When asked about how the year 2016 was for the Three Affiliated Tribes and the Native American run Missouri River Resources, their CEO David Williams took a brief pause before answering the question.
“To sum up 2016, I would say it was survival of the fittest,” Williams said.
Williams said one advantage of being a small company is they only having one debtor, allowing more control over their cash flow and operations. Although they are keeping momentum going, it hasn’t been without some bumps and tough decisions.
“We have been paying our bills and trying to make as much production as we can, keeping it slim,” Williams said. “I had to lay off a few people, that’s part of the game and part of the business. It’s unfortunate.”
Williams is a veteran in the oil and gas industry and understands the ebbs and flows of pricing. He also understands he has no control over it either.
“We also rely on the fact that oil is a commodity and it is influenced by global forces,” Williams said. “We are trying to be as optimistic as we can. I believe we will have an advantage, I say maybe, because of the new president. But at the same time, Saudi Arabia, OPEC and even non-OPEC countries cutting back on production.”
Continuing to look at the big picture with oil and gas, Williams understands how global and local politics can influence the industry and how their company must adjust accordingly.
“I think the word for the year was rebalancing,” Williams said. “I have been talking to people, reading articles about where people can function at $65-$70 a barrel without getting too high or too low.”
He hopes the global economics can come to an agreement that this price scale will end up being around $65-$70, which Williams believes would be beneficial to all.
“Hopefully, that will keep up as anticipated,” Williams said.
Looking at the new year, Williams and The Three Affiliated Tribes are cautiously moving ahead in anticipation of an uptick in oil prices.
“In 2017, I think we are on the same focus which is drilling,” Williams said. “We have acquired land in the past year and a half that has brought us to a project where we want to drill 23 wells in a few sections down on the reservation,” Williams said. “We are pretty happy about that and our lender seems very optimistic about moving forward.”
Williams is reminded of one year ago, when oil prices were extremely low and money was scarce. And this time in the oil and gas timeline is a positive reminder because energy development is a marathon, not a sprint.
“All this takes time. A year ago February, oil was in the 20’s and we couldn’t have found a bank even to borrow us $200,000 because of the way things were happening,” Williams said. “Now that we are here a year later, we are pretty fortunate to still be viable and moving forward keeping our experts and keeping our staff.”
Williams added that it is been extremely helpful knowing that the tribe has been understanding with low oil prices and the reduction in royalties.
One difficult part of the current state of affairs is the unknown budgets from the state and tribe, according to Williams. The unknown has a ripple throughout the state and industry creating uncertainty with what the next steps are in Native American nation building.
“The state and the tribe are busy trying to find a budget that will work for everyone,” Williams said. “I wouldn’t want that job.”
Williams expounded on the difficulty with Native Americans and oil and gas citing examples of the extra red tape and government bureaucracy creating an uneven playing field. Williams said the process of getting drilling or air quality permits on the reservation have additional steps private landowners do not have to go through. Plus the addition of an ever-changing government creates even more difficulty for the tribe.
“Our governments change every two to four years and sometimes it is hard to pass that baton on what someone wants to do,” Williams said. “Like in America, you have a president that worked eight years and the next president comes in and says I’m going to repeal everything that you have done. We’ve encountered the same thing. Boy it’s tough.”
Williams is going on ten years of attempting to empower the Native Americans with oil and gas development with a shared vision. That task alone is difficult, but when you throw in politics and leadership changes, it becomes an even more daunting task.
“With leadership changing and government changing, there’s a lot of moving parts,” Williams said. “Leadership has to voice that shared vision that we can work together as a nation or as Indian Country.”
A long term vision that enables the reservation to cultivate, develop, refine and ship product to the market.
“If we are refining and selling gas and natural gas to a reservation in Oklahoma or Nebraska or wherever, that’s part of the big picture in Indian Country,” Williams said.
Other reservations isn’t the only targeted customer for Missouri River Resources, according to Williams. He said that is a start and ideal situation. For now, education and getting the long term pieces in place is the order of the day.
“I still am creating relationships off the reservation and continuing with workforce development,” Williams said. “Also educating our own people to get degrees in oil and gas, working with the Petroleum Council on getting scholarships for Native Americans to enter into the field.”
Williams reiterated that it is still a struggle and sacrifice to get from point A to point B and where they want to be. Implementing a vision like the one Missouri Resources has takes time and Williams compares their situation to the Southern Utes tribe.
“It took the Southern Utes around 20 years to develop their oil and gas model, so if we keep that mentality and that long term vision, we will be alright,” Williams said. “We’ve accomplished a lot, but by no means is it over.”
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