The acquired properties include 63 billion cubic feet equivalent (Bcfe) of reserves of which 51Bcfe is proved developed producing. The acquisition also includes an additional estimated unproven reserve potential of 67Bcfe to 190Bcfe based primarily on infill drilling opportunities.
Net production as of the effective date of the transaction was approximately 14.5 million cubic feet equivalent per day, 92% of which was natural gas. Approximately 63% of the daily production will be from wells operated by Fidelity.
The purchase price for the properties is $113m, or $1.80 per thousand cubic feet equivalent of proven reserves, subject to accounting and purchase price adjustments customary with acquisitions of this type. The effective date of the acquisition is October 1, 2009, with the expected closing date to occur on or before April 29, 2010.
Terry Hildestad, president and CEO of MDU Resources, said: ”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.”
