NEW TOWN - Tribal chairman Marcus Wells Jr. said he saw a bald eagle fly just above the butte ridge the day he agreed to an historic oil tax agreement with the state of North Dakota.

As fate would have it, a few weeks later Marathon Oil Co. started drilling that butte overlooking Lake Sakakawea, the first well on the Fort Berthold Indian Reservation in decades and the first ever to probe the lucrative Bakken formation inside the boundary.

Wells and Gov. John Hoeven met in the tribal chambers at New Town Tuesday to sign an agreement that will streamline tribal and state oil taxes into one and hopefully open the oil spigot wide open in an area where 72 rigs are at work.

The agreement ends an unattractive double tax on some wells and it makes the state the single tax collector, paying out a percentage to the tribal government.

It's estimated as many as 800 new Bakken wells could be drilled on the reservation and the tribe's share could be as much as $11 million annually. The tribe also will get 18 percent of the value of each barrel produced on tribal trust acres.

The new tax system goes into effect July 1. In it, the tribe gets half of the 11 percent production and extraction tax on trust land and 1 percent of 5 percent tax on fee land.

Tribal vice chairman Marcus Wolf said the agreement benefits all people, not just the tribe.

"We need to be fair with one another and to live together," Wolf said.

The agreement will last for two years and be revised, if necessary, Wells said.

Wells said the tax revenue will go toward roads, health care and law enforcement on the reservation, nothing extravagant.

"We want to be independent, not dependent on the federal government and this is another one of those steps," Wells said.

Hoeven said the tribal chambers were the right place to sign the agreement.

"This will truly make a difference here on the reservation," Hoeven said.

Most trust land - whether it's allotted to individuals and to the tribe - has been leased, but drilling has been slow, even though a portion of the reservation includes Mountrail County, where some Bakken wells are coming in at a phenomenal initial rate.

Tribal attorney Damon Williams said there's a perception that the double tax was a barrier to oil development, but the real barrier is the 45-step process to get tribal oil leases and permits through the Bureau of Indian Affairs.

The Marathon well presaged by the eagle's flight took nearly three years to get permitted, the company said.

Hoeven's legal counsel Ryan Bernstein said the governor plans to lean on BIA officials next week in Washington, D.C., "to get them to step it up on leases."

He said the administration also will meet with the Environmental Protection Agency on the tribe's plan for an oil refinery, which already has been approved by regional EPA officials.

(Reach reporter Lauren Donovan at 888-303-5511 or lauren.)@westriv.com