How Many Millions Write off will MDU Take on the Fidelity Sale.. today wti posted price $ 78.24 . On May 1 2014 when Sale of Mountrail county assets for Approx $ 200 Million was announced wti Cushing was $ 99.69, On Oct 1 -2013 Date for the $ 200 Million Purchase of Power River Assets started wti was $ 102.09.
in press release MDU on web site indicated the closure of the Mountrail asset sale..
Looks like the Paradox Basin must have been the ship that sunk the fleet.. Margin , do you still have ptsd over the paradox . Does this Mean Fidelity is also selling the NG assets of ND and MT , ( Baker Mt and Bowdin Mt )
I hope there will be lots of Questions tomorrow ,and lots of straight forward answers...
From the MDU news releases
May 1 2014 .. Announce sale of Mountrail property for 200 Million $$$ ( so this discussion could have easily started 6 weeks or more earlier )
From MDU news releases
MDU Resources Announces Executive Promotions at Fidelity Exploration & Production Company
07/08/2014 - MDU Resources Group, Inc. (NYSE:MDU) announced today that Pat O’Bryan will become president of its indirect wholly owned subsidiary, Fidelity Exploration & Production Company, effective July 15. He will report directly to J. Kent Wells, who will continue in his roles of chief executive officer of Fidelity and vice chairman of the corporation
( so now we have another promotion in Fidelity ) Where is O'Bryan going, and When will Wells be let go.. or is it the intention of MDU to keep on this Vice Chairman and CEO of a division that no longer exists)
( 9-15- 2014 Earnings are lower, because of Paradox Basin well problems)
Nov 3 2014 announcement .
So Skip I would say they have had problems trying to figure out what this division has been doing for 7-8 months..
Unless this is operated as a Ready, Fire, Set order of operation.. don
this is the Break up value of MDU I presented in may of 2012.. If you disagree ( and I expect some will ) then state you figures along with facts ..) don
May 9, 2012
Some on the MDU board have suggested breaking up MDU, or selling to Bufffet.. so i have set about with MY estimation of the locked up value of MDU. you 3 different valuation methods for different portions of the company. each segment is identified and valued.. companies used for valuations are listed in the proxy page 19. all companies are publicly traded... I expect and welcome criticism, but with criticism, i want your numbers and what exact method you are using.. i surely can be wrong.. but you telling me i am wrong does not do a d..n bit of good for any of us shareholders.. The numbers are rounded for better understanding.
1. E+P division ..On april 24th 2012 ( GEOI) ( geo resources ) was sold for $ 978,000,000 this company has oil/gas wells in the Bakken and in south texas it was producing approx 7,000 boepd . this sales placed a value on this company of $139,000 per flowing BO.
From the 1st qtr earning Numbers of MDU, showed 973M BO, and 10,047 Mmcft of ng.( The conversion value of ng is 6 mcft of ng to 1 BO ) and the econmic value of NG is 20 % of a barrel of OIL. so 10,047 MCFT divided by 6 equals 1,674 bo ( this number is shown in 1st qtr earnings number ) but has a oil equal $$ value of 335M bo. The added 973M and 335 M equals 1,308,000 BO divided by 91 production days in the first qtr equals. 14,373 BOEPD. this times the GEOI sales data equals 1.997 Billion $$ or $ 10.62 per share.
Assuming the 188 Million Shares out standing..
A year ago Statoil bought out Brigham exp and paid $ 223,000 per flowing BO..
2. The Regulated Utility division. for a comparable i used the spyder etf ( XLU ) a group of approx 20 gas/elec dividend paying utilites. this has a 14.39 pe, which is what i used for valuation, because it is a lower valuation then 1.29 sales..
So according to the 2011 annual report MDU had profits in the elec/ng dividion of 67.6 Million this gives a value of $973,000,000
or $ 5.17 per share
3. the pipeline and energy services. i used OKE ( oneOK) a ND,OK based ng gas gathering and processing company for this segment.
OKE is valued today at .62 price to Sales ,. MDU pipeline service had a 2011 sales number of $ 278,000,000 which would allow a $ 172 ,000,000 value, or .92 cents per share.
4. Construction Material, i used valcan material ( VMC ) and Martin Merietta Material ( MLM )for comparison. both of these companies have a 2.02 or 2.03 Price to sales stock price today.. I think the aggreate material business of vmc, and mlm are over valued, so in this evaluation i used a conservative 1.5 times sales for the construction materials.. so in 2011 mdu had revenues in this division of $ 1,510,000,000 . X 1.5 price to sales equals $ 2,265,000,000 or $ 12.04 per share.
5.Construction Services division . i used Quanta ( pwr ) as a comparison they have a .95 price to sales
MDU construction services in 2011 had sales of $ 854,400,000 x.95 equals $ 811,680,000 or $ 4.31 per mdu share.
the estimated split values of the different divisions are $ 33.06 using these conservative numbers
2. $ 5.17
3. $ .92
5. $ 4.31
So what are your thoughts on valuation of MDU... don
Yes, Wed morning does say -2 below 0 for a overnight low.. this huge cold front is headed South and SE so it appears All of the USA will be cold by next Friday.don
A 40 percent chance of snow. Mostly cloudy, with a high near 23.
Mostly cloudy, with a low around 6.
Mostly cloudy, with a high near 17.
