MDU Resources Group, Inc. (NYSE:MDU) has announced that its wholly owned subsidiary, Fidelity Exploration & Production Company, reached a new Bakken production record of over 3,500 net barrels of oil per day from its operated wells. Including its non-operated production, the peak rate is now over 5,000 net barrels of oil per day. The company continues to drill strong wells on its Mountrail County acreage. The most recent eight wells are listed below:
|Well||Formation||Initial 24-hour rate (gross BOEPD)|
|TTT Ranch 34-27XH||Bakken||1,749|
|Lori 18-19H||Three Forks||804|
In Stark County, Fidelity is drilling its first two long-lateral Three Forks wells and has seen very encouraging shows on both wells. These wells are on its core central acreage block; the company will complete these wells and provide results as soon as the information is available and can be shared. Two offsetting wells to this acreage block were drilled by another operator and have initial 24-hour rates of 2,694 and 2,171 (gross BOEPD). Additionally, a short-lateral well was drilled by Fidelity on its far-eastern block to delineate the productive limits of the field; its 24-hour IP rate was 115 gross BOEPD. Based on these results, the company plans to have a two-rig program focused on its core central acreage block, with the second rig arriving in March.The company also recently acquired an additional 27,000 acres of leaseholds in Richland County, Montana. Fidelity now holds approximately 57,000 net leasehold acres in Richland County, all acquired in the past year. This acreage position is a contiguous block immediately adjacent to the prolific Elm Coulee field. The company has spud its first of two appraisal wells. Depending upon results, a continuous drilling program utilizing one to two rigs is being planned. “We now have the acreage, drilling rigs and services as well as the organizational capability and experience to sustainably grow our Bakken production,” said Kent Wells, president and chief executive officer of Fidelity. “Our systematic approach of appraising and continuously improving our drilling and production operations is starting to pay dividends and we have only just begun.” With the latest acreage acquisition, Fidelity holds a total of approximately 124,000 net leasehold acres in the Bakken area with plans to invest approximately $160 million in the region this year. “We will continue to expand our Bakken program as the results dictate,” Wells said. “Superior financial returns typically come from developing reserves in a world-class basin such as the Bakken, where economies of scale and continuous improvement make a notable difference.” Fidelity expects to be operating five drilling rigs in the greater Bakken area in the near term.
“We are excited about the momentum building within our oil development and exploration business,” said Terry D. Hildestad, president and chief executive officer of MDU Resources. “Overall, we’ve grown our deployed rig count from two rigs a year ago to nine rigs today. We are on our way to reaching our goal of increasing oil production by 20 percent to 30 percent this year over 2011, with plans to invest $400 million in this business this year.”Hildestad noted that Fidelity continues to look for other leasehold opportunities to augment the company’s reserves and production. Analyst SeminarThe company will host a webcast of its annual investor analyst seminar March 15 beginning at 8:30 a.m. EDT, concluding at approximately 12:00 p.m. EDT. Access is available at www.mdu.com. Senior management including operating company leads will provide an update on operational strategy and financials. Forward-Looking StatementThe information in this release includes certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements contained in this release, including statements by executive management of MDU Resources and Fidelity Exploration & Production Company, are expressed in good faith and are believed by the company to have a reasonable basis. Nonetheless, actual results may differ materially from the projected results expressed in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the fluctuations in crude oil and natural gas prices; fluctuations in commodity price basis differentials; drilling successes in natural gas and oil operations; the timely receipt of necessary permits and approvals; the ability to contract for or to secure necessary drilling rig contracts and to retain employees to drill for and develop reserves; other risks incidental to the operation of oil and natural gas wells; and the effects on operations of extensive 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. Company Information MDU Resources Group, Inc., 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 utilities and pipelines, exploration and production, and construction materials and services companies. For more information about MDU Resources, see the company's Web site at www.mdu.com or contact the Investor Relations Department at firstname.lastname@example.org .