FOURTH QUARTER HIGHLIGHTS
- Production of 131,777 Boe per day (59.9% oil), a 15% increase
from the fourth quarter of the prior year
- GAAP cash flow from operations of $290.3 million. Excluding
changes in net working capital, cash flow from operations was
$358.9 million
- Capital expenditures of $258.9 million, excluding
previously-announced non-budgeted acquisitions and other items
- Free Cash Flow (non-GAAP) was $96.4 million in the fourth
quarter. See “Non-GAAP Financial Measures” below
- Closed previously announced acquisition of Uinta Basin assets
from XCL Resources, LLC (“XCL”) on October 1, 2024 for $511.3
million in cash
- Declared $0.45 per share common dividend for the first quarter
of 2025, an increase of 12.5% from the first quarter of 2024
- Repurchased 693,658 shares of common stock at an average price
of $36.28 per share
SUBSEQUENT EVENTS
- In February 2025, signed definitive agreement to acquire 2,275
net acres in Upton County, TX in Midland Basin joint development
with a private operating partner for an unadjusted purchase price
of $40 million.
Northern Oil and Gas, Inc. (NYSE: NOG) (“NOG”) today announced
the company’s fourth quarter and full year 2024 results and
provided 2025 guidance.
MANAGEMENT COMMENTS
“NOG continues to raise the bar, delivering another year of cash
flow, production and reserve growth, strategic investments in
high-value assets, and the deliberate expansion of our internal
infrastructure—all reinforcing our long-term ability to create
shareholder value,” commented Nick O’Grady, NOG’s Chief Executive
Officer.
Mr. O’Grady continued, “Building on the strong foundation laid
in 2024, we have meticulously crafted a 2025 capital plan designed
to drive growth in 2025, 2026 and beyond. We expect to execute a
record number of SPUDs, building momentum throughout the year. Our
diversified model positions NOG with substantial external
opportunities to create additional value, further solidifying our
commitment to delivering both top-tier relative and absolute
returns.”
FINANCIAL RESULTS
Oil and natural gas sales for the fourth quarter were $545.5
million, as compared to $543.4 million for the prior year period.
Fourth quarter GAAP net income was $71.7 million or $0.71 per
diluted share. Fourth quarter Adjusted Net Income was $111.8
million or $1.11 per adjusted diluted share. Adjusted EBITDA in the
fourth quarter was $406.6 million.
Oil and natural gas sales for full year 2024 were $2.2 billion.
Full year 2024 GAAP net income was $520.3 million or $5.14 per
diluted share. Full year 2024 Adjusted Net Income was $531.2
million or $5.26 per adjusted diluted share. Full year 2024
Adjusted EBITDA was $1.6 billion, an increase of 13% over the prior
year. (See “Non-GAAP Financial Measures” below.)
PRODUCTION
Fourth quarter production was 131,777 Boe per day, a 15%
increase from the prior year period. Oil production was a record
78,939 Bbl per day, an 11% sequential increase over the third
quarter, and represented 59.9% of production in the fourth quarter.
NOG had 25.8 net wells turned in line during the fourth quarter,
compared to 9.5 net wells turned in line in the third quarter of
2024. NOG’s fourth quarter benefited from a full contribution of
the Point acquisition as well as the contribution from the XCL
acquisition and an increase in turn-in-line activity, offset by
shut-ins and disruptions from forest fires, curtailments and
numerous deferrals on completed wells from price-sensitive private
operators in the Williston Basin, as well as material downtime from
third-party crude takeaway in the Uinta Basin. Full year 2024
production was 124,108 Boe per day, a 26% increase from the prior
year.
PRICING
During the fourth quarter, NYMEX West Texas Intermediate (“WTI”)
crude oil averaged $70.32 per Bbl, and NYMEX natural gas at Henry
Hub averaged $2.98 per Mcf. NOG’s unhedged net realized oil price
in the fourth quarter was $65.40 per Bbl, representing a $3.86
differential to WTI prices (as adjusted). NOG’s fourth quarter
unhedged net realized gas price was $2.42 per Mcf, representing
approximately 81% realizations compared with Henry Hub pricing. In
the fourth quarter, overall oil differentials were largely in-line
with prior periods, with the higher average takeaway costs in the
Uinta Basin increasing NOG’s corporate average modestly. Natural
gas realizations benefited from a slight quarter-over-quarter
improvement in pricing and a seasonal uplift in NGL prices due to
winter demand. The Company also benefited from seasonally stronger
natural gas differentials in Appalachia.
