United States Niobrara Shale Oil Project United States Niobrara Shale Oil Project

October 15, 2010

JD Rockies Resources Limited ("JDR"), a 100% owned U.S. subsidiary of ITOCHU Corporation, has entered into an agreement with Fidelity Exploration & Production Company ("Fidelity"), a U.S. oil and natural gas company, on October 13, 2010, to acquire a 25% working interest in the emerging DJ Basin Niobrara play from Fidelity, covering approximately 88,000 net acres of oil and gas leases pertaining to this deal located in southeastern Wyoming, U.S. The transaction will be completed by early December 2010, when all conditions precedent to close the transaction are satisfied. ITOCHU Corporation will be the first Japanese company to participate in a shale oil project in the U.S. Fidelity is an experienced operator of shale gas and shale oil projects and has had success in the Williston Basin Bakken play located in the State of North Dakota, U.S.

The drilling of the initial Fidelity operated wells and subsequent production in the Niobrara play is likely to begin in 2011. JDR estimates that its portion of the total development costs will be approximately US$390 million. The gravity of crude oil from the Niobrara Field will be an estimated API 32~39.

Similar to the well-known Bakken play, the Niobrara play is one of the most attractive Shale Oil resource areas in the U.S. and an area where many exploration and production companies are seeking opportunities to acquire leasehold positions. JDR and Fidelity are aiming to jointly acquire additional acreage in the Niobrara play and are looking at other areas to pursue jointly on a long-term basis.

MDU Resources Group Inc. (NYSE : MDU), a Fortune 500 company and a member of the S&P MidCap 400 Index, is the parent company of Fidelity and is headquartered in Bismarck, North Dakota, U.S. MDU Resources Group, Inc. provides value-added natural resources products and services including regulated businesses, an exploration and production company and construction companies.

ITOCHU Corporation’s Energy Division is presently participating in oil and gas exploration, development and production projects in Azerbaijan, the North Sea (UK), Australia, Algeria and Russia. ITOCHU is also involved in LNG projects in Qatar and Oman. Based on these core operations and with the addition of this shale oil project, ITOCHU will continue to acquire quality energy resources to add to our balanced portfolio.

Fidelity Exploration & Production Company

A U.S. oil and natural gas Company, with approximately 170 employees doing business in the Rocky Mountain and Mid-Continent/Gulf States regions of the United States.

MDU Resources Croup Inc.

100% parent company of Fidelity Exploration & Production Company.
A U.S. company with businesses in energy, utility resources and construction materials. Listed on the New York Stock Exchange (Market Cap. US$3.8 billion) with approximately 8,000 employees.

Shale Oil

Crude oil accumulated in siltstone and limestone interbedded with shale, which have the potential to generate hydrocarbons. A type of unconventional energy resource.
Extraction methods are similar to Shale Gas, which during recent years has attracted much attention in the U.S.
North Dakota where the largest portion of the Bakken play is located, is a major Shale Oil producing state, with production of over 321,000 barrels of oil equivalent per day.

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