NOG Announces Second Quarter 2024 Results, Updates 2024 Guidance
Northern Oil and Gas (NYSE: NOG) reported strong Q2 2024 results, with record quarterly production of 123,342 Boe per day, up 36% year-over-year. The company achieved GAAP net income of $138.6 million and Adjusted EBITDA of $413.1 million. NOG generated $133.7 million in Free Cash Flow and repurchased 895,076 shares at an average price of $38.96. The company announced two joint acquisitions: $510 million for Uinta Basin properties and $220 million for Delaware Basin properties. NOG's Board approved a new $150 million share repurchase authorization and management recommended a 5% increase to the quarterly dividend. The company updated its 2024 guidance, increasing production estimates to 120,000-124,000 Boe per day and capital expenditures to $890-$970 million.
Northern Oil and Gas (NYSE: NOG) ha riportato risultati solidi per il secondo trimestre del 2024, con una produzione trimestrale record di 123.342 Boe al giorno, in aumento del 36% rispetto all'anno precedente. L'azienda ha ottenuto un utile netto GAAP di 138,6 milioni di dollari e un EBITDA rettificato di 413,1 milioni di dollari. NOG ha generato 133,7 milioni di dollari di flusso di cassa libero e ha riacquistato 895.076 azioni a un prezzo medio di 38,96 dollari. L'azienda ha annunciato due acquisizioni congiunte: 510 milioni di dollari per le proprietà nel Bacino di Uinta e 220 milioni di dollari per le proprietà nel Bacino del Delaware. Il Consiglio di NOG ha approvato una nuova autorizzazione al riacquisto di azioni da 150 milioni di dollari e la direzione ha raccomandato un aumento del 5% del dividendo trimestrale. L'azienda ha aggiornato le sue previsioni per il 2024, aumentando le stime di produzione a 120.000-124.000 Boe al giorno e le spese in capitale a 890-970 milioni di dollari.
Northern Oil and Gas (NYSE: NOG) reportó resultados sólidos para el segundo trimestre de 2024, con una producción trimestral récord de 123,342 Boe por día, un aumento del 36% con respecto al año anterior. La compañía logró un ingreso neto GAAP de 138.6 millones de dólares y un EBITDA ajustado de 413.1 millones de dólares. NOG generó 133.7 millones de dólares en flujo de caja libre y recompró 895,076 acciones a un precio promedio de 38.96 dólares. La empresa anunció dos adquisiciones conjuntas: 510 millones de dólares para propiedades en la Cuenca de Uinta y 220 millones de dólares para propiedades en la Cuenca de Delaware. La Junta de NOG aprobó una nueva autorización de recompra de acciones de 150 millones de dólares y la dirección recomendó un incremento del 5% en el dividendo trimestral. La compañía actualizó su guía para 2024, elevando las estimaciones de producción a 120,000-124,000 Boe por día y las inversiones de capital a 890-970 millones de dólares.
노던 오일 앤 가스(NYSE: NOG)는 2024년 2분기 실적을 발표하며 1일 123,342 Boe의 분기 생산량 기록을 세웠으며, 이는 전년 대비 36% 증가한 수치입니다. 이 회사는 GAAP 기준 순이익 1억 3천8백6십만 달러와 조정 EBITDA 4억 1천3십1만 달러를 달성했습니다. NOG는 1억 3천3백7십만 달러의 자유 현금 흐름을 창출하고, 평균 가격 38.96달러로 895,076개의 주식을 재매입했습니다. 이 회사는 두 가지 공동 인수를 발표했습니다: 우인터 분지 자산에 대해 5억 1천만 달러와 델라웨어 분지 자산에 대해 2억 2천만 달러입니다. NOG의 이사회는 새로운 1억 5천만 달러 주식 매입 승인을 승인하고 경영진은 분기 배당금 5% 인상을 권장했습니다. 이 회사는 2024년 가이던스를 업데이트하여 생산 예상치를 120,000-124,000 Boe로, 자본 지출을 8억 9천만-9억 7천만 달러로 증가시켰습니다.
