MDU Resources Picks Up Stake in Big Horn Basin in Wyoming
MDU Resources Group says that its subsidiary, Fidelity Exploration & Production Company, has closed on the acquisition of oil and natural gas properties located in the Big Horn Basin of Wyoming.
In total, Fidelity acquired 51 billion cubic feet equivalent (Bcfe) of proven reserves of which 45 percent is oil, 44 percent natural gas, and 11 percent natural gas liquids. In addition, over 75 Bcfe of estimated probable and possible reserves are associated with the acquired properties. The purchase price for these properties is approximately $88.5 million, or $1.74 per thousand cubic feet equivalent of proven reserves, subject to accounting and purchase price adjustments customary for oil and natural gas acquisitions of this type. A portion of the purchase price is attributable to the substantial value associated with the estimated 75 Bcfe of probable and possible reserves identified with these properties. Additional future consideration may be paid to the seller if certain production targets are met.
"This acquisition increases Fidelity's operated asset base in the Rocky Mountain region and provides additional diversity to its proven reserve mix by adding long-term oil and natural gas reserves and new producing formations," said Martin A. White, chairman of the board and chief executive officer of MDU Resources. White added that the location of these assets will allow for vertical integration with the company's interstate natural gas pipelines and energy-related management services creating additional value potential from the acquisition. "These high-quality, concentrated proven reserves, combined with the probable and possible reserve upside, have long-term development and exploitation potential that fit very well into our existing operations and strategic direction."
Fidelity will operate the new assets which are expected to be
accretive to earnings per share. The closing date of the acquisition
was May 1, 2006, with an effective date of March 1, 2006.
- MDU Resources Eyes More Interest For Bakken Gas Pipeline (Mar 24)
- Fidelity E&P Acquires Proven Gas Reserves of 63 Bcfe (Mar 17)
- Fidelity E&P Broadens Position in Rocky Mountain Region (Mar 16)