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RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc.

MDU Resources Group Inc. · Nov 8, 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. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 1
    MDU Building A Strong America RESOURCES Group, Inc.
  2. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 2
    Diversified Natural Resources Company Earnings Contribution Utilities Pipeline & Energy Services Regulated 30% Construction Exploration 34% & Production 36% Note: TTM at 9/30/2013 on adjusted basis. Building A Strong…
  3. RESOURCES EEI FINANCIAL CONFERENCE – 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. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 4
    Shareholder Returns Total Annualized Shareholder Returns MDU Year-to-Date YTD 43% 43% 1 Year 41% 10% 25% 27% 10 Year 21% 20 Year 12% MDU S&P 500 S&P 400 Peer Avg. Note: At October 31, 2013 RESOURCES Building A…
  5. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 5
    Execution Leads to Growth 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 Construction…
  6. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 6
    Vertically Integrated Advantage Ability to leverage our expertise across business units Diesel topping plant in Bakken region engaging all business segments Strong balance sheet Improved financing options Scale for lower rates…
  7. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 7
    Regulated Businesses Electric & Natural Gas Utilities Distributes natural gas and electricity to 1 million customers Generates and transmits electricity Pipeline & Energy Services Provides natural gas transportation, underground…
  8. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 8
    Electric & Natural Gas Utilities Electric WA 135,000 customers 3,100 miles of transmission lines MT ND MN 4,700 miles of distribution lines OR ID Generation: SD Owned: WY - 392 MW Coal Fired 56% - 98 MW Gas Turbines 14% -…
  9. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 9
    Rate Base & Earnings Growth Electric & Natural Gas Utilities Tripled rate base and Projecting 6% CAGR in earnings since 2006 rate base next 5 years 1,400 80 1,000 1,200 800 1,000 60 800 600 40 600 400 400 20 200…
  10. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 10
    Substantial Growth Opportunities Electric & Natural Gas Utilities Approx. 70 million capital expenditures targeted for Bakken area in 2013 building infrastructure to accommodate electric and gas load growth 9% electric and 7%…
  11. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 11
    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 Large growth projects Rate cases, manage regulated returns Potential projects for…
  12. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 12
    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…
  13. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 13
    Bakken Opportunities Through Growing Production Bakken Oil Bakken Natural Gas (MBO/d) (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…
  14. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 14
    Expanding 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…
  15. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 15
    Bakken Diesel Topping Plant Process Bakken crude Projected cost 300 million split 50/50 with Calumet 20,000 barrels/day Participation for all MDU Resources business units Diesel fuel, market locally Pipeline, co-owner and natural…
  16. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 16
    Proposed Bakken Natural Gas Pipeline 400-mile 24-inch pipe would transport Bakken natural gas from western ND to western MN Would provide interconnections with Great lakes Gas Transmission, TransCanada and Viking Gas Transmission…
  17. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 17
    Goal to Double Invested Capital Pipeline & Energy Services Capital Expenditures Invested Capital* Actual Projected (Millions) 428 800 450 700 Goal 400 Other 600 Projects 350 500 Dakota Prairie 300 224 Refining 250 400…
  18. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 18
    Outlook Expanding our system of transmission and storage assets Added 12 miles of high pressure transmission pipeline Garden Creek I plant to Northern Border Completed 13 miles of high pressure transmission pipeline from Stateline…
  19. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 19
    Construction Materials & Services Materials Top 10 U.S. producer 6th Sand and gravel 9th Aggregate Increasingly valuable aggregate reserves totaling 1.1 billion tons in strategic locations Services Inside, Outside, Industrial…
  20. RESOURCES EEI FINANCIAL CONFERENCE – 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. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 21
    Building Momentum Construction Earnings Combined Backlog (Millions) (Millions) 140 958 121 1,000 120 900 834 100 92 80 80 73 71 800 60 48 48 700 40 600 20 500 0 2007 2008 2009 2010 2011 2012 TTM - 9/30/2012 9/30/2013…
  22. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 22
    Growing Demand Strength in North Dakota - Combined backlog of approx. 157 million at September 30, compared to 65 million a year ago - Greenfielding materials locations in key growth markets - Services expertise in transmission and…
