2010-10-21-2010-10-15

To buy 25% WI in 88,000 net acres in Niobrara oil shale project in SE WY.

Japanese conglomerate Itochu Corp., Tokyo, (Tokyo: 8001), through its U.S. subsidiary JD Rockies Resources Ltd., plans to acquire a 25% working interest in a Niobrara project in southeastern Wyoming from Fidelity Exploration & Production Co., a subsidiary of MDU Resources Group Inc., Bismarck, N.D., (NYSE: MDU) for an undisclosed price. The acquisition marks the first time a Japanese company has participated in a U.S. shale oil project.

The prospect covers approximately 88,000 net acres in the Niobrara oil shale play. Drilling of the initial Fidelity operated wells and subsequent production in the Niobrara play is likely to begin in 2011. JD Rockies estimates its portion of the total development costs will be approximately $390 million.

Itochu's energy division is presently participating in oil and gas development and production projects in Azerbaijan, the North Sea, Australia, Algeria and Russia. They also are involved in liquid natural gas projects in Qatar and Oman.

MDU Resources president and chief executive Terry Hildestad says, "Fidelity acquired its Niobrara leasehold position earlier this year and interest in the play has continued to increase with multiple oil and gas companies entering or expanding their position. Leasehold costs in the play have also increased since the beginning of the year and selling down a portion of the position to a well-capitalized partner helps manage Fidelity's overall portfolio risk and capital requirements."

The deal is expected to close in early December.