Northern Oil and Gas (NYSE: NOG) a annoncé des résultats solides pour le deuxième trimestre 2024, avec une production trimestrielle record de 123 342 Boe par jour, en hausse de 36 % par rapport à l'année précédente. L'entreprise a enregistré un bénéfice net GAAP de 138,6 millions de dollars et un EBITDA ajusté de 413,1 millions de dollars. NOG a généré 133,7 millions de dollars de flux de trésorerie libre et a racheté 895 076 actions à un prix moyen de 38,96 dollars. La société a annoncé deux acquisitions conjointes : 510 millions de dollars pour des propriétés dans le bassin de Uinta et 220 millions de dollars pour des propriétés dans le bassin du Delaware. Le conseil d'administration de NOG a approuvé une nouvelle autorisation de rachat d'actions de 150 millions de dollars et la direction a recommandé une augmentation de 5 % du dividende trimestriel. L'entreprise a mis à jour ses prévisions pour 2024, augmentant les estimations de production à 120 000-124 000 Boe par jour et les dépenses d'investissement à 890-970 millions de dollars.
Northern Oil and Gas (NYSE: NOG) hat im zweiten Quartal 2024 solide Ergebnisse berichtet, mit einer Quartalsproduktion von 123.342 Boe pro Tag, was einem Anstieg von 36 % im Vergleich zum Vorjahr entspricht. Das Unternehmen erzielte ein GAAP-Nettoeinkommen von 138,6 Millionen US-Dollar und ein bereinigtes EBITDA von 413,1 Millionen US-Dollar. NOG generierte 133,7 Millionen US-Dollar an Free Cash Flow und repurchase 895.076 Aktien zu einem Durchschnittspreis von 38,96 US-Dollar. Das Unternehmen gab zwei gemeinsame Akquisitionen bekannt: 510 Millionen US-Dollar für Grundstücke im Uinta-Becken und 220 Millionen US-Dollar für Grundstücke im Delaware-Becken. Der Vorstand von NOG genehmigte eine neue Aktienrückkaufautorisierung in Höhe von 150 Millionen US-Dollar und das Management empfahl eine Erhöhung der Quartalsdividende um 5 %. Das Unternehmen aktualisierte seine Prognose für 2024 und erhöhte die Produktionsschätzungen auf 120.000-124.000 Boe pro Tag sowie die Investitionen auf 890-970 Millionen US-Dollar.
- Record quarterly production of 123,342 Boe per day, up 36% year-over-year
- GAAP net income of $138.6 million and Adjusted EBITDA of $413.1 million
- Generated $133.7 million in Free Cash Flow
- Announced two joint acquisitions totaling $730 million
- New $150 million share repurchase authorization approved
- Recommended 5% increase to quarterly dividend
- Increased 2024 production guidance to 120,000-124,000 Boe per day
- Increased 2024 capital expenditures guidance to $890-$970 million
- Widened oil differentials guidance for 2024
- Higher transportation costs expected in the Uinta Basin
NOG's Q2 2024 results demonstrate strong operational and financial performance, positioning the company as a leader in its niche. Key highlights include:
- Record quarterly production of 123,342 Boe per day, up
36% year-over-year - GAAP net income of
$138.6 million and Adjusted EBITDA of$413.1 million - Free Cash Flow generation of
$133.7 million - Announced strategic acquisitions in the Uinta and Delaware Basins
The company's diversified portfolio across regions and commodities, coupled with low leverage and strong free cash flow, positions it well for future growth. The increased production guidance and reduced per-unit operating expenses highlight operational efficiency. The
However, investors should note the potential risks associated with the pending acquisitions, as their closure is subject to various conditions. The company's hedging strategy, while providing some price protection, may limit upside potential if commodity prices rise significantly.
Overall, NOG's Q2 results and strategic moves indicate a positive trajectory, but careful monitoring of acquisition integration and commodity price trends will be important for assessing future performance.
NOG's Q2 results underscore its unique position in the oil and gas sector as a non-operated working interest player. The company's ability to achieve record production levels while maintaining cost discipline is particularly noteworthy in the current market environment.
Key observations:
- The
36% year-over-year production increase demonstrates NOG's ability to effectively manage its diverse asset base. - Improved oil differentials and better-than-expected natural gas realizations highlight the benefits of NOG's multi-basin strategy.
- The announced acquisitions in the Uinta and Delaware Basins show a strategic focus on expanding in high-quality, oil-weighted areas.
The company's success in reducing lease operating expenses to
However, the increased capital expenditure guidance warrants attention. While partly due to the pending acquisitions, investors should monitor capital efficiency metrics closely in the coming quarters.
NOG's hedging strategy appears balanced, providing downside protection while allowing for some upside participation. This approach is prudent given the volatile nature of commodity markets.
In summary, NOG's Q2 performance reinforces its unique value proposition in the E&P sector, with its non-operated model proving effective in driving growth and returns.
