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THE AGA FINANCIAL FORUM – MDU Resources Group Inc.

MDU Resources Group Inc. · May 15, 2011 · 45 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 1
    Investor Relations AGA Financial Forum Mayy 2011 Building A Strong America Terry D. Hildestad President and CEO 1
  2. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 2
    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…
  3. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 3
    Our Business Utilities Pipeline & Energy Regulated Services 43% Exploration Construction 22% & Production 35% Construction Materials & Contracting Regulated and Construction Non-regulated Note: Based on 2010 consolidated…
  4. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 4
    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…
  5. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 5
    Regulated Electric i & Natural Gas Utilities ii i Distributes natural gas and electricity to 964,000 customers, and generates and transmits electricity. Pipeline & Energy Services Engaged in natural gas transportation,…
  6. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 6
    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 - 103 MW Gas Turbines - 55 MW…
  7. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 7
    Rate Case Recovery Electric & Natural Gas Utilities North Dakota Electric rate case request of 8 8.88 million annually annually, or 77.7% 7% for recovery of infrastructure upgrades and investments in renewable generation…
  8. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 8
    Future Generation Growth Electric & Natural Gas Utilities Plan to invest 150 million per year over next 5 years for rate base growth Investment I iin upgrading di andd modernizing d i i current ffacilities ili i environmental i l…
  9. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 9
    Growing Rate Base Electric & Natural Gas Utilities 5-Year 5 Year CAGR 21% 1,101 1,154 1,200 1,084 1,030 973 1,000 745 800 (Millions) 600 362 400 200 2006 2007 2008 2009 2010 2011 2012 MDU Resources…
  10. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 10
    Outlook Electric & Natural Gas Utilities Rate base growth g Cost containment Capitalize on employee expertise through integration Customer Growth Western North Dakota oil activityy Load Growth Agriculture and industrial use of…
  11. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 11
    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…
  12. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 12
    Baker Enhancement Pipeline & Energy Services Expanding deliverability of storage Ultimate expansion will add MT 125 MMcf/d firm deliverability ND Open season results - Approx. 30% of storage deliverability expansioni SD…
  13. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 13
    More Growth Projects Pipeline & Energy Services Bakken Opportunities Pursuing expansion of natural gas pipeline Currently have 11 receipt points Solicited customer interest for 27 MMcf/d expansion Obtained sufficient interest to…
  14. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 14
    Natural Gas & Oil Production Returns driven Added more than 175 oil drilling locations based on 640-acre spacing last year 646 Bcfe of proved natural gas and oil reserves at year-end 2010 69% Natural Gas 31% Oil Operated Areas…
  15. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 15
    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 approx. 2.7 million net barrels in…
  16. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 16
    Bakken Mountrail County Natural Gas & Oil Production Own 16,000 net acres Held by production Drilled 8 wells in 2010 - 37 operated wells in total Average production approx. 3,700 net barrels per day Operated future drilling…
  17. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 17
    Bakken Stark County Saskatchewan Manitoba Bakken on Natural Gass & Oil Productio Test well 3 MT ND Stark County SD Test well 1 Test well 2 MDU Resources Group, Inc. E&P Building A Strong America 18
  18. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 18
    Bakken Stark County Natural Gas & Oil Production Approx. 50,000 net exploratory acres Primary target Three Forks formation Drilled 3 test wells - Kostelecky 31-6H 24-hour IP rate of 1,343 BOE - Oukrop 34-34H Planning to put well…
  19. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 19
    Niobrara Oil DJ BASIN Niobrara Oil Play Activity Samson O&G Play Chesapeake FEPC EOG PLATTE Oil Production FEPC Emerging oil play GOSHEN LARAMIE Early results of other producers appear promising OUNTAINS…
  20. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 20
    Niobrara Oil Play Natural Gas & Oil Production Hold H ld approx. 65 65,000 000 nett exploratory l t acres - Goshen and Laramie counties, Wyoming De-risked investment with sale of 25% working interest in December Utilize…
  21. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 21
    Heath Shale Play Natural Gas & Oil Production Oil play Hold approx. 80,000 net exploratory acres Plan to spud first test Petroleum Garfield well in last half of year Musselshell Rosebud Golden Valley MDU Resources…
  22. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 22
    Other Properties Natural Gas & Oil Production South/Central Texas Multi-zone ppotential ((Stacked pays) p y ) 2011 projected capital expenditures approx. 47 million 20 wells to be drilled in 2011 Big Horn Basin 2011 projected…
