RESOURCES Group, Inc . Building a Strong America Dave Goodin President & Chief Executive Officer 1
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 PIPELINE…
Company Management Building a Strong America Dave Goodin President & CEO of MDU Resources RESOURCES Dave Barney President & CEO of Knife River Corporation Martin Fritz President & CEO of WBI Holdings Nicole Kivisto President…
Dickinson, North Dakota Building a Strong America MDU providing utility services since 1930 RESOURCES Dakota Prairie refinery located 4 miles west of city Great proximity to critical infrastructure Rail Highway Natural gas…
Diversified Natural Resources Company Building a Strong America PIPELINE 6
Positioned for Long-term Growth Building a Strong America Assets and underlying strengths of businesses provide attractive growth opportunities Focused on improving earnings and lowering operating costs across our RESOURCES…
Electric & Natural Gas Distribution Nicole Kivisto President & CEO Utilities Group Building a Strong America 8
Strategy Recognized as one of the top performing utilities in the nation Safety First - Industry leader in safety Customers Deliver safe, reliable and economic service to more than 1 million customers across eight states Employees…
Strengths Regulated model: Low risk; franchised service areas Reliable earnings and cash flows Geographic diversity Organic growth opportunities Strong regulatory relationships Recognized ability to close acquisitions Building…
Electric & Natural Gas Distribution Electric & Natural Gas Utilities Building a Strong America WA MT ND MN ID OR SD WY Operating in 8 states 1,034,000 electric and natural gas customers in 448 communities Electric…
Electric & Natural Gas Utilities Lower natural gas margins; 12 percent sales Year To Date Earnings* decrease; warmer weather across eight (millions) states (6M) 41.6 Higher O&M, including payroll and benefits Higher DD&A rate base…
Rate Base & Earnings Growth More than tripled rate base and Projecting 11% CAGR in earnings since 2006 rate base next 5 years 1,600 80 2,800 1,400 2,400 1,200 60 2,000 1,000 1,600 800 40 1,200 600 400 20 800 200 400 0 0 0…
Thunder Spirit Wind Acquisition Agreement to purchase 43 wind turbines, 107.5 MW of electric generation Electric & Natural Gas Distribution To be located near Hettinger in southwestern North Dakota Building a Strong America…
BSSE Project Proposed Midcontinent-ISO multi-value 345-kV transmission line Electric & Natural Gas Distribution Building a Strong America 160 miles from Big Stone City, SD to Ellendale, ND Projected cost 205 million for companys…
Big Stone Station Environmental Upgrade Required retrofit installation Electric & Natural Gas Distribution Building a Strong America Cost approx. 90 million for companys share Environmental cost recovery rider approved in ND and…
Additional Organic Growth Opportunities 19 MW natural gas generation near Lewis & Clark Station - 40 million 2015 Bakken region investments - 60 million Pursuing additional projects for accommodating load growth in industrial and…
Supportive Regulatory Environments Completed Cases MT natural gas rate increase request of 3 million annually; new rates of 2.5 million annually implemented May 20 WY natural gas rate increase request of 788,000 annually; new rates of…
Supportive Regulatory Environments (cont.) Pending Cases ND natural gas rate increase request of 4.3 million annually, interim increase of 4.3 million implemented for service effective April 7; 2.6 million settlement filed Aug. 26;…
Utilities Outlook Record capital program - plan to invest approximately 1.7 billion during next 5 years through 2019 Expect to grow rate base approx. 1 billion, 11% compounded annually over next 5 years Timely recovery positive…
Electric & Natural Gas Distribution Building a Strong America 21
PIPELINE & Energy Services Martin A. Fritz President & CEO WBI Energy Building a Strong America 22
Pipeline & Energy Services Assets Building a Strong America Regulated operations 3,800 miles of pipe PIPELINE 137,391 HP compression Over 1.4 Bcf/d system capacity 193 Bcf working storage Non-regulated operations 1,600…
Business Overview Low risk/stable returns with regulated business High quality customers Pipeline projects totaling 137,000 dkt/day completed in 2014 contributing to current and future earnings Pronghorn oil and gas gathering &…
Current Landscape: Bakken Drilling ND Active Rig Count 250 Limited activity 200 190 186 194 concentrated few counties 200 150 Fewer/smaller projects 100 76 Increase our share with 50 more business 0 development focus August-11…
