NOG Announces First Quarter 2023 Results, Including Record Quarterly Production
FIRST QUARTER HIGHLIGHTS
-
Record quarterly production of 87,385 Boe per day (
62% oil), an increase of23% from the first quarter of 2022. -
Net income of
$340.2 million $325.5 million -
Cash flow from operations of
$269.3 million $296.2 million 26% sequentially from the fourth quarter of 2022. -
Generated
$83.9 million -
Closed on the acquisition of a
39.958% non-operated working interest in the MPDC Mascot project in January 2023, for$319.9 million
SHAREHOLDER RETURN HIGHLIGHTS
-
Paid
$0.34 13% from the fourth quarter of 2022, and declared$0.37 9% increase from the first quarter. -
Repurchased
$8.0 million $27.82 -
Repurchased and retired
$19.1 million 8.125% Senior Notes at an average price of96.4% of par value. -
Increased the Senior Notes repurchase authorization by
$100 million
MANAGEMENT COMMENTS
“NOG 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,” commented Nick O’Grady, NOG’s Chief Executive Officer. “Our 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’s 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.”
FIRST QUARTER FINANCIAL RESULTS
Oil and natural gas sales for the first quarter were
PRODUCTION
First quarter production was 87,385 Boe per day, an increase of
PRICING
During the first quarter, NYMEX West Texas Intermediate (“WTI”) crude oil averaged
OPERATING COSTS
Lease operating costs were
CAPITAL EXPENDITURES AND ACQUISITIONS
Capital expenditures for the first quarter was
NOG’s Williston Basin spending was
As previously announced, during the first quarter of 2023, NOG completed its Midland Basin Mascot Project acquisition with a
LIQUIDITY AND CAPITAL RESOURCES
NOG had total liquidity of
As of March 31, 2023, NOG had
SHAREHOLDER RETURNS
In February 2023, NOG’s Board of Directors declared a regular quarterly cash dividend for NOG’s common stock of
In May 2023, NOG’s Board of Directors declared a regular quarterly cash dividend for NOG’s common stock of
In the first quarter, NOG repurchased
In the first quarter, NOG repurchased and retired
The Company also reduced the outstanding balance on its revolving credit facility by over
2023 FULL YEAR GUIDANCE
(all forecasts are provided on a 2-stream production basis)
NOG 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.
|
2023 Guidance |
Annual Production (Boe per day) |
91,000 - 96,000 |
Oil as a Percentage of Sales Volumes |
62.0 - |
Total Capital Expenditures ($ in millions) |
|
Net Wells Added to Production |
80 - 85 |
Operating Expenses and Differentials |
|
Production Expenses (per Boe) |
|
Production Taxes (as a percentage of Oil & Gas Sales) |
|
Average Differential to NYMEX WTI (per Bbl) |
( |
Average Realization as a Percentage of NYMEX Henry Hub (per Mcf) |
|
General and Administrative Expense (per Boe): |
|
Non-Cash |
|
Cash (excluding transaction costs on non-budgeted acquisitions) |
|
FIRST QUARTER 2023 RESULTS
The following tables set forth selected operating and financial data for the periods indicated.
