After a period of financial uncertainty and financial challenges,
the largest financial asset of the Nation finds success and growth on the horizon
St. Michaels, Arizona – After years of financial challenge caused by volatile oil prices and mismanagement by prior leadership, according to a press release the Navajo Nation Oil and Gas Company (NNOGC) is back on solid financial footing and entering a period of growth, according to its recently released annual report and audit. At the company’s annual meeting in Albuquerque, New Mexico, leadership presented its year-end report to Navajo Nation Shareholder Representatives showing that they received an unqualified opinion from auditors and made a profit for the first time since 2014. The Company’s upstream, midstream and downstream business units all showed a profit in fiscal year 2018.
“The Navajo Nation Oil and Gas Company is embarking on an exciting new chapter in our 20-year history,” said Louis Denetsosie, President and CEO of NNOGC. “We are now ready to rebuild our technical staff, invest in new business opportunities and increase the value of the nation’s most important financial asset. And we are pleased that despite our recent financial challenges, we were able to save 81 jobs, 98% of which are Navajo, and very valuable tribal assets, including the Running Horse Pipeline.”
The company had been in a holding pattern for the last several years because of the financial strain. Instead of looking for new opportunities to grow business, drill wells, or develop new convenience stores, the company’s sole focus has been to restore financial stability. Over the span of four years, NNOGC repaid $152.75 million to senior lenders without any financial assistance from the Navajo Nation. With their final payment, NNOGC recapitalized with a new credit facility from Guggenheim Partners, clearing the way for management to focus on reserve, business development, and shareholder value growth.
At the annual meeting, Company leadership attributed the successful turnaround to the support of the Navajo Nation Council, particularly the Budget and Finance Committee. “Their support in upholding the credibility of the company with the financial community helped to keep us focused and moving forward,” said Denetsosie. “We also could not have done this without the support of the shareholder representatives and the hard work and singular focus of the NNOGC Board and the entire team.”
“This remarkable turnaround isn’t just a success for the company, but for the entire Nation,” said Seth Damon, Chairman, Budget and Finance Committee of the Navajo Nation Council. “Continued growth will enable the company to make royalty payments, pay taxes and rights-of way payments, and provide scholarships and other contributions that are so important to the Nation.”
NNOGC is a diversified energy company operating in the upstream, midstream and downstream sectors of the oil and gas industry, both on and off Navajo Indian Reservation lands. The company owns and operates oil and natural gas interests primarily in the San Juan Basin in New Mexico and the Greater Aneth, Tohonadla and Desert Creek fields in southeast Utah. NNOGC has a new partner in the Aneth Field that is planning to significantly increase production in the coming years. And the company continues to own and operate the Running Horse Pipeline in southeast Utah and northwest New Mexico and gas stations on the Navajo Nation under the Navajo Petroleum and Chevron brands.
As the company looks ahead, they are focused on executing on a long-term growth plan that includes increasing crude oil production in the Greater Aneth Field, producing and processing helium, and expanding the number of its convenience stores. Its plan also includes hiring personnel to carry out these plans and to continue its search for investors, including the possibility of an investment from the Navajo Nation itself.
“Having a financial commitment from the Nation shows pride, ownership, and responsibility, and given the company’s growth plans, it is also a smart investment,” said Benjamin Bennett, NNOGC Shareholder Representative and Vice-Chairman of the Resource and Development Committee of the Navajo Nation Council. “We continue to be grateful to the leadership shown by the Speaker, the Controller, and members of the Navajo Nation Council.”
Core activities of the company include exploration, development, and production of oil and gas properties, transportation of crude oil and gas, wholesale of refined fuel products, and the management and operation of convenience stores and service stations.