Christian C. Sizemore, Land Lead

Newfield Exploration Company

*

You could say that I grew up with oil and gas in my blood. Iam the son of a lifelong landman, born and raised inBillings, Montana. After graduating from Billings CentralCatholic I attained an associates in Engineering and also aBachelors of Science in Business Administration with afocus in Finance, from Montana State University-Billings.Although I didn't focus my education specifically on oil andgas, I knew at the time, that this was the industry I wasdestined for. In fact, I spent over a decade in the fieldworking for Lonewolf Energy, the company my fatherbuilt. Here I was able to interact and gain experienceacross much of the Rockies including many of the NativeAmerican Reservations including Fort Belknap, Fort Peck,Crow, Yakima, Turtle Mountain and Blackfeet to name afew. At this point in my career I knew I wanted to gain "in-house" experience which led me to join NewfieldExploration in 2011. Once "in-house" my focus became theUte Indian Tribe and Newfield's ongoing operations in theUinta Basin. I am happily married to my loving wife,Elizabeth, and we are blessed with our incredible four yearold son and landman in training, Cabrin.

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*Topic One*History of how Indian Country came to be

*Topic Two*Fee Simple verses Tribal verses Allotted

*Topic Three*Bureau of Indian Affairs

*Topic Four

*Pooling in a Resource Play

*Topic Five*Communitization Agreements

*Topic Six*Preliminary Communitization Agreements

*Question and Answer

*Sources

*

History of how

Indian Country came to be

*

*Treaties with the tribes

* From 1778 to 1871 the United States and many tribes signed treaties where by the tribes gave up millions of acres to the United States in exchange for protection and other rights and benefits

*Federally recognized tribe

* 566 American Indian and Alaska Native tribes

* Recognition through treaties, acts of Congress, presidential executive orders or federal court decisions

* Government to Government relationship

* Sovereign Nations

*Federal Indian Reservation

* 326 land areas

* 56.2 million acres

* Largest 16 million acre Navajo Nation in Arizona, New Mexico and Utah

* Smallest 1.32 acre parcel Pit River Tribe’s cemetery in California

*

*American Indian Population

*5.2 million or 1.7% of the total U.S. Population

*39% growth from 2000 to 2010 census

*Top 5 Cities with highest percentage of American Indians

* Anchorage, AK 12.4%

* Tulsa, OK 9.2%

*Norman, OK 8.1%

*Oklahoma City, OK 6.3%

* Billings, MT 6.0%

*

*

Ute Indian Tribe* Establishment of Reservation

* Uintah Reservation established by Executive Order in 1861

* Uncompahgre Reservation established by Executive Order in 1882

* In 1886 consolidated reservations to Uintah & Ouray Reservation

* Three bands

* Whiteriver

* Uncompahgre

* Uintah

* Business Committee governing body made up of two members from each band

* 3,157 tribal members with over half living on the reservation

* Ute Partition Act of 1954

* Termination plan for mixed-bloods

* 490 people terminated

* 1956 agreed on division of assets

* Ute Tribe-72.84%

* Terminated Utes-27.16%

* Ute Distribution Corporation (1958)

*

Fee Simple

Vs.

Tribal

Vs.

Allotted

*

*Fee Simple

*Ownership interest in real property limited by government powers such as taxation and eminent domain

*Lands held in Trust by the United States

*Tribal Lands: Lands held on behalf of a Tribe

*Allotted Lands: Lands held on behalf of an individual Indian mineral owner or the heirs of the original owner

*General Allotment Act of 1887 (Dawes Act)

* Indian Reorganization Act of 1934

* Currently there is over 10 million acres held for individual alloteesand their heirs

*Lands in limbo between Trust and Fee status

*Fee Lands under Allotted: BIA does not have trust responsibility

* Trust interest transfers to Non-Indian Owner

Bureau of Indian Affairs

*

*

*History of the Bureau of Indian Affairs

*1775 established Committee on Indian Affairs headed by Benjamin Franklin

*1789 responsibilities transferred to Secretary of War

*1824 Secretary of War, John C. Calhoun administratively established the BIA

*1832 Congress legislatively established the BIA

*1849 the BIA was transferred to Interior Department

*45 Commissioners of Indian Affairs since inception with only six (6) Native Americans

