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Devon to be Repaid and Retreat from Badger-Two Medicine Development

The Department of Interior on Wednesday reached a milestone settlement with Devon Energy Corp. to cancel 15 oil and natural gas leases in northwest Montana, an area considered sacred by the Blackfeet Tribe.

Interior Secretary Sally Jewell, in an event with members of the Blackfeet Nation and Devon CEO Dave Hager, said Devon would be entitled to a refund for all bids and other payments totaling $206,058 for the leases it held in the Badger-Two Medicine Area. The accord with Devon retires more than 32,254 undeveloped acres.

"This is the right action to take on behalf of current and future generations," Jewell said. The agreement protects the region's "rich cultural and natural resources and recognizes the irreparable impacts that oil and gas development would have on them."

Interior collaborated with the Blackfeet Nation, U.S. Forest Service (USFS) and Devon “to achieve this important milestone, rolling back decades-old leases and reinforcing the importance of developing resources in the right ways and the right places," she said.

"We know how important this is to the Blackfeet people, and we appreciate the work the Interior Department has done to make it possible," Hager said. "For Devon, cancellation of these leases at this time is simply the right thing to do...

“One of the core values that we have is to be a good neighbor. We certainly think this is a great opportunity to demonstrate the fact that we can be a good neighbor in this situation.”

The cancellation respected recommendations by the USFS, the Advisory Council on Historic Preservation, and concerns expressed by the Blackfeet.

Half of Devon's reimbursement is to come from the Treasury Department account that receives royalties for onshore oil and gas development while the other half would be paid by Montana, which also receives royalty payments. Because the land was never developed and remains undisturbed by energy exploration and development, Devon would not need to pay for any reclamation.

The 130,000 acres in Badger-Two Medicine are situated along the Rocky Mountain Front within the Lewis and Clark National Forest. Glacier National Park, the Bob Marshall Wilderness and the Blackfeet Indian Reservation surround the area, considered sacred by the Blackfeet and part of a recognized Traditional Cultural District.

Under President Reagan, Interior issued 47 drilling leases in Badger-Two Medicine to operators. The unique characteristics of the area led Congress to legislatively withdraw Badger-Two Medicine from mineral development in 2006. Most of the original leaseholders, including BP plc and Occidental Petroleum Corp., relinquished their leases after taking advantage of tax incentives enacted by Congress.

At the start of 2016, only 17 leases still remained, with Devon owning 15.

Jewell in March canceled a Montana oil and gas lease held by Solonex to avoid tribal conflict. Solonex had sued for permission to drill on the land tied to the leases, which dated to 1982. Interior said then the lease had been issued improperly in violation of the National Environmental Policy Act and the National Historical Preservation Act.

Montana Sen. Jon Tester (D), who joined Jewell, Hager and Blackfeet representatives in Washington, DC, said there were "special places in this world where we just shouldn't drill, and the Badger-Two Medicine is one of those places. This region carries great cultural and historical significance to the Blackfeet Tribe." The "announcement will ensure that the Badger-Two Medicine will remain pristine for both the Tribe and the folks who love to hunt, hike, and fish near Glacier Park and the Bob Marshall Wilderness."

The Blackfeet Tribe's "pursuit to protect the Badger-Two Medicine has lasted more than three decades, and it will continue until all the illegal oil and gas leases are canceled and the area is permanently protected,” Blackfeet Chairman Harry Barnes said. "This area is sacred to the Blackfeet people, and we appreciate that others are starting to recognize it as well. There are many who have helped us get to this point today, but I want to especially recognize Devon Energy for its leadership and willingness to partner with Indian Country."

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