Doran Schwartz - Vice President and CFO Terry Hildestad - President and CEO Steve Bietz - President and CEO, WBI Energy Dave Goodin - President and CEO, Montana Dakota, Great Plains Natural Gas, Cascade Natural Gas and Intermountain Gas John Harp - CEO, Knife River Corporation and MDU Construction Services Kent Wells - President and CEO, Fidelity Exploration & Production Bill Schneider - Executive Vice President, Bakken Development Nicole Kivisto - Vice President, Controller and CAO

Chris Ellinghaus - Williams Capital Paul Ridzon - KeyBanc

Good morning. My name is Eva and I will be your conference facilitator. At this time, I would like to welcome everyone to the MDU Resources Group Third Quarter 2012 conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. (Operator Instructions) This call will be available for replay, beginning at 2:00 p.m. ET today, through 11:59 p.m. ET on November 15. The conference ID number for the replay is 34753792, again the conference ID number for the replay is 34753792. The number to dial-in for the replay is 1855-859-2056 or 404-537-3406. I would now like to turn the conference over the Doran Schwartz, Vice President and Chief financial officer of MDU Resources Group. Thank you, Mr. Schwartz, you may begin your conference.

Thank you, and welcome to our earnings release conference call. For those of you who are dealing with the aftermath of storm Sandy our sincerest thoughts are with you for a return to some normalcy in the days ahead. And before I turn the presentation over the Terry Hildestad, our President and Chief Executive Officer, I would like to mention that this conference call is being broadcast live to the public over the internet and slides will accompany or remarks. If you’d would like to view the slides go to our website at www.mdu.com and follow the link to the conference call. Our earnings release is also available on our website. Now during the course of this presentation. We will make certain forward-looking statements within the meaning of section 21 of the securities exchange act of 1934. Although the company believes that its expectations and beliefs are based on reasonable assumptions actual results may differ materially. For a discussion of factors that may cause actual results therefore refer to item 1A Risk Factors in our most recent Form 10-K and a Risk Factors section in our most recent form 8-K. Our format today will include formal remarks by Terry, followed by a Q&A session. Other members of our management team who will be available to answer questions during the Q&A session of the conference call today are, Steve Bietz - President & CEO, WBI Energy, Dave Goodin, President & CEO of Montana Dakota, Great Plains Natural Gas, Cascade Natural Gas and Intermountain Gas; John Harp, CEO of Knife River Corporation and MDU Construction Services; Kent Wells, President & CEO of Fidelity Exploration & Production; Bill Schneider, Executive Vice President of Bakken Development and Nicole Kivisto, Vice President, Controller & Chief Accounting Officer for MDU Resources. And with that I’ll turn the presentation over to Terry, for his formal remarks. Terry?

