RESOURCES Group, Inc . Investor Relations September 2014 1
Diversified Natural Resources Company Earnings Contribution Utilities Pipeline & Energy Services Regulated 30% Construction Exploration 36% & Production 34% Note: 2013 Adjusted Earnings. 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. 4
Shareholder Returns Total Annualized Shareholder Returns MDU One Year 1 Year 39% 39% 5 Year 16% 28% 25% 25% 10 Year 11% 20 Year 14% MDU S&P 500 S&P 400 Peer Avg. Note: At June 30, 2014 RESOURCES Group, Inc . 5
Vertically Integrated Advantage Ability to leverage our expertise across business units Customers in common Strong balance sheet Improved financing options Scale for lower rates Utilize cash flow reallocation from one business to…
Electric & Natural Gas Utilities Operating in 8 states More than 1 million electric and natural gas customers in 448 communities 2.1% customer growth in 2013 Electric Natural Gas 137,000 customers 880,000 customers 639 MW of…
Rate Base & Earnings Growth More than tripled rate base and Projecting 9% CAGR in earnings since 2006 rate base next 5 years 1,400 80 2,200 2,000 1,200 1,800 1,000 60 1,600 1,400 800 1,200 40 600 1,000 800 400 20 600 400 200…
Substantial Growth Opportunities Record 300 million capital expenditures planned for 2014 80 million targeting Bakken to accommodate electric and natural gas load growth 77 million 88-MW gas turbine in Mandan, brought on line in…
Outlook Plan to invest approximately 1.3 billion during next 5 years Expect to grow rate base by approximately 700 million, 9% compounded annually over next 5 years Large growth projects Potential projects for accommodating load…
Pipeline & Energy Services Regulated operations 3,800 miles of pipeline Over 1 Bcf/d system capacity 13 interconnecting points 3 storage fields with 193 Bcf working storage capacity Non-regulated operations 1,600 operated miles…
Bakken Opportunities Through Growing Production Pipeline (MMcf/d) Bakken Oil Bakken Natural Gas Historical & Forecast (MBO/d) 2,750 Historical Forecast 3,900 3,600 Energy 2,500 3,300 2,250 3,000 Service 2,000 1,750…
Dakota Prairie Refinery Began construction March 2013, Projected cost 350 million split now approx. 80% complete 50/50 with Calumet To be completed late 2014 All MDU Resources business units Process 20,000 barrels/day engaged with…
Proposed Dakota Pipeline 375-mile 24-inch pipe would transport Bakken natural gas from western ND to northwestern MN Would provide interconnections with pipelines owned by Great Lakes Gas Transmission, Viking Gas Transmission and…
Proposed Dakota Pipeline Route Pipeline & Energy Services 15
Wind Ridge Pipeline Project Designed to provide natural gas to CHS announced fertilizer production facility near Spiritwood, ND 95 miles of 16 inch pipe Initial capacity 90 MMcf/d Potential for additional demand Projected…
Growth in Invested Capital 1,400 1,200 Dakota Pipeline 1,000 800 Wind Ridge Project 2015-2018 Projects 600 Dakota Prairie Refinery Pronghorn 400 Other Projects 200 12/31/2011 - (Millions) Pipeline & Energy Services…
Outlook FERC rate case settled with new rates implemented effective May 1, annual revenue increase approx. 11.5 million based on adjusted base case period volumes Liquid-based midstream opportunities Construction of joint venture…
Construction Materials & Services Materials Top 10 U.S. producer 5th Sand and gravel Increasingly valuable aggregate reserves totaling 1.1 billion tons in strategic locations Services Ranked No. 11 on The Top 600 Specialty…
Building Momentum 140 Construction Earnings 121 120 103 107 100 Margin and volume 80 expansion 45% earnings 80 73 71 growth on 8% revenue 60 growth in 2013 48 48 40 20 0 (Millions) 2007 2008 2009 2010 2011 2012 2013 2014*…