NOG's Q2 2024 results and strategic moves offer several key insights for investors:
- The company's record production and strong financial performance demonstrate its ability to execute effectively in a challenging market environment.
- NOG's diversified portfolio across multiple basins provides a competitive advantage, allowing for optimization of capital allocation and risk mitigation.
- The announced acquisitions in the Uinta and Delaware Basins indicate a focus on high-quality, oil-weighted assets, which could enhance the company's production mix and returns.
Market implications:
1. Sector outperformance: NOG's strong results may lead to outperformance relative to peers, potentially attracting increased investor interest in the non-operated E&P model.
2. Dividend growth: The recommended
3. M&A activity: NOG's successful execution of bolt-on acquisitions may encourage similar moves by other players in the sector, potentially leading to increased consolidation activity.
4. ESG considerations: While not explicitly mentioned, NOG's focus on operational efficiency and diverse asset base may position it well in terms of environmental and governance factors, which are increasingly important to investors.
Investors should closely monitor the integration of the pending acquisitions and NOG's ability to maintain its operational efficiency as it grows. The company's performance in the coming quarters will be important in determining whether it can sustain its current trajectory and continue to create shareholder value.
SECOND QUARTER HIGHLIGHTS
-
Record quarterly production of 123,342 Boe per day (
57% oil), increases of3% from the first quarter of 2024 and36% from the second quarter of 2023 -
GAAP net income of
$138.6 million $147.8 million $413.1 million -
Cash flow from operations of
$340.5 million $374.2 million 33% from the second quarter of 2023 -
Generated
$133.7 million -
Announced joint acquisition of Uinta Basin properties from XCL Resources with SM Energy Company for
$510 million -
Repurchased 895,076 shares of common stock at an average price of
$38.96
POST QUARTER HIGHLIGHTS
-
Announced joint acquisition of
Delaware Basin properties from Point Energy Partners with Vital Energy, Inc. for$220 million -
Board of Directors approved new
$150 million -
Management will recommend that the Board of Directors approve a
5% mid-year increase to NOG’s quarterly common stock dividend, to$0.42
MANAGEMENT COMMENTS
“NOG’s results continue to underscore its role as the definitive national working interest franchise, diversified by region and commodity mix, with low leverage, strong free cash flow, and growing cash returns,” commented Nick O’Grady, NOG’s Chief Executive Officer. “Our cash flow and production are at record levels, and we have increased our shareholder returns. At the same time, we continue to find both organic and inorganic paths to growth for our investors positioning NOG as a superior investment alternative for the long term. As we reinforce through our financial results and through our corporate actions, we are unrivaled in our niche and continue to press our advantage. We remain highly aligned with and motivated to continue to deliver for our investors in the future.”
SECOND QUARTER FINANCIAL RESULTS
Oil and natural gas sales for the second quarter were
PRODUCTION
Second quarter production was 123,342 Boe per day, an increase of
PRICING
During the second quarter, NYMEX West Texas Intermediate (“WTI”) crude oil averaged
OPERATING COSTS
Lease operating costs were
CAPITAL EXPENDITURES AND ACQUISITIONS
Capital expenditures for the second quarter were
NOG’s Permian Basin spending was
LIQUIDITY AND CAPITAL RESOURCES
NOG had total liquidity in excess of
SHAREHOLDER RETURNS
In the second quarter of 2024, the Company repurchased 895,076 shares of common stock at an average price, inclusive of commissions, of
In May 2024, NOG’s Board of Directors declared a regular quarterly cash dividend for NOG’s common stock of
On July 29, 2024, NOG’s Management announced that it intends to recommend that the Board of Directors approve a
2024 ANNUAL GUIDANCE(1)(2)
NOG is providing preliminary updated annual guidance, as shown in the table below, with the assumption that the pending XCL and Point acquisitions close on October 1, 2024.
