Regulated MDU Resources Group, Inc. E&P Terry D. Hildestad President and CEO Building A Strong America Construction 1
Diversified Natural Resources Company Diversified Di ifi d Asset-Based Solid operators Fiscally responsible Strong balance sheet Access to capital Exceptional workforce M D U 3
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. Building A…
Strength Through Diversification 2011 Earnings Contribution Utilities Pipeline & Energy Regulated Services 40% C Construction i Exploration 24% & Production 36% Note: Earnings before discontinued operations.…
Superior Shareholder Returns Total Annualized Shareholder Returns 10Year YTD 5% 8% 8% 3 Year 15% 8% 10 Year 4% 20 Year 12% 0% 5% 10% 15% MDU S&P 500 S&P 400 Note: At March 31, 2012 M D U 6
Roadmap to Success E&P Regulated Strong portfolio of properties Electric & Natural Gas Utilities Oil economics are robust Increasing value Projecting substantially higher oil Specifically identified organic growth production this…
Exploration & Production Headquartered in Denver, CO Two T producing d i regions: i Rocky Mountain Region 76% of proved reserves* Mid-Continent/Gulf States 24% of proved reserves* Q4 2011 production 30 MBOE/d 34% Oil 72%…
Accelerating Oil Growth Exploration & Production 50%+ Oil % of Total Production Target Solid set of assets to grow from Nearly 1,000 1 000 liquids-based liquids based drilling locations 32% 100 200 MMBO potential Targeting 50%+…
Key Operating Areas Exploration & Production Bakken Areas Net et Acres: c es 124,000 ,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…
2012 Capital Expenditures: Investing for Today and Tomorrow Exploration & Production Texas Paradox 60 35 Heath 20 2012 total approx. Niobrara 400 million, an Bakken Areas 25 25 Leaseholds increase of over 160 25 45% from…
Bakken Mountrail County Exploration & Production Key development area - 16,000 net acres New field production record 5,000 net BOPD operated and non-operated Strong recent well results Over 50 future gross locations Currently 53…
Bakken Stark County Key growth area Primary target Exploration & Production Three Forks formation Approx. 51,000 net acres Plan to drill 7 operated wells in 2012 Saskatchewan Manitoba Approx. 140 gross Bakken potential…
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…
Niobrara Exploration & Production Approx. 65,000 net acres Successful transaction with non-op JV partner Mixed results in middle block Results in Southern block expected to be stronger Currently drilling 3rd well Preparing to…
Paradox Basin Paradox WY UT CO Grand County Hold approx. 75,000 Cane Creek Unit nett acres San Juan County Exploration & Production AZ Approx. 70 potential gross well sites with Gross EUR 250-500 MBO/well Data…
Texas Texas Exploration & Production Multi-zone M lti potential t ti l (stacked ( t k d pays)) Price uplift from high liquids yield Plans to drill approx. 20 wells this year Approx. 50 potential gross drilling locations Gross…
Heath Shale Play Hold approx. 90,000 net acres Exploration & Production Data from recent appraisal wells expected 2Q 1st well on flow back EUR potential 165 - 220 MBO/well M D U E&P Building A Strong America 18
2012 Outlook Exploration & Production 20% to 30% increase in oil production Hedge Position as of March 1, 2012 over 2011 levels Led by growth in Bakken 2013 2012 12% to 16% decrease in natural gas Natural Gas Natural Gas…
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…
Signs of Stability Materials & Services Construction Earnings (Millions) 47.6 48.0 Positioned to grow Peak earnings 120.8 million in 2007 Significantly lower cost structure now 2010 2011 MDU Resources Group, Inc. Building A…
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 22
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…
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…
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, Ohio casinos, industrial…
Outlook Materials & Services Reorganization and combination of construction businesses Dec. D 31 combined bi d backlog b kl off 692 million illi - Highway paving projects, airports, bridge work, reclamation and harbor expansion…
Regulated Businesses Electric & Natural Gas Utilities Di Distributes t ib t natural t l gas andd electricity l t i it tot 974,000 customers Generates and transmits electricity Pipeline & Energy Services Engaged in natural gas…
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…
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…
Growing Rate Base Electric & Natural Gas Utilities C E CapEx D Depreciation i ti (Millions) 1,000 6% CAGR projected for rate base for 2012 2016 800 Capital expenditures greater than 600 depreciation equals growing rate…
Bakken Opportunities Electric & Natural Gas Utilities More than 50 million capital expenditures targeted for Bakken area in 2012 Customer growth 5% electric in Bakken area in 2011 Higher growth expected in 2012 Water depot projects…
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 NDPSC approved application for advanced prudency April 11th 125…
Outlook Electric & Natural Gas Utilities Rate R t base b growth th Customer Growth Bakken oil activity Load Growth Strong, stable Agricultural, commercial and industrial use of earnings and natural gas Water depots cash…
Regulated MDU Resources Group, Inc. E&P Doran N. Schwartz Vice President and CFO Building A Strong America Construction 34
Pipeline & Energy Services Engaged in gathering, storage, transportation, Regulated operations and energy service related activities. 3,700 miles of pipeline 860 MMcf/d system capability WA 12 interconnecting points MT ND 3…
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…
Bakken Diesel Plant Opportunity Pipeline & Energy Services Studying feasibility of joint venture Process underway to build and operate topping plant Site selection Experienced partner Permitting Calumet Refining, LLC Crude oil…
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…
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…
Capital Expenditures Growth 3 7B 3.7B 2.7B Increase Cap Ex 37% next 5 years 20072011 20122016 Regulated E&P Construction Note: Excludes acquisitions. Building A Strong America M D U 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…
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…
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…
Regulated MDU Resources Group, Inc. E&P Building A Strong America Construction 45
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