New Town - Mark Fox, Tribal Tax Director said his department has collected more than $3 million dollars in outstanding or past due drilling fees from oil companies since the beginning of the year. He said $2.3 million was recovered from one company, WPX Energy, Inc. and the rest came from several different companies with outstanding balances on their oil and gas drilling fees.
Fox said the Tribes signed an Oil and Gas Agreement with the state of North Dakota in June of 2008. According to the Agreement, it “provides for an efficient method of taxation and regulation of oil and gas production and extraction on the Fort Berthold Reservation”. The Agreement gives authority to the Tribal Tax Department to collect fees from oil companies before they can come onto or drill on the reservation. The one-time fee is a $100,000 application fee for drilling on the reservation. The fee is to be collected before the oil companies began work. Fox was appointed Tax Director in November 2010 and immediately began checking compliance to see which company’s fees were paid.
Since the Agreement was signed, the Tribes have collected approximately $93 million dollars, but the State of North Dakota has collected $167 million dollars in oil and gas taxes per the Agreement.
Some companies, however, began work prior to the Agreement and one, WPX Energy, Inc. argued that since they assumed ownership of almost 86,000 net acres on the reservation and 24 wells in 2010 from Dakota Three, a company already drilling on the reservation, they claimed exemption from the fees. The Tribal Tax Department argued that since the Agreement was signed in 2008, it supersedes all other agreements up to that time and this was a new acquisition coming onto the Reservation. Fox said, “After much deliberation and communication, we came to an agreement and WPX agreed to pay all outstanding amounts claimed by the Tribes.” He said WPX Energy, Inc. fully recognizes the importance of working with our tribal government to resolve differences and maintain compliance with applicable tribal laws, regulations and policy. They understand that the Tribal Tax Department is responsible for ensuring regulatory compliance with the Tribal-State Oil and Gas Agreement.
Chairman Tex Hall speaking on behalf of the MHA Nation said, “We are always looking for fairness either with oil companies or the State of North Dakota; they need to pay their fair share and this is a good step forward for our Tribal Tax Department. Director Mark Fox and his staff are doing a good job of collecting from all oil and gas companies who want to work on the Reservation.
Previously, Williams Cos, Inc. Tulsa, Oklahoma purchased 82,800 net acres from private owners on the reservation in November 2010. It then announced it would be separating into two stand-alone publicly traded companies. In January 2012, Williams announced it finished its split with WPX Energy, Inc. WPX Energy, Inc. will focus on exploration and production of oil and gas and Williams will place their focus on pipelines and other energy infrastructure in North America. Both companies have their base in Tulsa, Oklahoma with WPX having operations in North Dakota, Colorado, New Mexico, Oklahoma, Pennsylvania, Texas, Wyoming, Argentina and Colombia.