MDU Resources Group Inc. (NYSE: MDU) has announced that its indirect wholly owned subsidiary, Fidelity Exploration & Production Co., signed a purchase and sale agreement for the sale of certain oil and natural gas production assets in Mountrail County, N.D., with an effective date of May 1, 2014. The sale price is $200 million plus customary closing adjustments with closing expected by Sept. 30.
The assets sold consist of approximately 4,363 net acres with net daily production of approximately 2,000 barrels of oil per day from 81 gross wells, 49 of which are operated by Fidelity. The company will continue to hold 12,000 net acres in Mountrail County.
“The sale represents continued success with Fidelity’s growth strategy of acquiring carefully targeted assets, developing them over time, capturing that growth through monetization, and redeploying the capital to repeat the growth cycle,” said Kent Wells, CEO of Fidelity Exploration & Production Co.
“Fidelity has operated in Mountrail County since 2007 and we have been pleased with our results there,” said David Goodin, president and CEO of MDU Resources. “This sale is an opportunity to monetize a portion of our success, but Mountrail County and our other Bakken assets will continue to be an important part of Fidelity’s strategy.”
Fidelity’s exploration and production strategy is focused on three top-tier oil plays. In addition to the Bakken, Fidelity holds approximately 130,000 net acres in the Paradox Basin in Utah and 24,500 net acres in the southern Powder River Basin in Wyoming that were acquired in March for approximately $200 million.
The company plans to update its 2014 guidance with the second quarter earnings news report scheduled for release after market close Aug. 4.
MDU is based in Bismarck, N.D.
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