Jun. 15, 2010 (Business Wire) -- MDU Resources Group, Inc. (NYSE:MDU) is conducting its Annual Analyst Tour beginning today in the North Dakota Bakken area. Management will be conducting presentations that include providing resource information for its Bakken acreage.
Earlier this year the company acquired approximately 40,000 net acres in the North Dakota Bakken area, bringing the total acreage to more than 56,000 net acres.
Drilling plans for the Mountrail County acreage totaling 16,000 net acres include the drilling of approximately 10 wells this year. The company projects gross estimated ultimate recoveries (EUR) of 250,000 to 450,000 barrels of oil equivalents per well. Utilizing the current rig under contract, it expects to drill 13 wells in 2011. Approximately 20 future operated Middle Bakken infill locations and 30 to 45 potential Three Forks locations have been identified within the Mountrail County acreage. Additionally, the company expects to participate in a number of non-operated wells.
“We are excited to be showcasing our North Dakota Bakken acreage,” said Terry D. Hildestad, president and chief executive officer of MDU Resources. “Our first 30-day average production rates in our Mountrail County acreage have been very strong and are reflective of what other producers in the immediate area have experienced. Wells in this developed area of the Bakken tend to be lower-risk and results are increasingly repeatable. We’ve produced approximately 1.5 million net barrels of oil from this area in less than three years. Our current production is 3,000 net barrels per day which is up 75 percent from a year ago.”
For the 40,000 net acres of Bakken region leaseholds held in Stark County, the Heart River project, plans include drilling three wells this year to evaluate the acreage. Future drilling plans for this acreage will be determined once results are analyzed for the three delineation wells and could include adding an additional drilling rig in the Bakken region next year. Lease terms extend up to five years including renewal options available to the company. A total of 60 drilling sites have been identified in this area based on 640-acre spacing. Gross EUR potential for the acreage is estimated at 250,000 to 500,000 barrels of oil equivalents per 640-acre location.
The company also earlier announced the acquisition of 80,000 net acres in the emerging Niobrara oil play in Laramie and Goshen Counties in southeastern Wyoming and north central Colorado. The company plans to begin drilling in the area in early 2011. Assuming 640-acre spacing, the company has 120 drilling sites available on this acreage. Lease terms are generally five years with most having five-year renewal options available to the company. Although this emerging play is still developing in terms of resource potential, early results announced by other producers in nearby acreage appear promising.
Hildestad added, “Our recent leasehold acquisitions in the Bakken and Niobrara areas are expected to add substantial value to the corporation. These leasehold additions were acquired at very attractive prices and broaden our long-term growth potential with additional exposure to oil, which provides more balance to our portfolio.
“We also plan to discuss growth opportunities we have in our utility, pipeline and construction businesses. We are in the right industries that will provide the incremental energy and infrastructure our country needs as it continues to recover and grow. Our strategy has delivered significant value to shareholders in the past, and we believe the future potential of our company to continue to grow and create wealth for shareholders is bright.”
Presentation slides associated with the company’s Annual Analyst Tour can be accessed at www.mdu.com.
The information in this release includes certain forward-looking statements, including estimated number of wells to be drilled, future drilling sites, acre spacing and ultimate recovery of barrels of oil equivalents, as well as statements by the president and chief executive officer of MDU Resources Group, Inc. regarding plans to develop leaseholds, within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations are based on reasonable assumptions, actual results may differ materially. Important factors that could cause actual results to differ materially from those in the forward-looking statements include fluctuations in commodity prices and commodity price basis differentials; drilling successes; the timely receipt of necessary permits and approvals; the ability to contract for or to secure necessary drilling rig and service contracts; to retain employees to drill for and develop reserves; the ability to obtain economic financing; changes in reserve estimates; and revised or additional environmental laws and regulations. For a discussion of other important factors that could cause actual results to differ materially from those expressed in the forward-looking statements, refer to Item 1A – Risk Factors in MDU Resources’ most recent Form 10-K and Form 10-Q.
MDU Resources Group, Inc., a Fortune 500 company and a member of the S&P MidCap 400 index, provides value-added natural resource products and related services that are essential to energy and transportation infrastructure, including regulated businesses, an exploration and production company and construction companies. MDU Resources includes regulated electric and natural gas utilities and regulated natural gas pipelines and energy services, natural gas and oil production, construction materials and contracting, and construction services. For more information about MDU Resources, see the company's website at www.mdu.com or contact the Investor Relations Department at investor@mduresources.com.
