Case Study: Innovative Financing

DGS represented the Ute Indian Tribe of the Uintah and Ouray Reservation in structuring and negotiating an innovative financing vehicle designed to enable the Tribe to develop a number of its oil and gas properties in the Uintah Basin. This transaction required our attorneys to combine a broad array of public lands, oil and gas, corporate finance and real estate expertise to develop a special purpose Delaware entity that could serve as an investment vehicle through which a private equity fund invested equity and debt capital to be used by the Tribe to finance its share of development costs for its oil and gas assets.  DGS attorneys worked with the Tribe to adopt the uniform commercial code and real property recording statutes necessary to permit the Tribe and others doing business on the reservation to grant enforceable personal and real property liens on reservation lands. The financing structure was designed to allocate project and financing liabilities to the special purpose entity and to protect the Tribe's sovereign rights and revenue sources related to these assets. This transaction required a thorough understanding of the the interaction of tribal, federal and Utah state law, and the applicability of those laws to tribal activities conducted on tribal lands through non-tribal entities, as well as the effect of those laws on issues such as the jurisdiction in which disputes could be legally resolved. The transaction also required DGS to adapt corporate governance and fiduciary duty principles for a special purpose entity where the majority owner is a sovereign Indian tribe with special public policy concerns and responsibilities. We also worked with the Bureau of Indian Affairs to obtain approval of the transaction under the federal Non-Intercourse Act and other applicable laws and regulations governing Indian tribes, as well as with the joint venture parties and operators of the oil and gas properties involved in the transaction.