Inquiring about potential laterals for Bakken East (e.g., Ellendale), how the gas strategy integrates with the electric utility's data center plans, and if the capital-light approach for data centers might become more capital-intensive.

Nicole Kivisto confirmed continued discussions with data center customers and a potential shift to more capital-intensive investments for future agreements. Jason Vollmer clarified that the Ellendale lateral is not currently contemplated in the Bakken East design due to lack of interest at that specific location, but other laterals could develop over time. “we may consider changing that strategy a bit and leaning into some investment. And so more to follow in terms of those final decisions being made, but we are continuing to discuss with potential customers the ability to serve them from a large load perspective.”

Questioning how MDU Resources plans to finance the $2.7B-$3.2B Bakken East project, given its size, and if partnerships or sell-downs are being considered.

Jason Vollmer stated that all financing options are on the table, including self-financing, partnerships, or other structures. The primary focus is to find an option that provides the best long-term return for shareholders while allowing MDU Resources to maintain a majority stake due to the project's connection to their existing system. “I would say all options are on the table as we look at ways to finance this... Our primary focus is going to be to try to find an option that provides the best return for our shareholders over the long term, but also gives us the ability to have a majority stake in this project.”

Asking for an update on the Montana rate case and if a settlement is still being pursued given an upcoming deadline.

Jason Vollmer confirmed that interim rates were approved and effective April 1. While a hearing is scheduled for July, the company remains open to a potential settlement and will continue discussions. “Typically, as we look at these types of cases, we look for potential settlements along the way where we can. And certainly, we'll continue to be in discussions on that.”

MDU

MDU Resources Group (MDU) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Utilities· May 7, 2026

Source: earnings call transcript

Executive summary

MDU Resources Group Inc. Q1 FY26 — Strong Operational Performance and Bakken East Pipeline Progress

MDU Resources Group reported Q1 FY26 earnings reflecting strong operational performance across its businesses, partially offset by mild winter weather. The company affirmed its full-year EPS guidance, buoyed by significant progress on the Bakken East Pipeline project and growing data center demand. Management is evaluating financing options for the substantial pipeline investment and considering a more capital-intensive approach for future data center opportunities, while maintaining a focus on regulatory engagement and long-term EPS growth.

Highlights

Affirmed 2026 EPS guidance of $0.93 to $1.00 per share, despite mild weather headwinds.
Bakken East Pipeline project received approximately 1.4 Bcf/d of submitted interest, with 40% already signed under precedent agreements.
Data center load under signed electric service agreements reached 580 MW, with 180 MW online since mid-2023 and an additional 100 MW ramping online.
Retail customer growth of 1.4% year-over-year, within the targeted annual growth rate of 1% to 2%.
Average retail customer receives an approximate $70 per year bill credit from data center load, anticipated to increase to over $200 per year.

Concerns

Mild winter weather impacts reduced Q1 FY26 earnings by approximately $0.03 per share.
Electric utility earnings decreased by $0.5 million to $14.5 million, primarily due to lower retail sales volumes from 10% to 30% milder weather.
Natural gas utility earnings decreased by $0.5 million to $44.2 million, impacted by approximately $5 million due to warmer weather.
Pipeline segment earnings decreased by $1.9 million to $15.3 million, driven by lower interruptible natural gas storage withdrawals and higher O&M expenses.

