MDU Williams Capital Midwest Utilities Seminar April 2013 RESOURCES David L. Goodin Group, Inc. President & Chief Executive Officer 1
Diversified Natural Resources Company Earnings Contribution 2012 Utilities Pipeline & Energy Services Regulated 34% Construction Exploration 33% & Production 33% Note: Based on 2012 adjusted earnings which excludes…
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…
Shareholder Returns Total Annualized Shareholder Returns MDU YeartoDate YTD 18% 18% 15% 15% 1 Year 13% 11% 10 Year 10% 20 Year 11% MDU S&P 500 S&P 400 Peer Avg. Note: At March 31, 2013 RESOURCES Building A Strong…
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 Recently broke…
Vertically Integrated Advantage Ability to leverage our expertise across business units Planned diesel refinery in Bakken region has potential to engage all business segments Strong balance sheet Improved financing options Scale…
Exploration & Production Significantly grow earnings and NAV Targeting oil to maximize profitability Focusing on best basins in Rockies, Texas and Mid-Continent regions Expanding key existing positions and exploring emerging…
Returns Based Investing Exploration & Production Production Mix 2007 2012 Natural Gas Natural Gas 81% 48% Oil/Liquids Oil/Liquids 19% 52% E&P Rebalancing portfolio toward higher returns for oil Note: Fourth quarter…
Oil Growth Oil Production by Quarter 59% Increase Increased oil production by 1,200 Y/Y 36% in 2012 1,000 4Q 2012 oil production increased to 1.1 million 800 barrels, 59% over 4Q 2011 1,139 2012 Oil Reserve 600…
Bakken Oil Play 4Q 2012 oil production up 77% over 4Q 2011 2012 Oil Production 200 million in capital spending planned for 2013 2.1 Million Mountrail County Current 2 rig program drilling Net Barrels Middle Bakken & Three Forks wells…
Bakken Mountrail County Exploration & Production Key development area - 16,000 net acres Strong well results Approx. 40 middle Bakken potential gross well sites Potential upside with Three Forks formation and downspacing…
Bakken Saskatchewan Manitoba Bakken Stark County Exploration & Production MT ND Primary target Stark County SD Three Forks formation Approx. 51,000 net acres Currently 14 gross operated wells Approx. 40 potential gross…
Bakken Richland County Exploration & Production Primary target Bakken Shale Sidney, MT and Three Forks Approx. 60,000 net acres Estimated gross EUR 250 500 MBO per well Saskatchewan Bakken Richland County MT…
Paradox WY Paradox Basin UT CO Grand County Exploration & Production Cane Creek Unit Approx. 92,000 net acres, AZ San Juan County plus 20,000 acres under option CCU 12-1 well producing 1,500 BOPD gross since Sept.…
South Texas Exploration & Production Hold approx. 9,000 net acres Multi-zone potential (stacked pays) Liquids rich gas Plan to invest approx. 40 million in 2013 Estimated gross EUR 250 400 MBOE per well E&P Building A…
Operational Improvements Exploration & Production Well Cost Efficiency Gains Bakken (1280 Acre Lateral With 30 Stages) 1Q 2012 - 8.5 - 9.5 million 1Q 2013 - 7.0 - 7.5 million Paradox (1st Well On Pad) 1Q 2012 - 8.0+ million 1Q…
2013 Outlook Exploration & Production Returns Based Investment Philosophy Hedged to Support Oil Growth Accelerating oil growth 2013 25% to 30% increase in oil production Led by growth in Bakken & Paradox Amount hedged (BOPD) Oil…
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…
Congress Passes Transportation Bill 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 and will provide approx.…
Growing Demand Strength in the Bakken - Combined backlog of approx. 33 million at year-end - Greenfielding materials locations in key growth markets within region - Services expertise in transmission and distribution, substation…
Outlook Strong national indicators for business Public work expanding supported by longer-term transportation funding/assistance Strengthening markets in key areas Improved backlog Expanded operations in North Dakota Anticipating…
Regulated Businesses Electric & Natural Gas Utilities Distributes natural gas and electricity to 992,000 customers Generates and transmits electricity Pipeline & Energy Services Provides natural gas transportation, underground…
Electric & Natural Gas Utilities Electric WA 132,000 customers 3,100 miles of transmission lines MT ND MN 4,700 miles of distribution lines OR ID Generation: SD Owned: W Y - 392 MW Coal Fired 56% - 98 MW Gas Turbines 14% -…
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…
Substantial Growth Opportunities Approx. 70 million capital expenditures targeted for Bakken area in 2013 building infrastructure to accommodate electric and gas load growth 9% electric and 7% natural gas customer growth in Bakken in…
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 70 million infrastructure investment in 2013, higher customer counts and increased loads in…
MDU Doran N. Schwartz RESOURCES Vice President & Chief Financial Officer Group, Inc. 31
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…
Opportunities Through Growing Production Bakken Oil Bakken Natural Gas (MBopd) (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 1,800…
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…
Bakken Diesel Topping Plant Process Bakken crude ND diesel consumption increased 74% in past four years 20,000 barrels/day Consumption is more than 53,000 bpd, expected to increase to Diesel fuel, market locally 75,000 bpd by 2025…
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…
Outlook Pursuing liquid based midstream opportunities Purchased 50% interest in Pronghorn oil and natural gas midstream assets in western ND Formed joint venture to build and operate Bakken diesel refinery Potential for Paradox Basin…
Capital Expenditures Growth 3.8B 3.1B Increase Cap Ex Construction E&P 25% Regulated next 5 years 20082012 20132017 Note: Excludes unidentified acquisitions. RESOURCES Building A Strong America 39
Credit & Liquidity At December 31, 2012 (Millions) Capacity Outstanding Available Commercial Paper Programs 625 293 312 * 40% Revolving Credit Agreements 115 28 87 Construction Total Exploration 740 321 399 24% & Production…
Dividend Growth 75 0.69 75 consecutive years of Years quarterly dividend payments Dividend increased November 2012, marking 0.45 22 consecutive years of increases Committed to paying a competitive dividend 2003 2004 2005 2006…
Outlook 2012 had many achievements and some challenges Stronger now than a year ago, and positioned to grow Utility record 252 million capital program in 2013 driven by customer and load growth particularly in North Dakota Pipeline…
MDU Building A Strong America RESOURCES Group, Inc. 44
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