MDU Completes Purchase Of Oil And Gas Assets In Southern Powder River Basin, Converse County, Wyoming; Most Likely A Niobrara Play

Source: MDU press release --

MDU Resources Group, Inc. (NYSE:MDU) announced today its indirect wholly owned subsidiary, Fidelity Exploration & Production Company, closed on the purchase of oil and natural gas production assets in Converse County, Wyo., in the southern Powder River Basin, with an effective date of Oct. 1, 2013.

The purchase price was approximately $183 million plus accounting and purchase price adjustments customary with acquisitions of this type and is expected to be accretive to 2014 earnings per share.

"We identified the area last year for establishment of our third oil play and our team successfully sought out acreage in this top-tier basin," said David L. Goodin, president and CEO of MDU Resources.

"The upside potential of its multiple prospective zones is appealing to us and we anticipate it will result in a long-lived production asset."

The acquisition consists primarily of non-operated undeveloped mineral leasehold positions of approximately 42,100 gross acres and 24,500 net acres. In January, the properties had existing net production of more than 1,100 barrels of oil equivalent per day, 80 percent of which is oil. Plans for 2014 include a two-rig seasonal drilling program targeting the heart of the prolific Frontier play.

About $7,500/acre -- already producing.

Converse County is east of Casper, Wyoming, just west of the South Dakota/Nebraska state line. It is about twice the size of Williams County, North Dakota.

There are four unconventional "plays" in the basin but the Niobrara is probably the most discussed at the present time. 

I track the Niobrara here.