Northern Oil & Gas, Inc 8-K, filed Apr 30, 2024
Northern Oil & Gas, Inc. (NOG)
8-K
2024-04-30
For: 2024-04-29
View Original
Added on
April 12, 2026
About this 8-K
Northern Oil & Gas, Inc filed this 8-K on April 30, 2024, reporting on events of April 29, 2024.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.02: Financial results
- Item 2.03: New debt or off-balance-sheet obligation
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 29, 2024
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
(Address of principal executive offices) | (Zip Code) | ||||
Registrant’s telephone number, including area code (952 ) 476-9800
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On April 29, 2024, Northern Oil and Gas, Inc. (the “Company”) entered into an amendment (the “Credit Agreement Amendment”) to its Third Amended and Restated Credit Agreement, dated June 7, 2022, governing the Company’s revolving credit facility with Wells Fargo Bank, N.A., as administrative agent and collateral agent, and the lenders from time to time party thereto. Pursuant to the Credit Agreement Amendment, the Company’s semi-annual borrowing base redetermination was completed and: (i) the borrowing base will remain $1.8 billion and (ii) the elected commitment amount will increase from $1.25 billion to $1.5 billion.
The foregoing description of the Credit Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to such document, which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
Item 2.02. Results of Operations and Financial Condition.
On April 30, 2024, Northern Oil and Gas, Inc. issued a press release announcing 2024 first quarter financial and operating results. A copy of the press release is furnished as Exhibit 99.1 hereto.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information required by Item 2.03 relating to the Credit Agreement Amendment is contained in Item 1.01 of this Current Report on Form 8-K above and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
| Exhibit Number | Description | |||||||
| Third Amendment to the Third Amended and Restated Credit Agreement among Northern Oil and Gas, Inc., Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto, dated April 29, 2024. | ||||||||
| Press release of Northern Oil and Gas, Inc., dated April 30, 2024. | ||||||||
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: April 30, 2024 | NORTHERN OIL AND GAS, INC. By /s/ Erik J. Romslo Erik J. Romslo Chief Legal Officer and Secretary | ||||
Exhibit 10.1
THIRD AMENDMENT TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of April 29, 2024, is among NORTHERN OIL AND GAS, INC., a Delaware corporation (the “Borrower”), each of the Lenders party hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent (in such capacity, together with its successors in such capacity, the “Administrative Agent”).
RECITALS
A. The Borrower, the Administrative Agent and the Lenders are party to that certain Third Amended and Restated Credit Agreement dated as of June 7, 2022, (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lenders have made certain credit available to and on behalf of the Borrower.
B. The Borrower, the Administrative Agent and the Lenders party hereto have agreed to amend certain provisions of the Credit Agreement and to (1) reaffirm the Borrowing Base of $1,800,000,000 and (2) increase the Aggregate Elected Commitment Amount to $1,500,000,000, in each case as more fully set forth herein.
C. By executing and delivering a signature page to this Amendment, each Lender will, upon the Third Amendment Effective Date, have the Commitments in the principal amount set forth on Annex I attached hereto.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms. Each capitalized term which is defined in the Credit Agreement, but which is not defined in this Amendment, shall have the meaning ascribed such term in the Credit Agreement after giving effect to this Amendment. Unless otherwise indicated, all references to sections in this Amendment refer to sections in the Credit Agreement as amended by this Amendment.
Section 2. Amendments to Credit Agreement. The Credit Agreement is hereby amended effective as of the Third Amendment Effective Date (as defined below) as follows:
2.1 Section 1.02 of the Credit Agreement is hereby amended by adding the following new defined terms in proper alphabetical order as follows:
“Third Amendment” means that certain Third Amendment to Third Amended and Restated Credit Agreement, dated as of April 29, 2024, by and among the Borrower, the Lenders party thereto and the Administrative Agent.
“Third Amendment Effective Date” shall have the meaning given to such term in the Third Amendment.
2.2 Section 1.02 of the Credit Agreement is hereby amended by amending and restating the following defined term as follows:
“Aggregate Elected Commitment Amount” means, at any time, an amount equal to the sum of the aggregate Elected Commitments, as the same may be increased, reduced or terminated pursuant to Section 2.06(c). The Aggregate Elected Commitment Amount as of the Third Amendment Effective Date is $1,500,000,000.
2.3 Annex I to the Credit Agreement is hereby amended and restated in its entirety as set forth on Annex I attached hereto.
Section 3. Borrowing Base Redetermination. Subject to the satisfaction or waiver in writing of each of the conditions set forth in Section 4 below and in reliance upon the representations, warranties, covenants and agreements contained in this Amendment, (a) the Administrative Agent and each of the undersigned Lenders hereby reaffirm the Borrowing Base, effective as of the Third Amendment Effective Date, of $1,800,000,000, and (b) the Administrative Agent, each of the undersigned Lenders and the Borrower hereby agree and acknowledge that such Borrowing Base shall remain in effect until the date such Borrowing Base is otherwise adjusted pursuant to the terms of the Credit Agreement. The Borrower hereby accepts such Borrowing Base as so reaffirmed to be effective upon the Third Amendment Effective Date. The redetermination provided for herein shall be deemed to constitute the Scheduled Redetermination for April 1, 2024, and this Amendment shall constitute the New Borrowing Base Notice in accordance with Section 2.07(d) of the Credit Agreement.
Section 4. Conditions Precedent. This Amendment shall become effective on the date, when each of the following conditions is satisfied (the “Third Amendment Effective Date”):
4.1 The Administrative Agent shall have executed and received from the Lenders party hereto (constituting the Required Lenders) and the Borrower, counterparts (in such number as may be requested by the Administrative Agent) of this Amendment signed on behalf of each such Person.
4.2 Immediately after giving effect to this Amendment, no Default, Event of Default or Borrowing Base Deficiency shall have occurred and be continuing.
4.3 Each representation and warranty contained in Section 5 hereof shall be true and correct in all material respects (except for those which have a materiality qualifier, which are true and correct in all respects as so qualified), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the date hereof, such representations and warranties shall continue to be true and correct in all material respects (except for those which have a materiality qualifier, which shall be true and correct in all respects as so qualified) as of such specified earlier date.
4.4 The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Third Amendment Effective Date, including, without limitation, fees payable to Lenders in respect of any increases to their respective Elected Commitments and the reimbursement or payment of all reasonable and documented out-of-pocket fees and expenses in accordance with Section 12.03(a) of the Credit Agreement.
4.5 To the extent requested by a Lender, the Administrative Agent shall have received duly executed Notes payable to such Lender in a principal amount equal to its Elected Commitment Amount, dated as of the Third Amendment Effective Date.
For purposes of determining compliance with the conditions specified in this Section 4, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received written notice from such Lender prior to the proposed Third Amendment Effective Date specifying its objection thereto. The Administrative Agent shall notify the Borrower and the Lenders of the Third Amendment Effective Date, and such notice shall be conclusive and binding.