2015 Project Changes Wind Ridge Pipeline Project Demicks Lake Project North North Dakota Dakota Demicks Lake Plant Site Project Tie-in with Northern Project Border Pipeline WBI Energy WBI Energy Transmission, Inc.…
2015-2016 Project Updates North Badlands Expansion Project Overview 4 miles 16 loop of Garden Creek II pipeline Measurement and associated facilities Timeline Precedent and interconnect agreements executed August 2015 Sold…
2015-2016 Project Updates Northwest ND Expansion Project Overview Modify existing compression Charbonneau new unit Williston re-cylinder 47,000 mcf/day of capacity Timeline Precedent Agreement signed May 2015 Sold 8,000 dkt/day…
Dakota Prairie Refining (DPR) May 2013 May 2015 Building a Strong America Pipeline & Energy Services 29
DPR Construction Facts First new refinery built in U.S. in nearly 40 years Cubic yards of earth moved 1.3 million Major pieces of equipment on site (weighing 10 tons or more) 87 Power and communication cable used 146 miles Pipe 60…
DPR Operation Facts Process Bakken crude Products 20,000 barrels/day Diesel fuel, market locally ATBs Diesel Naphtha and ATBs, rail 1/3 1/3 Mechanically complete in March 2015 Began operations in second quarter 2015 Naphtha…
DPR Go-Live Market Challenges Increased crude cost Narrowing Bakken basis differential Markets for diesel/naphtha currently depressed Decreased oil field activity reducing diesel demand Increased associated diesel supply from…
Outlook Bakken Basis Differential Should Return U.S. Gulf Coast light crude oil appetite is filled by Permian & Eagle Ford production Brent linked crudes will compete with Bakken on east coast due to low prices Rail will remain the…
Outlook North Dakota Diesel Demand 90 80 70 60 50 40 30 20 10 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Third-Party Consulting Firm Actual Forecast Oil field and agriculture demand are…
DPR Improvement Projects Improvement projects High quality winter diesel premium (marketing) Cost structure improvements High H2S crude slate potential Sulfur recovery & amine unit improvements Debottlenecking Longer-term diesel…
DPR Strategically Sound Longer Term Diesel demand will be high; local supply short Upside potential (e.g. premium winter diesel; operating cost improvements; high H2S crude slate; debottlenecking, etc.) Crude quality is high and…
WBI Energy Goals Be the leading Bakken pipeline and a growing midstream provider Accelerate WBIs growth Develop midstream culture Aggressively pursue Bakken growth Explore expansion into other basins Improve existing operations…
Dakota Prairie Refinery Tour Overview Interconnect with Bridger Pipeline Contract for 10,000 bpd of crude oil with ability to access additional capacity Building a Strong America PIPELINE & Energy Services 38
Crude oil offloading Bridger Pipeline terminal Rail Loading Facility Two terminals to offload crude Contract to receive 10,000 bpd with the ability to access additional capacity. Building a Strong America PIPELINE &…
Crude oil storage Three crude oil storage tanks that store a total of 225,000 barrels or about 11 days of crude oil needs Building a Strong America PIPELINE & Energy Services 40
Crude oil distillation unit Separates raw crude oil into its primary product constituents (LPG, Naphtha, Diesel and ATB) Building a Strong America PIPELINE & Energy Services 41
ATB Storage Four finished ATB tanks. Total ATB storage is 120,000 barrels or about 17 days of production Building a Strong America PIPELINE & Energy Services 42
Naphtha Stabilizer Unit Designed to remove any entrained light hydrocarbons - necessary to meet product vapor specifications Building a Strong America PIPELINE & Energy Services 43
Naphtha Storage Three finished naphtha tanks. Total naphtha storage is 75,000 barrels or about 11 days of production Building a Strong America PIPELINE & Energy Services 44
Diesel Hydrotreater & Catalytic Dewaxing Unit (DHT) Removes sulfur and nitrogen contaminants from the diesel raw product (distillate) Building a Strong America PIPELINE & Energy Services 45
Hydrogen Generation Unit Purified hydrogen is then available for the (DHT) unit Building a Strong America PIPELINE & Energy Services 46
Diesel Storage Tanks Three finished diesel tanks. Total diesel storage is 120,000 barrels or about 17 days of production Building a Strong America PIPELINE & Energy Services 47
Diesel terminal Bridger Pipeline Three terminals to pickup diesel Rail Loading Facility Contract to receive 10,000 bpd with the ability to access additional capacity. Building a Strong America PIPELINE & Energy Services…
Bakken Oil Express Rail Loading Facility Building a Strong America PIPELINE & Energy Services 49
PIPELINE & Energy Services Building a Strong America 50
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