First Nations, Métis Settlements invest in Clearwater oilfield

On Feb. 22 at Rogers Place in Edmonton, Peerless Trout First Nation and 11 other Lesser Slave Lake area Indigenous communities signed an agreement to invest in Tamarack Valley Energy, for 85 per cent of the company’s infrastructure in the Clearwater oil play in the Marten Hills and Nipisi area. Left-right are: Tyler Letendre, PTFN Development Corporation director of operations; PTFN Councillor Paul Houle; PTFN Chief Gilbert Okemow; and PTFN Councillors Judy Sinclair and Julianne Noskiye. Photo courtesy of Peerless Trout First Nation.

Pearl Lorentzen
For South Peace News

Twelve north-central Albertan Indigenous communities have invested in the local oilfield.

And according to representatives of Peerless Trout First Nation, they are feeling pretty good about the prospects.

“It’s going to be a big impact for us regarding an economic source of revenue,” says Peerless Trout First Nation (PTFN) Chief Gilbert Okemow.

“This was a good deal for us,” he adds. “It’s going to be beneficial for sure for our community.”

In alphabetical order, the communities are: Driftpile Cree Nation, Duncan’s First Nation, East Prairie Métis Settlement, Gift Lake Métis Settlement, Kapawe’no First Nation, Loon River First Nation, Peavine Métis Settlement, Peerless Trout First Nation, Sawridge First Nation, Sucker Creek First Nation, Swan River First Nation, and Whitefish Lake First Nation (#459).

Clearwater play

The 12 Indigenous communities formed Wapiscanis Waseskwan Nipiy Holding Limited Partnership (WWN) to invest in the Clearwater Infrastructure Limited Partnership (CIP), says a Dec. 13, 202 Tamarack Valley Energy news release. Tamarack transferred its Clearwater assets into the new partnership. The Indigenous communities’ investment gives them 85 per cent and Tamarack holds the other 15 per cent. WWN invested $172 million ($146.2 million in cash and a 15 per cent operated working) for their share.

The CIP assets include oil batteries, gas processing facilities, in-field pipelines at Nipisi, West Marten Hills, Marten Hills, and Perryvale. They are all in the Clearwater play.

A play is described (by National Geographic) as “a group of oilfields in a single geographic region, created by the same geologic forces or during the same time period.”

The Clearwater play is in the Marten Hills and Nipisi area, says a 2019 BOE Report. From 2016-19, oilfield activity intensified in the area. At the time, it was estimated to have 4.96 billion barrels of oil-in-place.

Tamarack also has oil interests by Peavine.

An October 2023 Financial Post article describes the Clearwater play as the “the most heavily drilled play in the province in the past several years.”

Indigenous community investment is big business

In the news release, Tamarack commits to extracting an average of 29,000 barrels of oil equivalent per day (boe/d) for the next 16 years.

The company’s year-end financials from 2023 include more information on its Clearwater assets. It has 39 wells in 15 batteries. The average yield was 19,000 barrels per day.

In the Tamarack news release, company president Brian Schmidt says, “The new venture will provide for meaningful long-term economic ownership by the Indigenous communities in proximity to our world-class Clearwater assets. We are proud to be able to participate in this innovative business opportunity, which strengthens our existing relationships, builds Indigenous business capacity, and affords Tamarack continued alignment with the Indigenous communities surrounding the areas we operate in.”

Investment

The Indigenous communities received the money from a 15-year grant which has been guaranteed by the Alberta Indigenous Opportunities Corporation (AIOC). A loan guarantee means that the third party (AIOC) will be liable if WWN defaults.

The AIOC website says,

“Our goal is to reduce your barriers (to) borrowing so that your project can get off the ground,” cites the AIOC website.

This was the sixth deal closed by the AIOC. It is the second largest, with a loan guarantee of $150 million.

AIOC is a Crown corporation run by the Government of Alberta, whose goal is to “serve as a catalyst for Indigenous prosperity and independence by providing loan guarantees for equity investments like this one.” says the AIOC news release.

The loan guarantees help Indigenous communities investments in natural resources, agriculture, transportation, and telecommunications. It has a loan guarantee budget of up to $3 billion.

As of December 2023 (when the announcement was made), AIOC had guaranteed loans of $661 million to 39 Indigenous communities.

Tyler Letendre, PTFN Development Corporation director of operations, was on the negotiating committee as the representative for Kee Tas Kee Now Tribal Council. KTC includes Peerless Trout, Loon River, Lubicon Lake Band, Whitefish Lake, and Woodland Cree.

The negotiating committee ended up with five members representing the various tribal councils and individual nations.

“It’s almost like a mortgage; that’s the financial model of it,” says Letendre. “After 15 years that debt will be paid. The Indigenous communities are the investors.”

Letendre calls it “a huge benefit to the Nation.”

The investment includes returns even as the loan is being paid off, adds Letendre. After the loan is paid off in 15 years, all of the investment shares become returns, which go into the community.

“It’s the next generation that will benefit,” he says.

The shares go to the Indigenous community governments. The Indigenous communities elected officials and administration decide how to use the money.

“This type of deal, to own 85 per cent of an oilfield asset, is definitely a first for Northern Alberta at least,” says Letendre. “It was a learning process, but overall, the experience was really great.”

Other AIOC projects

In August 2020, Whitefish Lake First Nation (#459) was also one of six Indigenous community partners, which received an AIOC loan guarantee of $93 million to invest in a natural gas electrical power plant by Edson, AB called the Cascade Power Project. The plant started operating in June 2023.

Sucker Creek First Nation is one of five which have invested in a 15-megawatt cogeneration (steam and power) plant at the Wembley Gas Plant.

AIOC’s website has information on other projects, which do not have a local Indigenous group involved. The projects listed are three pipelines and cogeneration plant by Cold Lake.

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