For full year 2024, NOG’s realized oil price differential was
$3.88 per Bbl (as adjusted). NOG’s full year unhedged net realized
gas price was $2.24 per Mcf, representing approximately 93%
realizations compared with Henry Hub pricing.
OPERATING COSTS
Lease operating costs were $116.6 million in the fourth quarter
of 2024, or $9.62 per Boe, a 1% increase on a per unit basis
compared to the third quarter. The increase in unit costs was
primarily driven by fixed cost absorption from the wildfires and
deferrals in the Williston which was partially offset by lower
operating costs from our Uinta Basin properties.
Fourth quarter general and administrative (“G&A”) costs
totaled $15.5 million, which includes non-cash stock-based
compensation. Cash G&A costs totaled $12.0 million or $0.99 per
Boe in the fourth quarter. Excluding approximately $0.8 million of
transaction costs, remaining cash G&A was $11.2 million, or
$0.93 per Boe.
CAPITAL EXPENDITURES
Capital spending for the fourth quarter, excluding non-budgeted
acquisitions and other items, was $258.9 million. This was
comprised of $197.3 million of organic drilling and completion
(“D&C”) capital and $61.6 million of total acquisition
spending, inclusive of ground game D&C spending. NOG had 25.8
net wells turned in line in the fourth quarter. Wells in process
totaled 50.4 net wells as of December 31, 2024. Total 2024 capital
expenditures, excluding non-budgeted acquisitions were $990.1
million, above expectations driven by significant ground game
opportunities executed and continued elevated workover
activity.
LIQUIDITY, CAPITAL RESOURCES AND RECENT ACQUISITIONS
As of December 31, 2024, NOG had $8.9 million in cash and $690.0
million of borrowings outstanding on its revolving credit facility.
NOG had total liquidity of $818.9 million as of December 31, 2024,
consisting of cash and committed borrowing availability under the
revolving credit facility.
On October 2, 2024, NOG announced the closing of its acquisition
of Uinta Basin assets from XCL Resources, LLC (“XCL”) The closing
included the assets previously owned by Altamont Energy, LLC
(“Altamont”). These transactions provide NOG with over a decade of
Tier 1 inventory across ~15,800 net acres in the Uinta Basin with
~116 net underwritten undeveloped locations and additional
exploration upside potential. At closing, NOG paid $511.3 million
in cash. The closing settlement included the purchase of the
Altamont assets. NOG jointly acquired the assets with SM Energy,
Inc. (“SM”), which will become the operator of substantially all
the assets. In connection with the transaction, NOG and SM entered
into cooperation and long-term joint development agreements.
On February 11, 2025, NOG entered into a definitive agreement to
acquire assets in Upton County, TX with one of NOG’s existing
private operating partners for an unadjusted purchase price of $40
million in cash, subject to customary closing adjustments. These
assets include approximately 2,275 net acres in the Midland Basin.
NOG has entered into a joint development agreement on the
properties. The Company expects to close the transaction within 60
days. The obligations of the parties to complete the transactions
contemplated by the purchase agreement are subject to the
satisfaction or waiver of customary closing conditions. The
associated 2025 development costs post-closing for these assets
have been included in NOG’s initial capital expenditure
guidance.
SHAREHOLDER RETURNS
In November 2024, NOG’s Board of Directors declared a regular
quarterly cash dividend for NOG’s common stock of $0.42 per share
for stockholders of record as of December 30, 2024, which was paid
on January 31, 2025. In January 2025, NOG’s Board of Directors
declared a regular quarterly cash dividend for NOG’s common stock
of $0.45 per share for stockholders of record as of March 28, 2025,
which will be paid on April 30, 2025.
In the fourth quarter of 2024, NOG repurchased 693,658 shares of
its common stock in the fourth quarter at a weighted average price
of $36.28 per share, inclusive of commissions. In 2024, the Company
repurchased a total of 2,535,391 shares at a weighted average price
of $37.27, inclusive of commissions. In total, the Company
delivered nearly $260 million in shareholder returns to investors
for 2024 comprised of share repurchases and dividends.