|
Three Months Ended March 31, |
|||||||||
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
Net Production: |
|
|
|
|
|
|||||
Oil (Bbl) |
|
4,847,773 |
|
|
|
3,824,022 |
|
|
27 |
% |
Natural Gas and NGLs (Mcf) |
|
18,101,255 |
|
|
|
15,533,638 |
|
|
17 |
% |
Total (Boe) |
|
7,864,649 |
|
|
|
6,412,962 |
|
|
23 |
% |
|
|
|
|
|
|
|||||
Average Daily Production: |
|
|
|
|
|
|||||
Oil (Bbl) |
|
53,864 |
|
|
|
41,565 |
|
|
30 |
% |
Natural Gas and NGLs (Mcf) |
|
201,125 |
|
|
|
168,844 |
|
|
19 |
% |
Total (Boe) |
|
87,385 |
|
|
|
69,706 |
|
|
25 |
% |
|
|
|
|
|
|
|||||
Average Sales Prices: |
|
|
|
|
|
|||||
Oil (per Bbl) |
$ |
73.31 |
|
|
$ |
91.19 |
|
|
(20 |
)% |
Effect of Gain (Loss) on Settled Oil Derivatives on Average Price (per Bbl) |
|
(1.22 |
) |
|
|
(26.10 |
) |
|
|
|
Oil Net of Settled Oil Derivatives (per Bbl) |
|
72.09 |
|
|
|
65.09 |
|
|
11 |
% |
|
|
|
|
|
|
|||||
Natural Gas and NGLs (per Mcf) |
|
3.91 |
|
|
|
6.94 |
|
|
(44 |
)% |
Effect of Gain (Loss) on Settled Natural Gas Derivatives on Average Price (per Mcf) |
|
1.08 |
|
|
|
(0.93 |
) |
|
|
|
Natural Gas and NGLs Net of Settled Natural Gas Derivatives (per Mcf) |
|
4.99 |
|
|
|
6.01 |
|
|
(17 |
)% |
|
|
|
|
|
|
|||||
Realized Price on a Boe Basis Excluding Settled Commodity Derivatives |
|
54.20 |
|
|
|
71.18 |
|
|
(24 |
)% |
Effect of Gain (Loss) on Settled Commodity Derivatives on Average Price (per Boe) |
|
1.74 |
|
|
|
(16.40 |
) |
|
|
|
Realized Price on a Boe Basis Including Settled Commodity Derivatives |
|
55.94 |
|
|
|
54.78 |
|
|
2 |
% |
|
|
|
|
|
|
|||||
Costs and Expenses (per Boe): |
|
|
|
|
|
|||||
Production Expenses |
$ |
9.93 |
|
|
$ |
8.50 |
|
|
17 |
% |
Production Taxes |
|
4.44 |
|
|
|
5.40 |
|
|
(18 |
)% |
General and Administrative Expenses |
|
1.65 |
|
|
|
2.15 |
|
|
(23 |
)% |
Depletion, Depreciation, Amortization and Accretion |
|
12.03 |
|
|
|
8.29 |
|
|
45 |
% |
|
|
|
|
|
|
|||||
Net Producing Wells at Period End |
|
827.8 |
|
|
|
726.7 |
|
|
14 |
% |
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, 2023.
|
|
Crude Oil Commodity
|
|
Crude Oil Commodity Derivative Collars |
||||||||||||||
Contract Period |
|
Volume
|
|
Weighted
|
|
Collar Call
|
|
Collar Put
|
|
Weighted
|
|
Weighted
|
||||||
2023: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Q2 |
|
23,750 |
|
75.85 |
|
1,046,500 |
|
887,250 |
|
89.76 |
|
73.85 |
||||||
Q3 |
|
19,375 |
|
|
77.17 |
|
|
1,633,000 |
|
|
1,265,000 |
|
|
87.63 |
|
|
72.73 |
|
Q4 |
|
18,750 |
|
|
76.10 |
|
|
1,688,200 |
|
|
1,311,000 |
|
|
86.77 |
|
|
72.63 |
|
2024: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Q1 |
|
7,075 |
|
|
78.10 |
|
|
1,672,125 |
|
|
1,080,625 |
|
|
85.68 |
|
|
70.42 |
|
Q2 |
|
7,050 |
|
|
77.04 |
|
|
1,663,025 |
|
|
1,080,625 |
|
|
85.52 |
|
|
69.68 |
|
Q3 |
|
6,875 |
|
|
75.34 |
|
|
632,500 |
|
|
494,500 |
|
|
82.36 |
|
|
69.53 |
|
Q4 |
|
2,825 |
|
|
69.63 |
|
|
586,500 |
|
|
425,500 |
|
|
83.98 |
|
|
69.86 |
|
2025: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Q1 |
|
— |
|
|
— |
|
|
225,000 |
|
|
135,000 |
|
|
81.25 |
|
|
70.00 |
|
Q2 |
|
— |
|
|
— |
|
|
204,750 |
|
|
136,500 |
|
|
76.60 |
|
|
70.00 |
|
Q3 |
|
— |
|
|
— |
|
|
184,000 |
|
|
115,000 |
|
|
76.90 |
|
|
70.00 |
|
Q4 |
|
— |
|
|
— |
|
|
161,000 |
|
|
92,000 |
|
|
78.50 |
|
|
70.00 |
|
| ____________ | |
(1) |
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-Q filed with the SEC for the quarter ended March 31, 2023. |
The following table summarizes NOG’s open natural gas commodity derivative swap contracts scheduled to settle after March 31, 2023.
