MDU Resources Group’s production subsidiary Fidelity Exploration & Production Co. said it has acquired producing natural gas properties located in the Green River Basin in Sweetwater and Carbon counties in southwest Wyoming for $113 million from an undisclosed seller.
Based on estimates by Fidelity’s reservoir engineers, the acquired properties include 63 Bcfe of proven reserves of which 51 Bcfe is proved developed producing. The company noted that the acquisition includes an additional estimated unproven reserve potential of 67 Bcfe to 190 Bcfe based primarily on infill drilling opportunities. Net production — as of the deal’s effective date of Oct. 1, 2009 — was 14.5 MMcfe/d, 92% of which was natural gas. Approximately 63% of the daily production will be from wells operated by Fidelity.
“This acquisition further broadens our position in the Rocky Mountain region and supports our production and reserve growth objectives,” said MDU Resources CEO Terry D. Hildestad. “The producing properties provide immediate production and cash flows and the unproven reserves provide low-risk development opportunities.”
The purchase price equates to $1.80/Mcfe of proven reserves, subject to accounting and purchase price adjustments. The transaction is expected to close on or before April 29.
Fidelity said the acquisition is expected to be accretive to 2010 earnings per share and was financed through a combination of internal funds and other borrowings. The company is engaged in gas and oil acquisition, exploration, development and production activities in the Rocky Mountain and Midcontinent/Gulf Coast regions of the United States.
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