NOG Announces Fourth Quarter and Full Year 2021 Results
Northern Oil and Gas (NOG) reports a strong fourth quarter & full year 2021, with production averaging 64,155 Boe per day, up 11% from Q3. Q4 GAAP cash flow from operations reached $133.1 million, a 29% rise. The company achieved Free Cash Flow of $70.7 million, a 28% increase, and closed the Veritas acquisition for $419.4 million. For 2022, NOG expects production of 70,000 - 75,000 Boe per day with planned capital expenditures of $350 - $415 million. The company announced a Base Dividend Growth plan, aiming for a 20% average dividend increase per quarter through 2023.
- Q4 production increased to 64,155 Boe per day, up 11% from Q3 2021.
- Q4 cash flow from operations was $133.1 million, an increase of 29%.
- Free Cash Flow for Q4 was $70.7 million, 28% higher than Q3.
- Completed the largest acquisition in company history with Veritas for $419.4 million.
- 2022 production guidance set at 70,000 - 75,000 Boe per day, a 35% increase from 2021.
- Full year GAAP net loss of $8.4 million, equating to $0.13 per diluted share.
HIGHLIGHTS
-
Fourth quarter production of 64,155 Boe per day (
59.2% oil), an increase of11% from the third quarter of 2021 -
Fourth quarter GAAP cash flow from operations of
. Excluding changes in net working capital, cash flow from operations was$133.1 million , an increase of$158.0 million 29% from the third quarter of 2021 -
Total capital expenditures of
during the fourth quarter, excluding previously-announced non-budgeted acquisitions$83.7 million -
Free Cash Flow (non-GAAP) of
during the fourth quarter, post-preferred stock dividends, increased$70.7 million 28% from the third quarter of 2021. See “Non-GAAP Financial Measures” below -
Initiates 2022 production guidance of 70,000 - 75,000 Boe per day, with
-$350 total planned capital expenditures$415 million -
Closed Veritas acquisition in the
Permian Basin , largest acquisition in NOG’s history, onJanuary 27, 2022 -
Announced a Base Dividend Growth plan in
December 2021 , highlighted by planned20% average dividend growth per quarter through 2023 -
Retired
in face value of Convertible Preferred Stock$7.2 million
MANAGEMENT COMMENTS
“2021 was a truly transformational year for NOG,” commented Nick O’Grady, NOG’s Chief Executive Officer. “We enter 2022 with a stronger asset base and balance sheet, and with a formalized plan of increasing shareholder returns. We are an increasingly diversified, balanced business, with opportunities to self-fund accretive growth while steadily increasing returns to our shareholders.”
FINANCIAL RESULTS
Oil and natural gas sales for the fourth quarter were
Oil and natural gas sales for full year 2021 were
PRODUCTION
Fourth quarter production was 64,155 Boe per day, an
PRICING
During the fourth quarter, NYMEX West Texas Intermediate (“WTI”) crude oil averaged
For full year 2021, NOG’s realized oil differential was
OPERATING COSTS
Lease operating costs were
Fourth quarter general and administrative (“G&A”) costs totaled
CAPITAL EXPENDITURES AND ACQUISITIONS
Capital spending for the fourth quarter, excluding non-budgeted acquisitions, was
RESERVES
Total proved reserves at
LIQUIDITY, CAPITAL RESOURCES, AND RECENT ACQUISITIONS
As of
In
On
On
STOCKHOLDER RETURNS
On
On
In
2022 ANNUAL GUIDANCE
NOG anticipates approximately 70,000 - 75,000 Boe per day of production in 2022, an increase of approximately
|
2022 Guidance |
Annual Production (Boe per day) |
70,000 - 75,000 |
Oil as a Percentage of Sales Volumes |
59.5 - |
Total Capital Expenditures ($ in millions) |
|
Net Wells Added to Production |
48 - 52 |
Operating Expenses and Differentials |
|
Production Expenses (per Boe) |
|
Production Taxes (as a percentage of Oil & Gas Sales) |
8.0 - |
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) |
|
PROVED RESERVES AS OF
|
SEC Pricing Proved Reserves(1) |
||||||||||||
|
Reserve Volumes |
|
PV-10(3) |
||||||||||
Reserve Category |
Oil
|
|
Natural Gas
|
|
Total
|
|
% |
|
Amount
|
|
% |
||
|
84,920 |
|
491,852 |
|
166,895 |
|
58 |
|
|
$ |
2,328,766 |
|
70 |
|
2,585 |
|
6,706 |
|
3,703 |
|
1 |
|
|
|
71,209 |
|
2 |
|
43,890 |
|
439,165 |
|
117,084 |
|
41 |
|
|
|
941,114 |
|
28 |
Total |
131,395 |
|
937,723 |
|
287,682 |
|
100 |
|
$ |
3,341,089 |
|
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 |
|
(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 |
FOURTH QUARTER 2021 RESULTS
The following table sets forth selected operating and financial data for the periods indicated.