Guidance & targets

Category	Target	Timeline	Confidence
Adjusted EPS	$0.93 to $1.00 per share high materiality	FY26	High
Long-term EPS growth rate	6% to 8% high materiality	Long-term	High
Annual dividend payout ratio	60% to 70% medium materiality	Annual	High
Bakken East Pipeline capital investment	$2.7 billion to $3.2 billion high materiality	Project duration	Medium
Bakken East Pipeline FERC 7C application filing	Q3 2026 medium materiality	Q3 · FY26	High
Bakken East Pipeline construction completion (first in-service)	Late 2029 high materiality	FY29	Medium
Bakken East Pipeline construction completion (second phase in-service)	Late 2030 high materiality	FY30	Medium
North Dakota general rate case filing	Yet this year medium materiality	FY26	High
Washington multiyear rate case filing	This year medium materiality	FY26	High
Minnesota general rate case filing	Later in 2026 medium materiality	FY26	High
Line Section 32 expansion construction completion	Late 2028 low materiality	FY28	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Electric Utility Earnings decreased due to lower retail sales volumes from milder weather, partially offset by the first full quarter of Badger Wind Farm in service. Earnings: $14.5 million (Q1 FY26)Earnings (Q1 FY25): $15 millionWeather impact: -$2 million (vs Q1 FY25)Retail sales volumes: Lower (10% to 30% milder weather)	—	—	—	$14.5 million
Natural Gas Utility Earnings decreased due to warmer weather impacting volumes, largely offset by rate relief in Washington, Idaho, Montana, and Wyoming, and weather normalization mechanisms. Earnings: $44.2 million (Q1 FY26)Earnings (Q1 FY25): $44.7 millionWeather impact: -$5 million (vs Q1 FY25)Temperatures: 20% warmer in Idaho, 30% warmer in Montana, 10% to 30% higher across rest of service territory	—	—	—	$44.2 million
Pipeline Segment Earnings decreased from record prior-year levels due to lower storage withdrawals and higher O&M, partially offset by strong short-term contract demand and the Minot expansion. Earnings: $15.3 million (Q1 FY26)Earnings (Q1 FY25): $17.2 millionDriver: Lower interruptible natural gas storage withdrawalsDriver: Higher O&M expense (increased material costs, payroll)Driver: Higher Montana property tax accrualsOffset: Strong customer demand for short-term natural gas transportation contractsOffset: Contributions from Minot expansion project	—	—	—	$15.3 million

Orderbook & backlog

Bakken East Pipeline submitted interest 1.4 Bcf/d Q1 FY26

Approximately 40% signed under precedent agreements, additional in active negotiation. Includes $50 million annually for 10 years from North Dakota.

Data center load under signed electric service agreements 580 MW Q1 FY26

180 MW online since mid-2023; 50 MW (second data center) online; additional 50 MW ramping online; 150 MW expected online later 2026; 100 MW expected online 2027; 50 MW expected online 2028.

Capital programs

Bakken East Pipeline Project Under development $2.7 billion to $3.2 billion

Funding: Balance sheet, potential partnerships, various other options

Benefit:Approx. 1.4 Bcf/d transportation capacity; 353 miles of mainline pipe; 21 miles of lateral pipelines; 3 new compressor stations

Projected capital investment is incremental to current $3.1 billion capital investment forecast. Pre-filed with FERC in December 2025, 7C application targeted for Q3 2026. Team focused on getting to a final investment decision.

Line Section 32 Expansion Project Under development $70 million

Benefit:Natural gas transportation service to an electric generating facility in Northwest North Dakota

Included in the $3.1 billion capital plan. FERC Section 7C application filed in March 2026. Project is dependent on regulatory approvals.

Minot Industrial Pipeline Project Early-stage development

Benefit:Approx. 90-mile pipeline from Tioga, North Dakota, to Minot, North Dakota, providing incremental natural gas transportation capacity for anticipated industrial demand.

Signed agreement to support early-stage development extended through late 2026. Included in outer years of the $3.1 billion capital plan.

Risks & headwinds

Mild winter weather impacts Q1 FY26

Reduced earnings by approximately $0.03 per share consolidated; $2 million impact on electric utility earnings; $5 million impact on natural gas utility earnings.

Mitigation:Weather normalization mechanisms in certain states helped to offset the warmer temperatures.

Higher operation and maintenance expense Q1 FY26

Contributed to decreased pipeline segment earnings.

Lower interruptible natural gas storage withdrawals Q1 FY26

Contributed to decreased pipeline segment earnings.

Regulatory approval risk for Bakken East Pipeline Q3 2026 (7C filing), construction target late 2029-2030

Project dependent on FERC 7C application approval.