Overall, the impact of the acquisitions serves to increase annual production and to reduce per unit operating expenses, production tax rates and per unit cash G&A costs. Additionally, capital expenditures are being adjusted to account for additional capital expected to be incurred on the acquired properties post-closing of the transactions. Given stronger than anticipated gas realizations year-to-date, further adjusted for the pending acquisitions, the Company is increasing guidance for gas realizations. Due to higher transportation costs expected in the Uinta Basin, slightly offset by modest improvements experienced year-to-date, the Company is widening its oil differentials for 2024 modestly. Additionally, NOG is adjusting its per unit DD&A rate guidance for the estimated impact of the pending acquisitions.
|
|
Original Guidance |
|
Revised Guidance |
Annual Production (Boe per day) |
|
115,000 - 120,000 |
|
120,000 - 124,000 |
Annual Oil Production (Bbls per day) |
|
70,000 - 73,000 |
|
73,000 - 76,000 |
Total Capital Expenditures ($ in millions) |
|
|
|
|
Net Wells Turned-in-Line (“TIL”) |
|
87.5 - 92.5 |
|
93.0 - 98.0 |
Net Wells Spud |
|
67.5 - 72.5 |
|
73.0 - 78.0 |
|
|
|
|
|
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) |
|
|
|
|
DD&A Rate (per Boe) |
|
|
|
|
|
|
|
|
|
General and Administrative Expense (per Boe): |
|
|
|
|
Non-Cash |
|
|
|
|
Cash (excluding transaction costs on non-budgeted acquisitions) |
|
|
|
|
________________
(1) |
All forecasts are provided on a 2-stream production basis. |
|
(2) |
Updated guidance assumes an October 1, 2024 closing date for NOG’s pending XCL and Point acquisitions. Actual closing dates of these transactions may differ materially, which may impact NOG’s annual guidance and actual results. The closings of these transactions are subject to the satisfaction or waiver of closing conditions, many of which are out of the Company’s control. There can be no assurance that the transactions will close on the assumed timeline, or at all. See “Safe Harbor” below. |
SECOND QUARTER 2024 RESULTS
The following tables set forth selected operating and financial data for the periods indicated.
|
Three Months Ended June 30, |
||||||||
|
|
2024 |
|
|
|
2023 |
|
% Change |
|
Net Production: |
|
|
|
|
|
||||
Oil (Bbl) |
|
6,337,728 |
|
|
|
4,981,162 |
|
27 |
% |
Natural Gas (Mcf) |
|
29,318,623 |
|
|
|
19,732,243 |
|
49 |
% |
Total (Boe) |
|
11,224,165 |
|
|
|
8,269,869 |
|
36 |
% |
|
|
|
|
|
|
||||
Average Daily Production: |
|
|
|
|
|
||||
Oil (Bbl) |
|
69,645 |
|
|
|
54,738 |
|
27 |
% |
Natural Gas (Mcf) |
|
322,183 |
|
|
|
216,838 |
|
49 |
% |
Total (Boe) |
|
123,342 |
|
|
|
90,878 |
|
36 |
% |
|
|
|
|
|
|
||||
Average Sales Prices: |
|
|
|
|
|
||||
Oil (per Bbl) |
$ |
77.11 |
|
|
$ |
71.03 |
|
9 |
% |
Effect of Gain (Loss) on Settled Oil Derivatives on Average Price (per Bbl) |
|
(2.30 |
) |
|
|
1.31 |
|
|
|
Oil Net of Settled Oil Derivatives (per Bbl) |
|
74.81 |
|
|
|
72.34 |
|
3 |
% |
|
|
|
|
|
|
||||
Natural Gas and NGLs (per Mcf) |
|
2.47 |
|
|
|
3.18 |
|
(22 |
)% |
Effect of Gain on Settled Natural Gas Derivatives on Average Price (per Mcf) |
|
0.80 |
|
|
|
1.05 |
|
(24 |
)% |
Natural Gas and NGLs Net of Settled Natural Gas Derivatives (per Mcf) |
|
3.27 |
|
|
|
4.23 |
|
(23 |
)% |
|
|
|
|
|
|
||||
Realized Price on a Boe Basis Excluding Settled Commodity Derivatives |
|
49.98 |
|
|
|
50.36 |
|
(1 |
)% |
Effect of Gain on Settled Commodity Derivatives on Average Price (per Boe) |
|
0.79 |
|
|
|
3.30 |
|
(76 |
)% |
Realized Price on a Boe Basis Including Settled Commodity Derivatives |
|
50.77 |
|
|
|
53.66 |
|
(5 |
)% |
|
|
|
|
|
|
||||
Costs and Expenses (per Boe): |
|
|
|
|
|
||||
Production Expenses |
$ |
8.99 |
|
|
$ |
10.20 |
|
(12 |
)% |
Production Taxes |
|
4.33 |
|
|
|
4.49 |
|
(4 |
)% |
General and Administrative Expenses |
|
1.21 |
|
|
|
1.50 |
|
(19 |
)% |
Depletion, Depreciation, Amortization and Accretion |
|
15.73 |
|
|
|
12.87 |
|
22 |
% |
|
|
|
|
|
|
||||
Net Producing Wells at Period End |
|
1,015.2 |
|
|
|
872.8 |
|
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 June 30, 2024.
