Despite the “potential negative implications” from recent court decisions that impact its coalbed methane (CBM) production volumes in Montana, MDU Resources Group Inc. said Thursday that it is reaffirming its 2005 earnings guidance to a range of between $1.80-2.00/share.

The earnings guidance was reaffirmed after the Ninth Circuit Court of appeals last week issued an emergency injunction halting the development of CBM in the Montana section of the Powder River Basin while an appeal of the case is being decided (see Daily GPI, June 2). The ruling affects subsidiary Fidelity Exploration & Production Co.

CFO Warren L. Robinson said that the overall business outlook for MDU “remains strong for the year,” and said the company does not expect any material change to the consolidated earnings based on the company’s diversification.

MDU now expects total gas and oil production this year to be “slightly lower” than 2004 production.

“We will fully comply with the orders of the Montana district court and the Ninth Circuit,” said Fidelity CEO John K. Castleberry. “We are formulating a plan that will ensure quick and safe compliance. Although we are committed to compliance with the law in all respects, we intend to work within the system and take all necessary actions to contest the Ninth Circuit’s injunction and the most recent orders…”

In a separate announcement, MDU said it has purchased seven privately held construction companies in Oregon for an undisclosed amount of cash and stock. The companies have been merged into Knife River Corp., the construction materials and mining subsidiary of MDU. The construction materials companies are headquartered in Klamath Falls, OR, and have a collective annual revenue of $6 million.

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