|
|
Natural Gas Commodity
|
|
Natural Gas Commodity Derivative Collars |
||||||||||||||
Contract Period |
|
Volume
|
|
Weighted
|
|
Collar Call
|
|
Collar Put
|
|
Weighted
|
|
Weighted
|
||||||
2023: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Q2 |
|
57,495 |
|
4.483 |
|
4,777,500 |
|
3,202,500 |
|
6.577 |
|
4.190 |
||||||
Q3 |
|
65,185 |
|
|
4.350 |
|
|
5,060,000 |
|
|
5,060,000 |
|
|
6.674 |
|
|
4.182 |
|
Q4 |
|
62,304 |
|
|
4.308 |
|
|
6,285,000 |
|
|
6,285,000 |
|
|
6.902 |
|
|
4.134 |
|
2024: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Q1 |
|
54,725 |
|
|
4.029 |
|
|
1,592,500 |
|
|
1,592,500 |
|
|
7.917 |
|
|
4.000 |
|
Q2 |
|
52,571 |
|
|
3.814 |
|
|
227,500 |
|
|
227,500 |
|
|
8.700 |
|
|
4.000 |
|
Q3 |
|
52,000 |
|
|
3.814 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Q4 |
|
36,217 |
|
|
3.774 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
2025: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Q1 |
|
11,500 |
|
|
3.791 |
|
|
900,000 |
|
|
900,000 |
|
|
5.650 |
|
|
3.250 |
|
Q2 |
|
5,055 |
|
|
4.000 |
|
|
910,000 |
|
|
910,000 |
|
|
5.650 |
|
|
3.250 |
|
Q3 |
|
5,000 |
|
|
4.000 |
|
|
920,000 |
|
|
920,000 |
|
|
5.650 |
|
|
3.250 |
|
Q4 |
|
3,315 |
|
|
4.000 |
|
|
920,000 |
|
|
920,000 |
|
|
5.650 |
|
|
3.250 |
|
2026: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Q1 |
|
— |
|
|
— |
|
|
900,000 |
|
|
900,000 |
|
|
6.000 |
|
|
3.250 |
|
Q2 |
|
— |
|
|
— |
|
|
910,000 |
|
|
910,000 |
|
|
6.000 |
|
|
3.250 |
|
Q3 |
|
— |
|
|
— |
|
|
920,000 |
|
|
920,000 |
|
|
6.000 |
|
|
3.250 |
|
Q4 |
|
— |
|
|
— |
|
|
920,000 |
|
|
920,000 |
|
|
6.000 |
|
|
3.250 |
|
| ____________ | |
(1) |
This table does not include basis swaps. For additional information, see Note 11 to our financial statements included in our Form 10-Q filed with the SEC for the quarter ended March 31, 2023. |
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) |
|
2023 |
|
|
|
2022 |
|
Cash Received (Paid) on Settled Derivatives |
$ |
13,670 |
|
$ |
(105,161 |
) |
|
Non-Cash Mark-to-Market Gain (Loss) on Derivatives |
|
139,987 |
|
|
|
(384,227 |
) |
Gain (Loss) on Commodity Derivatives, Net |
$ |
153,656 |
|
|
$ |
(489,388 |
) |
CAPITAL EXPENDITURES & DRILLING ACTIVITY
(In millions, except for net well data) |
|
Three Months Ended
|
||
Capital Expenditures Incurred: |
|
|
||
Organic Drilling and Development Capital Expenditures |
|
$ |
197.3 |
|
Ground Game Drilling and Development Capital Expenditures |
|
$ |
1.4 |
|
Ground Game Acquisition Capital Expenditures |
|
$ |
11.6 |
|
Other |
|
$ |
2.0 |
|
Non-Budgeted Acquisitions |
|
$ |
314.6 |
|
|
|
|
||
Net Wells Added to Production |
|
|
13.1 |
|
|
|
|
||
Net Producing Wells (Period-End) |
|
|
827.8 |
|
|
|
|
||
Net Wells in Process (Period-End) |
|
|
59.3 |
|
Increase in Wells in Process over Prior Period |
|
|
3.9 |
|
|
|
|
||
Weighted Average Gross AFE for Wells Elected to |
|
$ |
9.6 |
|
FIRST QUARTER 2023 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 Friday, May 5, 2023 at 10:00 a.m. Central Time.
