Fidelity Exploration & Production, a subsidiary of MDU Resources, has signed an agreement with JD Rockies Resources to sell a 25% working interest in approximately 88,000 net acres in the Niobrara oil shale play in Wyoming.
The transaction is expected to be completed in early December of this year.
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, MDU Resources said.
MDU Resources president and CEO Terry Hildestad said that 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.
Drilling of the initial Fidelity operated wells and subsequent production in the Niobrara play is expected to begin in 2011.
MDU Resources provides value-added natural resource products and related services for energy and transportation infrastructure.