Thank you, Doran, and good morning. Thank you for joining us today to discuss third quarter results. We had a good quarter with a strength of our diversified group of companies we were able to generate solid earnings growth for the quarter, even though we realize lower natural gas and oil prices in the prior year. Our construction businesses continued to experience upward momentum and our utility business had another solid quarter driven by further growth in the Bakken. We experienced some delays in planned drilling during the third quarter, however, we’re seeing strong results from wells coming on line late in the quarter, and so far in the fourth quarter. Absent the non-cash charged earnings per share increased 12% compared to the last year. We reported consolidated earnings of $71.1 million or $0.38 per share compared the earnings of $63.8 million or $0.34 per share last year. We have revised our annual 2012 earnings guidance to a range of $1.05 to $1.20 and this is from $1.00 to $1.25 previously. This range excludes the effects of this quarter’s non-cash charges as well as the arbitration charge reversal from the second quarter this year. Now moving on to our individual operations, I’ll start with our construction materials and service companies, we’re very pleased with the results of this group in the third quarter. Combined earnings for the Group were $51.8 million that’s a 36% increase over the last year, on 6% revenue growth. We experienced higher construction workloads and margins as well as improved volumes and margins in our asphalt, oil and ready-mix concrete product lines. Our specialty equipment manufacturing sales, and rental division had another solid quarter with an increased earnings contribution. In addition our SG&A costs were down for our combined construction businesses. The Bakken is at the heart of what continues to feel more and more like an uptick for our Construction Group. We continue to grow our operations in the region, in August we began production for our new ready-mix plants in both Dickenson and Watford City North Dakota. This is in the Bakken area. Backlog in the area is approximately $50 million which we believe is a good backlog heading into the winter season. The North West is home to much of the quality insight electrical work our Service Group has been performing this year where we’ve been engaged on a substantial project. Further development in the region by our major tech company should provide opportunities going forward from both our materials and our service business. We’re also pleased that we are seeing an uptick in the transmission work being bid and worked. This represents a growing percentage of our services backlog in addition we’re happy to be doing our part to help the storm recovery work in the Greater New York area. Earlier this week our Services Group deployed about 85 linemen to that area. Backlog is up at both our Materials and Service groups, with a combined increase of $55 million compared to a year ago. We’ve also seen a shift to more private work for our Materials Group with private work now comprising 17% of our Construction Materials backlog. Now that compares to 8% at the end of the second quarter. National indicators are looking better for this group also, according to the US Department of Commerce. Housing starts in September were up 15% compared to 1 months earlier when you compare it to a year ago, they were up 35%. Construction spending is also on the rise with the first 8 months of the years being 9% higher compared to the same period last year. In addition, Congress passed a new two-year Highway Bill, it’s called MAP-21. It maintains the current funding level and allows states to move forward on larger and long-term projects. We’re happy with the direction of our Construction Group, they’re trending in the right direction, we’re optimistic, and it’s a sign of things to come. Our Utility business reported earnings of $11 million, that’s up 32% over the last year. This was largely a result of continued economic growth in the Bakken area which contributed to a 5% increase in overall electric sales. We also experienced lower operation and maintenance expenses. Our natural gas utility business, had normal seasonal loss but saw an approximate 20% improvement compared to last year related to lower operating expense this quarter. Further infrastructure investment in the Bakken continues to be driven by growing customer accounts for both electric and natural gas services. We have seen an 8% electric customer growth and a 7% natural gas customer growth just since last year. We have approximately $75 million in capital expenditures targeted the Bakken - for the Bakken area this year alone just to keep up with the needs of the growing customer base because North Dakota and Montana combined represent about 85% of our total electric sales, the Bakken truly is a needle-mover for our electric business and we look forward to sustained growth. We recently filed an public application with Montana Public Service Commission requesting a gas rate increase that totals $3.5 million annually or 5.9% over the current level. We have requested an interim increase in $1.7 million to be effective within 30 days this is the first natural gas rate increase request we’ve made in Montana since 2004. As you’re aware approval of advanced determination of prudence has been granted on two substantial projects for this unit, first, the EDA megawatt natural gas-fired turbine, adjacent to our existing Heskett Generating Station near Mandan, North Dakota. This has a projected cost of $85 million and second the environmental upgrade at the Big Stone Station that’s necessary to meet EPA standards for which our share of this cost is estimated to be about $125 million. Our Utility group is focused on growing it’s rate face and alongside that its earnings. To do so requires capital investments, we have nearly $1 billion in capital forecasted at the Utility of the next five years. We anticipate that investment will result in nearly a $400 million rate base growth. Of course, we continue to pursue acquisition opportunities as they arise, they are not included in our capital forecast. We look forward to growing our utility through smart solid investments that are necessary to meet our customer’s meets. Next our Pipeline and Energy Service Group compared earnings of $3.3 million that compared to the earnings of $5.2 million for the same period in 2011. The decrease was largely the result of lower gathering volumes as producers cut back on natural gas production because of uneconomic price environment. We did experience higher storage service revenue. Natural gas prices aside, good progress has been made in efforts to grow the mid-stream business, we recently exercised an option to purchase land for the proposed diesel topping plant site. The total cost of the project is expected to be approximately $280 million to $300 million. Again we think this is a good project it’s something the state really stands to benefit from and it has the potential to positively affect each of our business units. Earlier this year we announced the acquisition of a 50% interest in Pronghorn natural gas oil mid-stream assets near Belfield, North Dakota that’s in the Bakken region. The 2012 portion of our investments in this is approximately $100 million, production is coming online it’s continuing to ramp up and we expect this investment to provide accretive earnings and cash flow to be the business unit. We also continue to