Those wishing to listen to the conference call may do so via webcast or phone as follows:
Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=eaPzTdtx
Dial-In Number: (866) 373-3407 (US/
Conference ID: 13737814 - Northern Oil and Gas, Inc. First Quarter 2023 Earnings Call
Replay Dial-In Number: (877) 660-6853 (US/
Replay Access Code: 13737814 - Replay will be available through July 4, 2023
ABOUT NORTHERN OIL AND GAS
NOG is a company with a primary strategy of investing in non-operated minority working and mineral interests in oil & gas properties, with a core area of focus in the premier basins within
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 press release are forward-looking statements, including, but not limited to, statements 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, and indebtedness covenant compliance. When used in this press 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, sales, market size, collaborations, cash flows, 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
NOG has based any forward-looking statements on its current expectations and assumptions about future events. While NOG’s 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 obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements, other than as may be required by applicable law or regulation.
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
|
|||||||
|
Three Months Ended March 31, |
||||||
(In thousands, except share and per share data) |
|
2023 |
|
|
|
2022 |
|
Revenues |
|
|
|
||||
Oil and Gas Sales |
$ |
426,234 |
|
|
$ |
456,458 |
|
Gain (Loss) on Commodity Derivatives, Net |
|
153,656 |
|
|
|
(489,388 |
) |
Other Revenues |
|
2,324 |
|
|
|
— |
|
Total Revenues |
|
582,214 |
|
|
|
(32,930 |
) |
|
|
|
|
||||
Operating Expenses |
|
|
|
||||
Production Expenses |
|
78,088 |
|
|
|
54,540 |
|
Production Taxes |
|
34,918 |
|
|
|
34,616 |
|
General and Administrative Expenses |
|
13,000 |
|
|
|
13,813 |
|
Depletion, Depreciation, Amortization and Accretion |
|
94,618 |
|
|
|
53,185 |
|
Other Expenses |
|
1,001 |
|
|
|
— |
|
Total Operating Expenses |
|
221,625 |
|
|
|
156,154 |
|
|
|
|
|
||||
Income (Loss) From Operations |
|
360,589 |
|
|
|
(189,084 |
) |
|
|
|
|
||||
Other Income (Expense) |
|
|
|
||||
Interest Expense, Net of Capitalization |
|
(30,143 |
) |
|
|
(17,977 |
) |
Gain (Loss) on Unsettled Interest Rate Derivatives, Net |
|
(1,017 |
) |
|
|
1,290 |
|
Gain on Extinguishment of Debt, Net |
|
659 |
|
|
|
— |
|
Contingent Consideration Gain |
|
6,176 |
|
|
|
— |
|
Other Income (Expense) |
|
4,619 |
|
|
|
— |
|
Total Other Income (Expense) |
|
(19,706 |
) |
|
|
(16,687 |
) |
|
|
|
|
||||
Income (Loss) Before Income Taxes |
|
340,883 |
|
|
|
(205,771 |
) |
|
|
|
|
||||
Income Tax Provision (Benefit) |
|
692 |
|
|
|
789 |
|
|
|
|
|
||||
Net Income (Loss) |
$ |
340,191 |
|
|
$ |
(206,560 |
) |
|
|
|
|
||||
Cumulative Preferred Stock Dividend |
|
— |
|
|
|
(3,016 |
) |
|
|
|
|
||||
Premium on Repurchase of Preferred Stock |
|
— |
|
|
|
(14,957 |
) |
|
|
|
|
||||
Net Income (Loss) Attributable to Common Stockholders |
$ |
340,191 |
|
|
$ |
(224,533 |
) |
|
|
|
|
||||
Net Income (Loss) Per Common Share – Basic |
$ |
4.01 |
|
|
$ |
(2.92 |
) |
Net Income (Loss) Per Common Share – Diluted |
$ |