  23. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 23
    Outlook Strong national indicators for business Public work expanding supported by longer-term transportation funding/assistance Strengthening markets in key areas Improving backlog Expanded operations in North Dakota Anticipating…
  24. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 24
    Exploration & Production Significantly grow earnings and NAV by: Targeting oil to maximize profitability Expanding key existing positions and exploring emerging opportunities Leveraging our horizontal drilling and Two producing…
  25. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 25
    Returns Based Investing Exploration & Production Production Mix 2008 2013 Natural Gas Natural Gas 79% 46% Oil - 17% Oil - 47% NGL 7% NGL 4% E&P Rebalancing portfolio toward higher returns for oil Note: Third…
  26. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 26
    Oil Growth Oil Production by Quarter Increased oil production by 1,400 37% Increase Y/Y 36% in 2012 1,200 3Q 2013 oil production increased to 1.25 million 1,000 barrels, 37% over 3Q 2012 800 2012 Oil Reserve 1,252…
  27. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 27
    Bakken Oil Play YTD 2013 3Q 2013 oil production up 41% YOY net production Oil Production 8,300 bpd 2.1 Million 210 million in capital spending planned for 2013 Net Barrels Mountrail County Current 1 rig program drilling 59% of…
  28. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 28
    Bakken Mountrail County Exploration & Production Key development area - 16,000 net acres First three-well pad in July Potential upside with Three Forks formation and downspacing Currently 94 operated wells and interest in over…
  29. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 29
    Bakken Saskatchewan Manitoba Bakken Stark County Exploration & Production MT ND Primary target Stark County SD Three Forks formation Approx. 51,000 net acres Currently 29 gross operated wells Estimated gross EUR 200…
  30. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 30
    Paradox WY Paradox Basin UT CO Grand County Exploration & Production Moab Cane Creek Unit Approx. 92,000 net acres, San Juan County plus 20,000 acres under AZ option 1 rig currently plan to add second rig by January…
  31. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 31
    Paradox Basin Exploration & Production Net production averaged 2,300 BOPD in 3Q Oct. 31 approx. 3,000 BOPD CCU 12-1 amongst best onshore oil wells drilled in U.S. in 2012 Flowed for 9 months at constant 1,500 BOPD Still flowing at…
  32. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 32
    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 Salt…
  33. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 33
    Paradox Basin: Uphole Clastics Overview: Oil-bearing reservoirs above prolific Cane Creek Shale Vast majority of Fidelity acreage expected to be productive Moderate risk, high reward oil play Anticipated per well EUR: 150 400 MBO…
  34. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 34
    2013 Outlook Exploration & Production Hedged to Support Oil Growth 2013 Returns Based Investment Philosophy Accelerating oil growth Oil 30% to 35% increase in oil production Amount hedged (BOPD) Led by growth in Bakken & Paradox…
  35. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 35
    YTD Sept. 30 Consolidated Results Adjusted Earnings Adjusted EPS (millions) 199.6 1.05 142.7 0.76 2012 2013 2012 2013 Reconciliation 2012 2013 GAAP earnings 59.7 187.0 Discontinued operations (4.8) .2 Unrealized commodity…
  36. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 36
    Capital Expenditures Growth 3.9B 3.1B Increase Cap Ex Construction E&P 25% Regulated next 5 years 2008-2012 2013-2017 Note: Excludes proposed 400-mile pipeline and unidentified acquisitions. RESOURCES Building A Strong…
  37. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 37
    Strong Financial Position 2012 60% Equity 4,500 4,000 39% 37% 36% 34% 40% 3,500 3,000 Debt/Equity (Millions) 2,500 2,000 1,500 1,000 61% 64% 66% 60% 63% 500 0 12/31/2008 12/31/2009 12/31/2010 12/31/2011…
  38. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 38
    Credit & Liquidity At September 30, 2013 (Millions) Capacity Outstanding Available Commercial Paper Programs 625 337 288 40% Revolving Credit Agreements 115 56 57 * Construction Total Exploration 740 393 345 24% & Production…
  39. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 39
    Dividend Growth 76 0.69 Years 76 consecutive years of quarterly dividend payments Dividend increased 0.45 November 2012, marking 22 consecutive years of increases Committed to paying a competitive dividend 2003 2004 2005 2006…
  40. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 40
    Outlook Strong performance to date in 2013 positioned for growth Increased EPS guidance Utility record 280 million capital program in 2013 driven by customer and load growth particularly in North Dakota Pipeline expanding its…
  41. RESOURCES EEI FINANCIAL CONFERENCE – MDU Resources Group Inc. – slide 41
    MDU Building A Strong America RESOURCES Group, Inc.

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