MDU Resources Group Inc. (NYSE: MDU) reports that its indirect wholly owned subsidiary, Fidelity Exploration & Production Co., has agreed to purchase working interests and leasehold positions in oil and natural gas production assets in the southern Powder River Basin of Wyoming from undisclosed private sellers.
The oil and natural gas properties, located in Converse County, Wyoming, consist of primarily undeveloped mineral leasehold positions of approximately 41,000 gross acres and 23,700 net acres. The acquisition is expected to be accretive to 2014 earnings per share.
The purchase also includes working interests in a number of producing wells and an ongoing two rig development drilling program targeting the heart of the prolific Frontier play. Current net production is more than 1,100 barrels of oil equivalent per day, 80% of which is oil, with additional production expected to be on line before closing. In addition to the Frontier, the acreage is prospective in multiple other zones that may significantly enhance its value.
The effective date of the acquisition is Oct. 1, 2013, with the expected closing date to occur on or before April 1.