3.98 |
|
|
$ |
(2.92 |
) |
Weighted Average Common Shares Outstanding – Basic |
|
84,915,729 |
|
|
|
76,922,543 |
|
Weighted Average Common Shares Outstanding – Diluted |
|
85,407,197 |
|
|
|
76,922,543 |
|
CONDENSED BALANCE SHEETS
|
|||||||
(In thousands, except par value and share data) |
March 31, 2023 |
|
December 31, 2022 |
||||
Assets |
(Unaudited) |
|
|
||||
Current Assets: |
|
|
|
||||
Cash and Cash Equivalents |
$ |
6,073 |
|
|
$ |
2,528 |
|
Accounts Receivable, Net |
|
274,399 |
|
|
|
271,336 |
|
Advances to Operators |
|
40,985 |
|
|
|
8,976 |
|
Prepaid Expenses and Other |
|
2,328 |
|
|
|
2,014 |
|
Derivative Instruments |
|
72,156 |
|
|
|
35,293 |
|
Income Tax Receivable |
|
— |
|
|
|
338 |
|
Total Current Assets |
|
395,941 |
|
|
|
320,485 |
|
|
|
|
|
||||
Property and Equipment: |
|
|
|
||||
Oil and Natural Gas Properties, Full Cost Method of Accounting |
|
|
|
||||
Proved |
|
7,019,244 |
|
|
|
6,492,683 |
|
Unproved |
|
41,846 |
|
|
|
41,565 |
|
Other Property and Equipment |
|
7,096 |
|
|
|
6,858 |
|
Total Property and Equipment |
|
7,068,185 |
|
|
|
6,541,106 |
|
Less – Accumulated Depreciation, Depletion and Impairment |
|
(4,152,245 |
) |
|
|
(4,058,180 |
) |
Total Property and Equipment, Net |
|
2,915,940 |
|
|
|
2,482,926 |
|
|
|
|
|
||||
Derivative Instruments |
|
14,495 |
|
|
|
12,547 |
|
Acquisition Deposit |
|
— |
|
|
|
43,000 |
|
Other Noncurrent Assets, Net |
|
16,490 |
|
|
|
16,220 |
|
|
|
|
|
||||
Total Assets |
$ |
3,342,866 |
|
|
$ |
2,875,178 |
|
|
|
|
|
||||
Liabilities and Stockholders' Equity |
|||||||
Current Liabilities: |
|
|
|
||||
Accounts Payable |
$ |
134,264 |
|
|
$ |
128,582 |
|
Accrued Liabilities |
|
162,066 |
|
|
|
121,737 |
|
Accrued Interest |
|
15,221 |
|
|
|
24,347 |
|
Income Tax Payable |
|
353 |
|
|
|
— |
|
Derivative Instruments |
|
27,560 |
|
|
|
58,418 |
|
Contingent Consideration |
|
3,931 |
|
|
|
10,107 |
|
Other Current Liabilities |
|
1,905 |
|
|
|
1,781 |
|
Total Current Liabilities |
|
345,300 |
|
|
|
344,972 |
|
|
|
|
|
||||
Long-term Debt, Net |
|
1,756,949 |
|
|
|
1,525,413 |
|
Derivative Instruments |
|
156,603 |
|
|
|
225,905 |
|
Asset Retirement Obligations |
|
32,905 |
|
|
|
31,582 |
|
Other Noncurrent Liabilities |
|
3,042 |
|
|
|
2,045 |
|
|
|
|
|
||||
Total Liabilities |
$ |
2,294,799 |
|
|
$ |
2,129,917 |
|
|
|
|
|
||||
Commitments and Contingencies |
|
|
|
||||
|
|
|
|
||||
Stockholders’ Equity |
|
|
|
||||
Common Stock, Par Value 85,370,223 Shares Outstanding at 3/31/2023 85,165,807 Shares Outstanding at 12/31/2022 |
|
487 |
|
|
|
487 |
|
Additional Paid-In Capital |
|
1,708,147 |
|
|
|
1,745,532 |
|
Retained Deficit |
|
(660,568 |
) |
|
|
(1,000,759 |
) |
Total Stockholders’ Equity |
|
1,048,067 |
|
|
|
745,260 |
|
Total Liabilities and Stockholders’ Equity |
$ |
3,342,866 |
|
|
$ |
2,875,178 |
|
Non-GAAP Financial Measures
Adjusted Net Income, Adjusted EBITDA and Free Cash Flow are non-GAAP measures. 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 extinguishment of debt, net of tax, (iii) contingent consideration (gain) loss, net of tax, (iv) acquisition transaction costs, net of tax, and (v) (gain) 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) |
|
2023 |
|
|
|
2022 |
|
Income (Loss) Before Taxes |
$ |
340,883 |
|
|
$ |
