A Canadian firm says it has a deal with a land-grant association that could open up parts of Rio Arriba County to petroleum drilling that previously were restricted by questionable land titles.

Wind River Energy Corp. says it has agreements with the board of trustees of the Tierra Amarilla Land Grant that could mean billions of barrels of oil, mostly from shale deposits that require "fracking."

"Wind River believes that the waiver will resolve a 150-year-old historical title cloud that has constrained oil and gas development on the Tierra Amarilla Land Grant," a recent news release says.

The Vancouver, British Columbia-based company has issued three news releases since late last year, announcing it has acquired from a Texas firm a waiver and an indemnification agreement with the Tierra Amarilla Lane Grant board, which was paid $233,979.

Wind River's Denver-based president and chief executive officer, Jack Steinhauser, said the news releases are public disclosures required by the regulations of the Toronto Venture Exchange, where Wind River's stock is traded.

Steinhauser said if oil or gas production begins on Wind River's leases around Tierra Amarilla, royalties will be paid to various mineral-rights owners, including ranchers, other private parties and the state. The agreement with the land-grant board, he said, "eliminates any potential challenge to the title that would slow down drilling in the future."

"Our appearance on the scene has been welcomed by the landowners out there who are keen for us to drill," Steinhauser said. "But it has stirred up controversy among the heirs, as they are called, primarily because they didn't realize that the land grant was empowered to make these kinds of things and that the board could do that, and then a third issue, of course, which is, 'Where is the money going to go?,' and that's an internal matter for the land-grant association."

Dennis Wells, a former Chama town planner who is chairman of the Tierra Amarilla Land Grant board, confirmed that he is negotiating with Wind River. "That's in the process," he said. "That's what we're trying to deal (with) and get the heirs money."

Asked if he had accepted the $233,979 and how it would be distributed to land-grand heirs, he said, "That's controversial right now. We can't discuss that."

Carmen Quintana, who is known for her involvement with Santa Fe land grants, was one of nine directors of the Tierra Amarilla Land Grant listed in online state corporation records that expired in 1998. She said she was removed from the board after she questioned drilling in the area by the Hughes Oil Co.

"There's a lot of people in the land-grant movement now that only want money," she said. "They don't care what they do to the future of the county or the country or anything. They just want money in their own lifetimes."

Others familiar with the situation say Wells and other Tierra Amarilla Land Grant board members accepted a similar amount from another Texas company for a waiver and indemnification about a year ago.

Wind River's news releases contain a history of the Tierra Amarilla Land Grant, covering more than 500,000 acres, mostly in New Mexico but also in Colorado, from 1821 to the present. It was prepared by Santa Fe attorney James Bruce, who was the agent for two Dallas companies, Rio Chama Oil Co. and Petro Rio Oil & Gas Properties, that previously held the waiver from the land-grant association.

Natural gas has been produced for decades in the portions of the San Juan Basin — on the Jicarilla Apache Reservation, the far west portion of the Carson National Forest and other parts of northwestern Rio Arriba County.

According to Wind River's news release, up to 60 billion barrels of oil are available in Rio Arriba's northeast, around Tierra Amarilla, via the Niobrara formation — a 40-mile-long member of the 1,700-foot-thick Mancos shale layer that can be easily fractured to produce oil.

Fracking — fracturing underground rock strata by injecting water and chemicals — can damage the environment, according to Santa Fe filmmaker Debra Anderson's documentary Split Estate, which won an Emmy last year. Many who objected to a Houston firm's exploration for petroleum between Cerrillos and Galisteo said fracking could pollute water aquifers. But Steinhauser said there has not been "one proven case of groundwater contamination" from fracking despite the process being used on more than 1 million wells over 60 years.

Of about 200 petroleum wells drilled around the Tierra Amarilla Land Grant, including 12 in the last 20 years, some have produced small amounts of oil and gas, but none has been commercially viable, Steinhauser said. He said the past wells have been drilled by small, independent operators, while larger operators with the technology to make the wells commercially productive have steered clear of the area because of the questionable titles on both surface and mineral rights.

"The ranchers are very happy to see us coming. They haven't leased their land for some time," Steinhauser said. "We can bring great benefits to landowners, to local people living there. This area is, as you know, fairly economically depressed. There's not a lot going on there."

Contact Tom Sharpe at 986-3080 or tsharpe@sfnewmexican.com.