|
Three Months Ended
|
|||||||||
|
2021 |
|
2020 |
|
% Change |
|||||
Net Production: |
|
|
|
|
|
|||||
Oil (Bbl) |
|
3,492,556 |
|
|
|
2,508,618 |
|
|
39 |
% |
Natural Gas and NGLs (Mcf) |
|
14,458,119 |
|
|
|
4,675,896 |
|
|
209 |
% |
Total (Boe) |
|
5,902,243 |
|
|
|
3,287,934 |
|
|
80 |
% |
|
|
|
|
|
|
|||||
Average Daily Production: |
|
|
|
|
|
|||||
Oil (Bbl) |
|
37,963 |
|
|
|
27,268 |
|
|
39 |
% |
Natural Gas and NGL (Mcf) |
|
157,153 |
|
|
|
50,825 |
|
|
209 |
% |
Total (Boe) |
|
64,155 |
|
|
|
35,738 |
|
|
80 |
% |
|
|
|
|
|
|
|||||
Average Sales Prices: |
|
|
|
|
|
|||||
Oil (per Bbl) |
$ |
71.67 |
|
|
$ |
35.69 |
|
|
101 |
% |
Effect of Gain on Settled Derivatives on Average Price (per Bbl) |
|
(15.71 |
) |
|
|
14.51 |
|
|
|
|
Oil Net of Settled Derivatives (per Bbl) |
|
55.96 |
|
|
|
50.20 |
|
|
11 |
% |
|
|
|
|
|
|
|||||
Natural Gas and NGLs (per Mcf) |
|
5.68 |
|
|
|
2.13 |
|
|
167 |
% |
Effect of Gain (Loss) on Settled Derivatives on Average Price (per Mcf) |
|
(1.33 |
) |
|
|
(0.20 |
) |
|
|
|
Natural Gas Net of Settled Derivatives (per Mcf) |
|
4.35 |
|
|
|
1.93 |
|
|
125 |
% |
|
|
|
|
|
|
|||||
Realized Price on a Boe Basis Excluding Settled Commodity Derivatives |
|
56.31 |
|
|
|
30.27 |
|
|
86 |
% |
Effect of Gain (Loss) on Settled Commodity Derivatives on Average Price (per Boe) |
|
(12.60 |
) |
|
|
10.79 |
|
|
|
|
Realized Price on a Boe Basis Including Settled Commodity Derivatives |
|
43.72 |
|
|
|
41.06 |
|
|
6 |
% |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|||||
Costs and Expenses (per Boe): |
|
|
|
|
|
|||||
Production Expenses |
$ |
8.57 |
|
|
$ |
8.58 |
|
|
— |
% |
Production Taxes |
|
4.25 |
|
|
|
2.75 |
|
|
55 |
% |
General and Administrative Expense |
|
1.77 |
|
|
|
1.33 |
|
|
33 |
% |
Depletion, Depreciation, Amortization and Accretion |
|
7.25 |
|
|
|
9.97 |
|
|
(27 |
)% |
|
|
|
|
|
|
|||||
Net Producing Wells at Period End |
|
680.8 |
|
|
|
475.1 |
|
|
43 |
% |
FULL YEAR 2021 RESULTS
The following table sets forth selected operating and financial data for the periods indicated.
