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MDU Resources Reports First Quarter Earnings, Reaffirms 2012 Earnings Guidance

On a consolidated basis, the following information highlights the key growth strategies, projections and certain assumptions for the company:

  • Earnings per common share for 2012, diluted, are projected in the range of $1.00 to $1.25. The company expects the approximate percentage of 2012 earnings per common share by quarter to be:
    • Second quarter - 15 percent
    • Third quarter - 35 percent
    • Fourth quarter - 30 percent
  • Although near term market conditions are uncertain, the company's long-term compound annual growth goals on earnings per share from operations are in the range of 7 percent to 10 percent.
  • The company continually seeks opportunities to expand through strategic acquisitions and organic growth opportunities.
  • Estimated capital expenditures for 2012 are approximately $700 million.

Exploration and Production

 
Three Months Ended
    March 31,
    2012   2011

 

(Dollars in millions, where applicable)

Operating revenues:  
Oil $ 73.4 $ 58.6
Natural gas   26.4   45.4
    99.8   104.0
Operating expenses:
Operation and maintenance:
Lease operating costs 18.5 18.0
Gathering and transportation 4.3 5.7
Other 9.2 8.3
Depreciation, depletion and amortization 36.8 34.2
Taxes, other than income:
Production and property taxes 9.5 10.1
Other   .4   .3
    78.7   76.6
Operating income   21.1   27.4
Earnings   $ 12.9   $ 16.3
Production:
Oil (MBbls) 957 802
Natural gas (MMcf) 10,047 11,758
Total production (MBOE) 2,632 2,762
Average realized prices (including hedges):
Oil (per barrel) $ 76.71 $ 72.98
Natural gas (per Mcf) $ 2.63 $ 3.86
Average realized prices (excluding hedges):
Oil (per barrel) $ 84.62 $ 79.24
Natural gas (per Mcf) $ 1.94 $ 3.39
Average depreciation, depletion and amortization rate, per BOE $ 13.32 $ 11.76
Production costs, including taxes, per BOE:
Lease operating costs $ 7.02 $ 6.52
Gathering and transportation 1.63 2.05
Production and property taxes   3.62   3.65
    $ 12.27   $ 12.22
Notes:
• Oil includes crude oil, condensate and natural gas liquids.
• Beginning with first quarter results, reporting barrel of oil equivalents rather than million cubic feet equivalents, based on a 6:1 ratio.

Earnings at this segment were $12.9 million for the first quarter of 2012, compared to $16.3 million in 2011. This decrease reflects 32 percent lower average realized natural gas prices, decreased natural gas production of 15 percent, as well as higher depreciation, depletion and amortization expense. These decreases were partially offset by increased oil production of 19 percent and 5 percent higher average realized oil prices. The combined oil and natural gas pricing earnings effect was a negative $6.5 million.

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