expand our system for dry natural gas transmission assets. In August approximately 13 miles of high pressure transmission pipeline from the state line processing facilities to Northern border pipeline replaced and serviced. We doubled our take away capacity in the Bakken in 2011 to about 240 million cubic feet per day and with the completion of this project have nearly doubled that capacity again this year. This puts our total pipeline capacity to over 1 billion cubic feet a day on a peak day basis that’s a milestone, we are excited to have achieved. The potential exists for additional pipeline needs with proposed expansions at the Garden Creek II and other gas plants in the Bakken. Our pipeline’s proximity to rapid expanding energy development area serves as an excellent catalyst for future growth opportunities. Next our E&P Group, we had earnings of $13.1 million and excluded the non-cash charge, realized natural gas prices were down 20% and realized oil prices were down 5%. A higher Bakken differential, which includes transportation charges, averaged approximately $12 to $13 throughout the third quarter that effected our oil price realization. Forecasts indicate a significant improvement in these pricing spreads for the fourth quarter. October estimate was averaged around $4, again a significant improvement. 19% higher oil production for the quarter partial offset the lower prices. However, we did have some delays in our drilling and completion activity and we did not bring online all the wells we had planned, this is primarily a timing issue and a number of good wells were brought on production late in September and during October. As a result of these new wells we did reach a new weekly oil production record in October averaging approximately 13,500 barrels of oil a day. This is up from the average of 12,200 barrels of oil a day in the third quarter. We still expect to meet our full year oil production projection increase of 25% to 30%. On the natural gas side, it’s important to understand that we have strategically and voluntarily curtailed natural gas production in a sustained low price environment. This is driving our natural gas production decline. The curtailment focused on dry gas wells that were providing minimum margin in lower natural gas price environments. We plan to bring these wells back on production rather quickly when natural gas prices recover to an economic level. Now I want to give you an update on our key growth areas, first the Bakken, where we have five rigs drilling. Oil production in the Bakken was up a substantial 46% over last year. We have a new production record of more than 7,000 net barrels per day and are achieving that at a quite consistent level now. In Mountrail County we have seen continued strong wells in this development phase acreage. The Amundson 23-14H well had a 24 hour IP rate of 1,353 barrels of oil and 582 MCF of natural gas. The Luke 19-20-29H [IPed] at 968 barrels and 676 Mcf. We have identified approximately 40 remaining middle Bakken wells in the area and we’re evaluating our Three Forks potential following the lead of other operators, which would be incremental to these numbers. In Stark County, we continue to see encouraging results and gross production recently set a record of about 2,000 barrels a day. We have approximately 51,000 net acres here and through our appraisal program and beginning stages of development we’ve identified a sweet spot area we think will be highly productive. We recently completed a couple strong wells the Pavlish 19-20H came on line at 1,097 barrels of oil in 657 Mcf of natural gas. The Kudrna 5-8H had a 24-hour IP rate of 1,151 barrels and 571 Mcf. We have approximately 40 future drilling sites identified in this area. In Richland County, we’re initially targeting the Three Forks. What we are seeing now from our own data and from other produces in the area there looks to be significant upside potential in the Upper Bakken Shale on this acreage. While initial rates are not as high as some of our other Middle Bakken and Three Forks wells, it appears that the decline rates are shallower and can provide good economic returns. We still have a couple more wells planned for the Richland County this year, so stay tuned for further results as we continue to focus on cracking the code there. Now moving on to the Paradox basin, to put that simply, the Paradox basin is a potential game changer for us. As we mentioned before, we kick things off in this play with a great well that was a Cane Creek unit number 26-2H well. Then our next two wells were completed open hole and did not turn out so well, so we’ve returned to [cast] hole completions. We recently put the Cane Creek unit 12-1H well on production and it has been consistently producing approximately 1,500 barrels of oil a day over the past three weeks. It has a flowing pressure above 2,800 PSI. We have 50 to 75 future locations with gross EURs estimated up to 1 million barrels and perhaps beyond. We have concluded our appraisal program this year for the Heath Shale play in Montana where we have 90,000 net acres. We’ve drilled five wells, saw encouraging results in four of the five wells, but production issues are clouding the decision to move forward with additional drilling. These wells are being worked on by our production team. In Texas we continue to target areas with potential for higher liquids. In Central Texas we have drilled four wells and are assessing the development potential in this stack pay field. Potential ranges from rich gas to oil and includes zones in the Glenn Rose to the Buddha, as well as in the Woodbine zones. Finally in Nebraska, we have drilled two vertical wells and are performing selective zone testing to set up our first horizontal well planned for 2013. So in summary our E&P financial results were lower than expectations driven primarily by lower realized product prices and delays on bringing on some new oil production. Our October volumes give us confidence that we remain on track with this E&P growth strategy. Now with that I’ll return to a consolidated discussion. Overall, we’re very pleased with what our group of diversified companies has accomplished so far this year, and really what’s in store for the future. The construction group is on pace for a solid year for both materials and services and we see positive indicators for the momentum to continue. We anticipate seeing continued customer and load growth particularly in the Bakken at our utility, and we have substantial growth projects that are in the works in this business unit. Our pipeline has and will focus on expanding its system of midstream and pipeline transmission assets through the growth projects and through partnering opportunities. Our E&P business has strong recent well results and improved recent oil pricing differentials in the Bakken along with significant drilling inventory to provide upside opportunities. MDU is positioned for strategic growth, we’re financially strong with good cash flow and access to capital. Our 75-year dividend paying history reflects our commitment to creating shareholder value. We owned valuable assets that are becoming increasingly more valuable. The services and products we provide are essential, must haves and we have been in these businesses for many years and are focused on operating efficiently. Thank you for your interest in MDU resources and for your time today and look forward to speaking again with you soon. We’ll open the lines up now operator for questions.

