Investor Relations D.A. Davidson Conference September 2012 Regulated MDU Resources Group, Inc. E&P Terry D. Hildestad President & CEO Building A Strong America Construction 1
Diversified Natural Resources Company Diversified 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 in all of our markets while being a safe and great place to work. Building A Strong America M D U 4
Strength Through Diversification Earnings Contribution TTM at 6/30/12 Utilities Pipeline & Energy Regulated Services 40% Construction Exploration 26% & Production 34% Building A Strong America M D U 5
Superior Shareholder Returns Total Annualized Shareholder Returns 10Year YTD 6% 11% 3 Year 7% 9% 11% 10 Year 6% 20 Year 12% 0% 5% 10% 15% MDU S&P 500 S&P 400 Note: At July 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 producing regions: Rocky Mountain Region 76% of proved reserves* Mid-Continent/Gulf States 24% of proved reserves* Q2 2012 production 27 MBOE/d 44% Oil 56% Operated Proved…
Accelerating Oil Growth Exploration & Production 50%+ Oil % of Total Production Target Plan to invest approx. 475 million in 2012 32% Solid set of assets to grow from 100 200 MMBO potential Targeting 50%+ oil 2006 2007 2008 2009…
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…
Bakken Acreage Exploration & Production 215 million in spending expected in Bakken in 2012 An expansion of 115 million compared to last year Production Bakken Approx. 124,000 net acres Mountrail County, approx. 16,000 Averaged…
Bakken Mountrail County Exploration & Production Key development area - 16,000 net acres Plan to drill 20 operated wells in 2012 Strong well results Approx. 40 potential gross well sites Currently 63 operated wells and interests…
Bakken Stark County Key growth area Primary target Exploration & Production Three Forks formation Approx. 51,000 net acres Plan to drill 14 operated wells in 2012 Saskatchewan Manitoba Approx. 40 potential Bakken gross…
Bakken Richland County Exploration & Production Recently established core 57,000 net acre block adjacent Sidney, MT to prolific Elm Coulee Field Acquisition of 27,000 net acres closed 1Q 2012 Targeting Three Forks formation…
Paradox Basin Paradox WY UT CO Grand County Hold approx. 75,000 Cane Creek Unit net acres San Juan County Exploration & Production AZ Evaluating both vertical and horizontal development scenarios Plan to drill 6 to…
Texas Texas Exploration & Production Hold approx. 38,000 net acres Multi-zone potential (stacked pays) Plans to drill approx. 13 operated wells this year Approx. 50 potential gross well sites Estimated gross EUR 250 400 MBO per…
Heath Shale Play Hold approx. 90,000 net acres Exploration & Production Plan to drill 5 operated wells in 2012 M D U E&P Building A Strong America 17
Outlook Exploration & Production Returns Based Investment Philosophy Hedged to Support Oil Growth 25% to 30% increase in oil production over 2011 levels 2012 2013 Led by growth in Bakken Oil Oil Percentage hedged 55% - 60% 35% -…
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 - TTM (Millions) Positioned to grow 56.6 Peak earnings 120.8 million in 2007 53.4 Significantly lower cost structure now 6/30/2011 6/30/2012 MDU Resources Group,…
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 21
Congress Passes Transportation Bill Materials & Services 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…
Services Specialized & Highly Skilled Inside - Large, complex new construction projects - Maintenance and service work - Expertise in solar Outside - Large demand for upgrading and constructing transmission and distribution…
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 Two-year MAP-21 transportation funding bill of 40 billion annually for highways Backlog of 980 million at June 30 - Highway paving projects, airports, bridge work, reclamation, harbor expansion, substation…
Regulated MDU Resources Group, Inc. E&P David L. Goodin President and CEO of Utilities Building A Strong America Construction 27
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…
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 CapEx Depreciation (Millions) 1,000 6% CAGR projected for rate base for 2012 2016 800 Approval of advanced determination of 600 prudence granted on two substantial 400…
Bakken Opportunities Electric & Natural Gas Utilities Approx. 75 million capital expenditures targeted for Bakken area in 2012 8% electric and 6% gas customer growth in Bakken compared to a year ago Further growth expected for…
Outlook Electric & Natural Gas Utilities Rate base growth Plan to invest approx. 965 million during next 5 years Generating approx. 370 million additional rate base 85 million 88-MW simple cycle natural gas turbine in Mandan, ND…
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 June 30, 2012 (MBopd) 1,200 1,200 Historical Forecast Pipeline & Energy Services 1,000 1,000 800 Current Prod 800 Oil 660 MBopd Gas 713 MMcf/d 600 600 400 400 200 200 0 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…
Investing in Liquids-Based Midstream Assets Recently purchased 50% interest in oil and natural gas midstream assets near Belfield, ND in Bakken area Expect to invest approximately 100 million for our portion in 2012, including…
Outlook Pipeline & Energy Services Pursuing liquid based midstream opportunities Proposed Bakken diesel topping plant would process 20,000 bpd of crude Recently purchased 50% interest in oil and natural gas midstream assets near…
Consolidated Results June 30 YTD Consolidated Results (Millions) 87.7 89.6* Diversified earnings mix 2011 2012 EPS 0.46 0.47* * Includes the effect of the reversal of an arbitration charge of 15.0 million, or 8 cents per…
Capital Expenditures Growth 3.9B 2.7B Increase Cap Ex 44% next 5 years 20072011 20122016 Regulated E&P Construction Note: Excludes unidentified acquisitions. Building A Strong America M D U 41
Credit & Liquidity At June 30, 2012 (Millions) Capacity Outstanding Available Commercial Paper Programs 600 300 280 * 40% Revolving Credit Agreements 115 --- 113 * Construction Total Exploration 715 --- 393 24% & Production…
Dividend Growth 0.67 Consecutive quarterly dividend payments for 74 years Dividend increased November 2011, marking 21 0.43 consecutive years of increases Committed to paying a competitive dividend 2002 2003 2004 2005 2006…
Roadmap to Success Competitive dividend In excellent position to take advantage of growth opportunities Approx. 400 million in available liquidity in addition to 102 million in cash on hand at June 30 Significant investment in our…
Regulated MDU Resources Group, Inc. E&P Building A Strong America Construction 46
Loading...