2025 ANNUAL GUIDANCE
NOG anticipates approximately 130,000 - 135,000 Boe per day of
production in 2025. NOG currently expects total capital spending in
the range of $1,050 - $1,200 million for 2025, with approximately
66% of its 2025 budget to be spent on the Permian, 20% on the
Williston, 7% on the Appalachian and 7% on the Uinta.
2025 Guidance
Annual Production (Boe per day)
130,000 - 135,000
Annual Oil Production (Bbls per day)
75,000 - 79,000
Total Capital Expenditures ($ in
millions)
$1,050 - $1,200
Net Wells Turned-in-Line
87.0 - 91.0
Net Wells Spud
106.0 - 110.0
Operating Expenses and
Differentials
Production Expenses (per Boe)
$9.15 - $9.40
Production Taxes (as a percentage of Oil
& Gas Sales)
8.5% - 9.0%
Average Differential to NYMEX WTI (per
Bbl)
($4.75) - ($5.50)
Average Realization as a Percentage of
NYMEX Henry Hub (per Mcf)
85% - 90%
DD&A (per Boe)
$16.50 - $17.50
General and Administrative Expense (per
Boe):
Non-Cash
$0.25 - $0.30
Cash (excluding transaction costs on
non-budgeted acquisitions)
$0.85 - $0.90
PROVED RESERVES AS OF DECEMBER 31, 2024
Total proved reserves at December 31, 2024, increased 11% from
year-end 2023 to 378.5 million barrels of oil equivalent (73%
proved developed) with an associated pre-tax PV-10 value of $5.1
billion (80% proved developed) at SEC Pricing. The reserves are
calculated under SEC guidelines relating to both commodity price
assumptions and a maximum five year drill schedule. See “Non-GAAP
Financial Measures” below regarding PV-10 value.
SEC Pricing Proved
Reserves(1)
Reserve Volumes
PV-10(3)
Reserve Category
Oil
(MBbls)
Natural Gas
(MMcf)
Total
(MBoe)(2)
%
Amount
(In thousands)
%
PDP Properties
128,508
728,333
249,897
66
$
3,791,530
75
PDNP Properties
7,049
127,227
28,254
7
259,341
5
PUD Properties
59,554
244,677
100,333
27
1,018,980
20
Total
195,111
1,100,237
378,484
100
$
5,069,851
100
_____ ___________
(1)
The SEC Pricing Proved Reserves
table above values oil and natural gas reserve quantities and
related discounted future net cash flows as of December 31, 2024,
based on average prices of $75.48 per barrel of oil and $2.13 per
MMbtu of natural gas. Under SEC guidelines, these prices represent
the average prices per barrel of oil and per MMbtu of natural gas
at the beginning of each month in the 12-month period prior to the
end of the reporting period. The average resulting price used as of
December 31, 2024, after adjustment to reflect applicable
transportation and quality differentials, was $70.60 per barrel of
oil and $2.02 per Mcf of natural gas.
(2)
Boe are computed based on a
conversion ratio of one Boe for each barrel of oil and one Boe for
every 6,000 cubic feet (i.e., 6 Mcf) of natural gas.
(3)
Pre-tax PV10%, or “PV-10,” may be
considered a non-GAAP financial measure as defined by the SEC. See
“Non-GAAP Financial Measures” below.
FOURTH QUARTER 2024 RESULTS
The following table sets forth selected operating and financial
data for the periods indicated.
Three Months Ended
December 31,
2024
2023
% Change
Net Production:
Oil (MBbl)
7,262
6,336
15
%
Natural Gas (MMcf)
29,167
25,111
16
%
Total (MBoe)
12,123
10,521
15
%
Average Daily Production:
Oil (MBbl)
79
69
15
%
Natural Gas (MMcf)
317
273
16
%
Total (MBoe)
132
114
15
%
Average Sales Prices:
Oil (per Bbl)
$
65.40
$
74.51
(12
)%
Effect of Loss on Settled Derivatives on
Average Price (per Bbl)
2.17
(0.85
)
Oil Net of Settled Derivatives (per
Bbl)
67.57
73.66
(8
)%
Natural Gas and NGLs (per Mcf)
$
2.42
$
2.84
(15
)%
Effect of Gain (Loss) on Settled
Derivatives on Average Price (per Mcf)
0.33
0.68
Natural Gas Net of Settled Derivatives
(per Mcf)
2.75
3.52
(22
)%
Realized Price on a Boe Basis Excluding
Settled Commodity Derivatives
$
44.99
$
51.65
(13
)%
Effect of Gain (Loss) on Settled Commodity
Derivatives on Average Price (per Boe)
2.10
1.12
Realized Price on a Boe Basis Including
Settled Commodity Derivatives
47.09
52.77
(11
)%
Costs and Expenses (per Boe):
Production Expenses
$
9.62
$
9.70
(1
)%
Production Taxes
3.52
4.36
(19
)%
General and Administrative Expense
1.28
0.91
41
%
Depletion, Depreciation, Amortization and
Accretion
16.88
14.37
17
%
Net Producing Wells at Period
End
1,108.0
951.6
16
%
FULL YEAR 2024 RESULTS
The following table sets forth selected operating and financial
data for the periods indicated.