|
Years Ended |
||||||||
|
2021 |
|
2020 |
|
% Change |
||||
Net Production: |
|
|
|
|
|
||||
Oil (Bbl) |
|
12,288,358 |
|
|
|
9,361,138 |
|
31 |
% |
Natural Gas and NGLs (Mcf) |
|
44,073,941 |
|
|
|
16,473,287 |
|
168 |
% |
Total (Boe) |
|
19,634,015 |
|
|
|
12,106,686 |
|
62 |
% |
|
|
|
|
|
|
||||
Average Daily Production: |
|
|
|
|
|
||||
Oil (Bbl) |
|
33,667 |
|
|
|
25,577 |
|
32 |
% |
Natural Gas and NGL (Mcf) |
|
120,751 |
|
|
|
45,009 |
|
168 |
% |
Total (Boe) |
|
53,792 |
|
|
|
33,078 |
|
63 |
% |
|
|
|
|
|
|
||||
Average Sales Prices: |
|
|
|
|
|
||||
Oil (per Bbl) |
$ |
62.94 |
|
|
$ |
32.61 |
|
93 |
% |
Effect of Gain (Loss) on Settled Oil Derivatives on Average Price (per Bbl) |
|
(10.17 |
) |
|
|
20.08 |
|
|
|
Oil Net of Settled Oil Derivatives (per Bbl) |
|
52.77 |
|
|
|
52.69 |
|
— |
% |
|
|
|
|
|
|
||||
Natural Gas and NGLs (per Mcf) |
|
4.57 |
|
|
|
1.14 |
|
301 |
% |
Effect of Gain (Loss) on Settled Natural Gas Derivatives on Average Price (per Mcf) |
|
(0.92 |
) |
|
|
0.02 |
|
|
|
Natural Gas and NGLs Net of Settled Natural Gas Derivatives (per Mcf) |
|
3.65 |
|
|
|
1.16 |
|
215 |
% |
|
|
|
|
|
|
||||
Realized Price on a Boe Basis Excluding Settled Commodity Derivatives |
|
49.66 |
|
|
|
26.77 |
|
86 |
% |
Effect of Gain (Loss) on Settled Commodity Derivatives on Average Price (per Boe) |
|
(8.45 |
) |
|
|
15.55 |
|
|
|
Realized Price on a Boe Basis Including Settled Commodity Derivatives |
|
41.21 |
|
|
|
42.32 |
|
(9 |
)% |
|
|
|
|
|
|
||||
Costs and Expenses (per Boe): |
|
|
|
|
|
||||
Production Expenses |
$ |
8.70 |
|
|
$ |
9.61 |
|
(9 |
)% |
Production Taxes |
|
3.92 |
|
|
|
2.46 |
|
59 |
% |
General and Administrative Expenses |
|
1.55 |
|
|
|
1.53 |
|
1 |
% |
Depletion, Depreciation, Amortization and Accretion |
|
7.17 |
|
|
|
13.39 |
|
(46 |
)% |
|
|
|
|
|
|
||||
Net Producing Wells at Period-End |
|
680.8 |
|
|
|
475.1 |
|
43 |
% |
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
Crude Oil Commodity Derivative Swaps |
||||||
Contract Period |
|
Volume (Bbls) |
|
Volume (Bbls/Day) |
|
Weighted Average Price
|
2022: |
|
|
|
|
|
|
Q1 |
|
2,690,980 |
|
29,900 |
|
|
Q2 |
|
2,598,000 |
|
28,549 |
|
|
Q3 |
|
2,559,900 |
|
27,825 |
|
|
Q4 |
|
2,398,900 |
|
26,075 |
|
|
2023(1): |
|
|
|
|
|
|
Q1 |
|
1,131,750 |
|
12,575 |
|
|
Q2 |
|
923,650 |
|
10,150 |
|
|
Q3 |
|
581,900 |
|
6,325 |
|
|
Q4 |
|
572,700 |
|
6,225 |
|
|
2024(1): |
|
|
|
|
|
|
Q1 |
|
136,500 |
|
1,500 |
|
|
Q2 |
|
136,500 |
|
1,500 |
|
|
Q3 |
|
138,000 |
|
1,500 |
|
|
Q4 |
|
138,000 |
|
1,500 |
|
|
_____________
(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. For additional information, see Note 12 to our financial statements included in our Form 10-K filed with the |
The following table summarizes NOG’s open natural gas commodity derivative swap contracts scheduled to settle after
Natural Gas Commodity Derivative Swaps |
||||||
Contract Period |
|
Gas (MMBTU) |
|
Volume (MMBTU/Day) |
|
Weighted Average Price
|
|
|
|
|
|
|
|
2022(1): |
|
|
|
|
|
|
Q1 |
|
6,814,132 |
|
75,713 |
|
|
Q2 |
|
8,715,000 |
|
95,769 |
|
|
Q3 |
|
9,660,000 |
|
105,000 |
|
|
Q4 |
|
8,880,000 |
|
96,522 |
|
|
2023: |
|
|
|
|
|
|
Q1 |
|
5,690,000 |
|
63,222 |
|
|
Q2 |
|
1,840,000 |
|
20,220 |
|
|
Q3 |
|
1,840,000 |
|
20,000 |
|
|
Q4 |
|
1,437,000 |
|
15,620 |
|
|
2024: |
|
|
|
|
|
|
Q1 |
|
630,000 |
|
6,923 |
|
|
Q2 |
|
644,000 |
|
7,077 |
|
|
Q3 |
|
