Fidelity E&P To Add 63 Bcfe In WY Green River Basin For $113MM

Purchased Green River Basin properties in Sweetwater & Carbon counties, WY, gaining 63 Bcfe proved, 14.5 MMcfe/d.

The E&P subsidiary of MDU Resources Group, Bismark, N.D., (NYSE: MDU) Fidelity Exploration & Production Co.plans to acquire producing properties in the Green River Basin of southwestern Wyoming in Sweetwater and Carbon counties from an undisclosed seller for $113 million.

The assets include 63 billion cubic feet equivalent of proved reserves (51 billion proved developed producing). Net production is approximately 14.5 million cubic feet equivalent per day (92% gas; 63% operated). Upside includes an additional estimated unproven reserve potential of 67 billion equivalent to billion based primarily on infill drilling opportunities.

Fidelity values the deal at $1.80 per thousand cubic feet equivalent of proved reserves.

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

The effective date is Oct. 1, 2009. Closing is expected by April 29. The acquisition is expected to be financed through a combination of internal funds and other borrowings.