Investor Relations D.A. Davidson Engineering & Construction Conference September 2011 Building A Strong America Terry D. Hildestad President and CEO 1
Diversified Natural Resources Diversified Company Asset-Based Solid operators 31.5 26.4 Fiscally responsible track record Strong balance sheet Access to capital Exceptional E ti l workforce kf Construction Regulated…
Our Business Utilities Pipeline & Energy Regulated Services 45% Construction Exploration 23% & Production 32% Construction Materials & Contracting Regulated and Construction Non-regulated Note: Based on 12 months ended June…
Proven Strategy Apply our expertise in energy and transportation infrastructure industries to increase market share share, increase profitability and enhance shareholder value. Growth Capital Allocation Opportunistic approach to…
Total Annualized Shareholder Returns At June 30, 2011 YeartoDate Returns 1 Year 29% 13% 5 Year 1% 9% 10 Year 8% 6% 20 Year 13% 4% 0% 10% 20% 30% MDU S&P 500 S&P 400 Peers Resources Group, Inc. Building A Strong…
Regulated Electric i & Natural Gas Utilities ii i Distributes natural gas and electricity to 965,000 customers, and generates and transmits electricity. Pipeline & Energy Services Engaged in natural gas transportation,…
Electric & Natural Gas Utilities Electric WA 125,000 customers ID MT ND 3,000 miles of transmission lines MN OR 4,600 miles of distribution lines SD WY Generation: Owned: - 395 MW Coal Fired - 114 MW Gas Turbines - 55 MW…
Future Growth Electric & Natural Gas Utilities Plan to add generation to replace purchased power and meet capacity requirements, and to replace purchased power Filed an advance determination of prudence with the North Dakota PSC in…
Outlook Electric & Natural Gas Utilities Rate base growth g Cost containment Capitalize on employee expertise through integration Customer Growth North Dakota oil activityy Load Growth Agriculture and industrial use of natural…
Pipeline & Energy Services Regulated operations Engaged in gathering, storage, transportation, 3,700+ miles of pipeline and energy service related activities. 750 MMcf/d system capability 11 interconnecting points WA 3 storage…
North Dakota Daily Production Pipeline & Energy Services (MMcf/d) (MBopd) 1 000 1,000 1 000 1,000 900 Historical Forecast 900 800 800 700 700 600 Current Prod 600 Oil 361 MBopd 500 500 Gas 358 MMcf/d 400 400 300 300 *Expect…
Baker Enhancement Pipeline & Energy Services Expanding firm deliverability Ultimate expansion will add MT 125 MMcf/d firm deliverability ND Current project Baker storage field - Add 35 MMcf/d of firm storage d li…
More Growth Projects Pipeline & Energy Services Bakken Opportunities Construction of natural gas pipeline expansion is underway 27 MMcf/d increase to existing infrastructure Install 2,370 horsepower of compression at Charbonneau…
Natural Gas & Oil Production Proved Reserves - 646 Bcfe Oil - 31% RP ratio - 9.2 years As of 12/31/10 Total Assets - 1.4B Net Leasehold Acres - Approx. 1 million As of 6/30/11 2Q 2011 pproduction - 178 Mmcfe/d Oil - 30% /…
Fidelitys Strategic Direction Natural Gas & Oil Production Significantly grow Fidelitys earnings and net asset value (NAV) by: Accelerating oil drilling to balance production to a nominal target of 50/50 Focusing investments…
Strategic Growth Projects Natural Gas & Oil Production Potential Gross Approx. Potential Reserves/Well* Well Cost Net Acres Net Wells* Project Area Product (000s barrels) (millions) Bakken ND & MT Oil 90,000 100 125 250 500 7 8…
Growth Requires An Increasing Activity Set Number of Working Rigs Oil Production 12 Actual Forecasted 10 10 9 8 8 6 6 Natural Gas & O 6 5 4 4 2 2 0 Engaged 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q in natural gas & 2011 2011 2011…
Bakken Saskatchewan Manitoba Bakken Mountrail MT Mountrail County ND County SD Mountrail County, y, ND Natural Gas & Oil Production Our largest oil property Good success Produced over 3 million net barrels 4…
Bakken Mountrail County Natural Gas & Oil Production Own 16,000 net acres Held by production Drilled 10 wells to date in 2011 - 48 operated wells in total Strong results with last few wells Behr 16-21H IP 1,761 Boepd Hill 31-30H IP…
Avg Production Rates - Bakken Natural Gas & Oil Production Improving p o g IP,, 30- 30 and a d 60-Day 60 ay Wells Completed Average IP (24 hr) Average 30 Day Rate Average 60 Day Rate (Though June 2011) BOEPD BOEPD BOEPD 1,511…
Bakken Stark County Saskatchewan Manitoba Bakken on Natural Gass & Oil Productio Approx. 50,000 net IP Rate IP Rate IP Rate acres 3,612 BOEPD 870 BOEPD 454 BOEPD MT ND Primary target Three Stark County SD Forks formation…
Bakken Richland County Natural Gas & Oil Production Oil Play Primary target Three Forks formation Approx. 20,000 net acres 44 net potential wells Gross EUR 250 400 MBO/well Spud first appraisal well in early 2012…
Niobrara Oil Play Approx. A 65,000 65 000 nett acres Exploration Well Location Oil Production 5-year lease terms with 5-year renewal options Exploration Well Location Drilling 4 exploration wells 3Q/4Q 2011 50 to 200 net…