(205,771 |
) |
Add: |
|
|
|
||||
Impact of Selected Items: |
|
|
|
||||
(Gain) Loss on Unsettled Commodity Derivatives |
|
(139,987 |
) |
|
|
384,227 |
|
(Gain) on Extinguishment of Debt |
|
(659 |
) |
|
|
— |
|
Contingent Consideration (Gain) |
|
(6,176 |
) |
|
|
— |
|
Acquisition Transaction Costs |
|
3,481 |
|
|
|
6,848 |
|
(Gain) Loss on Unsettled Interest Rate Derivatives |
|
1,017 |
|
|
|
(1,290 |
) |
Adjusted Income Before Adjusted Income Tax Expense |
|
198,559 |
|
|
|
184,014 |
|
|
|
|
|
||||
Adjusted Income Tax Expense |
|
(48,647 |
) |
|
|
(45,083 |
) |
|
|
|
|
||||
Adjusted Net Income (non-GAAP) |
$ |
149,912 |
|
|
$ |
138,930 |
|
|
|
|
|
||||
Weighted Average Shares Outstanding – Basic |
|
84,915,729 |
|
|
|
76,922,543 |
|
Weighted Average Shares Outstanding – Diluted |
|
85,407,197 |
|
|
|
88,051,830 |
|
|
|
|
|
||||
Income (Loss) Before Taxes Per Common Share – Basic |
$ |
4.01 |
|
|
$ |
(2.68 |
) |
Add: |
|
|
|
||||
Impact of Selected Items |
|
(1.68 |
) |
|
|
5.07 |
|
Impact of Income Tax |
|
(0.56 |
) |
|
|
(0.58 |
) |
Adjusted Net Income Per Common Share – Basic |
$ |
1.77 |
|
|
$ |
1.81 |
|
|
|
|
|
||||
Income (Loss) Before Taxes Per Common Share – Diluted |
$ |
3.99 |
|
|
$ |
(2.34 |
) |
Add: |
|
|
|
||||
Impact of Selected Items |
|
(1.67 |
) |
|
|
4.43 |
|
Impact of Income Tax |
|
(0.56 |
) |
|
|
(0.51 |
) |
Adjusted Net Income Per Common Share – Diluted |
$ |
1.76 |
|
|
$ |
1.58 |
|
| ____________ | |
(1) |
For the three months ended March 31, 2023 and March 31, 2022, this represents a tax impact using an estimated tax rate of |
Reconciliation of Adjusted EBITDA
|
|||||||
|
Three Months Ended March 31, |
||||||
(In thousands) |
|
2023 |
|
|
|
2022 |
|
Net Income (Loss) |
$ |
340,191 |
|
|
$ |
(206,560 |
) |
Add: |
|
|
|
||||
Interest Expense |
|
30,143 |
|
|
|
17,978 |
|
Income Tax Provision (Benefit) |
|
692 |
|
|
|
789 |
|
Depreciation, Depletion, Amortization and Accretion |
|
94,618 |
|
|
|
53,185 |
|
Non-Cash Stock-Based Compensation |
|
2,151 |
|
|
|
1,447 |
|
(Gain) on Extinguishment of Debt |
|
(659 |
) |
|
|
— |
|
Contingent Consideration (Gain) Loss |
|
(6,176 |
) |
|
|
— |
|
Acquisition Transaction Costs |
|
3,481 |
|
|
|
6,848 |
|
(Gain) Loss on Unsettled Interest Rate Derivatives |
|
1,017 |
|
|
|
(1,290 |
) |
(Gain) Loss on Unsettled Commodity Derivatives |
|
(139,987 |
) |
|
|
384,227 |
|
Adjusted EBITDA |
$ |
325,472 |
|
|
$ |
256,623 |
|
Reconciliation of Free Cash Flow
|
|||
|
Three Months Ended March 31, |
||
(In thousands) |
|
2023 |
|
Net Cash Provided by Operating Activities |
$ |
269,308 |
|
Exclude: Changes in Working Capital and Other Items |
|
26,864 |
|
Less: Capital Expenditures (1) |
|
(212,235 |
) |
Free Cash Flow |
$ |
83,937 |
|
| ____________ | |
(1) |
Capital expenditures are calculated as follows: |
|
Three Months Ended March 31, |
||
(In thousands) |
|
2023 |
|
Cash Paid for Capital Expenditures |
$ |
460,982 |
|
Less: Non-Budgeted Acquisitions |
|
(271,606 |
) |
Plus: Change in Accrued Capital Expenditures and Other |
|
22,859 |
|
Capital Expenditures |
$ |
212,235 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230504005971/en/
Evelyn Infurna
Vice President of Investor Relations
952-476-9800
ir@northernoil.com
Source: Northern Oil and Gas, Inc.
