The Write Offs were $ 1.16 per share.. MDU had huge NON cash write off in 2008 due to the collaspe of Oil and NG prices..If you go to Baker hughes the number of NG rigs working in America is approx. half of what it was in 2009, due to the glut of NG.. Fidelity has huge Dry NG fields Near Baker and Bowdin MT, and in East Texas..
I wonder what Area's of Exploration were Non Economic?? Could it be the Heath . and parts of the Niobrara Formation???? don
The exploration and production business, like many independent companies in the sector, uses the full-cost method of accounting. Under this method, the company is required to perform a quarterly ceiling test comparing its capitalized costs to the after-tax, discounted expected cash flow from its economic proved oil and natural gas reserves. The price used in the test is based on the average of the trailing 12 months. This test resulted in total after-tax write-downs for the year of $246.8 million. The write-downs were largely driven by the lower natural gas price environment in 2012. Other factors affecting the write-downs include certain capital associated with non-economic 2012 exploratory activity. The write-downs are noncash and do not affect cash flows.
“In the fourth quarter, net of the noncash write-down, our exploration and production business reported its highest quarterly earnings since 2009," Goodin said. "The group increased annual oil production by 36 percent over the prior year, outperforming its target.”
I heard the last 15 minutes or so. I wish E&P sounded like it was on firmer footing. Henry's Hub prices down to around $3.15 last I looked. I really do expect NG to come back in price, and MDU by then should have everyone pretty accustomed to using non GAAP earnings which is really necessary as long as the E&P portion of MDU is significant.
don, I listened to some of the MDU conference call today. heard the analyst questions session. last question put to CEO was break-up of integrated business model. CEO acknowledged he has read the reports on breaking up of MDU, but is focused on getting operations to leverage integrated model....