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THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc.

MDU Resources Group Inc. · Apr 2, 2012 · 44 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 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 1
    Regulated MDU Resources Group, Inc. E&P Doran N. Schwartz Vice President and CFO Building A Strong America Construction
  2. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – 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 M D U
  3. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 3
    Our Business Utilities Pipeline & Energy Regulated Services 40% Construction Exploration 24% & Production 36% Note: Based on 2011 earnings before discontinued operations. Building A Strong America M D U
  4. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 4
    Superior Shareholder Returns Total Annualized Shareholder Returns 1-Year 10-Year 9% 9% 7% 3% 2% -2% MDU S&P 500 S&P 400 MDU S&P 500 S&P 400 Note: At December 31, 2011 M D U
  5. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 5
    Roadmap to Success Regulated E&PE&P Electric & Natural Gas Utilities Strong portfolio of properties Increasing value Oil economics are robust Specifically identified organic growth Projecting substantially higher oil projects…
  6. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 6
    Regulated Businesses Electric & Natural Gas Utilities Distributes natural gas and electricity to 974,000 customers Generates and transmits electricity Pipeline & Energy Services Engaged in natural gas transportation, underground…
  7. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 7
    Electric & Natural Gas Utilities Electric WA 127,000 customers MT ND 3,000 miles of transmission lines OR ID MN 4,600 miles of distribution lines SD Generation: WY Owned: - 395 MW Coal Fired - 114 MW Gas Turbines - 55 MW…
  8. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 8
    Rate Base & Earnings Growth Electric & Natural Gas Utilities Rate Base Earnings (Millions) 1,200 80 1,000 60 800 600 40 400 20 200 0 0 2006 2007 2008 2009 2010 2011 Rate base growth has driven earnings growth…
  9. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 9
    Growing Rate Base Electric & Natural Gas Utilities CapEx Depreciation (Millions) 6% CAGR projected for rate base for 1,000 2012 2016 800 Capital expenditures greater than depreciation equals growing rate base 600 400 200…
  10. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 10
    Bakken Opportunities Electric & Natural Gas Utilities More than 50 million capital expenditures targeted for Bakken area in 2012 Customer growth 5% electric and nearly 3% natural gas growth in Bakken area in 2011 Higher growth…
  11. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 11
    Future Growth Electric & Natural Gas Utilities Plan to invest more than 900 million during next 5 years 85 million 88-MW simple cycle natural gas turbine in Mandan, ND Settlement agreement for advance prudency filed with NDPSC, order…
  12. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 12
    Outlook Electric & Natural Gas Utilities Rate base growth Customer Growth Bakken oil activity Load Growth Strong, stable Agricultural, commercial and industrial use of earnings and natural gas Water depots cash flows Potential…
  13. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 13
    Pipeline & Energy Services Regulated operations Engaged in gathering, storage, transportation, and energy service related activities. 3,700 miles of pipeline 860 MMcf/d system capability WA 12 interconnecting points MT ND 3…
  14. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 14
    North Dakota Daily Production (MMcf/d) As of January 31, 2011 (MBopd) 1,200 1,200 Historical Forecast Pipeline & Energy Services 1,000 1,000 800 800 Current Prod Oil 546 MBopd 600 Gas 572 MMcf/d 600 400 400 200 200 0…
  15. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 15
    Bakken Diesel Topping Plant Opportunity Pipeline & Energy Services Studying feasibility of joint venture to build Process underway and operate topping plant Site selection Experienced partner Permitting Calumet Refining, LLC Crude…
  16. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 16
    Growth Projects Pipeline & Energy Services Opportunities in Bakken/Oil Development Areas Pursuing opportunities to provide oil and natural gas gathering and processing services in Bakken and Niobrara plays Bakken diesel topping…
  17. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 17
    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 2011 production 30 MBOE/d 34% Oil 72% Operated Proved…
  18. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 18
    Accelerating Oil Growth Exploration & Production Oil % of Total Production 50%+ Solid set of assets to grow from Target 2011 oil was 32% of total production 100 200 MMBO potential 32 % Targeting 50%+ oil Selectively adding new…
  19. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 19
    Key Operating Areas Exploration & Production Bakken Areas Net Acres: 124,000 MT ND Heath Shale Net Acres: 90,000 Cedar Creek Anticline Net profits interest WY Niobrara UT Net Acres: 65,000 CO Growing Areas Texas Paradox Net…
  20. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 20
    Strategy Exploration & Production Significantly grow Fidelitys earnings and net asset value (NAV) by: Accelerating oil drilling to obtain 50%+ oil production Focusing on the best basins in the Rockies, Texas and Mid-Continent…
  21. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 21
    2012 Capital Expenditures: Investing for Today and Tomorrow Exploration & Production Texas Paradox 60 35 Heath Shale 20 Niobrara 25 Bakken Areas Leaseholds 2012 Total 160 25 Approx. 400 Million Other 75 E & P Building A…
  22. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 22