644,000 |
|
7,000 |
|
|
Q4 |
|
427,000 |
|
4,641 |
|
|
_____________
(1) |
This table does not include volumes subject to collars. This table also does not include basis swaps. For additional information, see Note 12 to our financial statements included in our Form 10-K filed with the |
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
|
|
Twelve Months Ended
|
|||||||||||
(In thousands) |
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||||
Cash Received (Paid) on Derivatives |
$ |
(74,353 |
) |
|
$ |
35,482 |
|
|
$ |
(165,823 |
) |
|
$ |
188,234 |
Non-Cash Gain (Loss) on Derivatives |
|
61,170 |
|
|
|
(84,923 |
) |
|
|
(312,370 |
) |
|
|
39,878 |
Gain (Loss) on Derivative Instruments, Net |
$ |
(13,183 |
) |
|
$ |
(49,441 |
) |
|
$ |
(478,193 |
) |
|
$ |
228,112 |
CAPITAL EXPENDITURES & DRILLING ACTIVITY
(In millions, except for net well data) |
|
Three Months Ended
|
|
Year Ended |
Capital Expenditures Incurred: |
|
|
|
|
Organic Drilling and Development Capital Expenditures |
|
|
|
|
Ground Game Drilling and Development Capital Expenditures |
|
|
|
|
Ground Game Acquisition Capital Expenditures |
|
|
|
|
Other |
|
|
|
|
Non-Budgeted Acquisitions |
|
|
|
|
|
|
|
|
|
Net Wells Added to Production |
|
12.1 |
|
35.8 |
|
|
|
|
|
Net Producing Wells (Period-End) |
|
|
|
680.8 |
|
|
|
|
|
|
|
|
|
42.5 |
Change in Wells in Process over Prior Period |
|
(0.6) |
|
14.5 |
|
|
|
|
|
Weighted Average AFE for Wells Elected to |
|
|
|
|
Capitalized costs are a function of the number of net well additions during the period, and changes in wells in process from the prior year-end. Capital expenditures attributable to the increase of 14.5 in net wells in process during the year ended
ACREAGE
As of
FOURTH QUARTER 2021 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
Those wishing to listen to the conference call may do so via the company’s website, www.northernoil.com, or by phone as follows:
Website: https://themediaframe.com/mediaframe/webcast.html?webcastid=EctAX0qH
Dial-In Number: (866) 373-3407 (US/
Conference ID: 13726752 - Fourth Quarter 2021 Earnings Call
Replay Dial-In Number: (877) 660-6853 (US/
Replay Access Code: 13726752 - Replay will be available through
ABOUT
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 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 properties and properties pending acquisition; NOG’s ability to acquire additional development opportunities; potential or pending acquisition transactions; NOG’s ability to consummate pending acquisitions, and the anticipated timing of such consummation; 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; disruptions to NOG’s business due to acquisitions and other significant transactions; infrastructure constraints and related factors affecting NOG’s properties; cost inflation or supply chain disruption; ongoing legal disputes over and potential shutdown of the Dakota Access Pipeline; the COVID-19 pandemic and its related economic repercussions and effect on the oil and natural gas industry; 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 raise or access capital; cyber-related risks; changes in accounting principles, policies or guidelines; and financial or political instability, health-related epidemics, acts of war or terrorism, 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
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.