Years Ended December
31,
2024
2023
% Change
Net Production:
Oil (MBbl)
26,511
22,013
20
%
Natural Gas (MMcf)
113,476
84,342
35
%
Total (MBoe)
45,423
36,070
26
%
Average Daily Production (in
thousands):
Oil (MBbl)
72
60
20
%
Natural Gas (MMcf)
310
231
34
%
Total (Boe)
124
99
26
%
Average Sales Prices:
Oil (per Bbl)
$
71.59
$
74.78
(4
)%
Effect of Loss on Settled Oil Derivatives
on Average Price (per Bbl)
(0.11
)
(0.90
)
Oil, Net of Settled Oil Derivatives (per
Bbl)
71.48
73.88
(3
)%
Natural Gas and NGLs (per Mcf)
2.24
2.98
(25
)%
Effect of Gain on Settled Natural Gas
Derivatives on Average Price (per Mcf)
0.76
0.92
Natural Gas and NGLs, Net of Settled
Natural Gas and NGL Derivatives (per Mcf)
3.00
3.90
(23
)%
Realized Price on a Boe Basis Excluding
Settled Commodity Derivatives
47.38
52.61
(10
)%
Effect of Gain on Settled Commodity
Derivatives on Average Price (per Boe)
1.83
1.61
Realized Price on a Boe Basis Including
Settled Commodity Derivatives
49.21
54.22
(9
)%
Costs and Expenses (per Boe):
Production Expenses
$
9.46
$
9.62
(2
)%
Production Taxes
3.46
4.44
(22
)%
General and Administrative Expenses
1.11
1.30
(15
)%
Depletion, Depreciation, Amortization and
Accretion
16.31
13.47
21
%
Net Producing Wells at
Period-End
1,108.0
951.6
16
%
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 December 31, 2024.
Crude Oil Commodity Derivative
Swaps(1)
Crude Oil Commodity Derivative
Collars and Puts
Contract Period
Volume (Bbls/Day)
Weighted Average Price
($/Bbl)
Collar Call Volume
(Bbls/Day)
Weighted Average Collar Call
Prices
($/Bbl)
Collar Put Volume
(Bbls/Day)
Weighted A verage Collar Put
Prices
($/Bbl)
2025(1):
Q1
32,791
$74.82
25,592
$78.25
20,998
$69.68
Q2
29,623
$74.57
27,502
$77.45
22,189
$69.41
Q3
26,413
$73.62
25,054
$77.43
19,761
$69.15
Q4
28,433
$73.34
24,766
$77.55
19,473
$69.15
2026(1):
Q1
5,430
$71.79
17,230
$74.75
12,437
$66.42
Q2
2,930
$70.31
14,730
$74.41
9,937
$66.15
Q3
2,930
$70.24
14,730
$74.41
9,937
$66.15
Q4
2,930
$70.15
14,730
$74.41
9,937
$66.15
_____________
(1)
Includes derivative contracts
entered into through February 18, 2025. This table does not include
volumes subject to swaptions and call options, which are crude oil
derivative contracts NOG has entered into which may increase
swapped volumes at the option of NOG’s counterparties. This table
also does not include basis swaps. For additional information, see
Note 11 to our financial statements included in our Form 10-K filed
with the SEC for the year ended December 31, 2024.
The following table summarizes NOG’s open natural gas commodity
derivative swap contracts scheduled to settle after December 31,
2024.
