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MDU Resources Group Inc. Message Board

  • bob.ram8888 bob.ram8888 Feb 4, 2013 7:56 PM Flag



    Sentiment: Hold

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    • 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.”

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