The sharp decline in oil prices has caused MDU Resources Group Inc. to delay plans to market its Fidelity Exploration & Production business.
In a Jan. 9 statement, company president and CEO David L. Goodin said MDU will take time to evaluate the market and prepare for its next move.
“We believe marketing Fidelity is the right strategic decision for the company and our shareholders, but it makes sense to delay our plans in light of the recent volatility of oil prices,” Goodin said. “We are nearing completion of the data room and other preparatory work that will be necessary, so we will be prepared to expedite the process when we believe the time is right.”
The company also announced that it expects the Dakota Prairie Refining facility, which it is developing in conjunction with Calumet Specialty Products Partners LP, to begin commercial production of diesel fuel and other products in the second quarter of 2015. Dakota Prairie Refining had expected to begin production by Dec. 31, 2014, but experienced delays from severe winter weather in November and late revisions to electrical systems and controls.
The facility’s cost now is expected to be more than $400 million. Construction costs and returns are shared equally with Calumet.
“Although we are disappointed in the delay and cost increase at the refinery, we anticipate good returns from this facility,” Goodin said. “In the future, we expect there will be opportunities to improve financial performance of the refinery through debottlenecking and other strategies. We also will benefit from experience gained with this project to help develop future projects, such as a second plant presently being evaluated near Minot, North Dakota.”
The company expects to provide additional information with its year-end 2014 earnings results news release and conference call on Feb. 3.