MDU Resources is getting out of the exploration and production business.

The Bismarck, North Dakota, company announced this week that it entered into five agreements to sell subsidiary Fidelity Exploration & Production Company’s oil and gas assets. The first sale closed in October, and company officials said they expect the remainder will be finalized by year’s end. A sixth undisclosed property that accounts for less than one-tenth of its year-to-date production remains on the market.

Details of the transactions are scarce, and it’s unclear how they will affect operations at Fidelity’s oil and gas wells in the Big Flat area off state Route 313.

Operating company public relations manager Tim Rasmussen said that Fidelity will cease to operate. Moving forward, he said, it will be up to the assets’ new owners to decide the fate of the West Fertilizer oil and gas proposal and any other local projects in the works.

“This is in the hands of the new buyer,” he told the Moab Sun News

Bureau of Land Management (BLM) Moab Field Office Manager Beth Ransel said that no one has formally contacted her agency to discuss any related issues.

“As of right now, there has been no request filed with the BLM to transfer any of Fidelity’s holdings,” she said.

Beyond the news of the sale itself, Rasmussen said the company cannot divulge any details about the transactions.

“The purchase and sale agreements for the assets have been completed with private companies and we have confidentiality agreements in place with each of them,” he said. “This prohibits us from discussing specific terms of the asset sales or identifying the buyers.”

MDU Resources previously said that it is divesting itself from its oil and natural gas production assets that Fidelity operates. The main company put its indirect subsidiary on the market one year ago, but it subsequently postponed those plans following a sharp drop in crude oil prices.

Fast-forwarding to late 2015, MDU President and CEO David L. Goodin said the time is now right to move ahead with the divestment process.

“We are pleased to be nearly complete with the sale process for our oil and natural gas assets,” Goodin said in a statement. “The sale prices are in line with current and prospective market conditions, and exiting the exploration and production business will allow us to focus more fully on our remaining businesses.”

Rasmussen said that the company is working with the buyers to iron out the details of the asset transfers.

“The status of specific office locations will be determined by the new buyers as we work through these details,” he said.

Likewise, he said, the new buyers will also determine the employment status of Fidelity’s workers.

MDU expects that the five sales will generate about $450 million in proceeds and tax-related benefits, which it will primarily use to pay off debt.

According to the company’s third-quarter earnings report, its exploration and production business reported a loss of $790.4 million in the first nine months of 2015, compared to $75.3 million in earnings for the same period one year ago.

During the third quarter alone, the company’s now-discontinued operations experienced a loss of $202.6 million, which it linked to the after-tax fair value impairment of its exploration and production assets. At the same time, the company witnessed a 54 percent drop in average realized oil prices and a 33 percent drop in oil production.

In recent years, Fidelity’s operations in the Big Flat area have been a boon to the energy industry in Grand County – and to the county’s tax base.

Oil production from the company’s Grand County wells jumped from 23,301 barrels in 2007 to a high of more than 1.31 million barrels in 2014, according to the Utah Division of Oil, Gas and Mining (UDOGM). Production for the year to date is down to 475,083 barrels, although that figure is still the third highest on record over the last eight years. Natural gas production has also increased, albeit on a smaller scale.

The rise in development near the gateway to Dead Horse Point State Park, Canyonlands National Park’s Island in the Sky District and other scenic wonders has been controversial at times.

In 2014, environmentalists raised safety concerns about the approval and installation of the Dead Horse Lateral natural gas pipeline. More recently, recreationists have questioned the company’s plans for new oil and gas wells near Hell Roaring and Spring canyons.

Grand County Council member Lynn Jackson said he believes that Fidelity has been sensitive to the community’s concerns about more development in the area, and he called the company a model corporate citizen.

“I think that Grand County has had a really good partner in Fidelity,” he said. “We’ve been lucky to have a company of their worthiness that’s been willing to go the extra mile out there.”

Since 2007, he said, the company has worked hard to mitigate development-related impacts, while helping trail advocates develop new bike routes in the area.

“They’ve learned as they’ve gone along,” he said.

Moving forward, Jackson said his main concern is that Fidelity’s successor will be starting in the Big Flat area from scratch.

“I hope that whoever buys it has the same ethics,” he said. “We’ll just keep our fingers crossed and hope that we have a company that’s just as responsible in what they’re doing.”

Company working with new buyers to iron out details of transfer

I think that Grand County has had a really good partner in Fidelity … We’ve been lucky to have a company of their worthiness that’s been willing to go the extra mile out there.