MDU Resources Subsidiary Announces Agreement to Purchase Green River Basin Production Assets

BISMARCK, N.D.--(BUSINESS WIRE)--Fidelity Exploration & Production Company, the wholly owned natural gas and oil production subsidiary of MDU Resources Group (NYSE: MDU), announced that it signed a purchase and sale agreement on March 15, 2010, to acquire producing natural gas properties located in the Green River Basin in Sweetwater and Carbon counties in southwest Wyoming.

“This acquisition further broadens our position in the Rocky Mountain region and supports our production and reserve growth objectives”

Based on estimates by Fidelity’s reservoir engineers, the acquired properties include 63 billion cubic feet equivalent (Bcfe) of proven reserves of which 51 Bcfe is proved developed producing. In addition, the acquisition includes an additional estimated unproven reserve potential of 67 Bcfe to 190 Bcfe based primarily on infill drilling opportunities. Net production as of the effective date of the transaction was approximately 14.5 million cubic feet equivalent per day, 92 percent of which was natural gas. Approximately 63 percent of the daily production will be from wells operated by Fidelity.

The purchase price for the properties is $113 million, or $1.80 per thousand cubic feet equivalent of proven reserves, subject to accounting and purchase price adjustments customary with acquisitions of this type. The effective date of the acquisition is Oct. 1, 2009, with the expected closing date to occur on or before April 29, 2010. The acquisition is expected to be accretive to 2010 earnings per share and financed through a combination of internal funds and other borrowings.

“This acquisition further broadens our position in the Rocky Mountain region and supports our production and reserve growth objectives,” said Terry D. Hildestad, president and chief executive officer of MDU Resources. “The producing properties provide immediate production and cash flows and the unproven reserves provide low risk development opportunities.”

The information in this release includes certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements contained in this release, including statements by the president and chief executive officer of MDU Resources and those with respect to the anticipated effect of the transaction upon earnings per share, are expressed in good faith and are believed by the company to have a reasonable basis. Nonetheless, actual results may differ materially from the projected results expressed in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the ability to effectively integrate the acquired properties; the satisfaction of closing conditions; fluctuations in natural gas and crude oil prices; fluctuations in commodity price basis differentials; drilling successes in natural gas and oil operations; the timely receipt of necessary permits and approvals; the ability to contract for or to secure necessary drilling rig contracts and to retain employees to drill for and develop reserves; other risks incidental to the operation of natural gas and oil wells; and the effects on operations of extensive environmental laws and regulations. For a discussion of other important factors that could cause actual results to differ materially from those expressed in the forward-looking statements, refer to Item 1A – Risk Factors in MDU Resources’ most recent Form 10-K.

MDU Resources Group, Inc., a Fortune 500 company and a member of the S&P MidCap 400 index, provides value-added natural resource products and related services that are essential to energy and transportation infrastructure, operating in three core lines of business: utility resources, energy and construction materials. MDU Resources includes electric and natural gas utilities, construction services, natural gas and oil production, natural gas pipelines and energy services, and construction materials and contracting. For more information about MDU Resources, see the company's Web site at www.mdu.com or contact the Investor Relations Department at [e-mail].