Panel Orders Wind River Tribes To Pay Energy Company $13 Million For Oil Field Infrastructure 

An energy company this week asked a federal court to ensure that the Northern Arapaho and Eastern Shoshone Tribes pay it $13 million for infrastructure the tribes gained when they stopped leasing an oil and gas field to the company.

Clair McFarland

April 14, 20233 min read

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An arbitration panel last week ordered the Northern Arapaho and Eastern Shoshone Tribes of Wyoming to pay $13 million for infrastructure and equipment they gained when they cut ties with an oil and gas company.   

Now the company, Merit Energy Operations, is asking a federal court judge to ensure that the tribes follow up on the order.

Merit left behind valuable machinery, buildings, tools, well casings and other infrastructure when its oil and gas lease for Circle Ridge Field on the Wind River Indian Reservation expired in 2021. An arbitration panel valued the equipment and infrastructure at $13 million.

The company asked a federal court judge on Tuesday to confirm the arbitration panel’s decision.

“The Arbitration Award should be confirmed,” said Merit in the filing.   

What Is Owed  

The panel of three arbiters decided April 7 that the Circle Ridge Equipment is worth $13,086,555.  

At first another panel of appraisers said the equipment was worth $23.1 million.   

The Northern Arapaho Tribe countered that it was worth between $3.6 and $5.3 million.   

Ultimately the arbiters reduced the appraisers’ price tag to about $13 million, noting that nearly $10 million of the equipment wasn’t addressed in the lease agreement, and the tribes decided not to buy another batch of equipment worth $100,000.    

Tribes’ Ordinance Did Not Stand  

The tribes during the arbitration process on Oct. 7 produced a joint tribal ordinance that sought to change the lease’s definition of “equipment.”   

The ordinance also added criteria that the appraisers were to consider when arriving at a price, and gave the tribes the right to refuse to purchase pieces of equipment they were using if the tribes disagreed with the appraisers’ pricing.   

“The ordinance represented a broad assault on the entire process,” says the arbiters’ order, which is included in Merit’s request for judicial confirmation. “The tribes contended that their status as sovereigns gave them the right to change the results of the appraisal by making new rules after the appraisal was concluded.”   

The arbiters rejected the ordinance.

“There is little doubt that if the Tribes had prevailed on this issue, the price for the Equipment would have been significantly less than the $13,086,555 that this Panel awarded,” said the arbitration panel in its order.   

The Northern Arapaho Tribe declined to comment on the pending litigation and Eastern Shoshone Tribe did not return a request for comment by publication time.   

Why They Went To Arbitration  

The two tribes co-habit the Wind River Indian Reservation. They took over operations officially on the Circle Ridge Field near Crowheart in 2021 after leasing the field for decades, at first to Marathon Oil Company and then to Merit.  

But when their lease agreement ended, the tribes and Merit Energy quarreled over how much money the tribes should pay the oil company for its equipment on the site.   

They selected an arbitration panel, with the tribes choosing one panel member, Merit choosing another, and the two panelists together selecting a third, independent panelist to join them, according to court documents.   

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Clair McFarland

Crime and Courts Reporter