Section 5. Representations and Warranties. In order to induce the Administrative Agent and the Lenders to enter into this Amendment, the Borrower hereby represents and warrants to the Administrative Agent and the Lenders that:
5.1 Accuracy of Representations and Warranties. Each representation and warranty of each Credit Party contained in each Loan Document are true and correct in all material respects (except for those which have a materiality qualifier, which are true and correct in all respects as so qualified) on and as of the date hereof, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties continue to be true and correct in all material respects (except for those which have a materiality qualifier, which are true and correct in all respects as so qualified) as of such specified earlier date.
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5.2 Due Authorization, No Conflicts. The execution, delivery and performance by the Borrower of this Amendment are within the Borrower’s corporate powers, have been duly authorized by necessary action, require no action by or in respect of, or filing with, any governmental body, agency or official (other than filings with the SEC required under applicable law) and do not violate or constitute a default under any provision of applicable law, the Second Lien Indenture or any agreement evidencing Material Debt binding upon any Credit Party, or result in the creation or imposition of any Lien upon any Property of any Credit Party.
5.3 Validity and Binding Effect. This Amendment constitutes the valid and binding obligations of the Borrower enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditor’s rights generally, and subject to general principles of equity, regardless of whether considered in a proceeding in equity or law.
5.4 Absence of Defaults. No Default or Event of Default has occurred that is continuing immediately prior to and after giving effect to this Amendment.
Section 6. Elected Commitment Amounts.
(a) Each Lender party hereto hereby agrees (i) to commit to provide its respective Elected Commitment, as set forth on Annex I to this Amendment, on the terms and subject to the conditions set forth below and (ii) that as of the Third Amendment Effective Date, Annex I of the Credit Agreement is amended and restated in its entirety by replacing such Annex I with Annex I attached to this Amendment.
(b) On the Third Amendment Effective Date, (i) each of the Lenders shall hereby assign to each other Lender and (ii) each of the Lenders shall hereby purchase from each other Lender, at the principal amount thereof, such interests in the outstanding Loans and participations in Letters of Credit outstanding on the Third Amendment Effective Date that will result in, after giving effect to all such assignments and purchases, such Loans and participations in Letters of Credit being held by the Lenders ratably in accordance with their Elected Commitment, after giving effect to this Amendment and as set forth on Annex I.
(c) Each Lender (i) confirms that it has received a copy of this Amendment, the Credit Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Amendment; (ii) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender or agent thereunder and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement and the other Loan Documents as are delegated to Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.
Section 7. Miscellaneous.
7.1 Confirmation. The Credit Agreement and each of the other Loan Documents, as specifically amended by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. Without limiting the generality of the foregoing, the Security Instruments and all of the Collateral described therein do and shall continue to secure the payment of all Secured Obligations of the Credit Parties under the Loan Documents, in each case, as amended by this Amendment. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. On and after the Third Amendment Effective Date, this Amendment shall for all purposes constitute a Loan Document.
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7.2 Counterparts. This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page to this Amendment by fax, facsimile, as an attachment to an email or other similar electronic means shall be effective as delivery of a manually executed counterpart of this Amendment. The words “execution,” “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Amendment shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. Each party hereto agrees that any Electronic Signature or execution in the form of an Electronic Record shall be valid and binding on itself and each of the other parties hereto to the same extent as a manual, original signature. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the parties of a manually signed paper which has been converted into electronic form (such as scanned into PDF format), or an electronically signed paper converted into another format, for transmission, delivery and/or retention.
7.3 No Oral Agreement. This Amendment, the Credit Agreement and the other Loan Documents represent the final agreement among the parties hereto and thereto and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.
7.4 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
7.5 Payment of Expenses. The Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable and documented out-of-pocket costs and expenses incurred in connection with this Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby in accordance with Section 12.03 of the Credit Agreement.
7.6 Severability. Any provision of this Amendment which is held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof or thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
7.7 Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
7.8 Miscellaneous. Section 12.09(b), (c) and (d) of the Credit Agreement shall apply to this Amendment, mutatis mutandis.
[Signature pages follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed effective as of the day and year first above written.
| BORROWER: | ||||||||
| NORTHERN OIL AND GAS, INC. | ||||||||
| By: | /s/ Chad Allen | |||||||
| Name: | Chad Allen | |||||||
| Title: | Chief Financial Officer | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Lender and Issuing Bank | ||||||||
| By: | /s/ Jonathan Herrick | |||||||
| Name: | Jonathan Herrick | |||||||
| Title: | Managing Director | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
Bank of America, N.A. as a Lender | ||||||||
| By: | /s/ Greg Smothers | |||||||
| Name: | Greg Smothers | |||||||
| Title: | Director | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
Citibank N.A., as a Lender | ||||||||
| By: | /s/ Ryan Watson | |||||||
| Name: | Ryan Watson | |||||||
| Title: | Senior Vice President | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
TRUIST BANK, as a Lender | ||||||||
| By: | /s/ Farhan Iqbal | |||||||
| Name: | Farhan Iqbal | |||||||
| Title: | Director | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
CAPITAL ONE, NATIONAL ASSOCIATION, as a Lender | ||||||||
| By: | /s/ Lyle Levy | |||||||
| Name: | Lyle Levy | |||||||
| Title: | Director | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
CITIZENS BANK, N.A., as a Lender | ||||||||
| By: | /s/ Scott Donaldson | |||||||
| Name: | Scott Donaldson | |||||||
| Title: | Senior Vice President | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
FIFTH THIRD BANK, NATIONAL ASSOCIATION, as a Lender | ||||||||
| By: | /s/ Thomas Kleiderer | |||||||
| Name: | Thomas Kleiderer | |||||||
| Title: | Managing Director | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
JPMorgan Chase N.A., as a Lender | ||||||||
| By: | /s/ Hadrien Chain | |||||||
| Name: | Hadrien Chain | |||||||
| Title: | Authorized Signatory | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
MIZUHO BANK, LTD., as a Lender | ||||||||
| By: | /s/ Edward Sacks | |||||||
| Name: | Edward Sacks | |||||||
| Title: | Managing Director | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
PNC Bank, National Association, as a Lender | ||||||||
| By: | /s/ Danielle Hudek | |||||||
| Name: | Danielle Hudek | |||||||
| Title: | Vice President | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
ROYAL BANK OF CANADA, as a Lender | ||||||||
| By: | /s/ Michael Sharp | |||||||
| Name: | Michael Sharp | |||||||
| Title: | Authorized Signatory | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
U.S. BANK NATIONAL ASSOCIATION, as a Lender | ||||||||
| By: | /s/ Bruce Hernandez | |||||||
| Name: | Bruce Hernandez | |||||||
| Title: | Senior Vice President | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
Cathay Bank, as a Lender | ||||||||
| By: | /s/ Dale T Wilson | |||||||
| Name: | Dale T Wilson | |||||||
| Title: | Senior Vice President | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
Comerica Bank, as a Lender | ||||||||
| By: | /s/ Cassandra Lucas | |||||||
| Name: | Cassandra Lucas | |||||||
| Title: | Vice President | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
FIRST-CITIZENS BANK & TRUST COMPANY, as a Lender | ||||||||
| By: | /s/ John Feeley | |||||||
| Name: | John Feeley | |||||||
| Title: | Managing Director | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
Morgan Stanley Senior Funding, Inc., as a Lender | ||||||||
| By: | /s/ Karina Rodriguez | |||||||
| Name: | Karina Rodriguez | |||||||
| Title: | Vice President | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
BOKF, NA, as a Lender | ||||||||
| By: | /s/ Benjamin H. Adler | |||||||
| Name: | Benjamin H. Adler | |||||||
| Title: | Senior Vice President | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
Cadence Bank, as a Lender | ||||||||
| By: | /s/ Ian Payne | |||||||
| Name: | Ian Payne | |||||||
| Title: | Vice President | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
Goldman Sachs Lending Partners LLC, as a Lender | ||||||||
| By: | /s/ Priyankush Goswami | |||||||
| Name: | Priyankush Goswami | |||||||
| Title: | Authorized Signatory | |||||||
Signature Page to Third Amendment to Third Amended and Restated Credit Agreement
Northern Oil and Gas, Inc.