Growing Demand Strength in energy markets - Combined North Dakota backlog of approx. 169 million compared to 165 million last year - Texas materials market growing with refinery expansions and oil and gas drilling - Growing demand in…
Outlook 1.15 billion backlog as of June 30 Including record backlog of 764 million at Materials Strengthening markets in key areas Capturing additional market share and expanding into new markets Highly-skilled specialized…
Exploration & Production Significantly grow earnings and NAV by: Targeting oil to maximize profitability Expanding key existing positions and exploring emerging opportunities Two producing regions: Leveraging our horizontal…
Returns Based Investing Production Mix 2008 2013 Gas Gas 80% 45% Oil 16% Oil 47% NGL 8% NGL 4% Rebalancing portfolio toward higher returns for oil 25
Bakken Oil Play 2013 2Q 2014 net oil production 7,600 BOPD Oil Production Approximately 125 million in capital 2.8 Million spending planned for 2014 Net Barrels Mountrail County Current 1 rig program drilling Middle Bakken and…
Paradox Basin - Continuing to build a dominant position Approx. 140,000 net acres, plus 20,000 acres under option Recently spud 1st horizontal well within W Fert 3D area Anticipate spending 150 million in 2014 Estimated gross…
Paradox Basin Big well potential: Well Name 1st Sales Cum. To Date (MBO) CCU 12-1 Sept 2012 752 CCU 18-1 Mar 2013 348 CCU 36-1 Sept 2013 310 CCU 26-3 Oct 2013 216 Production information as of 7/31/14 28
Powder River Basin Moving into sweet spot of a top-tier basin Acquisition of 42,148 SM Loco Federal 4076-9-4-1FH Frontier gross/24,475 net acres 906 BOPD + 1186 MCF/d SM Brider Federal 4076-23-14-1SH Shannon 642 BOPD + 313…
Powder River Basin Potential impact of stacked pay Frontier Play Entering development phase 2nd Bench1 90 gross/24 net wells Net potential reserves 15 MMBO and 26 Bcf 1st Bench1 120 gross/26 net wells Net potential reserves 16…
Gas Properties Oil growth is key to Fidelitys strategy, but we maintain a diversified portfolio Our gas assets include: Significant operated fields (all 100% WI) Baker Field, Fallon County, MT Bowdoin Field, Phillips County, MT…
2013 Reserve Summary NPV10 increased 272 million to 1.34 billion Strategic direction driving value creation over reserve volume growth YE 2013 reserves of 80.7 MMBOE essentially flat to YE 2012 reserves of 80.5 MMBOE Managed…
Outlook Returns Based Investment Philosophy Focus on oil growth projecting 10 to 15% increase this year Growth in Paradox, Bakken and Powder River Basin Capital expenditures of approximately 620 million 125 million in the Bakken,…
Record Capital Program 4.6B 3.2B Increase Cap Ex Construction E&P 43% Regulated over next 5 years 2009-2013 2014-2018 Note: Excludes unidentified acquisitions and proposed 375-mile pipeline. 35
Credit & Liquidity At June 30, 2014 (Millions) Capacity Outstanding Available Commercial Paper Programs 825 268 557 40% Revolving Credit Agreements 115 0 113 * Construction Total Exploration 940 268 670 24% & Production…
Funding Plan for 2014 2014 Projected Capital Expenditures Totaling Approximately 1.1 Billion Funding Sources Previous Range Updated Range Operating cash flows 675M - 725M 600M - 650M Debt 200M - 250M 225M - 275M Asset sales 0 -…
Equity For Accretive Growth Business Project Accretive Utility Rate base growth Pipeline Dakota Prairie Refinery 39
Dividend Growth 76 consecutive years of 0.71 quarterly dividend payments Dividend increased November 2013, marking 23 consecutive 0.48 years of increases Committed to paying a competitive dividend 2004 2005 2006 2007 2008 2009…
Outlook Strong performance positioned for growth Utility record approx. 300 million capital program in 2014 driven by RESOURCES customer and load growth particularly in North Dakota Pipeline expanding its midstream assets through…
RESOURCES Group, Inc . Building a Strong America 42
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