|
|||||||||||||||
STATEMENTS OF OPERATIONS |
|||||||||||||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(In thousands, except share and per share data) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenues |
|
|
|
|
|
|
|
||||||||
Oil and Natural Gas Sales |
$ |
332,372 |
|
|
$ |
99,511 |
|
|
$ |
975,089 |
|
|
$ |
324,052 |
|
Gain (Loss) on Derivative Instruments, Net |
|
(13,183 |
) |
|
|
(49,441 |
) |
|
|
(478,193 |
) |
|
|
228,141 |
|
Other Revenue |
|
1 |
|
|
|
4 |
|
|
|
3 |
|
|
|
17 |
|
Total Revenues |
|
319,190 |
|
|
|
50,074 |
|
|
|
496,899 |
|
|
|
552,210 |
|
|
|
|
|
|
|
|
|
||||||||
Operating Expenses |
|
|
|
|
|
|
|
||||||||
Production Expenses |
|
50,571 |
|
|
|
28,204 |
|
|
|
170,817 |
|
|
|
116,336 |
|
Production Taxes |
|
25,056 |
|
|
|
9,034 |
|
|
|
76,954 |
|
|
|
29,783 |
|
General and Administrative Expenses |
|
10,463 |
|
|
|
4,361 |
|
|
|
30,341 |
|
|
|
18,546 |
|
Depletion, Depreciation, Amortization and Accretion |
|
42,814 |
|
|
|
32,769 |
|
|
|
140,828 |
|
|
|
162,120 |
|
Impairment Expense |
|
— |
|
|
|
104,463 |
|
|
|
— |
|
|
|
1,066,668 |
|
Total Operating Expenses |
|
128,904 |
|
|
|
121,539 |
|
|
|
418,940 |
|
|
|
1,393,453 |
|
|
|
|
|
|
|
|
|
||||||||
Income (Loss) From Operations |
|
190,286 |
|
|
|
(62,527 |
) |
|
|
77,959 |
|
|
|
(841,243 |
) |
|
|
|
|
|
|
|
|
||||||||
Other Income (Expense) |
|
|
|
|
|
|
|
||||||||
Interest Expense, Net of Capitalization |
|
(15,899 |
) |
|
|
(13,358 |
) |
|
|
(59,020 |
) |
|
|
(58,503 |
) |
Write-off of Debt Issuance Costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,543 |
) |
Gain (Loss) on Unsettled Interest Rate Derivatives |
|
589 |
|
|
|
186 |
|
|
|
1,043 |
|
|
|
(1,019 |
) |
Loss on the Extinguishment of Debt |
|
— |
|
|
|
— |
|
|
|
(13,087 |
) |
|
|
(3,718 |
) |
Contingent Consideration Loss |
|
— |
|
|
|
(169 |
) |
|
|
(292 |
) |
|
|
(169 |
) |
Other Income (Expense) |
|
(16 |
) |
|
|
(25 |
) |
|
|
(9 |
) |
|
|
(12 |
) |
Total Other Income (Expense) |
|
(15,326 |
) |
|
|
(13,366 |
) |
|
|
(71,365 |
) |
|
|
(64,964 |
) |
|
|
|
|
|
|
|
|
||||||||
Income (Loss) Before Income Taxes |
|
174,960 |
|
|
|
(107,939 |
) |
|
|
6,594 |
|
|
|
(906,207 |
) |
|
|
|
|
|
|
|
|
||||||||
Income Tax Expense (Benefit) |
|
233 |
|
|
|
— |
|
|
|
233 |
|
|
|
(166 |
) |
|
|
|
|
|
|
|
|
||||||||
Net Income (Loss) |
|
174,727 |
|
|
|
(107,939 |
) |
|
|
6,361 |
|
|
$ |
(906,041 |
) |
|
|
|
|
|
|
|
|
||||||||
Cumulative Preferred Stock Dividend |
|
(3,605 |
) |
|
|
(1,029 |
) |
|
|
(14,761 |
) |
|
|
(15,266 |
) |
|
|
|
|
|
|
|
|
||||||||
Net Income (Loss) Attributable to Common Shareholders |
$ |
171,122 |
|
|
$ |
(143,152 |
) |
|
$ |
(8,400 |
) |
|
$ |
(921,307 |
) |
|
|
|
|
|
|
|
|
||||||||
Net Income (Loss) Per Common Share – Basic |
$ |
2.42 |
|
|
$ |
(3.14 |
) |
|
$ |
(0.13 |
) |
|
$ |
(21.55 |
) |
Net Income (Loss) Per Common Share – Diluted |
$ |
2.13 |
|
|
$ |
(3.14 |
) |
|
$ |
(0.13 |
) |
|
$ |
(21.55 |
) |
Weighted Average Shares Outstanding – Basic |
|
70,660,131 |
|
|
|
45,520,634 |
|
|
|
62,989,543 |
|
|
|
42,744,639 |
|
Weighted Average Shares Outstanding – Diluted |
|
81,849,627 |
|
|
|
