Native American Initiative Strategic Center for Natural Gas and Oil For GAO Review August 09, 2007

 Targets resources on tribal lands  890 million bbls oil  5.6 trillion ft 3 of gas  Helps tribes develop and manage energy resources while protecting the environment  Stimulates economic development of oil & gas  Promotes Tribe-industry partnerships  22 projects funded from 1994 to 2004 Program Description

Participating Tribes  Assiniboine & Sioux  Crow (2)  Eastern Shoshone & Northern Arapaho  Hopi  Inupiat  Jicarilla Apache (3)  Northern Cheyenne  Osage (5)  Southern Ute  Three Affiliated Tribes  Ute  Ute Mountain Ute

Goals  Promote dialogue among tribes, industry, and researchers  Develop and demonstrate innovative petroleum technologies  Increase exploration and development activity on tribal lands  Increase oil and natural gas production on tribal lands  Create jobs for tribal members

Budget Level PhasePeriodProjects #DOE $K DOE % Perform $K Perform % Total $$K I ,623100%00%1,632 II %00%818 III ,94370%83330%2,776 IV ,77862%1,10938%2,887 Total226,16276%1,94224%8,104

Success Enhanced Oil Recovery by Horizontal Waterflooding Osage Tribe and Grand Resources Inc. Goal:  Demonstrate that horizontal waterflooding can be technically and economically successful Accomplishments:  An abandoned field was revived  Technology successfully used in a nearby 100 year old field  Production went from 0 to a total of 100 bopd for the two fields  Expected ultimate production for the test wells is 29,000 bo

Enhanced Oil Recovery by Horizontal Waterflooding - Osage Tribe cont’d Benefits:  Technology can increase production in poorly performing waterfloods and thereby reduce field abandonments  Demonstration scale horizontal waterflood could generate $2.9 million over 6 years  Vertical waterflood would generate $1.4 million in 30 years

Success North Hill Creek 3-D Seismic Exploration Ute Tribe and Wind River Resources Corp. Goals:  Use 3D seismic surveys to assess oil and gas potential Accomplishments:  15 wells drilled with a 100% success rate  Royalty revenue for the Ute Tribe was $5,000 per day  Identified 1 formation that had never been produced commercially  1 formation had never been produced in that part of the basin

North Hill Creek 3-D Seismic Exploration Ute Tribe and Wind River Resources Corp. cont’d Benefits:  Demonstrated the value of 3D seismic surveys  Success spawned 11 additional surveys during the year following project  Survey cost of $1.5 million is less than cost of 1 dry hole  Increased gas production on Ute Tribal lands  Provided a new revenue stream for the Ute Tribe

Program Accomplishments  1.84 BCF natural gas produced  2 TCF unconventional gas resource identified  19 Exploration leads discovered  2 plays with high potential for oil and gas  Estimated $260 million in economic activity on tribal lands plus  $40 million in direct tribal royalty payments expected from the program over next 20 years