Mostly cloudy, with a low around 0.
Partly sunny, with a high near 17.
Partly cloudy, with a low around -2.
Mostly sunny, with a high near 20.
Partly cloudy, with a low around 5.
Partly sunny, with a high near 23.
Margin, if you go to MDU website and look at News, and follow the misunderstood steps for the E+P business in the last several years.
Mr Wells was brought in to run fidelity and was pd $ 2 Million + for his services, promoted to Vice Chairman What happens to him when fidelity is gone, what function will he do, be a piece of lawn decoration for the Corp headqtrs. In July of this Year a Mr O'Bryan was promoted to the top spot in fidelity, with Wells over seeing the division.
Fidelity in the last year bought nearly 41,000 acres of Wyoming Leases in Converse county, picked up some land leases in The Paradox, and have options for More.. ( Has anyone ever wondered what Fidelity did with that Huge land lease in the Wyoming/Nebraska Niobrara formation of 3-4 yrs ago ) I realize they sold some of it off to a foreign investor.. what happened to the rest..( dead Money )
This Morning I am thinking MDU may only get $ 4.50 per share or $ 850,000,000 ( before fees ) for all the E+P if sold/when sold..
So what happens to The Baker/Bowdin NG fields.. in 2008/09 when the world was crashing a analyst ask in a CC what they were doing long term, MDU CEO of the time indicated they only had .15 to .20 cents per mcft in LOE and it was like having a small money machine.. But if Fidelity keeps this they are still in E+P..
Thoughts.. or are there NONE from the Lurker/tos crowd.. don
I have been wondering if MDU made this Announcement of a Sale of E+P That it would increase the Failing Stock Price.. $ 1.45 earnings ( mdu Numbers for yr ) X 15 P/E( this is generous for a middle sized utility that has had no growth for years, with a marginal Dividend that will look smaller in the near future when Interest Rates go up) . this equals
$ 21.75 .. this is fair value today..that is why I posted that several weeks ago.. don
it appears like the dollar has stabilized ,and if it does not strengthen that will help firm oil prices.
Libya is having pipeline problems due to rebels, and I think the Russians will be a Pain the rest of month, and that the Bottom for oil may be in.. Now the upward price migration ( imho ) will be slow but steady.. I have been wrong before but these are my thoughts today.
if some of the weather forecasts for the usa for the winter are accurate, many , many gallons of Fuel oil , and Mcft of NG will be consumed for heating..i also think with gasoline down about 22 % more recreational driving will occur.. don
IN Bloomberg mag fri. Google subject for complete article. don
OPEC has been publishing its World Oil Outlook since 2007. That first report assumed $50-$60 per barrel of OPEC oil until 2030. Then prices rocketed to $141 and dropped to $33 in 2008, as the global financial crisis developed. In 2010, OPEC predicted a price level of $70-$80 until 2020, but that forecast has been blown out of the water. In the last four years, the average price has been above $100.
As Vagit Alekperov, the founder of the Russian oil giant Lukoil, once remarked, "The price is from God." Too many factors affect supply and demand for the most ambitious analyst to build a reliable model. OPEC tries, though, and according to its reference scenario, world oil demand will keep rising by at least 1 million barrels per day throughout 2019. Next year, demand outside the world's most developed countries -- members of the Organization for Economic Cooperation and Development -- should for the first time outstrip that in the OECD.
NCS Energy Services announced today two new completion records for its proprietary Multistage Unlimited coiled-tubing completion technology. The wells were completed for an independent operator in McKenzie County, North Dakota.
The first well, in the Middle Bakken formation, was completed with 94 stages and was flowing 7,120 BOE/d on October 10, 2014, according to the operator. When the well was completed, it established a world record for number of stages in a single well.
Soon after, an offset well in the Upper Three Forks formation was completed with 104 stages. This well was flowing 7,824 BOE/d on October 11, 2014. This was a hybrid completion comprising 97 NCS GripShift cemented casing sleeves, with seven NCS BallShift cemented ball-drop sleeves in the lower section of the well. In both wells, all stages were successfully fractured.
“At the time of completion, each well was a world record for total number of stages in a single well,” said Joe DeGeare, NCS Energy Services vice president of Sales and Operations. “The announced flow rates demonstrate the improved production potential inherent in these completion technologies.”
NCS Energy Services is the world leader in coiled-tubing-deployed frac-isolation technology used in multistage completions. NCS Energy Services is an independent technology and services company that has operated throughout North America, Latin America, Australia, and the Far East, with a history of more than 5,000 field successes. Visit NCS Energy Services
I have owned OKE made money and then sold it.. I wish I had picked up some when it had a down turn reciently, but I did not. . I believe they now have 8 NG processing plant in ND Bakken , 6 operational, and 2 more in planning.
They also have one in Marmarth ND and Baker Mt. For the life of me I can not understand why MDU which owns 50 % of a NG plant in belfield ND with WLL have not built all these plants.. a Out of state company came in and ATE all there lunch.don
Texas,.. The first 3 towns listed are all in SW corner of ND.. this cold will slow down work in the oil fields.. don
US National Weather Service Bismarck North Dakota
Early morning lows through 6 am CST, 5 am MST....uff da it's cold:
Glen Ullin: -18
Hazen, Linton, Beach, Center and Tioga: -13
Stanton, Dickinson and Killdeer