MDU Resources Posts $14 Million Q3 as Bakken East Clears FID

MDU Resources Group earned $14 million, or $0.07 per share, in the third quarter of 2026, down from $18.4 million, or $0.09 per share, a year earlier, as a renewable natural gas project cancellation and pipeline advisory costs weighed on results. Adjusted earnings came in at $16.6 million, or $0.08 per share, excluding the project cancellation and certain advisory costs.

The same quarter brought a milestone: the board approved a positive final investment decision (FID, the point at which a company commits capital to a project) for WBI Energy's Bakken East Pipeline Project, narrowing the estimated investment to $2.8 billion to $3.1 billion. For finance teams, the quarter illustrates the trade-off between near-term charges and a multiyear capital program now moving into execution.

What does the guidance say?

President and CEO Nicole Kivisto reaffirmed 2026 earnings guidance of $0.93 to $1.00 per share and the long-term earnings-per-share growth objective of 6% to 8%. The annual outlook assumes normal conditions for the rest of the year, continued customer growth, execution of capital plans and constructive regulatory outcomes.

CFO Jason Vollmer said the company has not yet issued 2027 earnings guidance. An updated five-year capital plan is expected later in November, Kivisto added — a document practitioners will want to watch for the financing picture around Bakken East.

How big is Bakken East?

The approximately 350-mile pipeline is designed to transport 1.4 billion cubic feet of natural gas per day, with two phases scheduled to enter service in late 2029 and late 2030. The final design includes sections of 42-inch, 36-inch and 30-inch pipe, four new compressor stations and additional compression at two existing facilities. MDU still expects to make its Federal Energy Regulatory Commission filing in the fourth quarter.

Vollmer said the larger pipe would reduce the amount of compression needed and lower customers' fuel costs. He said progress on the design, equipment orders and contractor discussions gave the company greater confidence to narrow its cost estimate.

MDU is evaluating financing options, including potential financial and strategic investors, while expecting WBI Energy to retain majority ownership and operational control. Vollmer said the company expects to provide more detail on financing around its fourth-quarter earnings call in February.

Which segments drove the quarter?

Electric utility earnings rose to $26.5 million from $21.5 million a year earlier. Vollmer attributed the increase to new rates, the Badger Wind Farm investment and higher retail sales volumes during warmer weather. Total retail electric sales volumes increased 9.3%, while data center sales volumes grew 18.4%.

Kivisto said MDU has more than 1 gigawatt of data center load under signed electric service agreements, with approximately 280 megawatts currently online. She said the company evaluates potential investments to serve large customers case by case and seeks to ensure those customers pay the costs they create.

The natural gas distribution segment's seasonal loss widened to $20.7 million from $18.2 million. The result included a $2.1 million after-tax loss from discontinuing the Knott Landfill Renewable Natural Gas Project in Oregon. Kivisto cited rising development costs and regulatory changes that altered the timing and volume of the company's need for renewable natural gas in the state.

Pipeline earnings fell to $13.1 million from $16.8 million, affected by higher operating and maintenance expenses, Bakken East advisory costs and lower storage injections. Vollmer said lower returns on nonqualified benefit plan investments affected all segments and reduced earnings by approximately $0.015 per share compared with the prior-year quarter.

Where do the rate cases stand?

Operating income rose to $47.6 million for the quarter from $39.8 million a year earlier. For the first nine months, operating income increased to $211.2 million from $183 million, while earnings rose to $116.1 million from $114.1 million.

On the regulatory front, Kivisto said North Dakota interim electric rates providing a $26.3 million increase took effect Sept. 1, subject to refund. The active docket list for finance teams to track:

• Montana: interim electric rates of $10.4 million remain in effect, subject to refund, while a $10 million settlement awaits approval.
• Oregon: a $12.2 million annual revenue increase for natural gas distribution, effective Oct. 31.
• Minnesota: MDU requested a $4.5 million annual revenue increase, plus a $3.9 million interim increase that, if approved, would take effect Jan. 1, 2027.

MDU Resources Group, headquartered in Bismarck, North Dakota, is a regulated energy delivery company serving electric and natural gas customers. Montana-Dakota Utilities operates electric generation, transmission and distribution systems and natural gas distribution networks across parts of North Dakota, South Dakota, Montana and Wyoming, while Great Plains Natural Gas serves portions of Minnesota.