Natural Gas Commodity
Derivative Swaps(1)
Natural Gas Commodity
Derivative Collars
Contract Period
Volume
(MMBTU/Day)
Weighted Average Price
($/MMBTU)
Collar Call Volume
(MMBTU/Day)
Weighted Average Collar Call
Prices ($/MMBTU)
Collar Put Volume
(MMBTU/Day)
Weighted Average Collar Put
Prices ($/MMBTU)
2025(1):
Q1
74,167
$3.45
113,738
$4.98
113,738
$3.12
Q2
40,495
$3.53
111,553
$4.71
111,553
$3.13
Q3
51,685
$3.68
106,387
$4.74
106,387
$3.13
Q4
51,576
$3.82
97,812
$4.85
97,812
$3.14
2026(1):
Q1
41,222
$4.00
74,647
$5.02
74,647
$3.16
Q2
33,681
$3.80
76,315
$5.02
76,315
$3.16
Q3
30,000
$3.88
75,486
$5.02
75,486
$3.16
Q4
21,522
$3.86
53,420
$4.94
53,420
$3.15
2027(1):
Q1
1,722
$3.20
9,889
$3.83
9,889
$3.00
Q2
—
—
10,110
$3.83
10,110
$3.00
Q3
—
—
10,000
$3.83
10,000
$3.00
Q4
—
—
6,630
$3.83
6,630
$3.00
_____________
(1)
Includes derivative contracts
entered into through February 18, 2025. This table does not include
volumes subject to swaptions and call options, which are natural
gas derivative contracts NOG has entered into which may increase
swapped volumes at the option of NOG’s counterparties. This table
also does not include basis swaps. For additional information, see
Note 11 to our financial statements included in our Form 10-K filed
with the SEC for the year ended December 31, 2024.
The following table summarizes NOG’s open NGL commodity
derivative swap contracts scheduled to settle after December 31,
2024.
NGL Contracts
Swaps
Contract Period
Volume
(BBL)
Weighted Average Price
($/BBL)
2025:
Q1
—
$
—
Q2
4,550
37.03
Q3
29,900
36.39
Q4
66,700
36.75
2026:
Q1
92,250
$
36.00
Q2
106,925
33.32
Q3
96,600
33.03
Q4
80,500
33.32
2027:
Q1
65,250
$
32.30
Q2
59,150
30.73
Q3
57,500
30.69
Q4
52,900
30.87
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
December 31,
Twelve Months Ended
December 31,
(In thousands)
2024
2023
2024
2023
Cash Received on Settled Derivatives
$
25,504
$
11,820
$
83,225
$
57,919
Non-Cash Mark-to-Market Gain (Loss) on
Derivatives
(59,728
)
235,553
(21,258
)
201,331
Gain (Loss) on Commodity Derivatives,
Net
$
(34,224
)
$
247,373
$
61,967
$
259,250
CAPITAL EXPENDITURES & DRILLING ACTIVITY
(In millions, except for net well
data)
Three Months Ended December
31, 2024
Year Ended December 31,
2024
Capital Expenditures Incurred:
Organic Drilling and Development Capital
Expenditures
$197.3
$862.3
Ground Game Drilling and Development
Capital Expenditures
$34.4
$74.7
Ground Game Acquisition Capital
Expenditures
$27.2
$53.1
Other
$3.5
$11.2
Non-Budgeted Acquisitions
$539.8
$883.5
Net Wells Turned In Line
25.8
90.7
Net Producing Wells (Period-End)
1,108.0
1,108.0
Net Wells in Process (Period-End)
50.4
50.4
Change in Wells in Process over Prior
Period
(1.9)
(16.1)
Weighted Average AFE for Wells Elected
to
$10.1
$9.4
Capitalized costs reflect ongoing development activities and are
primarily influenced by the number of net wells-in-process
additions and net well turn-in-lines during the reporting period.
Additionally, capital can be incurred via workover activity for
enhancement of existing producing wells.
FOURTH 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 Thursday,
February 20, 2025 at 8:00 a.m. Central Time.
Those wishing to listen to the conference call may do so via the
company’s website, www.noginc.com, or by phone as follows:
Webcast:
https://events.q4inc.com/attendee/150317474 Dial-In Number: (800) 715-9871 (US/Canada) and
(646) 307-1963 (International) Conference
ID: 4503139 - Fourth Quarter and Year-End 2024 Earnings
Conference Call Replay Dial-In Number:
(800) 770-2030 (US/Canada) and (647) 362-9199 (International)
Replay Access Code: 4503139 - Replay
will be available through March 8, 2024
ABOUT NORTHERN OIL AND GAS
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 future results that are subject to the safe
harbors created under the Securities Act of 1933 (the “Securities
Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”).
