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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: NikhilJog who wrote (45300)	11/5/2011 4:41:45 PM
From: E_K_S	Read Replies (2) \| Respond to of 78476

Re: MDU Resources Group Inc. (MDU) (Note: Lots of posts on MDU on this thread. Just search "MDU" w/ the SI search tool.) I researched the company enough to know that I like the company for the assets they own especially two of their operating divisions: (1) Exploration & Production and (2) Regulated - Electric and Natural Gas Distribution; - Pipeline and Energy Services. MDU also operates a Construction division which I have not followed and would rather they just sell it and focus on their other two divisions mentioned above. They own some really good Oil & NG assets in their Fidelity Exploration & Production Company. mdu.com In June 2011, MDU announced more Bakken leaseholds which further expands their exploration footprint in the Bakken shale fields. Announces Bakken Leaseholds Acquisition - 6/27/2011 Bismarck, ND mdu.com Their Regulated Divisions basically provides them "utility" pricing (for their two operating divisions) allowing them steady growing FCF to fund their growth and E&P operation. They have two Regulated Operating Divisions: Electric and Natural Gas Distribution: Montana-Dakota Utilities Great Plains Natural Gas Cascade Natural Gas Intermountain Gas Pipeline and Energy Services : Williston Basin Interstate Pipeline Bitter Creek Energy Services Prairielands Energy Marketing Both operate in the "sweet spot" for delivering their growing NG services. Their footprint for their pipe lines is located in the heart of the Bakken & Williston Basin shale fields. They own NG gathering assets through their Bitter Creek Energy Services company. From their 2010 Annual Report:: MDU owns some of the largest underground NG storage assets in the U.S... For example their Williston Basin’s underground natural gas storage facilities have a certificated storage capacity of approximately 353 Bcf, including 193 Bcf of working gas capacity, 85 Bcf of cushion gas and 75 Bcf of native gas. Williston Basin’s storage facilities enable its customers to purchase natural gas at more uniform daily volumes throughout the year and meet winter peak requirements. ---------------------------------------------------------------------------------------------------------------------------------------- MDU is a great company that fits my NG theme to a tee. It's just hard to value their assets because they have some limitations operating in a regulated environment. I think what they have is a good mix of synergistic operating businesses that provides for excellent growth over time. I would not split the company up but rather continue to expand all their NG related services. They own a small operating company called Total Corrosion Solutions ( totalcorrosion.com ) that is developing corrosion prevention solutions (& testing) critical in building "safe" NG pipeline systems. Perhaps their construction division can be morphed into a specialized NG pipeline construction company. There are a lot options they can explore in developing their specific NG infrastructure services. ============================================================== Here is a listing of the TOP NG Utilities that I have been using to identify investment target over the last 18 months, Both AGL and MDU are my largest holdings. I should really work on loading up on more of these companies but you have to focus on VALUE Buys. Many of these are excellent companies but no long VALUE Buys. EKS