Paradox Basin WY Natural Gas & Oil Production Paradox UT CO Grand County Hold approx. approx 75 75,000 000 net Cane Creek Unit acres San Juan County AZ Environmental assessment signed allowing 9 wells Initial…
Heath Shale Play Natural Gas & Oil Production Oil play Hold approx. 80,000 net acres Cabot/Cirque Resources other major players Drilling 2 appraisal wells in 2011 40 200 net potential wells Gross EUR 165 220 MBO/well…
South Texas Natural Gas & Oil Production Multi-zone ppotential ((Stacked pays) p y ) Price uplift from high liquids yield Drill 12-13 wells in 2011 40-70 future drilling locations Gross EUR 250-400 MBO/well Mcfe Per Day…
Outlook Natural Gas & Oil Production Capital Expenditures totaling approx. 300 million in 2011 - Includes further exploitation of existing properties, exploratory drilling and 50 million for leasehold acquisitions Capital…
Construction Construction Materials & Contracting Diverse portfolio of products, services and geography Increasingly valuable aggregate reserves totaling 1.1 billion tons in strategic locations Construction Services Inside…
Construction Services Authorized states of operations Construction services offices Inside Outside Industrial Equipment & Materials - Electrical - Transmission & - Power Plants - Manufacture - Mechanical Distribution -…
Adaptability Construction Services SG&A expenses down more than 30% for trailing 12-months ended June 30, compared to 2008 annual expenses, the peak earnings year Inside - Focus on maintenance and service work - Expertise in solar…
Outlook Construction Services Low cost structure June J 30 bbacklog kl att 364 million illi - Includes variety of projects such as substation and line construction, solar and other commercial, institutional and industrial…
Our Vision With integrity, create superior shareholder value by expanding upon our expertise to be the supplier of choice h i in i allll off our markets k t while hil bbeing i a safe and great place to work. Construction…
Building A Strong America William E. Schneider President & CEO of Construction Materials 35
Construction Materials & Contracting States KRC performs work Perform work in 17 states Areas with physical operations 5,000 employees at peak Top 10 U.S. producer 5th Sand and gravel 9th Aggregate 9th Ready-mixed concrete…
Vertical Integration Complete Advantage MT ND Asphalt oil Asphalt production SD WY Aggregate Construction based Cement sales Ready-mix/Prestress/ Precast MDU Resources Group, Inc. Construction Building A Strong…
Changing Market Construction Materials & Contracting 2006 Backlog Mix 6/30/2011 Backlog Mix Peak Earnings Year Public Public 60% 93% Private Private 40% 7% MDU Resources Group, Inc. Construction Building A Strong…
Volumes YTD June 2011 Construction Materials & Contracting 10 9 8 of Tons/Cubic Yards) 7 6 5 4 (Millions o 3 2 1 0 Aggregate Asphalt Readymix* 2010 2011 *Measured in cubic yards MDU Resources Group, Inc.…
Challenges Construction Materials & Contracting Federal highway funding State deficits Private construction spending 5th largest sand d and d gravell producer in U.S. MDU Resources Group, Inc. Construction Building A Strong…
Liquid Asphalt Expansion Construction Materials & Contracting Storage capacity doubled since 2005 New Wyoming expansion online in 2011 Exploring additional markets MDU Resources Group, Inc. Construction Building A Strong…
Southern California Ports Construction Materials & Contracting Port of Long Beach 25M contract for Phase I Phase II bids this summer Port of Los Angeles 1.2 million tons of aggregate Contract through 2012 MDU Resources…
Booming North Dakota 53M backlog Western North Dakota expansion Unprecedented NDDOT budget at 1.73B for 2011-2013 800M more than last biennium MDU Resources Group, Inc. Construction Building A Strong America 43
Outlook Construction Materials & Contracting Low cost structure - SG&A expenses down more than 40% for the trailing 12-months ended June 30, comparedd to t 2006 annuall expenses, the th peakk earnings i year June 30 backlog 649…
Building A Strong America Doran N. Schwartz Vice President & Chief Financial Officer 45
June 30 Year-to Date Consolidated Results (Milli (Millions)) 90.4 87.7 2010 2011 Diversified 2010 2011 earnings mix EPS .48 .46 MDU Resources Group, Inc. Building A Strong America 46
Cap Ex Growth Increase Cap Ex 27% 3 5B 3.5B in the next 5 years 2.7B 20062010 20112015 Regulated E&P Construction * Excludes acquisitions. MDU Resources Group, Inc. Building A Strong America 48
Credit & Liquidity At June 30, 2011 (Millions) Capacity Outstanding Available Commercial Paper Programs 500 6 469 * Master Shelves 125 88 38 Revolving Credit Agreements 115 --- 113 * Total 740 94 620 *Outstanding letters of…
Indicated Annualized Consecutive quarterly dividend Dividend payments for 5-YEAR CAGR 5% 73 years 0.65 0.54 2006 2007 2008 2009 2010 Dividend increased November 2010, marking 20 consecutive years of increases Committed to…
Construction Its Time to GO r w Regulated E&P Investing substantially in exploration of emerging oil shale plays 90,000 net acres in Bakken 65,000 net acres in Niobrara 80,000 net acres in Heath Shale 75,000 net acres…
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