45,520,634 |
|
|
|
62,989,543 |
|
|
|
42,744,639 |
|
_________
The accompanying notes are an integral part of these financial statements. |
|
|||||||
BALANCE SHEETS |
|||||||
(In thousands, except par value and share data) |
|
|
|
||||
Assets |
|
|
|
||||
Current Assets: |
|
|
|
||||
Cash and Cash Equivalents |
$ |
9,519 |
|
|
$ |
1,428 |
|
Accounts Receivable, Net |
|
193,554 |
|
|
|
71,015 |
|
Advances to Operators |
|
6,319 |
|
|
|
476 |
|
Prepaid Expenses and Other |
|
3,417 |
|
|
|
1,420 |
|
Derivative Instruments |
|
2,519 |
|
|
|
51,290 |
|
Total Current Assets |
|
215,328 |
|
|
|
125,629 |
|
|
|
|
|
||||
Property and Equipment: |
|
|
|
||||
|
|
|
|
||||
Proved |
|
5,034,769 |
|
|
|
4,393,533 |
|
Unproved |
|
24,998 |
|
|
|
10,031 |
|
Other Property and Equipment |
|
2,616 |
|
|
|
2,451 |
|
Total Property and Equipment |
|
5,062,383 |
|
|
|
4,406,015 |
|
Less – Accumulated Depreciation, Depletion and Impairment |
|
(3,809,041 |
) |
|
|
(3,670,811 |
) |
Total Property and Equipment, Net |
|
1,253,342 |
|
|
|
735,204 |
|
|
|
|
|
||||
Derivative Instruments |
|
1,863 |
|
|
|
111 |
|
Acquisition Deposit |
|
40,650 |
|
|
|
— |
|
Other Noncurrent Assets, Net |
|
11,683 |
|
|
|
11,145 |
|
|
|
|
|
||||
Total Assets |
$ |
1,522,866 |
|
|
$ |
872,089 |
|
|
|
|
|
||||
Liabilities and Stockholders' Equity |
|
|
|
||||
Current Liabilities: |
|
|
|
||||
Accounts Payable |
$ |
65,464 |
|
|
$ |
35,803 |
|
Accrued Liabilities |
|
105,590 |
|
|
|
68,673 |
|
Accrued Interest |
|
20,498 |
|
|
|
8,341 |
|
Derivative Instruments |
|
134,283 |
|
|
|
3,078 |
|
Contingent Consideration |
|
— |
|
|
|
493 |
|
Other Current Liabilities |
|
1,722 |
|
|
|
1,087 |
|
Current Portion of Long-term Debt |
|
— |
|
|
|
65,000 |
|
Total Current Liabilities |
|
327,557 |
|
|
|
182,475 |
|
|
|
|
|
||||
Long-term Debt, Net |
|
803,437 |
|
|
|
879,843 |
|
Derivative Instruments |
|
147,762 |
|
|
|
14,659 |
|
Asset Retirement Obligations |
|
25,865 |
|
|
|
18,366 |
|
Other Noncurrent Liabilities |
|
3,110 |
|
|
|
50 |
|
|
|
|
|
||||
Total Liabilities |
|
1,307,731 |
|
|
$ |
1,095,393 |
|
|
|
|
|
||||
Commitments and Contingencies |
|
|
|
||||
|
|
|
|
||||
Stockholders' Equity (Deficit) |
|
|
|
||||
Preferred Stock, Par Value
2,218,732 Shares Outstanding at
2,218,732 Shares Outstanding at |
|
2 |
|
|
|
2 |
|
Common Stock, Par Value
77,341,921 Shares Outstanding at
45,908,779 Shares Outstanding at |
|
479 |
|
|
|
448 |
|
|
|
1,988,649 |
|
|
|
1,556,602 |
|
Retained Deficit |
|
(1,773,996 |
) |
|
|
(1,780,356 |
) |
Total Stockholders’ Equity (Deficit) |
|
215,135 |
|
|
|
(223,304 |
) |
Total Liabilities and Stockholders' Equity (Deficit) |
$ |
1,522,866 |
|
|
$ |
872,089 |
|
___________
The accompanying notes are an integral part of these financial statements. |