ANNEX I
SCHEDULE OF ELECTED COMMITMENTS AND TERM COMMITMENTS
| Name of Lender | Elected Commitment | Applicable Revolving Percentage | Term Commitment | Applicable Term Loan Percentage | ||||||||||
| Wells Fargo Bank, National Association | $105,000,000.00 | 7.00% | $0.00 | 0.0% | ||||||||||
| PNC Bank, National Association | $105,000,000.00 | 7.00% | $0.00 | 0.0% | ||||||||||
| Capital One, National Association | $105,000,000.00 | 7.00% | $0.00 | 0.0% | ||||||||||
| Citibank, N.A. | $105,000,000.00 | 7.00% | $0.00 | 0.0% | ||||||||||
| Citizens Bank, N.A. | $105,000,000.00 | 7.00% | $0.00 | 0.0% | ||||||||||
| Fifth Third Bank, National Association | $105,000,000.00 | 7.00% | $0.00 | 0.0% | ||||||||||
| Bank of America, N.A | $105,000,000.00 | 7.00% | $0.00 | 0.0% | ||||||||||
| Royal Bank of Canada | $105,000,000.00 | 7.00% | $0.00 | 0.0% | ||||||||||
| Truist Bank | $105,000,000.00 | 7.00% | $0.00 | 0.0% | ||||||||||
| U.S. Bank National Association | $105,000,000.00 | 7.00% | $0.00 | 0.0% | ||||||||||
| JPMorgan Chase Bank, N.A. | $105,000,000.00 | 7.00% | $0.00 | 0.0% | ||||||||||
| Mizuho Bank, Ltd. | $105,000,000.00 | 7.00% | $0.00 | 0.0% | ||||||||||
| First-Citizens Bank and Trust Company | $40,000,000.00 | 2.666666667% | $0.00 | 0.0% | ||||||||||
| Cathay Bank | $40,000,000.00 | 2.666666667% | $0.00 | 0.0% | ||||||||||
| Morgan Stanley Senior Funding, Inc. | $40,000,000.00 | 2.666666667% | $0.00 | 0.0% | ||||||||||
| Comerica Bank | $40,000,000.00 | 2.666666667% | $0.00 | 0.0% | ||||||||||
| Cadence Bank | $35,000,000.00 | 2.333333333% | $0.00 | 0.0% | ||||||||||
| BOKF, NA dba Bank of Oklahoma | $35,000,000.00 | 2.333333333% | $0.00 | 0.0% | ||||||||||
| Goldman Sachs Lending Partners LLC | $10,000,000.00 | 0.666666667% | $0.00 | 0.0% | ||||||||||
| TOTAL | $1,500,000,000.00 | 100.00% | $0.00 | 0.0% | ||||||||||
Annex I
Exhibit 99.1
NOG Announces First Quarter 2024 Results, Achieves New Quarterly Production Record
FIRST QUARTER HIGHLIGHTS
•Record quarterly production of 119,436 Boe per day (59% oil), increases of 4% from the fourth quarter of 2023 and 37% from the first quarter of 2023
•GAAP net income of $11.6 million, Adjusted Net Income of $130.5 million and Adjusted EBITDA of $387.0 million. See “Non-GAAP Financial Measures” below
•Cash flow from operations of $392.1 million. Excluding changes in net working capital, cash flow from operations was $352.5 million, an increase of 19% from the first quarter of 2023
•Generated $54.0 million of Free Cash Flow. See “Non-GAAP Financial Measures” below
•Closed on previously announced acquisition of non-operated interests across 3,000 net acres in the Northern Delaware Basin
•After the closing of the Northern Delaware acquisition in the first quarter, NOG paid $40 million in common stock dividends, repurchased $20 million of common stock, and repaid approximately $50 million of debt
MINNEAPOLIS (BUSINESS WIRE) - April 30, 2024 - Northern Oil and Gas, Inc. (NYSE: NOG) (“NOG” or “Company”) today announced the Company’s first quarter results.
MANAGEMENT COMMENTS
“NOG has started 2024 in a powerful way, with strong well performance and better than expected cash flow and production,” commented Nick O’Grady, NOG’s Chief Executive Officer. “Our assets continue to perform exceptionally well, and we took advantage of market opportunities to repurchase shares at attractive prices during the first quarter. The acquisition pipeline remains robust and we remain disciplined in our approach to value creation, with a clear focus on maximizing total return for our investors.”
FIRST QUARTER FINANCIAL RESULTS
Oil and natural gas sales for the first quarter were $532.0 million. First quarter GAAP net income was $11.6 million or $0.11 per diluted share. First quarter Adjusted Net Income was $130.5 million or $1.28 per adjusted diluted share. Adjusted EBITDA in the first quarter was $387.0 million, a 19% increase from the first quarter of 2023. See “Non-GAAP Financial Measures” below.
PRODUCTION
First quarter production was 119,436 Boe per day, an increase of 4% from the fourth quarter of 2023 and an increase of 37% from the first quarter of 2023. Oil represented 59% of total production in the first quarter with 70,181 Bbls per day, an increase of 2% from the fourth quarter of 2023 and an increase of 30% from the first quarter of 2023. NOG had 25.3 net wells turned in-line during the first quarter, compared to 27.6 net wells turned in-line in the fourth quarter of 2023. Production increased quarter over quarter, driven primarily by better than expected well performance and growth in NOG’s Permian Basin production, which increased by 6% on a sequential quarterly basis and represented record quarterly volumes in the basin for the Company. The Permian represented approximately 45% of total volumes and eclipsed the Williston to become the largest basin by production in the quarter for the first time in the Company’s history.