  23. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 23
    Prices & Hedge Positions Natural Gas & Oil Production Assumed 2011 Prices (May-Dec.) Natural Gas: Oil: NYMEX - 4.00 - 4.50 NYMEX - 95 - 100 Ventura - 3.75 - 4.25 CIG - 3.50 - 4.00 Hedges g 2011 2012 Natural Gas 50% - 55% 20% -…
  24. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 24
    Outlook Natural Gas & Oil Production Capital Expenditures totaling approx. 306 million in 2011 - Includes further exploitation of existing properties, exploratory drilling and 50 million for leasehold acquisitions Projecting 5% to…
  25. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 25
    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…
  26. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 26
    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 6th Sand and gravel 9th Aggregate 9th Ready-mixed concrete…
  27. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 27
    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…
  28. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 28
    Changing Market Construction Materials & Contracting 2006 Backlog Mix 3/31/2011 Backlog Mix Peak Earnings Year Public Public 60% 93% Private Private 40% 7% MDU Resources Group, Inc. Construction Building A Strong…
  29. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 29
    Demonstrating Adaptability Construction Materials & Contracting Percentage Change 2010 vs. 2009 0% 4.60% 3.40% 3.10% 20% 13.90% 23.30% 40% 30.40% 37.10% 60% 80% 100% 120% 140% 160% 161.90% 180% Revenue Gross Profit SG&A…
  30. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 30
    Outlook Construction Materials & Contracting Low cost structure - SG&A expenses down 40% for the trailing 12-months ended March 31, compared to 2006 annual expenses, the peak earnings year March 31 backlog 569 million - Includes…
  31. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 31
    Construction Services Authorized states of operations Construction services offices Inside Outside Industrial Equipment & Materials - Electrical - Transmission & - Power Plants - Manufacture - Mechanical Distribution -…
  32. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 32
    Adaptability Construction Services SG&A expenses down 30% for trailing 12-months ended March 31, compared to 2008 annual expenses, the peak earnings year Inside - Focus on maintenance and service work - Expertise in solar Outside…
  33. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 33
    Outlook Construction Services Low cost structure March M h 31 backlog b kl att 347 million illi - Includes variety of projects such as substation and line construction, solar and other commercial, institutional and industrial…
  34. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 34
    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…
  35. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 35
    Building A Strong America Doran N. Schwartz Vice President & Chief Financial Officer 36
  36. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 36
    Consolidated Results (Millions) 2009* 2010** Earnings excluding one-time items 260 260.44 242 242.77 After tax charge (384.4) (16.5) Gain on sale --- 13.8 Earnings/Loss (124.0) 240.0 Member of Earnings per Share excluding…
  37. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 37
    First Quarter Consolidated Results (Milli (Millions)) 41.6 42.8 2010 2011 Solid 2010 2011 Financial Results EPS .22 .23 MDU Resources Group, Inc. Building A Strong America 38
  38. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 38
    Earnings Growth Diversified CAGR 2000-2008: 16.6% earnings mix 400 350 300 250 (Miillions) 200 00 150 100 50 0 2000 2001 2002 2003A 2004 2005 2006 2007 B 2008 C 2009 D 2010 E Regulated E&P Construction A Includes…
  39. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 39
    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 40
  40. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 40
    Strong Financial Position 2010 64% Equity 4,500 39% 4,000 36% 37% 34% 3,500 37% 3,000 Millions) 2 500 2,500 Debt/Equity (M 2,000 1,500 1,000 63% 66% 61% 63% 64% 500 0 12/31/2006 12/31/2007 12/31/2008…
  41. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 41
    Credit & Liquidity At March 31, 2011 (Millions) Capacity Outstanding Available Commercial Paper Programs 525 --- * 500 Master Shelves 125 88 38 Revolving Credit Agreements 115 --- * 113 Total 765 88 651 *Outstanding letters…
  42. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 42
    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…
  43. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 43
    Total Annualized Shareholder Returns At March 31, 2011 YeartoDate Returns 1 Year 10% 3 Year 1% 14% 11% 5 Year 5 Year 3% 9% 10 Year 7% 6% 20 Year 13% 0% 5% 10% 15% MDU S&P 500 S&P 400 Peers Resources Group, Inc.…
  44. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 44
    Construction Its Time to GrOw Regulated E&P Investing substantially in exploration of emerging oil shale plays Bakken oil play position of approx. 66,000 net acres 65,000 net acres in the emerging Niobrara oil play…
  45. THE AGA FINANCIAL FORUM – MDU Resources Group Inc. – slide 45
    Building A Strong America 46

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