Osage Minerals Council contentiously debates contract

Robert Smith
Pawhuska Journal-Capital

The Osage Minerals Council on May 18 held a contentious debate regarding the merits of an oil-and-gas development contract.

The contract was intended to offer the Minerals Council new opportunities to monetize “mature” oil-and-gas resources in Osage County.

A video of the debate was made available online via YouTube.

At issue was what step to take next regarding the contract, which was signed in late December 2021 with MI3 Petroleum Engineering, a firm based in Golden, Colorado.

Council members Susan Forman and Paul Revard asserted the contract had been improperly executed without full council consideration and should be nullified.

A 5-member majority defeated a motion that Forman put forward and Revard seconded. The majority — consisting of councilors Margo Gray, Marsha Harlan, Talee Redcorn, Myron Red Eagle and Chairman Everett Waller — then voted to approve Harlan’s motion that the contract should be terminated in the form in which it had been approved, and the council should call on attorneys Wilson Pipestem and Tim Dowd to help “rework” it.

The contract controversy erupted with less than a month to go before elections for seats on the Minerals Council, which is tasked with protecting the interests of shareholders in the Osage mineral estate.

The contract was listed on the council’s May 18 agenda as an executive session discussion item, but the councilors took it up in open session at the beginning of the meeting, which was held virtually via Zoom.

Councilor Redcorn said he would like to talk about the MI3 contract in open session, with MI3 represented in the discussion. Redcorn complained there had been misinformation regarding the contract.

The document had been leaked to the public and had become a subject of speculation on social media platforms.

The council’s conversation appeared to go forward without any participation by MI3.

Councilor Revard welcomed the opportunity for an open-session exchange about the contract.

”I can’t wait for this to be exposed to the public,” Revard said. “Our headright owners need to know what is being perpetrated behind closed doors.”

Redcorn objected to Revard’s characterization of how the relationship between the Minerals Council and M13 had been developing.

”There’s nothing been done in secret,” Redcorn said, adding that it is not his job to educate other councilors. Redcorn alluded during the debate to what he said was the possibility that the MI3 contract could result in billions of dollars of revenues for Osage headright owners. He also spoke briefly of a selection process of some kind, in which he had rated MI3 as the second-most-desirable firm with which to work.

Councilor Forman countered what Redcorn said about secrecy. She said the MI3 contract was secretly executed, and neither she nor Revard knew about that until May 6.

Forman described the contract with MI3 as one-sided in favor of the company. Revard termed the contract an “atrocity.”

Forman also said the contract was an agreement “of the greatest material significance.” She projected that it would alter “the course of development, control and protection of the mineral estate” while minimizing or possibly eliminating the responsibilities of the Minerals Council.

Forman acknowledged that the council had authorized its chairman, Councilor Waller, to develop a contract, but said Waller had not been empowered to move ahead and execute the document.

Forman specifically alleged during the meeting that Waller, Redcorn and Gray had held secret meetings.

Redcorn denied there had been secrecy, as did Gray, who complained that she had been slandered and defamed.

Waller did not respond to efforts by the Journal-Capital to contact him for comments.

Gray, Redcorn, Red Eagle, Revard and Waller are candidates for re-election. The election for Minerals Council seats is scheduled for June 6, contemporaneously with Osage Nation elections for executive and legislative branch positions. What is different about Minerals Council elections is that only owners of headrights, or portions of headrights, may vote.

Forman, who is not running for re-election, made two motions May 18 intended to help make sure that headright owners are able to vote in the upcoming election and have their votes counted.

One motion called for extending the deadline for counting absentee votes. The second motion called for mailing absentee ballots to all eligible headright owners. Both motions were defeated.