BISMARCK, ND–(Marketwired – June 28, 2016) – MDU Resources Group, Inc. (NYSE: MDU) announced today that its subsidiary, WBI Energy, Inc., has sold Dakota Prairie Refining LLC to Tesoro Refining & Marketing Company LLC, an affiliate of Tesoro Corporation.
WBI Energy had been equal partners in building and operating the refinery with Calumet North Dakota LLC, a subsidiary of Calumet Specialty Products Partners LP. To effect the sale of the refinery to Tesoro, WBI Energy on June 27 acquired Calumet North Dakota’s 50 percent membership interests.
Dakota Prairie Refining is capable of processing up to 20,000 barrels per day of Bakken crude oil and can produce approximately 8,000 barrels per day of diesel fuel, as well as the byproducts naphtha and atmospheric tower bottoms. Located just west of Dickinson, North Dakota, the refinery began operating in May 2015 and employs approximately 75 people.
“The refinery is operating well, which is a testament to the good work our employees have done in starting up and running the plant,” said David L. Goodin, president and CEO of MDU Resources. “Despite strong operations, the financial results from the refinery have been challenged because of low commodity prices. As a publicly traded corporation and a longtime North Dakota company, we felt a responsibility to our shareholders and to the state to find a solution that addressed the refinery’s financial challenges while ensuring it would continue operating and contributing to its neighboring communities and the state.”
With the sale of the refinery, MDU Resources anticipates an after-tax impairment in the second quarter from these discontinued operations in the range of $150 million-$160 million, subject to customary closing adjustments.
“Selling the refinery reduces our risk by decreasing our exposure to commodity prices, and it allows us to sharpen our focus on the growth opportunities at our ongoing businesses,” Goodin said. “As we have previously announced, we have a $1.5 billion, five-year capital investment plan at our regulated utility businesses, and we just announced a $50 million potential natural gas pipeline expansion project in North Dakota. This is also peak season for our construction companies, as we work on the $1.4 billion in backlog we previously announced.”
Forward-Looking Statements
The information in this release includes certain forward-looking statements, including statements by the president and CEO of MDU Resources, within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes its expectations are based on reasonable assumptions, actual results may differ materially. For a discussion of important factors that could cause actual results to differ materially from those expressed in the forward-looking statements, refer to Item 1A – Risk Factors in MDU Resources’ most recent Form 10-K and Form 10-Q.
About MDU Resources
MDU Resources Group, Inc., a member of the S&P MidCap 400 index, provides value-added natural resource products and related services that are essential to energy and transportation infrastructure, including regulated utilities, pipeline and midstream operations, and construction materials and services. For more information about MDU Resources, see the company’s website at www.mdu.com or contact the Investor Relations Department at investor@mduresources.com.