(Operator Instructions) Your first question comes from Chris Ellinghaus with Williams Capital. Chris Ellinghaus - Williams Capital: Can you give us any idea how much you’re curtailing intentionally on gas production?

Yeah, Chris this is Kent. We’ve got roughly 20 million to 25 million a day, that we’ve shut in and we focused on our dry gas fields, Baker, Bowdoin in the [coalbed]. Chris Ellinghaus - Williams Capital: Okay. And can you give us a little bit color – I am sorry go ahead.

Go ahead, Chris. Chris Ellinghaus - Williams Capital: The construction businesses looked much better this quarter, can you give us a little more color on what you’re seeing out there?

Well, it’s the nice thing that we see this quarter is we see both the top line and the bottom line growing, and that’s always a good sign to get growth in the revenue side, and more importantly take us a 6% growth but more importantly increase your earnings by 36%. And then the other thing that we disclose as you’re starting to see an uptick in the private work, and obviously that scenario where particularly in the material side of the business it’s really hampered our ability to produce their earnings that we’d like. So we’re – I think we’re in a good position I mean the interest that we’ve always talked about is our workforce in our people, we’ve had 8,000 plus workforce out there in the last three months that have really produced, I think, our customers were happy with our work, we continue to try to improve our reputation in our brand and so we’re cautiously optimistic going into next year. Chris Ellinghaus - Williams Capital: Okay. And what’s going on in the private side can you give us a little color there, it seems like maybe things have turned a corner?