|
|
Crude Oil Commodity
|
|
Crude Oil Commodity Derivative Collars |
|||||||||||
Contract Period |
|
Volume (Bbls/Day) |
|
Weighted Average Price ($/Bbl) |
|
Collar Call
|
|
Collar Put
|
|
Weighted Average Ceiling Price ($/Bbl) |
|
Weighted Average Floor Price ($/Bbl) |
|||
2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Q3 |
|
31,621 |
|
$ |
75.29 |
|
1,725,056 |
|
1,573,256 |
|
$ |
80.90 |
|
$ |
71.23 |
Q4 |
|
27,469 |
|
|
74.06 |
|
2,080,749 |
|
1,906,800 |
|
|
81.28 |
|
|
71.65 |
2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Q1 |
|
23,308 |
|
$ |
75.10 |
|
1,943,286 |
|
1,619,849 |
|
$ |
79.02 |
|
$ |
70.34 |
Q2 |
|
21,089 |
|
|
74.37 |
|
1,683,671 |
|
1,382,233 |
|
|
78.33 |
|
|
70.32 |
Q3 |
|
12,504 |
|
|
72.73 |
|
1,476,994 |
|
1,173,970 |
|
|
78.43 |
|
|
70.10 |
Q4 |
|
12,091 |
|
|
72.28 |
|
1,450,511 |
|
1,147,487 |
|
|
78.64 |
|
|
70.12 |
2026: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Q1 |
|
3,930 |
|
$ |
71.96 |
|
380,726 |
|
264,289 |
|
$ |
75.28 |
|
$ |
68.89 |
Q2 |
|
3,930 |
|
|
71.91 |
|
384,957 |
|
267,227 |
|
|
75.28 |
|
|
68.89 |
Q3 |
|
3,930 |
|
|
71.86 |
|
389,187 |
|
270,163 |
|
|
75.28 |
|
|
68.89 |
Q4 |
|
3,930 |
|
|
71.79 |
|
389,187 |
|
270,163 |
|
|
75.28 |
|
|
68.89 |
_____________
(1) |
Includes derivative contracts entered into as of July 29, 2024. 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 10 to our financial statements included in our Form 10-Q filed with the SEC for the quarter ended June 30, 2024. |
The following table summarizes NOG’s open natural gas commodity derivative swap contracts scheduled to settle after June 30, 2024.
|
|
Natural Gas Commodity Derivative Swaps(1) |
|
Natural Gas Commodity Derivative Collars |
|||||||||||
Contract Period |
|
Volume (MMBTU/Day) |
|
Weighted Average Price ($/MMBTU) |
|
Collar Call Volume (MMBTU) |
|
Collar Put Volume (MMBTU) |
|
Weighted Average Ceiling
($/MMBTU) |
|
Weighted Average
($/MMBTU) |
|||
2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Q3 |
|
118,048 |
|
$ |
3.49 |
|
7,360,000 |
|
7,360,000 |
|
$ |
4.37 |
|
$ |
3.05 |
Q4 |
|
83,890 |
|
|
3.49 |
|
9,096,586 |
|
9,096,586 |
|
|
4.63 |
|
|
3.07 |
2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Q1 |
|
16,500 |
|
$ |
3.61 |
|
9,196,417 |
|
9,196,417 |
|
$ |
5.10 |
|
$ |
3.13 |
Q2 |
|
10,110 |
|
|
3.60 |
|
8,771,297 |
|
8,771,297 |
|
|
4.81 |
|
|
3.13 |
Q3 |
|
10,000 |
|
|
3.60 |
|
8,407,569 |
|
8,407,569 |
|
|
4.84 |
|
|
3.13 |
Q4 |
|
11,630 |
|
|
3.66 |
|
7,618,723 |
|
7,618,723 |
|
|
4.95 |
|
|
3.12 |
2026: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Q1 |
|
14,889 |
|
$ |
3.74 |
|
5,828,249 |
|
5,828,249 |
|
$ |
5.06 |
|
$ |
3.09 |
Q2 |
|
15,165 |
|
|
3.74 |
|
6,024,706 |
|
6,024,706 |
|
|
5.06 |
|
|
3.09 |
Q3 |
|
15,000 |
|
|
3.74 |
|
6,024,706 |
|
6,024,706 |
|
|
5.06 |
|
|
3.09 |
Q4 |
|
11,576 |
|
|
3.66 |
|
4,304,642 |
|
4,304,642 |
|
|
4.97 |
|
|
3.09 |
2027: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Q1 |
|
1,722 |
|
$ |
3.20 |
|
890,000 |
|
890,000 |
|
$ |
3.83 |
|
$ |
3.00 |
Q2 |
|
— |
|
|
— |
|
920,000 |
|
920,000 |
|
|
3.83 |
|
|
3.00 |
Q3 |
|
— |
|
|
— |
|
920,000 |
|
920,000 |
|
|
3.83 |
|
|
3.00 |
Q4 |
|
— |
|
|
— |
|
610,000 |
|
610,000 |
|
|
3.83 |
|
|
3.00 |
