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WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc.

MDU Resources Group Inc. · Apr 4, 2012 · 48 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. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 1
    Regulated MDU Resources Group, Inc. E&P Terry D. Hildestad President and CEO Building A Strong America Construction 1
  2. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 2
    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
  3. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – 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 h i in i allll off our markets k t while hil bbeing i a safe and great place to work. Building A…
  4. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 4
    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 5
  5. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 5
    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 Organic and acquisition…
  6. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 6
    Superior Shareholder Returns Total Annualized Shareholder Returns 1Year 10Year 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 7
  7. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 7
    Roadmap to Success E&P Regulated E&P Strong portfolio of properties Electric & Natural Gas Utilities Oil economics are robust Increasing value Projecting substantially higher oil Specifically identified organic growth production…
  8. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 8
    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 O t d…
  9. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 9
    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…
  10. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 10
    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…
  11. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 11
    Business Environment Exploration & Production Price Volatility U.S. Rig Counts 8 120 2,500 2,500 7 100 2,000 6 80 5 1,500 4 60 3 1,000 40 2 500 20 1 0 2010 2011 0 0 2010 2011 Gas Oil Oil Gas Total E&P Building A…
  12. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 12
    Strategy Exploration & Production Significantly g y ggrow Fidelitys y earnings g and net asset value ((NAV)) by: y Accelerating oil drilling to obtain 50%+ oil production Focusing on the best basins in the Rockies, Texas and…
  13. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 13
    2012 Capital Expenditures: Investing for Today and Tomorrow ( in millions) Texas Paradox oduction 60 35 Heath Shale 20 Exploration & Pro Niobrara 25 Bakken Areas Leaseholds 160 25 2012 Total Approx. Other…
  14. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 14
    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…
  15. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 15
    Bakken Stark County Key growth area Primary target Three Exploration & Production Forks formation Approx. 51,000 net acres Approx. pp 140 ggross potential locations Core block looks very Saskatchewan Manitoba promising,…
  16. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 16
    Bakken Richland County Exploration & Production Recently established core 57,000 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.…
  17. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 17
    Niobrara Oil Play 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…
  18. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 18
    Paradox Basin Paradox WY UT CO Grand County Hold approx. 75,000 Cane Creek Unit net acres San Juan County Exploration & Production AZ Approx. 70 potential gross well sites with EUR 250-500 MBO/well Currentlyy…
  19. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 19
    Texas Texas Exploration & Production Multi-zone 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…
  20. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 20
    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 21
  21. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 21
    2012 Outlook Exploration & Production 20% to 30% increase in oil production H d Position Hedge P iti as off March M h 1,1 2012 over 2011 levels 2012 2013 Led by growth in Bakken Natural Gas Natural Gas 12% to 16% decrease in…
  22. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 22
    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…
  23. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 23
    Combined Construction Businesses John Harp Proven leader Track record of success in construction industry Ability to develop talented leaders and workforces Reorganization Improve p o e ab ability ty to ta takee ad…
  24. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 24
    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 sstructure uc u e 2010 2011 Construction…
  25. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 25
    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 26
  26. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 26
    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…
  27. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 27
    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…
  28. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 28
    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,…
  29. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 29
    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…
  30. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 30
    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…
  31. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 31
    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…
  32. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 32
    Rate Base & Earnings Growth Electric & Natural Gas Utilities Rate Base 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…
  33. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 33
    Growing Rate Base Electric & Natural Gas Utilities C E CapEx D i ti Depreciation (Millions) 6% CAGR projected for rate base for 1,000 2012 2016 800 Capital expenditures greater than depreciation equals growing rate base…
  34. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 34
    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…
  35. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 35
    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…
  36. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 36
    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…
  37. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 37
    Regulated MDU Resources Group, Inc. E&P Doran N. Schwartz Vice President and CFO Building A Strong America Construction 38
  38. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 38
    Pipeline & Energy Services Regulated operations Engaged in gathering, storage, transportation, and energy service related activities. 33,700 700 miles of pipeline 860 MMcf/d system capability WA 12 interconnecting points MT ND 3…
  39. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 39
    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…
  40. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 40
    Bakken Diesel Topping Plant Opportunity Pipeline & Energy Services Studying feasibility of joint venture to Process underway b ild andd operate build t ttopping i plant l t Site selection Experienced partner Permitting Calumet…
  41. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 41
    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…
  42. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 42
    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…
  43. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 43
    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 44
  44. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 44
    Strong Financial Position 4,500 4,000 39% 36% 34% 3,500 37% 34% 3,000 2011 37% Millions) 2,500 66% Equity E it Debt/Equity (M 2,000 1,500 1,000 63% 66% 61% 63% 64% 66% 500 0 12/31/2006 12/31/2007…
  45. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 45
    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…
  46. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 46
    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…
  47. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 47
    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…
  48. WILLIAMS CAPITAL GROUP MIDWEST UTILITIES SEMINAR – MDU Resources Group Inc. – slide 48
    Regulated MDU Resources Group, Inc. E&P Building A Strong America Construction 49

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