MDU Resources reaches new Bakken field production record, acquires additional Bakken acreage
| March 12, 2012 |
MDU Resources Group Inc. 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 more than 5,000 net barrels of oil per day.
The company continues to drill strong wells on its Mountrail County acreage. The company said that the results of these recent wells are very encouraging as their average 30-day rate
represents a 44 percent improvement over all previous wells drilled by Fidelity. Additionally, the drilling operations continue to improve with the most recent long-lateral horizontal well, the Lance 21-22-27, being drilled in a record 28 days from spud to rig release.
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 fareastern 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 nearly 57,000 net leasehold acres in Richland County, all acquiredin 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.
The company will host a webcast of its annual investor analyst seminar March 15 beginning at 8:30 a.m. EDT, concluding at approximately 12 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.