    Bakken Mountrail County Exploration & Production Key development area (16,000 net acres) New field production record recently achieved 5,000 net BOPD operated and non-operated Strong recent well results Over 50 future gross…
  23. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 23
    Bakken Stark County Key growth area Primary target Three Exploration & Production Forks formation Approx. 51,000 net acres Approx. 140 gross potential locations Core block looks very promising, while far Saskatchewan…
  24. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 24
    Bakken Richland County Exploration & Production Recently established core 57,000 net acre block adjacent to prolific Elm Coulee Field Acquisition of 27,000 net acres closed 1Q 2012 Targeting Three Forks formation Approx. 100…
  25. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 25
    Niobrara Exploration & Production Approx. 65,000 net acres EUR potential 200-300 MBO/well Currently drilling 3rd well 1st well disappointing Preparing to test 2nd well Goshen WY County NE Laramie County Niobrara CO…
  26. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 26
    Paradox Basin Paradox WY UT CO Grand County Hold approx. 75,000 Cane Creek Unit net acres Exploration & Production San Juan County AZ Approx. 70 potential gross well sites with EUR 250-500 MBO/well Currently…
  27. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 27
    Texas Texas Exploration & Production Multi-zone potential (stacked pays) Price uplift from high liquids yield Plans to drill approx. 20 wells this year Approx. 50 potential gross drilling locations Gross EUR 250 400 MBO/well 2012…
  28. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 28
    Heath Shale Play Hold approx. 90,000 net acres Exploration & Production Currently drilling 2nd well 1st well on flow back EUR potential 165-220 MBO/well M D U E&P Building A Strong America
  29. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 29
    2012 Outlook Exploration & Production 20% to 30% increase in oil production Hedge Position as of March 1, 2012 over 2011 levels 2012 2013 Led by growth in Bakken Natural Gas Natural Gas 12% to 16% decrease in natural gas…
  30. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 30
    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…
  31. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 31
    Signs of Stability Materials & Services Combined Construction Earnings (Millions) 47.6 48.0 Positioned to grow Peak earnings 120.8 million in 2007 Significantly lower cost structure 2010 2011 Construction Building A…
  32. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 32
    Materials Vertically Integrated MT ND Asphalt oil Asphalt production Aggregate Construction based Cement sales Ready-mix/Prestress/ Precast M D U Construction Building A Strong America
  33. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 33
    Services Specialized & Highly Skilled Inside - Focus on maintenance and service work - Expertise in solar Outside - Large demand for upgrading and constructing transmission and distribution systems Aging transmission network…
  34. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 34
    Growing Bakken Demand Materials & Services Aggregate, asphalt and ready-mix provider Road construction Subdivision site work Utility underground and hook ups Electric power lines Substation construction Commercial and industrial…
  35. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 35
    Substantial Opportunities Materials & Services Ports of Southern California Strong Markets Long Beach - 25M contract for Phase I North Dakota saw record quarter Los Angeles - 1.2 million tons of aggregate, contract Ohio casinos,…
  36. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 36
    Outlook Materials & Services Reorganization and combination of construction businesses under leadership of John Harp Dec. 31 combined backlog of 692 million - Highway paving projects, airports, bridge work, reclamation and harbor…
  37. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 37
    Consolidated Results Continuing Operations (Millions) 243.3 225.2 * Includes a gain on the sale of Brazilian assets of 13.8 million after tax, or .07 per common share, and a natural gas gathering arbitration charge of 16.5…
  38. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 38
    Capital Expenditures Growth 3.7B 2.7B Increase Cap Ex 37% next 5 years 2007-2011 2012-2016 Regulated E&P Construction Note: Excludes acquisitions. Building A Strong America M D U
  39. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 39
    Strong Financial Position 4,500 4,000 39% 36% 34% 3,500 37% 34% 3,000 2011 37% Debt/Equity (Millions) 2,500 66% Equity 2,000 1,500 1,000 63% 66% 61% 63% 64% 66% 500 0 12/31/2006 12/31/2007 12/31/2008 12/31/2009…
  40. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 40
    Credit & Liquidity At December 31, 2011 (Millions) Capacity Outstanding Available Commercial Paper Programs 500 --- 478 * 40% Revolving Credit Agreements 115 8 105 * Construction Total Exploration 615 8 583 24% & Production…
  41. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 41
    Dividend Growth 0.67 Consecutive 0.43 quarterly dividend payments for 74 years Dividend increased November 2011, marking 21 consecutive years of increases Committed to paying a competitive dividend M D U Building A…
  42. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 42
    Roadmap to Success In excellent position to take advantage of growth opportunities Approx. 600 million in available liquidity in addition to 163 million in cash on hand at year-end Significant investment in our company Intend to…
  43. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 43
    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. Building A Strong America M D U
  44. THE 2ND ANNUAL BAKKEN INVESTOR CONFERENCE – MDU Resources Group Inc. – slide 44
    Regulated MDU Resources Group, Inc. E&P Building A Strong America Construction

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