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 Convertible
Notes, including the potential impact that the Convertible Notes
may have 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 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 more recent Annual Report on Form 10-K 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. NOG does not undertake any duty to
update or revise any forward-looking statements, except as may be
required by the federal securities laws.
NORTHERN OIL AND GAS, INC.
STATEMENTS OF OPERATIONS
Three Months Ended
December 31,
Year Ended
December 31,
(In thousands, except share and per
share data)
2024
2023
2024
2023
Revenues
Oil and Gas Sales
$
545,472
$
543,403
$
2,152,079
$
1,897,779
Gain (Loss) on Commodity Derivatives,
Net
(34,224
)
247,373
61,967
259,250
Other Revenue
3,729
2,741
11,682
9,230
Total Revenues
514,977
793,517
2,225,728
2,166,259
Operating Expenses
Production Expenses
116,583
102,061
429,792
347,006
Production Taxes
42,621
45,903
157,091
160,118
General and Administrative Expenses
15,528
9,553
50,463
46,801
Depletion, Depreciation, Amortization and
Accretion
204,674
151,188
740,901
486,024
Other Expenses
2,937
768
9,650
4,448
Total Operating Expenses
382,343
309,473
1,387,897
1,044,397
Income From Operations
132,634
484,044
837,831
1,121,862
Other Income (Expense)
Interest Expense, Net of
Capitalization
(45,259
)
(36,513
)
(157,717
)
(135,664
)
Gain (Loss) on Interest Rate Derivatives,
Net
283
—
263
(1,017
)
Gain on the Extinguishment of Debt,
Net
—
—
—
659
Contingent Consideration Gain
—
—
—
10,107
Other Income
180
83
440
4,795
Total Other Income (Expense)
(44,796
)
(36,430
)
(157,014
)
(121,120
)
Income Before Income Taxes
87,838
447,614
680,817
1,000,742
Income Tax Expense
16,140
58,761
160,509
77,773
Net Income Attributable to Common
Shareholders
$
71,698
$
388,853
$
520,308
$
922,969
Net Income Per Common Share – Basic
$
0.72
$
3.92
$
5.21
$
10.09
Net Income Per Common Share – Diluted
$
0.71
$
3.90
$
5.14
$
10.03
Weighted Average Common Shares Outstanding
– Basic
99,217,821
99,278,050
99,852,539
91,483,687
Weighted Average Common Shares Outstanding
– Diluted
100,934,410
99,814,411
101,267,625
92,060,947
NORTHERN OIL AND GAS, INC. BALANCE
SHEETS
(In thousands, except par value and
share data)
December 31, 2024
December 31, 2023
Assets
Current Assets:
Cash and Cash Equivalents
$
8,933
$
8,195
Accounts Receivable, Net
389,673
370,531
Advances to Operators
12,291
49,210
Prepaid Expenses and Other
5,271
2,489
Derivative Instruments
46,525
75,733
Income Tax Receivable
38,050
3,249
Total Current Assets
500,743
509,407
Property and Equipment:
Oil and Natural Gas Properties, Full Cost
Method of Accounting
Proved
10,307,376
8,428,518
Unproved
42,702
36,785
Other Property and Equipment
8,197
8,069
Total Property and Equipment
10,358,275
8,473,372
Less – Accumulated Depreciation, Depletion
and Impairment
(5,276,105
)
(4,541,808
)
Total Property and Equipment, Net
5,082,170
3,931,563
Derivative Instruments
9,832
10,725
Acquisition Deposit
—
17,094
Other Noncurrent Assets, Net
11,077
15,466
Total Assets
$
5,603,822
$
4,484,255
Liabilities and Stockholders’
Equity
Current Liabilities:
Accounts Payable
$
202,866
$
192,672
Accrued Liabilities
290,792
147,943
Accrued Interest
25,992
26,219
Derivative Instruments
19,915
16,797
Other Current Liabilities
4,705
2,130
Total Current Liabilities
544,270
385,761
Long-term Debt, Net
2,369,294
1,835,554
Derivative Instruments
93,606
105,831
Deferred Tax Liability
228,038
68,488
Asset Retirement Obligations
45,907
38,203
Other Noncurrent Liabilities
2,272
2,741
Total Liabilities
$
3,283,387
$
2,436,578
Commitments and Contingencies
Stockholders’ Equity
Common Stock, Par Value $0.001;
270,000,000 authorized; 99,113,645 Shares
Outstanding at 12/31/2024
135,000,000 Authorized; 100,761,148 Shares
Outstanding at 12/31/2023
501
503
Additional Paid-In Capital
1,877,416
2,124,963
Retained Earnings (Deficit)
442,518
(77,790
)
Total Stockholders’ Equity
2,320,435
2,047,676
Total Liabilities and Stockholders’
Equity
$
5,603,822
$
4,484,255
Non-GAAP Financial Measures
Adjusted Net Income, Adjusted EBITDA and Free Cash Flow are
non-GAAP measures. Net income (loss) is the most directly
comparable GAAP measure for both Adjusted Net Income and Adjusted
EBITDA. Cash flows from operations is the most directly comparable
GAAP measure for Free Cash Flow. NOG defines Adjusted Net Income
