A unit of Japan’s ITOCHU Corp. is to acquire a one-quarter interest in Niobrara oil shale acreage in southeastern Wyoming, marking the first time a Japanese company is participating in a U.S. oil shale project.
MDU Resources Group Inc.’s Fidelity Exploration & Production Co. has agreed with JD Rockies Resources Ltd., a U.S. subsidiary of ITOCHU, to sell a 25% working interest in 88,000 net acres in the Niobrara play. The deal is expected to be completed in early December; terms were not disclosed.
“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,” said MDU CEO Terry Hildestad. “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.”
ITOCHU will be the first Japanese company to participate in a shale oil project in the U.S., according to MDU. Drilling of the initial Fidelity operated wells and subsequent production in the Niobrara play is likely to begin in 2011, MDU said.
ITOCHU was founded in 1858 and trades on the Tokyo Stock Exchange. The company is involved in domestic trading, import/export and overseas trading of textiles, machinery, information and communications technology, aerospace, electronics, energy, metals, minerals, chemicals, forest products, general merchandise, food, finance, realty, insurance and logistics services.
Annual revenues of ITOCHU exceed US$34 billion. The company’s energy division is participating in oil and gas development and production projects in Azerbaijan, the North Sea, Australia, Algeria and Russia. It also is involved in liquefied natural gas projects in Qatar and Oman.
The deal follows on the heels of a deal in which China’s CNOOC Ltd. is buying a stake in the Eagle Ford Shale in South Texas from Chesapeake Energy Corp. (see Shale Daily, Oct. 12).
© 2021 Natural Gas Intelligence. All rights reserved.
ISSN © 2577-9877 | ISSN © 2158-8023 |