BUSINESS WIRE<\/a>)–
\nNorthern Oil and Gas, Inc. (NYSE: NOG) (\u201cNOG\u201d or \u201cCompany\u201d) today announced the Company\u2019s first quarter results.<\/p>\nMANAGEMENT COMMENTS<\/b><\/p>\n
\n\u201cNOG is realizing the benefits of our successful growth efforts as we generated record production in the first quarter, ahead of internal expectations. While the team was primarily focused on the integration of our recent acquisitions, we did close on several substantive Ground Game opportunities,\u201d commented Nick O\u2019Grady, NOG\u2019s Chief Executive Officer. \u201cOur demonstrated ability to structure mutually beneficial transactions with operators and other parties has resulted in record levels of potential acquisition opportunities. We are excited about NOG\u2019s prospects for 2023. We will continue our measured approach toward growth investments and shareholder returns as the year progresses to support our primary goal of maximizing total shareholder returns over the long term.\u201d<\/p>\n
FIRST QUARTER FINANCIAL RESULTS<\/b><\/p>\n
\nOil and natural gas sales for the first quarter were $426.2 million. First quarter GAAP net income was $340.2 million or $3.98 per diluted share. First quarter Adjusted Net Income was $149.9 million or $1.76 per diluted share, an increase of 17% from the fourth quarter of 2022. Adjusted EBITDA in the first quarter was $325.5 million, an increase of 23% from the fourth quarter of 2022. See \u201cNon-GAAP Financial Measures\u201d below.<\/p>\n
PRODUCTION<\/b><\/p>\n
\nFirst quarter production was 87,385 Boe per day, an increase of 11% from the fourth quarter of 2022 and an increase of 23% from the first quarter of 2022. Oil represented 62% of total production in the first quarter with 53,864 Bbls per day, an increase of 15% from the fourth quarter of 2022 and a 27% increase over the first quarter of 2022. NOG had 13.1 net wells turned in-line during the first quarter, compared to 19.1 net wells turned in-line in the fourth quarter of 2022. Production increased quarter over quarter, driven primarily by growth in NOG\u2019s Permian production, which made up approximately 35% of volumes in the first quarter. Additionally, Williston volumes recovered from weather-related shut-ins experienced in the fourth quarter. Marcellus production was down 2% from the fourth quarter.<\/p>\n
PRICING<\/b><\/p>\n
\nDuring the first quarter, NYMEX West Texas Intermediate (\u201cWTI\u201d) crude oil averaged $75.98 per Bbl, and NYMEX natural gas at Henry Hub averaged $2.75 per million cubic feet (\u201cMcf\u201d). NOG\u2019s unhedged net realized oil price in the first quarter was $73.31, representing a $2.67 differential to WTI prices. NOG\u2019s unhedged net realized gas price in the first quarter was $3.91 per Mcf, representing approximately 142% realization compared with Henry Hub pricing.<\/p>\n
OPERATING COSTS<\/b><\/p>\n
\nLease operating costs were $78.1 million in the first quarter of 2022, or $9.93 per Boe, a 1% decrease on a per unit basis compared to the fourth quarter of 2022. The decrease in unit costs was driven primarily by increased lower cost Permian production, offset by higher processing costs associated with better than expected NGL prices. Additionally, service and maintenance costs and workover expenses were also slightly higher on a sequential quarter basis. First quarter general and administrative (\u201cG&A\u201d) costs totaled $13.0 million or $1.65 per Boe. This includes $3.5 million of legal and transaction expenses in connection with bolt-on acquisitions and $2.2 million of non-cash stock-based compensation. NOG\u2019s cash G&A costs excluding these amounts totaled $7.4 million or $0.94 per Boe in the first quarter, down 7% from the prior quarter on a unit basis.<\/p>\n
CAPITAL EXPENDITURES AND ACQUISITIONS<\/b><\/p>\n
\nCapital expenditures for the first quarter was $212.2 million (excluding non-budgeted acquisitions) representing 28% of previously disclosed annual capital expenditure guidance range at the midpoint. This was comprised of $198.7 million of total drilling and completion (\u201cD&C\u201d) capital on organic and ground game assets, and $13.5 million of ground game acquisition spending and other items. D&C spending was higher due to an increase in development activity and workover expense incurred in the period and significant Ground Game success. NOG has experienced moderate well cost inflation continuing into 2023, but year-to-date well costs have been within NOG\u2019s assumptions for the year. NOG\u2019s weighted average gross authorization for expenditure (or AFE) elected to in the first quarter was $9.6 million.<\/p>\n
\nNOG\u2019s Williston Basin spending was 66% of the total capital expenditures for the quarter, the Permian was 32%, the Marcellus was 1% and other items were also 1%. On the Ground Game acquisition front, NOG closed on ten transactions during the first quarter totaling 2.6 net wells and 369 net acres, a marked increase from the fourth quarter.<\/p>\n
\nAs previously announced, during the first quarter of 2023, NOG completed its Midland Basin Mascot Project acquisition with a $319.9 million cash settlement at closing. The Company\u2019s ability to perform on numerous large acquisitions has established NOG as a preferred non-op partner; as such, NOG\u2019s opportunity set is at record levels.<\/p>\n
LIQUIDITY AND CAPITAL RESOURCES<\/b><\/p>\n
\nNOG had total liquidity of $437.1 million as of March 31, 2023, consisting of $431.0 million of committed borrowing availability under the Revolving Credit Facility and $6.1 million of cash.<\/p>\n
\nAs of March 31, 2023, NOG had $569.0 million of outstanding borrowings under the Revolving Credit Facility, $705.1 million of outstanding 8.125% Senior Unsecured Notes due 2028, and $500.0 million of outstanding 3.625% Convertible Notes due 2029.<\/p>\n
SHAREHOLDER RETURNS<\/b><\/p>\n
\nIn February 2023, NOG\u2019s Board of Directors declared a regular quarterly cash dividend for NOG\u2019s common stock of $0.34 per share for stockholders of record as of March 30, 2023, which was paid on April 28, 2023. This represented a 13% increase from the prior quarter.<\/p>\n
\nIn May 2023, NOG\u2019s Board of Directors declared a regular quarterly cash dividend for NOG\u2019s common stock of $0.37 per share for stockholders of record as of June 29, 2023, which will be paid on July 31, 2023. This represents a 9% increase from the prior quarter.<\/p>\n
\nIn the first quarter, NOG repurchased $8.0 million of its common stock, or 287,751 shares at an average price of $27.82 per share.<\/p>\n
\nIn the first quarter, NOG repurchased and retired $19.1 million of its 8.125% Senior Unsecured Notes due 2028 at 96.4% of par value. The retirement of these notes will result in annualized interest expense savings of $1.6 million. At the end of the quarter, the Board of Directors increased the Company\u2019s Senior Notes repurchase authorization by $100 million.<\/p>\n
\nThe Company also reduced the outstanding balance on its revolving credit facility by over $25 million during the first quarter, after the closing of the MPDC Acquisition.<\/p>\n
2023 FULL YEAR GUIDANCE<\/b><\/p>\n
(all forecasts are provided on a 2-stream production basis)<\/i><\/b><\/p>\n
\nNOG is reaffirming its 2023 full year guidance for production and capital expenditures. The Company is increasing its estimates for natural gas realizations. As a result of this increase, the Company is also adjusting production expenses for the associated processing costs from higher realizations. The guidance does not contemplate potential acquisition or capital markets activity, beyond our regularly budgeted Ground Game capital.<\/p>\n
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