Whiting Petroleum Corporation (NYSE: WLL) today announced that its subsidiary, Whiting Oil and Gas Corporation, sold to Bitter Creek Pipelines, LLC, a subsidiary of MDU Resources Group Inc., a 50% ownership interest in Whiting’s Belfield gas processing plant, gas gathering, oil gathering and related facilities located in Stark County, North Dakota.
The facilities include a newly constructed, state-of-the-industry natural gas processing plant and a natural gas gathering pipeline system connected to the plant. A natural gas residue line that ties into the Williston Basin Interstate Pipeline Company system (an MDU Resources subsidiary) is also included, along with a crude oil gathering system, a crude oil storage terminal and a crude oil pipeline that connects the terminal to the Bridger Pipeline. Whiting will continue to operate the facilities.
The Belfield natural gas processing plant has an inlet processing capacity of 35 million cubic feet per day. The oil terminal is currently under construction, with completion expected in the third quarter of 2012. It will have a storage capacity of 20,000 barrels of oil.
Under the agreement, Bitter Creek paid 60% of the capital costs of the project to date and will pay 60% of certain future capital costs with respect to its 50% ownership. A $66 million payment was made to Whiting at closing for capital and operating costs to date. Fidelity Exploration & Production Company, also a subsidiary of MDU, will dedicate gas production from its development activity in the area to the Belfield gas plant.James J. Volker, Whiting’s Chairman and CEO, commented, “We are pleased to have MDU Resources Group participate in the Belfield gas plant and the associated facilities and gathering systems. This agreement will free up capital for Whiting’s high growth drilling operations, particularly in the Williston Basin, and provide MDU access to processing and gathering capacity for its development in the area.”
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