Exploration & Production | Service & Supply | Quarterly / Earnings Reports | Engineering & Construction | Second Quarter (2Q) Update

MDU's Construction Sector Sets Records in 2Q

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Fidelity E&P

Fidelity recently announced that it has signed an agreement to sell a portion of its producing properties in Mountrail County, North Dakota. The sale is part of Fidelity’s business strategy of acquiring and developing assets, capturing upside through monetization and redeploying the capital to repeat the growth cycle.

Fidelity Exploration & Production Company continued its oil focus for rebalancing its production portfolio with a 14 percent quarter-over-quarter increase in oil production. The growth was led by a 42 percent increase in production from the Paradox Basin and contributions from properties in Wyoming’s southern Powder River Basin, which were acquired in March. Natural gas production declined 18 percent, in large part because of the divestiture of Green River Basin assets in late 2013. Earnings were impacted by a net reduction in realized commodity derivatives and increased depreciation, depletion and amortization expense.

Despite mild weather, the utility had an earnings improvement this quarter. Electric sales grew 4 percent driven by continued strong customer growth combined with positive adjustments to electric and natural gas rates that reflected higher capital investments. Mild weather particularly in the western states resulted in lower natural gas sales.

The pipeline and energy services business more than doubled quarter-over-quarter earnings. The business continued to benefit from its 50 percent ownership in the Pronghorn gathering and processing facility, which had higher oil gathering and processing volumes. Pipeline operations benefited from the favorable settlement of a rate case with new rates going into effect May 1 as well as lower operation and maintenance expense.

Construction of the Dakota Prairie diesel refinery, a joint venture with Calumet Specialty Products Partners, is on budget and approximately 75 percent complete. The refinery remains on schedule for startup at year-end.

Goodin said: "We are pleased with the company’s performance thus far in 2014. Our expectations remain high for the remainder of the year, although we recognize that favorable weather will be important to performance at several of our businesses. We are maintaining our earnings guidance range of $1.50 to $1.65 per share despite the effects of the Mountrail County asset sale."