*

*Structure of departments

*Department of Interior

*Secretary – Sally Jewell

*Indian Affairs

*Assistant Secretary – Kevin Washburn

*Regional Offices (12 Regions)

*Regional Director

*Local Agency Offices

*Superintendent

*

*

*BIA’s Mission Statement:* "The BIA's mission is to enhance the quality of life, to promote economicopportunity, and to carry out the responsibility to protect and improve

the trust assets of American Indians, Indian tribes and Alaska Natives.

We will accomplish this through the delivery of quality services,

maintaining government-to-government relationships within the spirit

of self-determination.”

*Oversight of Oil and Gas activities on lands held in trust

*Ultimate approval for any lease or development agreement which comprises lands held in trust

*Jurisdiction of permitting on surface lands which are held in trust

*

*Leasing Tribal Minerals

* Indian Mineral Development Act of 1982

*Superintendent final approval

*Leasing Allotted Minerals

*Lease sale under sealed bid or negotiated leases

*Acquire signatures on sliding scale

* 0-5 owners acquire 90% of trust interest

* 6-10 owners acquire 80% of trust interest

* 11-19 owners acquire 60% of trust interest

* 20 or more owners acquire majority trust interest

*Allotted lease is issued at 100% of the minerals held in trust

*Superintendent final approval

*

Pooling in a Resource Play

*

*UT 4-17H

*Horizontal lateral produces from multiple federal

managed leases

*UT 6-17

*Vertical well on Tribal minerals

*Both pooled on 640 ac. basis

*Example Key

*Green – Allotted – 37.50%

*Light Green – Tribal – 25.00%

*Yellow – Fee Simple – 37.50%

*

CommunitizationAgreements

*

*Communitization Agreement (“CA”)

*Provides the ability to pool federal lands including Indian lands with other lands in a Drilling Spacing Unit (“DSU”)

*Requirements for CA prior to submittal

*State spacing order covering area and the well being communitized

*All Working Interest owners consent

*Any other interest holders in DSU requiring consent

* Tribal, Allotted, Federal, State and Fee owners without consent to pool in lease

*State force pooling order if you cannot acquire all consents

*

BLM

Payment can be

made to ONRR for

Allotted Royalties

Op

Set-up for

payment

Op

ONRR

Processes and

Superintendent

Approves CA

BIA

Issues

Agreement

Number

Notifies BLM to

issue Agreement

Number

BLM

Allottees

BIA

BLM

Finalize

Communitization

Agreement

Op

Tribal BC

Prepare

Communitization

Agreement

Op

Approve Order to pool

outstanding interest

Utah Division of Oil, Gas &

Mining (UDOGM)

Compulsory Pooling

of outstanding

interest if any

Op

E&M

Drills &

Completes

O&G Well

Required Parties

Notify

Send Completed CA

Send Notification Letter

YES interest

outstanding

NO interest

outstanding

Execute Consent

Documents

UDC

WI Owners

RI Owners Requiring

Notify

Op

Notify

Notify for Set-up

Notify

*

“The Communitization Agreement Process”

1) Operator drills and completes an oil & gas well capable of production

2) Operator makes determination if compulsory pooling is necessary based on if the Drilling Spacing Unit (“DSU”) has any outstanding interest

1) No there is no outstanding interest in DSU proceed to Step 3

2) Yes there is outstanding interest in DSU

1) Compulsory Pooling hearing is needed through Utah Division of Oil, Gas and Mining (“UDOGM”)

1) Final attempt notice to outstanding owners at least thirty (30) days prior to submitting hearing application

2) Submit hearing application to UDOGM

3) Notice outstanding owners of hearing date and reason

4) File Exhibits with UDOGM prior to hearing

5) Hearing before UDOGM to compulsory pool the DSU and the outstanding interest

6) UDOGM approves the order

3) Operator prepares Communitization Agreement (“CA”)

