MDU Resources Announces Agreement to Purchase Powder River Basin Production Assets
BISMARCK, N.D.--(BUSINESS WIRE)--MDU Resources Group, Inc. (NYSE: MDU) announced today that its indirect wholly owned subsidiary, Fidelity Exploration & Production Company, agreed to purchase working interests and leasehold positions in oil and natural gas production assets in the southern Powder River Basin of Wyoming from undisclosed private sellers.
“Our oil and gas company has been seeking another world-class oil resource to complement our established core assets in the Bakken in North Dakota and the Paradox Basin in Utah”
The oil and natural gas properties, located in Converse County, Wyo., consist of primarily undeveloped mineral leasehold positions of approximately 41,000 gross acres and 23,700 net acres. The acquisition is expected to be accretive to 2014 earnings per share.
The purchase also includes working interests in a number of producing wells and an ongoing two rig development drilling program targeting the heart of the prolific Frontier play. Current net production is more than 1,100 barrels of oil equivalent per day, 80 percent of which is oil, with additional production expected to be on line before closing. In addition to the Frontier, the acreage is prospective in multiple other zones that may significantly enhance its value.
“Our oil and gas company has been seeking another world-class oil resource to complement our established core assets in the Bakken in North Dakota and the Paradox Basin in Utah,” said David L. Goodin, president and CEO of MDU Resources. “The Powder River Basin is an area we know very well, and we have the geographic, technical and regulatory expertise to make this a long-lived production base.”
The effective date of the acquisition is Oct. 1, 2013, with the expected closing date to occur on or before April 1, 2014, conditioned upon completing a due diligence process, including environmental reviews, and satisfying other standard closing conditions.
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 crude oil and natural gas prices; fluctuations in commodity price basis differentials; drilling successes in oil and natural gas 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 oil and natural gas 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 and Form 10-Q.
About MDU Resources
MDU Resources Group, Inc., 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, including regulated utilities and pipelines, exploration and production, and construction materials and services. For more information about MDU Resources, see the company's website at www.mdu.com or contact the Investor Relations Department at email@example.com.