MDU Resources Announces Preliminary First Quarter Results, Oil Production Grows 19% And Rig Count Reaches 10, Advance Determination Of Prudence Approved For Natural Gas Plant, Reaffirms 2012 Earnings Guidance
MDU Resources Group, Inc. (NYSE:MDU) today announced preliminary unaudited financial results for the first quarter of 2012. The company expects to report first quarter earnings of approximately 19 cents per share, at the upper end of the first quarter earnings guidance range provided in February.
“We are pushing the upper range of our guidance, even with some weather and pricing challenges, which is a good indication of the strength of our operations,” said Terry D. Hildestad, president and chief executive officer of MDU Resources.
“Our utility operations experienced weather that was generally warmer than normal throughout the eight-state service territory compared to colder than normal temperatures in 2011,” Hildestad said. “In addition, our exploration and production company was affected by low realized natural gas prices during the quarter along with a widening of Bakken wellhead oil pricing spreads in March, compared to WTI posted prices. However, the price spread for April has improved, and forecasts indicate continued improvement throughout 2012.
“Our businesses are making good progress in executing their 2012 business plans,” Hildestad said. “Our construction services group had a strong quarter and we are making changes we believe will improve results at our construction materials business. Our pipeline storage group continued to be affected by the narrow natural gas pricing differentials. However, we are finding opportunities to invest in this segment as it expands into the liquids side of the midstream business. Our utility recently received approval for advance determination of prudence for our estimated $85 million investment into an 88-megawatt natural gas generation facility. This is a significant investment included in our approximate $915 million five-year utility capital growth program.”Hildestad noted that the company’s exploration and production business is on track to reach its 2012 targeted oil production increase of 20 percent to 30 percent over last year. Strong oil production growth during the latter part of the first quarter, primarily at Fidelity’s Bakken operations, helped drive the company’s overall oil production to approximately 10,500 barrels per day. This is an increase of approximately 19 percent from the same period a year earlier. The company has eight more oil rigs than a year ago, with a total of 10 rigs operating across its properties today. Five rigs are operating in the prolific Bakken, where the company holds approximately 124,000 net leasehold acres and has plans to invest approximately 40 percent of Fidelity’s capital this year.
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