MDU Resources Announces Acquisition of Buffalo Bituminous, Inc.

Business Editors

BISMARCK, N.D.--(BUSINESS WIRE)--June 6, 2002

MDU Resources Group, Inc. (NYSE:MDU) has acquired Buffalo Bituminous, Inc., a privately held grading, asphalt and sand and gravel company serving central Minnesota. The company will become part of Knife River Corporation, the construction materials and mining subsidiary of MDU Resources. Buffalo Bituminous was purchased with MDU Resources common stock and cash. Other financial details of the merger were not disclosed. MDU Resources anticipates that the acquisition will be accretive to earnings per share.

Buffalo Bituminous, headquartered in Buffalo, Minn., is a leading asphalt producer and paver in a 12-county area of central Minnesota. The company also supplies aggregates and does grading work for various types of projects and customers. The company has approximately 120 employees and average annual revenues of about $23 million.

Darrell E. Hicks started Buffalo Bituminous in 1960, incorporating the company in 1962. A few years after Hicks started Buffalo Bituminous at its headquarters location, he expanded the operations by opening an asphalt plant in Hennepin County, Minn., and later a plant in Monticello, Minn.

"We're excited to be able to serve this fast-growing area of the United States," said Terry Hildestad, president and chief executive officer of Knife River Corporation. "Buffalo Bituminous will play an integral role in rounding out our corporation's ability to effectively meet the construction needs of the customers and citizens of Minnesota."

The company's operational leadership team will not change; Greg Hicks will remain the company's general manager.

"We're excited about joining Knife River Corporation," Greg Hicks said. "We're looking forward to fitting our operations with theirs. The shared expertise between our companies is going to benefit our customers; they can continue to expect the same great products and the same great service from Buffalo Bituminous that they have come to know in the past 40 years."

The information in this release includes certain forward-looking statements, including statements by the president and chief executive officer of Knife River Corporation and statements concerning accretive earnings per share, within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations are based on reasonable assumptions, actual results may differ materially. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the effects of competition and the ability to effectively integrate acquired operations. For further discussion, refer to MDU Resources' most recent Form 10-Q at Item 2 - Management's Discussion and Analysis - Safe Harbor for Forward-looking Statements.

MDU Resources Group, Inc. provides energy, value-added natural resource products and related services that are essential to our country's energy, transportation and communication infrastructure. MDU Resources includes electric and natural gas utilities, a natural gas pipeline, utility services, natural gas and oil production, construction materials and mining, and energy services. For more information about MDU Resources, see the company's Web site at www.mdu.com or contact the investor relations department at [e-mail]. Knife River Corporation mines aggregates and markets crushed stone, sand, gravel and other related construction materials, including ready-mixed concrete, cement and asphalt, as well as value-added products and services in the north central and western United States, including Alaska and Hawaii. For more information about Knife River Corporation, visit the company's Web site at www.kniferiver.com.