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MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc.

MDU Resources Group Inc. · Mar 17, 2013 · 41 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. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 1
    MDU David L. Goodin RESOURCES President & Chief Executive Officer Group, Inc. 1
  2. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 2
    Diversified Natural Resources Company Diversified Asset-Based Solid operators Fiscally responsible Strong balance sheet Access to capital Exceptional workforce Building A Strong America 3
  3. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 3
    Our Vision With integrity, create superior shareholder value by expanding upon our expertise to be the supplier of choice in all of our markets while being a safe and great place to work. RESOURCES Building A Strong America…
  4. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 4
    Primary Focus Conduct business safely and with integrity Better leverage expertise across our businesses Execute our business plan Focus on continuous improvement RESOURCES Building A Strong America 5
  5. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 5
    Strength Through Diversification Earnings Contribution 2012 Utilities Pipeline & Energy Services Regulated 34% Construction 33% Exploration & Production 33% Note: Based on 2012 adjusted earnings which excludes…
  6. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 6
    Shareholder Returns Total Annualized Shareholder Returns MDU YeartoDate YTD 14% 14% 1 Year 15% 10% 10% 8% 10 Year 7% 20 Year 12% MDU S&P 500 S&P 400 Peer Avg. Note: At February 28, 2013 RESOURCES Building A Strong…
  7. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 7
    Substantial Growth Opportunities Projecting 6% annual rate base growth at Utility next 5 years Approx. 400 million additional rate base Considers organic growth opportunities only Enhancing midstream presence at the Pipeline…
  8. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 8
    Vertically Integrated Advantage Ability to leverage our expertise across business units Planned diesel refinery in Bakken region has potential to engage all business segments Strong balance sheet Improved financing options Scale…
  9. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 9
    Regulated Businesses Electric & Natural Gas Utilities Distributes natural gas and electricity to 992,000 customers Generates and transmits electricity Pipeline & Energy Services Provides natural gas transportation, underground…
  10. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 10
    Electric & Natural Gas Utilities Electric WA 132,000 customers 3,100 miles of transmission lines MT ND MN 4,700 miles of distribution lines OR ID Generation: SD Owned: W Y - 392 MW Coal Fired 56% - 98 MW Gas Turbines 14% -…
  11. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 11
    Rate Base & Earnings Growth Electric & Natural Gas Utilities (Millions) 1,000 1,400 80 1,200 800 1,000 60 600 800 40 600 400 400 20 200 200 0 0 0 2006 2012 (Millions) 2013 2017 Regulated Rate Base Earnings CapEx…
  12. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 12
    Substantial Growth Opportunities Approx. 70 million capital expenditures targeted for Bakken area in 2013 building infrastructure to accommodate electric and gas load growth 9% electric and 7% natural gas customer growth in Bakken in…
  13. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 13
    Outlook Plan to invest approx. 1 billion during next 5 years Expect to grow rate base by approx. 6% compounded annually over next 5 years 70 million infrastructure investment in 2013, higher customer counts and increased loads in…
  14. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 14
    Pipeline & Energy Services Regulated operations 3,800 miles of pipeline Engaged in transportation, gathering, storage, and energy service related activities. Over 1 Bcf/d system capacity 13 interconnecting points 3 storage fields…
  15. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 15
    Opportunities Through Growing Production Bakken Oil Bakken Natural Gas (MBopd) (MMcf/d) 2,750 3,900 Historical Forecast Historical Forecast 3,600 2,500 3,300 2,250 3,000 2,000 2,700 1,750 2,400 1,500 2,100 1,250 1,800…
  16. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 16
    Growing Midstream Business Pronghorn Asset Acquisition Purchased 50% interest in oil and natural gas midstream assets in Bakken area Invested approximately 100 million in 2012 Natural gas processing plant with 35 MMcfd inlet…
  17. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 17
    Bakken Diesel Topping Plant Pipeline & Energy Services Established joint venture to build and Process underway operate diesel topping plant Purchased land for site near Dickinson, N.D. Experienced partner Received air quality…
  18. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 18
    Outlook Pursuing liquid based midstream opportunities Purchased 50% interest in Pronghorn oil and natural gas midstream assets in western ND Formed joint venture to build and operate Bakken diesel refinery Potential for Paradox Basin…
  19. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 19
    Construction Materials & Services Materials Top 10 U.S. producer 5th Sand and gravel 9th Aggregate 9th Ready-mixed concrete Increasingly valuable aggregate reserves totaling 1.1 billion tons in strategic locations Services…
  20. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 20
    Operational Capabilities Materials Services Products Inside Aggregate, asphalt, ready-mix Commercial concrete, liquid asphalt Mechanical Cement sales Fire suppression Prestress/precast concrete Outside Building materials Power…
