BISMARCK, N.D., June 10, 2005 (BUSINESS WIRE) — MDU Resources Group, Inc. responded to recent Federal District Court decisions that impact the company’s coalbed natural gas production operations in Montana. Despite the potential negative implications to ongoing coalbed natural gas production volumes in Montana, the company is reaffirming its prior guidance that earnings per common share for 2005, diluted, remain within the previously projected range of $1.80 to $2.00.
Executive Vice President and Chief Financial Officer Warren L. Robinson reiterated that the overall business outlook for the company remains strong for the year. Robinson remarked the company does not expect any material change to the consolidated earnings outlook for the year based on the diversified nature of the corporation.
Fidelity Exploration & Production Company, a subsidiary of MDU Resources, received court orders to cease operations in its Badger Hills Project located in southeastern Montana. Following the issuance of the District Court decision, the company now expects its total natural gas and oil production for 2005 to be slightly lower than 2004 production. This represents a reduction from the previous estimate of volumes that would be comparable to or slightly higher than the previous year (based on the U.S. Ninth Circuit Court of Appeal’s May 31 injunction, pending appeal, covering further coalbed natural gas development in the Montana region).
On June 6, 2005, a Federal District Court in Billings, Mont., ordered a halt to coalbed natural gas operations in Fidelity’s Badger Hills project. The District Court’s order said the Bureau of Land Management’s Environmental Analysis was “tiered” to the Final Environmental Impact Statement which, in a previous court decision in February 2005, was ruled inadequate and remanded back for supplemental study.
“We will fully comply with the orders of the Montana District Court and the Ninth Circuit,” said John K. Castleberry, chief executive officer of Fidelity Exploration & Production Company. “We are formulating a plan that will ensure quick and safe compliance. Although we are committed to compliance with the law in all respects, we intend to work within the system and take all necessary actions to contest the Ninth Circuit’s injunction and the most recent orders of the Montana Federal District Court.”