(Loss) as net income (loss) excluding (i) (gain) loss on unsettled
commodity derivatives, net of tax, (ii) (gain) loss on the
extinguishment of debt, net of tax, (iii) (gain) loss on unsettled
interest rate derivatives, net of tax, (iv) contingent
consideration (gain) loss, net of tax, and (v) acquisition
transaction costs, 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 the
extinguishment of debt, (vi) contingent consideration (gain) loss,
(vii) acquisition transaction expense, (viii) (gain) loss on
unsettled interest rate derivatives, (ix) (gain) loss on unsettled
commodity derivatives, and (x) other non-cash adjustments. 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 (ii) preferred stock
dividends. A reconciliation of each of these measures to the most
directly comparable GAAP measure is included below.
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. Specifically, management believes
the non-GAAP financial measures included herein provide useful
information to both management and investors by excluding certain
items that management believes are not indicative of NOG’s core
operating results. 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.
Pre-tax PV10%, or PV-10, may be considered a non-GAAP financial
measure as defined by the SEC and is derived from the standardized
measure of discounted future net cash flows, which is the most
directly comparable GAAP measure for proved reserves calculated
using SEC pricing. PV-10 is a computation of the Standardized
Measure of discounted future net cash flows on a pre-tax basis.
PV-10 is equal to the Standardized Measure of discounted future net
cash flows at the applicable date, before deducting future income
taxes, discounted at 10 percent. Management believes that the
presentation of PV-10 is relevant and useful to investors because
it presents the discounted future net cash flows attributable to
NOG’s estimated net proved reserves prior to taking into account
future corporate income taxes, and it is a useful measure for
evaluating the relative monetary significance of NOG’s oil and
natural gas properties. Further, investors may utilize the measure
as a basis for comparison of the relative size and value of NOG’s
reserves to other companies. Management uses this measure when
assessing the potential return on investment related to NOG’s oil
and natural gas properties. PV-10, however, is not a substitute for
the Standardized Measure of discounted future net cash flows. A
reconciliation of PV-10 to the Standardized Measure is included
below.
Reconciliation of Adjusted Net Income
Three Months Ended
December 31,
Year Ended
December 31,
(In thousands, except share and per
share data)
2024
2023
2024
2023
Income Before Taxes
$
87,838
$
447,614
$
680,817
$
1,000,742
Add:
Impact of Selected Items:
(Gain) Loss on Unsettled Commodity
Derivatives
59,728
(235,553
)
21,258
(201,331
)
Gain on the Extinguishment of Debt
—
—
—
(659
)
(Gain) Loss on Unsettled Interest Rate
Derivatives
(283
)
—
(263
)
1,017
Contingent Consideration Gain
—
—
—
(10,107
)
Acquisition Transaction Costs
760
765
1,742
11,243
Adjusted Income Before Adjusted Income Tax
Expense
148,043
212,827
703,554
800,905
Adjusted Income Tax Expense (1)
36,271
52,143
172,371
196,222
Adjusted Net Income (non-GAAP)
$
111,772
$
160,684
$
531,184
$
604,683
Weighted Average Shares Outstanding –
Basic
99,217,821
99,278,050
99,852,539
91,483,687
Weighted Average Shares Outstanding –
Diluted
100,934,410
99,814,411
101,267,625
92,060,947
Less:
Dilutive Effect of Convertible Notes
(2)
(521,596
)
—
(343,860
)
(108,564
)
Weighted Average Shares Outstanding –
Adjusted Diluted
100,412,814
99,814,411
100,923,765
91,952,383
Income Before Income Taxes Per Common
Share – Basic
$
0.89
$
4.51
$
6.82
$
10.94
Add:
Impact of Selected Items
0.61
(2.36
)
0.23
(2.18
)
Impact of Income Tax
(0.37
)
(0.53
)
(1.73
)
(2.15
)
Adjusted Net Income Per Common Share –
Basic
$
1.13
$
1.62
$
5.32
$
6.61
Income Before Income Taxes Per Common
Share – Adjusted Diluted
$
0.87
$
4.48
$
6.75
$
10.88
Add:
Impact of Selected Items
0.60
(2.35
)
0.23
(2.17
)
Impact of Income Tax
(0.36
)
(0.52
)
(1.72
)
(2.13
)
Adjusted Net Income Per Common Share –
Adjusted Diluted
$
1.11
$
1.61
$
5.26
$
6.58
_______________
(1)
This represents a tax impact using an
estimated tax rate of 24.5% for the three and twelve months ended
December 31, 2024 and 2023.