  21. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 21
    Building Momentum Construction Earnings Combined Backlog (Millions) (Millions) 140 800 120 731 750 100 692 700 80 650 60 40 600 20 550 0 500 2007 2008 2009 2010 2011 2012 12/31/11 12/31/12 Margin and volume expansion 47%…
  22. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 22
    Congress Passes Transportation Bill MAP-21 Transportation Bill Multi-year bill provides funding and stability to transportation system Funds the surface transportation programs at about current FY 2012 levels and will Materials &…
  23. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 23
    Growing Demand Strength in the Bakken - Combined backlog of approx. 33 million - Greenfielding materials locations in key growth markets within region - Services expertise in transmission and distribution, substation construction,…
  24. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 24
    Outlook Strong national indicators for business Public work expanding supported by longer-term transportation Materials & Services funding/assistance Strengthening markets in key areas Improved backlog Expanded operations in…
  25. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 25
    Exploration & Production Building A Strong America J. Kent Wells President and CEO 26
  26. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 26
    Exploration & Production Headquartered in Denver, CO Two producing regions: Rocky Mountain Region 76% of proved reserves* Mid-Continent/Gulf States 24% of proved reserves* Q4 2012 production 28 MBOE/d 44% Oil 8% Natural Gas…
  27. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 27
    Growth Strategy Exploration & Production Significantly grow earnings and NAV Plan to invest approx. 400 million in 2013 Projecting 25-30% oil production increase Targeting oil to maximize profitability Solid set of assets to grow…
  28. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 28
    Oil Growth 1,200 Oil Production by Quarter Increased oil production by 36% in 2012 1,000 4Q 2012 oil production 800 increased to 1.1 million barrels (59%) over 4Q 2011 1,139 600 2012 Oil Reserve 912 876 Replacement…
  29. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 29
    Bakken Oil Play 4Q 2012 oil production up 77% over 4Q 2011 2012 Oil Production 200 million in capital spending planned for 2013 2.1 Million Mountrail County Current 2 rig program drilling Net Barrels Middle Bakken & Three Forks wells…
  30. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 30
    Paradox WY Paradox Basin UT CO Grand County Exploration & Production Cane Creek Unit Approx. 92,000 net acres, AZ San Juan County plus 20,000 acres under option CCU 12-1 well producing 1,500 BOPD gross since Sept.…
  31. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 31
    Paradox Basin Clastics Upside Stratigraphic Cross Section NW SE Ismay Salt 1 Clastic 1 Clastic 2 Clastic 4 Clastic 5 Clastic 7 Clastic 8 Clastic 9 Clastic 10 Clastic 12 Clastic 14 Clastic 18 Cane Crk. Base…
  32. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 32
    South Texas Exploration & Production Hold approx. 9,000 net acres Multi-zone potential (stacked pays) Liquids rich gas Plan to invest approx. 40 million in 2013 Estimated gross EUR 250 400 MBOE per well E&P Building A…
  33. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 33
    Operational Improvements Exploration & Production Well Cost Efficiency Gains Bakken (1280 Acre Lateral With 30 Stages) 1Q 2012 - 8.5 - 9.5 million 1Q 2013 - 7.0 - 7.5 million Paradox (1st Well On Pad) 1Q 2012 - 8.0 + million…
  34. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 34
    2013 Outlook Exploration & Production Returns Based Investment Philosophy Hedged to Support Oil Growth Accelerating oil growth 2013 25% to 30% increase in oil production Led by growth in Bakken & Paradox Amount hedged (BOPD) Oil…
  35. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 35
    Consolidated Results Adjusted Earnings (Millions) 225.2 216.8 Providing essential products and services 2011* 2012** EPS 1.19 1.15 * Excludes discontinued operations ** Excludes discontinued operations, noncash write-downs…
  36. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 36
    Capital Expenditures Growth 3.8B 3.1B Increase Cap Ex Construction E&P 25% Regulated next 5 years 20082012 20132017 Note: Excludes unidentified acquisitions. RESOURCES Building A Strong America 37
  37. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 37
    Strong Financial Position Dec. 31 60% Equity 4,500 4,000 3,500 3,000 Debt/Equity (Millions) 2,500 2,000 1,500 1,000 500 0 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 Equity Debt RESOURCES Building…
  38. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 38
    Credit & Liquidity At December 31, 2012 (Millions) Capacity Outstanding Available Commercial Paper Programs 625 293 312 * 40% Revolving Credit Agreements 115 28 87 Construction Total Exploration 740 321 399 24% & Production…
  39. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 39
    Dividend Growth 75 0.69 75 consecutive years of Years quarterly dividend payments Dividend increased November 2012, marking 0.45 22 consecutive years of increases Committed to paying a competitive dividend 2003 2004 2005 2006…
  40. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 40
    Outlook 2012 had many achievements and some challenges Stronger now than a year ago, and positioned to grow Utility record 252 million capital program in 2013 driven by customer and load growth particularly in North Dakota Pipeline…
  41. MARCH 2013 INVESTOR PRESENTATION – MDU Resources Group Inc. – slide 41
    MDU Building A Strong America RESOURCES Group, Inc. 42

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