Mitigation:Pre-filed with FERC in December 2025; targeting 7C application in Q3 2026.

Financing for Bakken East Pipeline Long-term

Projected capital investment of $2.7 billion to $3.2 billion, incremental to current capital plan.

Mitigation:Evaluating all options, including balance sheet, potential partnerships, and various other options; aiming to maintain majority stake.

What to watch in Q2 FY26

Bakken East Pipeline precedent agreements

Next quarter

Current 40% signed

Target Increased percentage of signed agreements

Why it matters

Securing additional precedent agreements is crucial for the final investment decision and derisking the substantial capital project.

In terms of the 40%, very encouraged that we have 40% of that under signed and executed precedent agreements. That's as of this date. We -- as we mentioned on the call and in the earnings release, we're in active negotiations on the remaining.

Find out whether MDU delivers this. Inve re-checks your case every morning.

Q&A highlights

Seeking more detail on the 40% signed precedent agreements for Bakken East and the timeline to finalize the remaining 60%.

Nicole Kivisto stated that the current progress aligns with initial expectations. The 40% is signed, and active negotiations are ongoing for the remainder, with key business terms largely agreed upon. The company aims for a Final Investment Decision (FID) as soon as practical, with a FERC 7C filing still targeted for Q3 2026.

“In terms of the 40%, very encouraged that we have 40% of that under signed and executed precedent agreements. That's as of this date. We -- as we mentioned on the call and in the earnings release, we're in active negotiations on the remaining.”

asked by Julien Dumoulin-Smith · answered by Nicole Kivisto

2 min read 5 chapters

Detailed narrative

Bakken East Pipeline Project Advancement

MDU Resources announced significant progress on the proposed Bakken East Pipeline, with approximately 1.4 Bcf/d of submitted interest from the binding open season. Notably, 40% of this interest is already secured under precedent agreements, including a $50 million annual commitment from North Dakota for 10 years.

The project's estimated capital investment is now between $2.7 billion and $3.2 billion, incremental to the company's existing capital plan, and management is exploring various financing options, including partnerships.

Growing Data Center Demand and Strategy

The company is experiencing substantial growth in data center load, with 580 MW under signed electric service agreements. Currently, 230 MW are online or ramping, with an additional 150 MW expected online later in 2026, 100 MW in 2027, and 50 MW in 2028.

MDU Resources is currently employing a capital-light model for these loads, which provides an approximate $70 annual bill credit to average retail customers, projected to increase to over $200. However, management is considering future capital investments in generation, substation, and transmission assets for new agreements.

Active Regulatory Engagement

MDU Resources continues its strategy of filing 3 to 5 rate cases annually. In the electric segment, a Wyoming rate case was approved, and Montana received interim rates for a $10.4 million annual increase. The natural gas segment saw new rates in Idaho ($13 million annual increase) and Washington ($10.8 million annual increase).

The company plans to file additional general rate cases in North Dakota, Washington, and Minnesota later in 2026, demonstrating ongoing efforts to secure constructive regulatory outcomes.

Strategic Pipeline Expansions

Beyond Bakken East, the company is advancing other key pipeline projects. The FERC Section 7C application was filed for the Line Section 32 expansion, a $70 million project included in the current capital plan, targeting completion in late 2028 to serve an electric generating facility.

Additionally, the early-stage development agreement for the Minot industrial pipeline, a potential 90-mile project, was extended through late 2026, indicating continued evaluation of customer-driven growth opportunities.

Financial Performance and Capital Management

Despite mild weather headwinds impacting Q1 FY26 earnings by $0.03 per share, MDU Resources affirmed its full-year EPS guidance of $0.93 to $1.00 per share and reiterated its long-term EPS growth target of 6% to 8%. The company settled 4.3 million shares from its December 2025 equity offering in March 2026, generating $81.3 million in proceeds, reinforcing its strong balance sheet and access to capital for future investments.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.