MDU Resources Subsidiary Purchases Interest in Bakken Oil and Natural Gas Midstream Assets
BISMARCK, N.D.--(BUSINESS WIRE)-- MDU Resources Group, Inc. (MDU), through its wholly owned subsidiary, Bitter Creek Pipelines, LLC, announced an agreement purchasing a 50 percent undivided interest in Whiting Oil and Gas Corporations natural gas and oil midstream assets near Belfield, N.D. in the Bakken area.
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.
This transaction is an important step forward in executing our strategy to become more liquids-based in the midstream space, said Terry D. Hildestad, president and chief executive officer of MDU Resources. As production continues to ramp up and the storage terminal is completed later this year, we will be positioned nicely for the investment to produce accretive earnings and cash flow.
Bitter Creek paid $66 million at closing to acquire its interest in the facilities and will be responsible for 60 percent of certain future capital expenditures as specified in the agreement.
This investment diversifies our operations into midstream gathering and processing of natural gas liquids and crude oil, said Steven L. Bietz, president and chief executive officer of Bitter Creek. This complements both our expertise in dry gas gathering, transportation and storage, and our asset base in the Bakken.
Oil and natural gas production from Whitings Pronghorn acreage in Stark and Billings counties, combined with adjacent Stark County acreage owned by Fidelity Exploration & Production Company (an MDU Resources subsidiary), will supply these facilities. Fidelity and Whiting currently have a combined seven rigs operating in the acreage feeding the facilities.
These assets will provide valuable natural gas and crude oil infrastructure for us to capture and process natural gas and allows us to take advantage of more choices to market crude oil, Hildestad said.
About MDU Resources
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.
The 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 WBI Energy, 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 fluctuations in crude oil and natural gas production and prices; the timely receipt of necessary approvals; and risks incidental to the development and operation of oil and natural gas wells, processing plants and pipeline systems. For a discussion of 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.
MDU Resources Group, Inc.
Phyllis A. Rittenbach, 701-530-1057
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Director of Communications and Public Affairs
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Operating Company Public Relations Manager
Source: MDU Resources Group, Inc.Copyright Business Wire 2012