PRICING
During the first quarter, NYMEX West Texas Intermediate (“WTI”) crude oil averaged $76.91 per Bbl, and NYMEX natural gas at Henry Hub averaged $2.10 per Mcf. NOG’s unhedged net realized oil price in the first quarter was $72.92, representing a $3.99 differential to WTI prices. NOG’s unhedged net realized gas price in the first quarter was $2.47 per Mcf, representing 118% realization compared with Henry Hub pricing. Oil differentials were modestly weaker than in the fourth quarter of 2023, with in-basin prices in the Williston and the Permian Basins widening as WTI prices increased during the quarter. Natural gas realizations were modestly better than forecast, driven by higher than expected NGL prices and tighter in-season Appalachian differentials.
OPERATING COSTS
Lease operating costs were $105.4 million in the first quarter of 2024, or $9.70 per Boe, flat on a per unit basis compared to the fourth quarter of 2023. LOE costs were aided by increased Permian volumes (which have lower costs), but this was offset by higher firm transport costs and the impact of carrying fixed costs during weather-related shut-ins. First quarter general and administrative (“G&A”) costs totaled $11.4 million or $1.05 per Boe. This includes $0.8 million of legal and transaction expenses in connection with bolt-on acquisitions and $2.3 million of non-cash stock-based compensation. NOG’s cash G&A costs excluding these amounts totaled $8.3 million or $0.77 per Boe in the first quarter of 2024, down $0.17 per Boe compared to the first quarter of 2023.
CAPITAL EXPENDITURES AND ACQUISITIONS
Capital expenditures for the first quarter were $295.8 million (excluding non-budgeted acquisitions and other). This was comprised of $291.8 million of total drilling and completion (“D&C”) capital on organic and Ground Game assets, and $4.0 million of Ground Game activity. D&C spending was driven by an acceleration of development activity, some of which had been previously planned for the second quarter of 2024. NOG’s weighted average gross authorization for expenditure (or AFE) elected to in the first quarter was $9.4 million, compared to $9.7 million in the fourth quarter of 2023, which is generally in line with expectations.
NOG’s Permian Basin spending was 68% of the capital expenditures for the first quarter, the Williston was 26%, and the Appalachian was 6%. On the Ground Game acquisition front, NOG closed on six transactions through various structures during the first quarter totaling 0.6 net current and future development wells and 1,709 net acres.
LIQUIDITY AND CAPITAL RESOURCES
NOG had total liquidity of $1.02 billion as of March 31, 2024, consisting of $987.0 million of committed borrowing availability under the Revolving Credit Facility and $32.5 million of cash.
As of March 31, 2024, NOG had total debt of $1,968.1 million. The total debt consisted of $263.0 million of outstanding borrowings under the Revolving Credit Facility, $705.1 million of outstanding 8.125% Senior Notes due 2028, $500.0 million of outstanding 3.625% Convertible Notes due 2029, and $500.0 million of outstanding 8.750% Senior Notes due 2031.
On February 5, 2024, NOG announced the closings of its November 2023 acquisitions of non-operated assets in the Utica and Northern Delaware Basins. At closing, NOG acquired approximately 3,000 net acres in the Delaware Basin as well as producing and in-process properties in both the Delaware and Utica Basins. The initial closing settlements totaled $162.2 million in cash plus a $17.1 million deposit paid at signing in November 2023.
SHAREHOLDER RETURNS
In the first quarter of 2024, the Company repurchased 549,356 shares at an average price of $36.42 per share in the open market. The company has $67.5 million remaining on its share repurchase authorization.
In February 2024, NOG’s Board of Directors declared a regular quarterly cash dividend for NOG’s common stock of $0.40 per share for stockholders of record as of March 28, 2024, to be paid on April 30, 2024. This represented a 18% increase from the first quarter of 2023.
2024 ANNUAL GUIDANCE*
NOG is reiterating its annual guidance as shown in the table below, with some modest adjustments and additional detail for the second quarter.
Given the acceleration and pull forward of activity in the first quarter, NOG expects relatively flat production in the second quarter and approximately 22 - 25 wells turned in-line. Overall, despite the acceleration of cash flow and production in the first quarter, NOG still expects approximately 60% of its budget to be incurred in the first half of 2024, with approximately $240 - $260 million of capital expenditures in the second quarter, and is reiterating its overall 2024 budget of $825 - $900 million. Based on current commodity prices, NOG anticipates spending toward the middle to upper band of guidance assuming oil prices and activity levels remain elevated throughout the remainder of 2024, but will remain flexible and return-driven. NOG expects modestly improving differentials for crude oil in the Williston Basin and materially wider gas differentials in the Permian Basin, driven by negative field level Waha hub prices, in the second quarter.
| Original Guidance | Revised Guidance | |||||||||||||
Annual Production (Boe per day) | 115,000 - 120,000 | 115,000 - 120,000 | ||||||||||||
Annual Oil Production (Bbls per day) | 70,000 - 73,000 | 70,000 - 73,000 | ||||||||||||
| Second Quarter Production (Boe per day) | — | 117,500 - 119,500 | ||||||||||||
| Second Quarter Oil Production (Boe per day) | — | 69,000 - 71,000 | ||||||||||||
Total Capital Expenditures ($ in millions) | $825 - $900 | $825 - $900 | ||||||||||||
| Net Wells Turned-in-Line (“TIL”) | 87.5 - 92.5 | 87.5 - 92.5 | ||||||||||||
| Net Wells Spud | 67.5 - 72.5 | 67.5 - 72.5 | ||||||||||||
| Operating Expenses and Differentials: | ||||||||||||||
Production Expenses (per Boe) | $9.25 - $10.00 | $9.25 - $9.90 | ||||||||||||
Production Taxes (as a percentage of Oil & Gas Sales) | 9.0% - 10.0% | 9.0% - 10.0% | ||||||||||||
Average Differential to NYMEX WTI (per Bbl) | ($4.00) - ($4.50) | ($4.00) - ($4.40) | ||||||||||||
Average Realization as a Percentage of NYMEX Henry Hub (per Mcf) | 80% - 85% | 80% - 85% | ||||||||||||
DD&A Rate (per Boe) | $15.50 - $17.50 | $15.50 - $17.50 | ||||||||||||
General and Administrative Expense (per Boe): | ||||||||||||||
Non-Cash | $0.25 - $0.30 | $0.25 - $0.30 | ||||||||||||
Cash (excluding transaction costs on non-budgeted acquisitions) | $0.75 - $0.85 | $0.75 - $0.85 | ||||||||||||
________________
*All forecasts are provided on a 2-stream production basis.
