,200-member tribe's economic future.
"[Utes are] becoming active partners for the first time in the development of our land and resources," she said. "This translates to great things for our tribe, surrounding communities and the state."
Ute Energy, in planning for the past four years, will be run temporarily by interim chief executive John Jurrius. He and chief financial officer Robert Ogle have long served the tribe as financial advisers.
"Historically, the tribe has just taken a royalty [from drillers]. But there are profits, too, associated with development, transportation [and services] from the wellhead," Jurrius said. "[Ute Energy] allows the tribe to participate in those profits and have a role with the development side of the project."
The Northern Utes see themselves as the ultimate environmental steward of their lands, and they have long wanted more involvement in day-to-day decision making about energy exploration. This time around, the tribe is a full partner in a fully integrated enterprise.
"Now, we are aligned with partners of long-standing expertise so we can learn," Jurrius added. "One day, Ute Energy could be developing tribal lands 100 percent."
The current effort, which will concentrate on oil and gas sites on the tribe's Naval Oil Shale Reserve and Brundage areas, also has the blessings of Gov. Jon Huntsman's administration.
"We commend the Northern Ute Indian tribe for seizing the opportunity to tap into the area's wealth of resources, helping us become less reliant on foreign energy supplies," said Gayle McKeachnie, Huntsman's rural affairs coordinator.
Ute Energy has recruited partners including Questar Gas Co., Fidelity Investors Management LLC, Bill Barrett Corp. and Berry Petroleum Co. to provide the company with energy development experience and capital.
Charles Stanley, president and CEO of Questar Market Resources, the utility's oil and gas exploration and production wing, said his division has a vision extending beyond the next four years. Market Resources also has signed a letter of intent to form a joint venture to build a natural gas-gathering system on tribal lands.
bmims@sltrib.com