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) unrealized (gain) loss on unsettled commodity derivatives, net of tax, (ii) financing expense, net of tax, (iii) impairment of other current assets, net of tax, (iv) write-off of debt issuance costs, net of tax, (v) loss on the extinguishment of debt, net of tax, (vi) debt exchange derivative (gain) loss, net of tax, (vii) contingent consideration loss, net of tax, (viii) acquisition transaction costs, net of tax, (ix) impairment expense, net of tax, and (x) 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) (gain) loss on unsettled commodity derivatives, (v) non-cash stock based compensation expense, (vi) write-off of debt issuance costs, (vii) loss on the extinguishment of debt, (viii) impairment of other current assets, (ix) debt exchange derivative (gain) loss, (x) contingent consideration loss, (xi) financing expense, (xii) impairment expense, (xiii) (gain) loss on unsettled interest rate derivatives, and (xiv) cash severance expense. 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
Reconciliation of Adjusted Net Income |
|||||||||||||||
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
(In thousands, except share and per share data) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Income (Loss) Before Taxes |
$ |
174,727 |
|
|
$ |
(142,123 |
) |
|
$ |
6,361 |
|
|
$ |
(906,041 |
) |
Add: |
|
|
|
|
|
|
|
||||||||
Impact of Selected Items: |
|
|
|
|
|
|
|
||||||||
(Gain) Loss on Unsettled Commodity Derivatives |
|
(61,170 |
) |
|
|
84,923 |
|
|
|
312,370 |
|
|
|
(39,878 |
) |
Impairment Expense |
|
— |
|
|
|
104,463 |
|
|
|
— |
|
|
|
1,066,668 |
|
Write-off of Debt Issuance Costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,543 |
|
Loss on the Extinguishment of Debt |
|
— |
|
|
|
— |
|
|
|
13,087 |
|
|
|
3,718 |
|
(Gain) Loss on Unsettled Interest Rate Derivatives |
|
(589 |
) |
|
|
(186 |
) |
|
|
(1,043 |
) |
|
|
1,019 |
|
Contingent Consideration Loss |
|
— |
|
|
|
169 |
|
|
|
292 |
|
|
|
169 |
|
Acquisition Transaction Costs |
|
1,986 |
|
|
|
— |
|
|
|
8,190 |
|
|
|
— |
|
Adjusted Income Before Adjusted Income Tax Expense |
|
115,188 |
|
|
|
47,246 |
|
|
|
339,491 |
|
|
|
127,032 |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Income Tax Expense |
|
(28,221 |
) |
|
|
(11,575 |
) |
|
|
(83,175 |
) |
|
|
(31,123 |
) |
|
|
|
|
|
|
|
|
||||||||
Adjusted Net Income (non-GAAP) |
$ |
86,967 |
|
|
$ |
35,670 |
|
|
$ |
256,316 |
|
|
$ |
95,910 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Shares Outstanding – Basic |
|
70,660,131 |
|
|
|
45,520,634 |
|
|
|
62,989,543 |
|
|
|
42,744,639 |
|
Weighted Average Shares Outstanding – Diluted |
|
81,849,627 |
|
|
|
55,381,388 |
|
|
|
73,366,750 |
|
|
|
52,659,217 |
|
|
|
|
|
|
|
|
|
||||||||
Income (Loss) Before Taxes Per Common Share – Basic |
$ |
2.48 |
|
|
$ |
(3.12 |
) |
|
$ |
0.10 |
|
|
$ |
(21.20 |
) |
Add: |
|
|
|
|
|
|
|
||||||||
Impact of Selected Items |
|
(0.85 |
) |
|
|
4.16 |
|
|
|
5.28 |
|
|
|
24.17 |
|
Impact of Income Tax |
|
(0.40 |
) |
|
|
(0.26 |
) |
|
|
(1.31 |
) |
|
|
(0.73 |
) |
Adjusted Net Income Per Common Share – Basic |
$ |
1.23 |
|
|
$ |
0.78 |
|
|
$ |
4.07 |
|
|
$ |
2.24 |
|
|
|
|
|
|
|
|
|
||||||||
Income (Loss) Before Taxes Per Common Share – Diluted |
$ |
2.14 |
|
|
$ |
(2.57 |
) |
|
$ |
0.09 |
|
|
$ |
(17.21 |
) |
Add: |
|
|
|
|
|
|
|
||||||||
Impact of Selected Items |
|
(0.73 |
) |
|
|
3.42 |
|
|
|
4.54 |
|
|
|
19.62 |
|
Impact of Income Tax |
|
(0.35 |