Yeah, there is – it’s a all over the map, I mean obviously that we’re starting to see some residential work come up in some small pockets. The other thing we’re trying to do, if you look at some niche work tailings and gold mines and areas where we think we can move our margins a little better. And so it’s a combination of the private work and also we’ve been very happy on the construction services side our Equipment Division and our supply business continues to grow. So it’s there is signs I mean I think there is a lot of money setting out the sidelines and have been for two or three years and the thing about construction, construction is built on one word and the word is confidence. And if the confidence starts to comeback in the marketplace with our cost structure and the 8,000 people that we’re working for us right now, we’re in a very good position. Chris Ellinghaus - Williams Capital: Okay. And one more thing, can you give us some sense of what your return expectations are for midstream asset investments?

Chris, this is Steve Bietz, from a return perspective it really goes project by project, I think, you’ve got to look at the risk associated with each of those projects and goes to some of the contractual terms that you have underlying those certainly we would look at a regulated type of return is a floor and can move up from there. Chris Ellinghaus - Williams Capital: Okay, great. Thanks a lot guys, appreciate it.

Thanks, Chris.

Your next question comes from Paul Ridzon with KeyBanc.

Hello good morning, Paul. Paul Ridzon - KeyBanc: Sorry, if construction takes off what your degree of confidence that you can hold the SG&A line or is that need to expand to meet the new business?

Well, Paul if you know anything about me, I’ve always had a pretty good hand on my cost and my overhead and so to tell you that we’re going to move those cost for any uptick actually I think we have some slack in our ability to increase sales without increasing SG&A, I think we’re right now probably in pretty good position on our SG&A but I think we can have nice uptick without driving those costs because we are very focused company on cost and performance and one of the things we talk about, we talk in our business with Kennish as I mentioned to you guys in Denver we’re interested and picking up that penny. So we’re looking at areas that we’re waking manage our cost and deliver good efficiencies and good productivity, so I think we can manage that SG&A will watch it very closely, we’ve got people that look at that daily via dashboards that we monitor and we’re really pay attention to our costs because I believe if you don’t know your cost you can’t be in business. Paul Ridzon - KeyBanc: As we move to more private component of the business mix, what do you see the opportunities from margin expansion?

Well, (Inaudible) in a pudding and let us deliver some results and then I will be comfortable talking to you about it but my bottom line that if that opportunity comes and we see some continuing improvement in that private sector, I like our players, I like our people, I like our performance those opportunities out there, we’re going to execute on them and I think the shareholder will benefit. Paul Ridzon - KeyBanc: And pockets in Bakken what the growth looks like at construction?

Well, the Bakken is a big part of MDU, when you look at everything that we offer out there it’s a broad range of services, but we see pockets in other parts of the country starting to develop and come back I mean we’re starting that such a low thresholds that any uptick, is going to be positive just because of if you’ve looked at our revenues where they were in our earnings back to 2008 versus where they’re at today, we’re basically about half where we were. So we think I’m -- that we have the opportunity with any type of improvement in the economy to benefit from that but it’s not just the Bakken but Bakken is a very important part of that, it’s certainly helped our material side of the business but we think there is other pockets that with any confidence coming back and is a private sector, I think we’re in good position. Paul Ridzon - KeyBanc: Is there growth excluding Bakken?

Yes, I mean there are growth in our private work was not just Bakken driven we had to have other areas that we show some improvements, again very good growth if you look at our Construction Services Group, we almost doubled our earnings 100% increase I mean those are positive signs that something good as happening out there. Paul Ridzon - KeyBanc: Thank you very much.

This marks the last call for question. (Operator Instructions) This call will be available for replay beginning at 2:00 p.m. Eastern today through to 11:59 p.m. Eastern on November 15th. The conference ID number for the replay is 34753792. Again, the conference ID number for the replay is 34753792. At this time there are no further questions. I would now like to turn the conference back over to management for closing remarks.

Thank you. We expect to be providing our assumptions for 2013 at our year-end report that occurs in early February, we certainly appreciate all of your participation on the call today we look forward to have an opportunity to speak with you soon. So thank you again for your interest in MDU Resources.

This concludes today’s MDU Resources Group conference call. Thank you for your participation. You may now disconnect.