FIRST QUARTER 2024 RESULTS
The following tables set forth selected operating and financial data for the periods indicated.
| Three Months Ended March 31, | |||||||||||||||||
| 2024 | 2023 | % Change | |||||||||||||||
| Net Production: | |||||||||||||||||
| Oil (Bbl) | 6,386,481 | 4,847,773 | 32 | % | |||||||||||||
| Natural Gas and NGLs (Mcf) | 26,892,903 | 18,101,255 | 49 | % | |||||||||||||
| Total (Boe) | 10,868,632 | 7,864,649 | 38 | % | |||||||||||||
| Average Daily Production: | |||||||||||||||||
| Oil (Bbl) | 70,181 | 53,864 | 30 | % | |||||||||||||
| Natural Gas and NGLs (Mcf) | 295,526 | 201,125 | 47 | % | |||||||||||||
| Total (Boe) | 119,436 | 87,385 | 37 | % | |||||||||||||
| Average Sales Prices: | |||||||||||||||||
| Oil (per Bbl) | $ | 72.92 | $ | 73.31 | (1) | % | |||||||||||
| Effect of Loss on Settled Oil Derivatives on Average Price (per Bbl) | (0.84) | (1.22) | (31) | % | |||||||||||||
| Oil Net of Settled Oil Derivatives (per Bbl) | 72.08 | 72.09 | — | % | |||||||||||||
| Natural Gas and NGLs (per Mcf) | 2.47 | 3.91 | (37) | % | |||||||||||||
| Effect of Gain on Settled Natural Gas Derivatives on Average Price (per Mcf) | 0.91 | 1.08 | (31) | % | |||||||||||||
| Natural Gas and NGLs Net of Settled Natural Gas Derivatives (per Mcf) | 3.38 | 4.99 | (32) | % | |||||||||||||
| Realized Price on a Boe Basis Excluding Settled Commodity Derivatives | 48.95 | 54.20 | (10) | % | |||||||||||||
| Effect of Gain (Loss) on Settled Commodity Derivatives on Average Price (per Boe) | 1.76 | 1.74 | 1 | % | |||||||||||||
| Realized Price on a Boe Basis Including Settled Commodity Derivatives | 50.71 | 55.94 | (9) | % | |||||||||||||
| Costs and Expenses (per Boe): | |||||||||||||||||
| Production Expenses | $ | 9.70 | $ | 9.93 | (2) | % | |||||||||||
| Production Taxes | 4.71 | 4.44 | 6 | % | |||||||||||||
| General and Administrative Expenses | 1.05 | 1.65 | (36) | % | |||||||||||||
| Depletion, Depreciation, Amortization and Accretion | 16.01 | 12.03 | 33 | % | |||||||||||||
| Net Producing Wells at Period End | 985.3 | 827.8 | 19 | % | |||||||||||||
HEDGING
NOG hedges portions of its expected production volumes to increase the predictability of its cash flow and to help maintain a strong financial position. The following table summarizes NOG’s open crude oil commodity derivative swap contracts scheduled to settle after March 31, 2024.
Crude Oil Commodity Derivative Swaps(1) | Crude Oil Commodity Derivative Collars | |||||||||||||||||||||||||||||||||||||||||||||||||
| Contract Period | Volume (Bbls/Day) | Weighted Average Price ($/Bbl) | Collar Call Volume (Bbls) | Collar Put Volume (Bbls) | Weighted Average Ceiling Price ($/Bbl) | Weighted Average Floor Price ($/Bbl) | ||||||||||||||||||||||||||||||||||||||||||||
| 2024: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Q2 | 27,173 | $ | 75.52 | 2,560,637 | 1,918,517 | $ | 83.84 | $ | 70.23 | |||||||||||||||||||||||||||||||||||||||||
| Q3 | 25,621 | 74.55 | 1,725,056 | 1,573,256 | 80.90 | 71.23 | ||||||||||||||||||||||||||||||||||||||||||||
| Q4 | 27,469 | 74.06 | 1,528,749 | 1,354,800 | 81.40 | 70.78 | ||||||||||||||||||||||||||||||||||||||||||||
| 2025: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Q1 | 20,308 | $ | 74.96 | 413,286 | 314,849 | $ | 79.20 | $ | 67.84 | |||||||||||||||||||||||||||||||||||||||||
| Q2 | 18,089 | 74.09 | 273,171 | 199,233 | 75.49 | 67.63 | ||||||||||||||||||||||||||||||||||||||||||||
| Q3 | 8,504 | 72.39 | 234,994 | 161,970 | 75.76 | 67.88 | ||||||||||||||||||||||||||||||||||||||||||||
| Q4 | 8,466 | 72.04 | 208,511 | 135,487 | 76.87 | 67.63 | ||||||||||||||||||||||||||||||||||||||||||||
| 2026: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Q1 | 2,930 | $ | 69.05 | 43,226 | 39,289 | $ | 70.25 | $ | 62.50 | |||||||||||||||||||||||||||||||||||||||||
| Q2 | 2,930 | 68.98 | 43,707 | 39,727 | 70.25 | 62.50 | ||||||||||||||||||||||||||||||||||||||||||||
| Q3 | 2,930 | 68.91 | 44,187 | 40,163 | 70.25 | 62.50 | ||||||||||||||||||||||||||||||||||||||||||||
| Q4 | 2,930 | 68.83 | 44,187 | 40,163 | 70.25 | 62.50 | ||||||||||||||||||||||||||||||||||||||||||||
_____________
(1)Includes derivative contracts entered into as of April 26, 2024. This table does not include volumes subject to swaptions and call options, which are crude oil derivative contracts NOG has entered into which may increase swapped volumes at the option of NOG’s counterparties. This table also does not include basis swaps. For additional information, see Note 10 to our financial statements included in our Form 10-Q filed with the SEC for the quarter ended March 31, 2024.
The following table summarizes NOG’s open natural gas commodity derivative swap contracts scheduled to settle after March 31, 2024.
