NOG Announces Closings of Utica and Northern Delaware Acquisitions

Rhea-AI Summary

Northern Oil and Gas, Inc. (NOG) has successfully completed the acquisition of Utica and Northern Delaware Basin assets from private sellers, paying a total of $162.6 million in cash. The closing costs were incurred in the fourth quarter of 2023 and the first quarter of 2024, with funding partially coming from a $17.1 million deposit paid at signing in November 2023. The acquisitions are subject to post-closing settlements between the parties.

Insights

Financial Analyst

The recent closure of acquisitions by Northern Oil and Gas, Inc. (NOG) represents a strategic expansion in the company's asset portfolio. With an investment of $162.6 million, NOG has demonstrated a significant commitment to growth in the Utica and Northern Delaware Basin regions. The financing of these acquisitions, particularly the division between the fourth quarter of 2023 and the first quarter of 2024, suggests a structured cash flow management approach. Investors should consider the potential for increased production capacity and revenue growth against the backdrop of the current energy market dynamics. Additionally, the funding through a $17.1 million deposit indicates NOG's ability to negotiate terms that may preserve liquidity.

It is crucial to monitor the post-closing settlements, as these may reflect adjustments that can impact the final cost of the acquisition. The timing of the cash settlements, with a larger portion deferred to the first quarter of 2024, may also indicate NOG's strategic financial planning to align with cash flow projections and operational integration timelines. This acquisition could potentially enhance NOG's market position and bargaining power, provided the integration of the new assets is managed effectively.

Market Research Analyst

The acquisitions by NOG mark a notable shift in the company's operational footprint, which could impact its competitive stance within the oil and gas industry. The Utica and Northern Delaware Basin are areas with proven reserves and production capabilities, suggesting that NOG is strategically positioning itself in regions with established infrastructure and market access. The entry into these regions could afford NOG greater economies of scale and diversification of its risk profile.

For stakeholders, the key interest lies in how these acquisitions will translate into operational efficiency and whether they will lead to an improved cost structure. The long-term benefits hinge on the integration of these assets into NOG's existing operations and the company's ability to leverage synergies. The market will also be looking for signals of how these acquisitions might affect NOG's reserve replacement ratio and its ability to maintain or enhance production levels in a market that is sensitive to supply changes.

Energy Sector Analyst

The energy sector is characterized by volatility and sensitivity to geopolitical events, regulatory changes and market demand. NOG's investment in the Utica and Northern Delaware Basin assets could be seen as a reaction to these factors, seeking to bolster its position in a competitive landscape. The company's strategy appears to be focused on acquiring proven assets that can provide immediate to medium-term returns.

This expansion could also be a response to investor expectations for sustainable production growth and value generation in a market where environmental considerations are becoming increasingly important. The successful management of these assets, with attention to environmental, social and governance (ESG) factors, could further influence NOG's reputation and long-term viability in the energy sector. Stakeholders would benefit from understanding how these acquisitions align with NOG's broader ESG strategy and operational excellence goals.

MINNEAPOLIS--(BUSINESS WIRE)-- Northern Oil and Gas, Inc. (NYSE: NOG) (“NOG”) has now closed on both of its previously announced acquisitions of Utica and Northern Delaware Basin assets from private sellers.

NOG paid $162.6 million in cash in aggregate initial closing settlements, with $28.4 million of the closing costs incurred in the fourth quarter of 2023 and the remaining $134.2 million in the first quarter of 2024. The first quarter closings were funded in part by a $17.1 million deposit paid at signing in November 2023. The closing settlements are net of preliminary and customary purchase price adjustments and remain subject to post-closing settlements between the parties. More information regarding these acquisitions can be found in NOG’s November 21, 2023, press release announcing the transactions, which is available here.

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. NOG is the largest public dedicated owner of non-operated energy assets in America. 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 dividend plans and practices, financial position, operating and financial performance, business strategy, plans and objectives of management for future operations, industry conditions, indebtedness covenant compliance, capital expenditures, production, cash flow, hedging and other matters are forward-looking statements. When used in this release, forward-looking statements are generally accompanied by terms or phrases such as “estimate,” “guidance,” “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 sales, production, drilling locations, capital expenditures, 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; 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; 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; 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.

NOG has based any 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. Forward-looking statements speak only as of the date they are made. You should consider carefully the statements under the heading “Risk Factors” in NOG’s Annual Report on Form 10-K for the year ended December 31, 2022, as updated by subsequent reports NOG files with the SEC. NOG does not undertake, and specifically disclaims, any duty to update or revise any forward-looking statements to reflect events or circumstances after the date of such statements, except as may be required by applicable law or regulation.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240205385036/en/

Evelyn Leon Infurna

Vice President of Investor Relations

(952) 476-9800

ir@northernoil.com

Source: Northern Oil and Gas, Inc.

FAQ

How much did NOG pay for the acquisitions?

NOG paid a total of $162.6 million in cash for the acquisitions of Utica and Northern Delaware Basin assets from private sellers.

When were the closing costs incurred?

The closing costs were incurred in the fourth quarter of 2023 and the remaining in the first quarter of 2024.

Where can more information about the acquisitions be found?

More information about the acquisitions can be found in NOG’s November 21, 2023, press release announcing the transactions.

How was the funding for the first quarter closings obtained?

The first quarter closings were funded in part by a $17.1 million deposit paid at signing in November 2023.