(2)
Weighted average shares outstanding
- diluted, on a GAAP basis, includes diluted shares attributable to
the Company’s Convertible Notes due 2029. However, the offsetting
impact of the capped call transactions that the Company entered
into in connection therewith is not recognized on a GAAP basis. As
a result, for purposes of this calculation, the Company excludes
the dilutive shares to the extent they would be offset by the
capped calls.
Reconciliation of Adjusted EBITDA
Three Months Ended
December 31,
Year Ended
December 31,
(In thousands)
2024
2023
2024
2023
Net Income
$
71,698
$
388,853
$
520,308
$
922,969
Add:
Interest Expense
45,259
36,513
157,717
135,664
Income Tax Expense
16,140
58,761
160,509
77,773
Depreciation, Depletion, Amortization and
Accretion
204,674
151,188
740,901
486,024
Non-Cash Stock-Based Compensation
3,539
1,181
11,858
5,660
Gain on the Extinguishment of Debt
—
—
—
(659
)
Contingent Consideration Gain
—
—
—
(10,107
)
Other Adjustments
5,116
—
5,116
—
Acquisition Transaction Costs
760
765
1,742
11,243
(Gain) Loss on Unsettled Interest Rate
Derivatives
(283
)
—
(263
)
1,017
(Gain) Loss on Unsettled Commodity
Derivatives
59,728
(235,553
)
21,258
(201,331
)
Adjusted EBITDA
$
406,631
$
401,708
$
1,619,146
$
1,428,254
Reconciliation of Free Cash Flow
Three Months Ended
December 31,
(In thousands)
2024
Net Cash Provided by Operating
Activities
$
290,278
Exclude: Changes in Working Capital and
Other Items
68,581
Less: Capital Expenditures (1)
(262,477
)
Free Cash Flow
$
96,382
_______________
(1) Capital expenditures are calculated as follows:
Three Months Ended
December 31,
(In thousands)
2024
Cash Paid for Capital Expenditures
$
662,623
Less: Non-Budgeted Acquisitions
(508,147
)
Plus: Change in Accrued Capital
Expenditures and Other
108,001
Capital Expenditures
$
262,477
Reconciliation of PV-10
The following table reconciles the pre-tax PV10% value of our
SEC Pricing Proved Reserves as of December 31, 2024 to the
Standardized Measure of discounted future net cash flows.
SEC Pricing Proved
Reserves
(In thousands)
Standardized Measure
Reconciliation
Pre-Tax Present Value of Estimated Future
Net Revenues (Pre-Tax PV10%)
$
5,069,851
Future Income Taxes, Discounted at
10%(1)
(838,931
)
Standardized Measure of Discounted Future
Net Cash Flows
$
4,230,920
_______________
(1)
The expected tax benefits to be realized
from utilization of the net operating loss and tax credit
carryforwards are used in the computation of future income tax cash
flows. As a result of available net operating loss carryforwards
and the remaining tax basis of our assets at December 31, 2024, our
future income taxes were significantly reduced.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250219644681/en/
Evelyn Infurna Vice President of Investor Relations 952-476-9800
ir@northernoil.com
Northern Oil and Gas (NYSE:NOG)
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