Natural Gas Commodity Derivative Swaps(1) | Natural Gas Commodity Derivative Collars | |||||||||||||||||||||||||||||||||||||
| Contract Period | Volume (MMBTU/Day) | Weighted Average Price ($/MMBTU) | Collar Call Volume (MMBTU) | Collar Put Volume (MMBTU) | Weighted Average Ceiling Price ($/MMBTU) | Weighted Average Floor Price ($/MMBTU) | ||||||||||||||||||||||||||||||||
| 2024: | ||||||||||||||||||||||||||||||||||||||
| Q2 | 119,514 | $ | 3.45 | 6,902,500 | 6,902,500 | $ | 4.16 | $ | 3.04 | |||||||||||||||||||||||||||||
| Q3 | 118,048 | 3.47 | 7,360,000 | 7,360,000 | 4.37 | 3.05 | ||||||||||||||||||||||||||||||||
| Q4 | 83,890 | 3.46 | 9,096,586 | 9,096,586 | 4.63 | 3.07 | ||||||||||||||||||||||||||||||||
| 2025: | ||||||||||||||||||||||||||||||||||||||
| Q1 | 16,500 | $ | 3.61 | 9,196,417 | 9,196,417 | $ | 5.10 | $ | 3.13 | |||||||||||||||||||||||||||||
| Q2 | 10,110 | 3.60 | 8,771,297 | 8,771,297 | 4.81 | 3.13 | ||||||||||||||||||||||||||||||||
| Q3 | 10,000 | 3.60 | 8,407,569 | 8,407,569 | 4.84 | 3.13 | ||||||||||||||||||||||||||||||||
| Q4 | 8,261 | 3.52 | 7,618,723 | 7,618,723 | 4.95 | 3.12 | ||||||||||||||||||||||||||||||||
| 2026: | ||||||||||||||||||||||||||||||||||||||
| Q1 | 5,000 | $ | 3.20 | 5,828,249 | 5,828,249 | $ | 5.06 | $ | 3.09 | |||||||||||||||||||||||||||||
| Q2 | 5,055 | 3.20 | 6,024,706 | 6,024,706 | 5.06 | 3.09 | ||||||||||||||||||||||||||||||||
| Q3 | 5,000 | 3.20 | 6,024,706 | 6,024,706 | 5.06 | 3.09 | ||||||||||||||||||||||||||||||||
| Q4 | 4,946 | 3.20 | 4,304,642 | 4,304,642 | 4.97 | 3.09 | ||||||||||||||||||||||||||||||||
| 2027: | ||||||||||||||||||||||||||||||||||||||
| Q1 | 1,722 | $ | 3.20 | 890,000 | 890,000 | $ | 3.83 | $ | 3.00 | |||||||||||||||||||||||||||||
| Q2 | — | — | 920,000 | 920,000 | 3.83 | 3.00 | ||||||||||||||||||||||||||||||||
| Q3 | — | — | 920,000 | 920,000 | 3.83 | 3.00 | ||||||||||||||||||||||||||||||||
| Q4 | — | — | 610,000 | 610,000 | 3.83 | 3.00 | ||||||||||||||||||||||||||||||||
____________
(1)Includes derivative contracts entered into as of April 26, 2024. This table does not include basis swaps. For additional information, see Note 10 to our financial statements included in our Form 10-Q filed with the SEC for the quarter ended March 31, 2024.
The following table presents NOG’s settlements on commodity derivative instruments and unsettled gains and losses on open commodity derivative instruments for the periods presented, which is included in the revenue section of NOG’s statement of operations:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (In thousands) | 2024 | 2023 | |||||||||||||||||||||
| Cash Received on Settled Derivatives | $ | 19,117 | $ | 13,670 | |||||||||||||||||||
| Non-Cash Mark-to-Market Gain (Loss) on Derivatives | (157,648) | 139,987 | |||||||||||||||||||||
| Gain (Loss) on Commodity Derivatives, Net | $ | (138,531) | $ | 153,656 | |||||||||||||||||||
CAPITAL EXPENDITURES & DRILLING ACTIVITY
| (In millions, except for net well data) | Three Months Ended March 31, 2024 | |||||||||||||
| Capital Expenditures Incurred: | ||||||||||||||
| Organic Drilling and Development Capital Expenditures | $ | 290.8 | ||||||||||||
| Ground Game Drilling and Development Capital Expenditures | $ | 1.0 | ||||||||||||
| Ground Game Acquisition Capital Expenditures | $ | 4.0 | ||||||||||||
| Other | $ | 2.7 | ||||||||||||
| Non-Budgeted Acquisitions | $ | 148.7 | ||||||||||||
| Net Wells Added to Production | 25.3 | |||||||||||||
| Net Producing Wells (Period-End) | 985.3 | |||||||||||||
| Net Wells in Process (Period-End) | 52.4 | |||||||||||||
| Weighted Average Gross AFE for Wells Elected to | $ | 9.4 | ||||||||||||
FIRST QUARTER 2024 EARNINGS RELEASE CONFERENCE CALL
In conjunction with NOG’s release of its financial and operating results, investors, analysts and other interested parties are invited to listen to a conference call with management on Tuesday, April 30, 2024 at 9:00 a.m. Central Time.
Those wishing to listen to the conference call may do so via webcast or phone as follows:
Webcast: https://events.q4inc.com/attendee/778174582
Dial-In Number: (888) 340-5044 (US/Canada) and (646) 960-0363 (International)
Conference ID: 9661789 - NOG First Quarter 2024 Earnings Conference Call
Replay Dial-In Number: (800) 770-2030 (US/Canada) and (609) 800-9909 (International)
Replay Access Code: 9661789 - Replay will be available through May 14, 2024
ABOUT NOG
NOG is a real asset company with a primary strategy of acquiring and investing in non-operated minority working and mineral interests in the premier hydrocarbon producing basins within the contiguous United States. More information about NOG can be found at www.noginc.com.
SAFE HARBOR
This press release contains forward-looking statements regarding future events and NOG’s future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this release regarding NOG’s financial position, operating and financial performance, business strategy, dividend plans and practices, plans and objectives of management for future operations, industry conditions, and indebtedness covenant compliance are forward-looking statements. When used in this release, forward-looking statements are generally accompanied by terms or phrases such as “estimate,” “project,” “predict,” “believe,” “expect,” “continue,” “anticipate,” “target,” “could,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other words and similar expressions that convey the uncertainty of future events or outcomes. Items contemplating or making assumptions about actual or potential future production and sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements.
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond NOG’s control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: changes in crude oil and natural gas prices, the pace of drilling and completions activity on NOG’s current properties and properties pending acquisition; infrastructure constraints and related factors affecting NOG’s properties; cost inflation or supply chain disruptions; ongoing legal disputes over, and potential shutdown of, the Dakota Access Pipeline; NOG’s ability to acquire additional development opportunities, potential or pending acquisition transactions, the projected capital efficiency savings and other operating efficiencies and synergies resulting from NOG’s acquisition transactions, integration and benefits of property acquisitions, or the effects of such acquisitions on NOG’s cash position and levels of indebtedness; changes in NOG’s reserves estimates or the value thereof; disruption to NOG’s business due to acquisitions and other significant transactions; general economic or industry conditions, nationally and/or in the communities in which NOG conducts business; changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets; risks associated with NOG’s 3.625% convertible senior notes due 2029 (the “Convertible Notes”), including the potential impact that the Convertible Notes may have on NOG’s financial position and liquidity, potential dilution, and that provisions of the Convertible Notes could delay or prevent a beneficial takeover of NOG; the potential impact of the capped call transaction undertaken in tandem with the Convertible Notes issuance, including counterparty risk; increasing attention to environmental, social and governance matters; NOG’s ability to consummate any pending acquisition transactions; other risks and uncertainties related to the closing of pending acquisition transactions; NOG’s ability to raise or access capital; cyber-incidents could have a material adverse effect on NOG’s business, financial condition or results of operations; changes in accounting principles, policies or guidelines; events beyond NOG’s control, including a global or domestic health crisis, acts of terrorism, political or economic instability or armed conflict in oil and gas producing regions; and other economic, competitive, governmental, regulatory and technical factors affecting NOG’s operations, products and prices. Additional information concerning potential factors that could affect future results is included in the section entitled “Item 1A. Risk Factors” and other sections of NOG’s most recent Annual Report on Form 10-K for the year ended December 31, 2023, and Quarterly Report on Form 10-Q, as updated from time to time in amendments and subsequent reports filed with the SEC, which describe factors that could cause NOG’s actual results to differ from those set forth in the forward-looking statements.