) |
|
|
(0.21 |
) |
|
|
(1.14 |
) |
|
|
(0.59 |
) |
Adjusted Net Income Per Common Share – Diluted |
$ |
1.06 |
|
|
$ |
0.64 |
|
|
$ |
3.49 |
|
|
$ |
1.82 |
|
_______________
(1) |
For the 2021 columns, this represents a tax impact using an estimated tax rate of |
Reconciliation of Adjusted EBITDA |
|||||||||||||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(In thousands) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Net Income (Loss) |
$ |
174,727 |
|
|
$ |
(142,123 |
) |
|
$ |
6,361 |
|
|
$ |
(906,041 |
) |
Add: |
|
|
|
|
|
|
|
||||||||
Interest Expense |
|
15,899 |
|
|
|
13,358 |
|
|
|
59,020 |
|
|
|
58,503 |
|
Income Tax Provision (Benefit) |
|
233 |
|
|
|
— |
|
|
|
233 |
|
|
|
(166 |
) |
Depreciation, Depletion, Amortization and Accretion |
|
42,814 |
|
|
|
32,769 |
|
|
|
140,828 |
|
|
|
162,120 |
|
Non-Cash Stock-Based Compensation |
|
1,374 |
|
|
|
936 |
|
|
|
3,621 |
|
|
|
4,119 |
|
Write-off of Debt Issuance Costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,543 |
|
Loss on the Extinguishment of Debt |
|
— |
|
|
|
— |
|
|
|
13,087 |
|
|
|
3,718 |
|
Contingent Consideration Loss |
|
— |
|
|
|
169 |
|
|
|
292 |
|
|
|
169 |
|
Acquisition Transaction Costs |
|
1,986 |
|
|
|
— |
|
|
|
8,190 |
|
|
|
— |
|
(Gain) Loss on Unsettled Interest Rate Derivatives |
|
(589 |
) |
|
|
(186 |
) |
|
|
1,019 |
|
|
|
1,019 |
|
(Gain) Loss on Unsettled Commodity Derivatives |
|
(61,170 |
) |
|
|
84,923 |
|
|
|
(39,878 |
) |
|
|
(39,878 |
) |
Impairment Expense |
|
— |
|
|
|
104,463 |
|
|
|
— |
|
|
|
1,066,668 |
|
Adjusted EBITDA |
$ |
175,275 |
|
|
$ |
94,309 |
|
|
$ |
542,959 |
|
|
$ |
351,774 |
|
Reconciliation of Free Cash Flow |
|||
|
Three Months Ended
|
||
(In thousands) |
2021 |
||
Net Cash Provided by Operating Activities |
$ |
133,102 |
|
Exclude: Changes in Working Capital and Other Items |
|
24,907 |
|
Less: Capital Expenditures (1) |
|
(83,671 |
) |
Less: Series A Preferred Dividends |
|
(3,605 |
) |
Free Cash Flow |
$ |
70,732 |
|
_______________
(1) |
Capital expenditures are calculated as follows: |
|
Three Months Ended
|
||
(In thousands) |
2021 |
||
Cash Paid for Capital Expenditures |
$ |
228,751 |
|
Less: Non-Budgeted Acquisitions |
|
(146,753 |
) |
Plus: Change in Accrued Capital Expenditures and Other |
|
1,673 |
|
Capital Expenditures |
$ |
83,671 |
|
Reconciliation of PV-10
The following table reconciles the pre-tax PV10% value of our SEC Pricing Proved Reserves as of
SEC Pricing Proved Reserves (In thousands) |
|
Standardized Measure Reconciliation |
|
Pre-Tax Present Value of Estimated Future Net Revenues (Pre-Tax PV10%) |
|
Future Income Taxes, Discounted at |
(450,980) |
Standardized Measure of Discounted Future Net Cash Flows |
|
(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 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220223006467/en/
Chief Strategy Officer
952-476-9800
ir@northernoil.com
Source:
FAQ
What were NOG's production numbers for the fourth quarter of 2021?
How much cash flow from operations did NOG have in Q4 2021?
What is NOG's 2022 production guidance?
What major acquisition did NOG complete in early 2022?