1) Obtain executed consent forms from following parties in the DSU if needed

1) All Working Interest Owners

2) Lessors that require consent

1) Ute Distribution Corp (“UDC”)

2) Ute Indian Tribe Business Committee (“Tribal BC”)

1) Work through Energy & Minerals Department (“E&M”)

4) Operator finalizes the CA and sends to Bureau of Indian Affairs (“BIA”)

1) Notify State Bureau of Land Management (“BLM”) that CA was sent

5) BIA notifies BLM to issue determination and agreement number

6) BIA notifies Allotted owners if the pooled unit contains Allotted leases

7) BLM issues determination and agreement number

8) BIA Superintendent signs on behalf of the pooled Allotted owners

9) BIA Superintendent approves the CA

1) Notify BLM of approval

2) Notify Operator of approval

10) BIA notifies Office of Natural Resources Revenue (“ONRR”) that the CA was approved and for ONRR to Set-up for payment

11) ONRR will set-up the CA along with all associated federal leases including Tribal and Allotted

12) Operator can make payments on producing properties

*

Preliminary CommunitizationAgreements

*

*Preliminary Communitization Agreement (“Pre-CA”)

*Provides the ability to expedite the conditional approval to pool federal lands including Indian lands with other lands in a DSU

*Requirements for Pre-CA prior to submittal

* State spacing order covering area and the well being communitized

* All Working Interest owners consent

* Any other interest holders in DSU requiring consent

* Tribal, Allotted, Federal, State and Fee owners without consent to

pool in lease

* State force pooling order if you cannot acquire all consents

Seven (7) day

notification prior

to BLM Submittal

Payment can be

made to ONRR for

Allotted Royalties

Op

Set-up for

payment

ONRR

BIA

Issues PCA

Agreement

Number

BLM BIA

Send Preliminary

Communitization

Agreement

Op

Prepare

Preliminary

Communitization

Agreement

Op

Op

Drills &

Completes

O&G Well

Op

Notify for Set-up

*

*

“The Preliminary CommunitizationAgreement Process”

1) Operator drills and completes an oil &

gas well capable of production

2) Operator prepares the Preliminary

Communitization Agreement (“Pre-CA”)

1) Operator only execution on Pre-CA

3) Operator notifies Bureau of Indian

Affairs (“BIA”) prior to submittal of

Pre-CA to State Bureau of Land

Management (“BLM”)

1) Seven (7) day notification email including the

following documentation:

1) Plat of Pre-CA Drilling Spacing Unit (“DSU”)

2) Recapitulation of tracts within DSU

3) Allotted and Tribal lease numbers and associated

acreage amounts

4) BLM Master Title Plat covering the DSU

4) Operator sends Pre-CA package to BLM

after expiration of seven (7) day notice

5) BLM issues a conditional approval and

agreement number

1) BLM notifies Office of Natural Resources

Revenue (“ONRR”), BIA and Operator of Pre-CA

conditional approval

2) Operator sends two (2) copies of signed Pre-CA

including the BLM conditional approval letter to

BIA

6) ONRR will set-up the Pre-CA along with

all associated federal leases including

Tribal and Allotted

7) Operator can make payments on

producing properties

*

*

* Cornell University Law School (CFR Source)

* http://www.law.cornell.edu/

* Uintah Basin Teaching American History Project

* http://www.uintahbasintah.org/utehistory.htm

* US Department of the Interior

* http://www.doi.gov/index.cfm

* US Department of the Interior Bureau of Land Management

* http://www.blm.gov/

* US Department of the Interior Indian Affairs

* http://www.bia.gov/index.htm

* Utah.com

* http://www.utah.com/tribes/ute_main.htm

* Utah.gov

* http://historytogo.utah.gov/people/ethnic_cultures/the_history_of_utahs_american_indians/

* Ute Indian Tribe

* http://www.utetribe.com/

* Weber State University

* http://faculty.weber.edu/kmackay/history_3010-treaties.htm

* Photos courtesy of Elizabeth Sizemore Photography, LLC.

* http://www.elizabethsizemore.com/

Land LeadNewfield Exploration Companycsizemore@newfield.com