NOG has based these forward-looking statements on its current expectations and assumptions about future events. While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond NOG’s control. Accordingly, results actually achieved may differ materially from expected results described in these statements. NOG does not undertake any duty to update or revise any forward-looking statements, except as may be required by the federal securities laws.
CONTACT:
Evelyn Infurna
Vice President of Investor Relations
952-476-9800
ir@northernoil.com
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended March 31, | |||||||||||||||||||||||
| (In thousands, except share and per share data) | 2024 | 2023 | |||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Oil and Gas Sales | $ | 532,041 | $ | 426,234 | |||||||||||||||||||
| Gain (Loss) on Commodity Derivatives, Net | (138,531) | 153,656 | |||||||||||||||||||||
| Other Revenues | 2,838 | 2,324 | |||||||||||||||||||||
| Total Revenues | 396,348 | 582,214 | |||||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||
| Production Expenses | 105,447 | 78,088 | |||||||||||||||||||||
| Production Taxes | 51,210 | 34,918 | |||||||||||||||||||||
| General and Administrative Expenses | 11,393 | 13,000 | |||||||||||||||||||||
| Depletion, Depreciation, Amortization and Accretion | 173,958 | 94,618 | |||||||||||||||||||||
| Other Expenses | 2,019 | 1,001 | |||||||||||||||||||||
| Total Operating Expenses | 344,027 | 221,625 | |||||||||||||||||||||
| Income From Operations | 52,321 | 360,589 | |||||||||||||||||||||
| Other Income (Expense) | |||||||||||||||||||||||
| Interest Expense, Net of Capitalization | (37,925) | (30,143) | |||||||||||||||||||||
| Loss on Unsettled Interest Rate Derivatives, Net | — | (1,017) | |||||||||||||||||||||
| Gain on Extinguishment of Debt, Net | — | 659 | |||||||||||||||||||||
| Contingent Consideration Gain | — | 6,176 | |||||||||||||||||||||
| Other Income (Expense) | 56 | 4,619 | |||||||||||||||||||||
| Total Other Income (Expense) | (37,869) | (19,706) | |||||||||||||||||||||
| Income Before Income Taxes | 14,452 | 340,883 | |||||||||||||||||||||
| Income Tax Expense | 2,846 | 692 | |||||||||||||||||||||
| Net Income | $ | 11,606 | $ | 340,191 | |||||||||||||||||||
| Net Income Per Common Share – Basic | $ | 0.12 | $ | 4.01 | |||||||||||||||||||
| Net Income Per Common Share – Diluted | $ | 0.11 | $ | 3.98 | |||||||||||||||||||
| Weighted Average Common Shares Outstanding – Basic | 100,442,472 | 84,915,729 | |||||||||||||||||||||
| Weighted Average Common Shares Outstanding – Diluted | 101,636,132 | 85,407,197 | |||||||||||||||||||||
CONDENSED BALANCE SHEETS
| (In thousands, except par value and share data) | March 31, 2024 | December 31, 2023 | |||||||||
| Assets | (Unaudited) | ||||||||||
| Current Assets: | |||||||||||
| Cash and Cash Equivalents | $ | 32,468 | $ | 8,195 | |||||||
| Accounts Receivable, Net | 331,119 | 370,531 | |||||||||
| Advances to Operators | 6,794 | 49,210 | |||||||||
| Prepaid Expenses and Other | 2,566 | 2,489 | |||||||||
| Derivative Instruments | 36,710 | 75,733 | |||||||||
| Income Tax Receivable | 3,139 | 3,249 | |||||||||
| Total Current Assets | 412,796 | 509,407 | |||||||||
| Property and Equipment: | |||||||||||
| Oil and Natural Gas Properties, Full Cost Method of Accounting | |||||||||||
| Proved | 8,877,966 | 8,428,518 | |||||||||
| Unproved | 34,507 | 36,785 | |||||||||
| Other Property and Equipment | 8,120 | 8,069 | |||||||||
| Total Property and Equipment | 8,920,593 | 8,473,372 | |||||||||
| Less – Accumulated Depreciation, Depletion and Impairment | (4,715,097) | (4,541,808) | |||||||||
| Total Property and Equipment, Net | 4,205,496 | 3,931,563 | |||||||||
| Derivative Instruments | 1,070 | 10,725 | |||||||||
| Acquisition Deposit | — | 17,094 | |||||||||
| Other Noncurrent Assets, Net | 14,439 | 15,466 | |||||||||
| Total Assets | $ | 4,633,801 | $ | 4,484,255 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current Liabilities: | |||||||||||
| Accounts Payable | $ | 156,233 | $ | 192,672 | |||||||
| Accrued Liabilities | 161,507 | 147,943 | |||||||||
| Accrued Interest | 28,044 | 26,219 | |||||||||
| Derivative Instruments | 80,290 | 16,797 | |||||||||
| Other Current Liabilities | 1,936 | 2,130 | |||||||||
| Total Current Liabilities | 428,010 | 385,761 | |||||||||
| Long-term Debt, Net | 1,938,731 | 1,835,554 | |||||||||
| Deferred Tax Liability | 71,249 | 68,488 | |||||||||
| Derivative Instruments | 151,308 | 105,831 | |||||||||
| Asset Retirement Obligations | 39,899 | 38,203 | |||||||||
| Other Noncurrent Liabilities | 2,625 | 2,741 | |||||||||
| Total Liabilities | $ | 2,631,822 | $ | 2,436,578 | |||||||
| Commitments and Contingencies | |||||||||||
| Stockholders’ Equity | |||||||||||
Common Stock, Par Value $.001; 135,000,000 Shares Authorized; 101,044,071 Shares Outstanding at 3/31/2024 100,761,148 Shares Outstanding at 12/31/2023 | 503 | 503 | |||||||||
| Additional Paid-In Capital | 2,067,660 | 2,124,963 | |||||||||
| Retained Deficit | (66,183) | (77,790) | |||||||||
| Total Stockholders’ Equity | 2,001,980 | 2,047,676 | |||||||||
| Total Liabilities and Stockholders’ Equity | $ | 4,633,801 | $ | 4,484,255 | |||||||
Non-GAAP Financial Measures
Adjusted Net Income, Adjusted EBITDA and Free Cash Flow are non-GAAP measures. NOG defines Adjusted Net Income (Loss) as income (loss) before income taxes, excluding (i) (gain) loss on unsettled commodity derivatives, net of tax, (ii) (gain) loss on extinguishment of debt, net of tax, (iii) contingent consideration (gain) loss, net of tax, (iv) acquisition transaction costs, net of tax, and (v) (gain) loss on unsettled interest rate derivatives, net of tax. NOG defines Adjusted EBITDA as net income (loss) before (i) interest expense, (ii) income taxes, (iii) depreciation, depletion, amortization and accretion, (iv) non-cash stock-based compensation expense, (v) (gain) loss on extinguishment of debt, (vi) contingent consideration (gain) loss (vii) acquisition transaction costs, (viii) (gain) loss on unsettled interest rate derivatives, and (ix) (gain) loss on unsettled commodity derivatives. NOG defines Free Cash Flow as cash flows from operations before changes in working capital and other items, less (i) capital expenditures, excluding non-budgeted acquisitions and changes in accrued capital expenditures and other items. A reconciliation of each of these measures to the most directly comparable GAAP measure is included below.
