U.S. Indian tribe exits Alberta CBM plays

Colorado’s Southern Ute Indian tribe has left Alberta’s coalbed methane plays to concentrate on its U.S. Rockies and Midcontinent operations.

It sold all of its Canadian coalbed methane assets for US$175 million to Trident Exploration, having tripled the value of its investment in three years.

The original stake included a C$15 million purchase of shares in Trident, which was announced by the U.S. Department of Interior’s Indian Affairs office in 2002.

The tribe later added half of Trident’s stake in a joint venture with Canadian independent Nexen. Privately owned Trident was formed in 2000 to concentrate on exploration and development of coalbed methane in Western Canada and is one of the leading companies in the Horseshoe Canyon and emerging Mannville plays.

The assets include 100 percent of Southern Ute’s working interest in the Fort Assiniboine joint venture, which has recently been elevated to commercial status.

Trident is a front-runner in Alberta’s coalbed methane sector, with more than 40 full-time employees. Its operating subsidiary has released rigs on more than 500 wells in 2004 and so far this year. Southern Ute plans to shift its attention to exploration and production and midstream operations in the United States, where it expects to spend US$500 million in 2006.

—Gary Park