Management believes the use of these non-GAAP financial measures provides useful information to investors to gain an overall understanding of current financial performance. Management believes Adjusted Net Income and Adjusted EBITDA provide useful information to both management and investors by excluding certain expenses and unrealized commodity gains and losses that management believes are not indicative of NOG’s core operating results. Management believes that Free Cash Flow is useful to investors as a measure of a company’s ability to internally fund its budgeted capital expenditures, to service or incur additional debt, and to measure success in creating stockholder value. In addition, these non-GAAP financial measures are used by management for budgeting and forecasting as well as subsequently measuring NOG’s performance, and management believes it is providing investors with financial measures that most closely align to its internal measurement processes. The non-GAAP financial measures included herein may be defined differently than similar measures used by other companies and should not be considered an alternative to, or more meaningful than, the comparable GAAP measures. From time to time NOG provides forward-looking Free Cash Flow estimates or targets; however, NOG is unable to provide a quantitative reconciliation of the forward looking non-GAAP measure to its most directly comparable forward looking GAAP measure because management cannot reliably quantify certain of the necessary components of such forward looking GAAP measure. The reconciling items in future periods could be significant.
Reconciliation of Adjusted Net Income
| Three Months Ended March 31, | |||||||||||||||||||||||
| (In thousands, except share and per share data) | 2024 | 2023 | |||||||||||||||||||||
| Income Before Income Taxes | $ | 14,452 | $ | 340,883 | |||||||||||||||||||
| Add: | |||||||||||||||||||||||
| Impact of Selected Items: | |||||||||||||||||||||||
| (Gain) Loss on Unsettled Commodity Derivatives | 157,648 | (139,987) | |||||||||||||||||||||
| Gain on Extinguishment of Debt | — | (659) | |||||||||||||||||||||
| Contingent Consideration Gain | — | (6,176) | |||||||||||||||||||||
| Acquisition Transaction Costs | 772 | 3,481 | |||||||||||||||||||||
| Loss on Unsettled Interest Rate Derivatives | — | 1,017 | |||||||||||||||||||||
| Adjusted Income Before Adjusted Income Tax Expense | 172,873 | 198,559 | |||||||||||||||||||||
Adjusted Income Tax Expense (1) | (42,354) | (48,647) | |||||||||||||||||||||
| Adjusted Net Income (non-GAAP) | $ | 130,519 | $ | 149,912 | |||||||||||||||||||
| Weighted Average Shares Outstanding – Basic | 100,442,472 | 84,915,729 | |||||||||||||||||||||
| Weighted Average Shares Outstanding – Diluted | 101,636,132 | 85,407,197 | |||||||||||||||||||||
| Income Before Income Taxes Per Common Share – Basic | $ | 0.14 | $ | 4.01 | |||||||||||||||||||
| Add: | |||||||||||||||||||||||
| Impact of Selected Items | 1.58 | (1.68) | |||||||||||||||||||||
| Impact of Income Tax | (0.42) | (0.56) | |||||||||||||||||||||
| Adjusted Net Income Per Common Share – Basic | $ | 1.30 | $ | 1.77 | |||||||||||||||||||
| Income Before Income Taxes Per Common Share – Adjusted Diluted | $ | 0.14 | $ | 3.99 | |||||||||||||||||||
| Add: | |||||||||||||||||||||||
| Impact of Selected Items | 1.56 | (1.67) | |||||||||||||||||||||
| Impact of Income Tax | (0.42) | (0.56) | |||||||||||||||||||||
| Adjusted Net Income Per Common Share – Adjusted Diluted | $ | 1.28 | $ | 1.76 | |||||||||||||||||||
______________
(1)For the three months ended March 31, 2024 and March 31, 2023, this represents a tax impact using an estimated tax rate of 24.5%.
Reconciliation of Adjusted EBITDA
| Three Months Ended March 31, | |||||||||||||||||||||||
| (In thousands) | 2024 | 2023 | |||||||||||||||||||||
| Net Income | $ | 11,606 | $ | 340,191 | |||||||||||||||||||
| Add: | |||||||||||||||||||||||
| Interest Expense | 37,925 | 30,143 | |||||||||||||||||||||
| Income Tax Expense (Benefit) | 2,846 | 692 | |||||||||||||||||||||
| Depreciation, Depletion, Amortization and Accretion | 173,958 | 94,618 | |||||||||||||||||||||
| Non-Cash Stock-Based Compensation | 2,274 | 2,151 | |||||||||||||||||||||
| Gain on Extinguishment of Debt | — | (659) | |||||||||||||||||||||
| Contingent Consideration Gain | — | (6,176) | |||||||||||||||||||||
| Acquisition Transaction Costs | 772 | 3,481 | |||||||||||||||||||||
| Loss on Unsettled Interest Rate Derivatives | — | 1,017 | |||||||||||||||||||||
| (Gain) Loss on Unsettled Commodity Derivatives | 157,648 | (139,987) | |||||||||||||||||||||
| Adjusted EBITDA | $ | 387,030 | $ | 325,472 | |||||||||||||||||||
Reconciliation of Free Cash Flow
| Three Months Ended March 31, | |||||||||||
| (In thousands) | 2024 | ||||||||||
| Net Cash Provided by Operating Activities | $ | 392,147 | |||||||||
| Exclude: Changes in Working Capital and Other Items | (39,665) | ||||||||||
Less: Capital Expenditures (1) | (298,507) | ||||||||||
| Free Cash Flow | $ | 53,975 | |||||||||
_______________
(1) Capital expenditures are calculated as follows:
| Three Months Ended March 31, | |||||||||||
| (In thousands) | 2024 | ||||||||||
| Cash Paid for Capital Expenditures | $ | 407,006 | |||||||||
| Less: Non-Budgeted Acquisitions | (127,834) | ||||||||||
| Plus: Change in Accrued Capital Expenditures and Other | 19,334 | ||||||||||
| Capital Expenditures | $ | 298,507 | |||||||||