____________
(2) |
Includes derivative contracts entered into as of July 29, 2024. This table does not include basis swaps. For additional information, see Note 10 to our financial statements included in our Form 10-Q filed with the SEC for the quarter ended June 30, 2024. |
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 June 30, |
|||||
(In thousands) |
|
2024 |
|
|
|
2023 |
Cash Received on Settled Derivatives |
$ |
8,896 |
|
|
$ |
27,265 |
Non-Cash Mark-to-Market Gain (Loss) on Derivatives |
|
(12,324 |
) |
|
|
30,503 |
Gain (Loss) on Commodity Derivatives, Net |
$ |
(3,428 |
) |
|
$ |
57,769 |
CAPITAL EXPENDITURES & DRILLING ACTIVITY
(In millions, except for net well data) |
|
Three Months Ended June 30, 2024 |
||
Capital Expenditures Incurred: |
|
|
||
Organic Drilling and Development Capital Expenditures |
|
$ |
212.2 |
|
Ground Game Drilling and Development Capital Expenditures |
|
$ |
14.2 |
|
Ground Game Acquisition Capital Expenditures |
|
$ |
10.9 |
|
Other |
|
$ |
3.0 |
|
Non-Budgeted Acquisitions |
|
$ |
(3.7 |
) |
|
|
|
||
Net Wells Added to Production |
|
|
30.1 |
|
|
|
|
||
Net Producing Wells (Period-End) |
|
|
1,015.2 |
|
|
|
|
||
Net Wells in Process (Period-End) |
|
|
41.0 |
|
|
|
|
||
Weighted Average Gross AFE for Wells Elected to |
|
$ |
9.5 |
|
SECOND 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 Wednesday, July 31, 2024 at 8:00 a.m. Central Time.
Those wishing to listen to the conference call may do so via webcast or phone as follows:
Webcast: https://events.q4inc.com/attendee/514541633
Dial-In Number: (888) 596-4144 (US/
Conference ID: 4503139 - NOG Second Quarter 2024 Earnings Conference Call
Replay Dial-In Number: (800) 770-2030 (US/
Replay Access Code: 4503139 - Replay will be available through August 14, 2024
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
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 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
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. Accordingly, results actually achieved may differ materially from expected results described in these statements. NOG does not undertake any duty to update or revise any forward-looking statements, except as may be required by the federal securities laws.
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) |
|||||||
|
Three Months Ended June 30, |
||||||
(In thousands, except share and per share data) |
|
2024 |
|
|
|
2023 |
|
Revenues |
|
|
|
||||
Oil and Gas Sales |
$ |
561,025 |
|
|
$ |
416,491 |
|
Gain (Loss) on Commodity Derivatives, Net |
|
(3,428 |
) |
|
|
57,769 |
|
Other Revenues |
|
3,169 |
|
|
|
2,294 |
|
Total Revenues |
|
560,766 |
|
|
|
476,554 |
|
|
|
|
|
||||
Operating Expenses |
|
|
|
||||
Production Expenses |
|
100,859 |
|
|
|
84,350 |
|
Production Taxes |
|
48,589 |
|
|
|
37,138 |
|
General and Administrative Expenses |
|
13,538 |
|
|
|
12,402 |
|
Depletion, Depreciation, Amortization and Accretion |
|
176,612 |
|
|
|
106,427 |
|
Other Expenses |
|
2,232 |
|
|
|
1,446 |
|
Total Operating Expenses |
|
341,830 |
|
|
|
241,763 |
|
|
|
|
|
||||
Income From Operations |
|
218,936 |
|
|
|
234,791 |
|
|
|
|
|
||||
Other Income (Expense) |
|
|
|
||||
Interest Expense, Net of Capitalization |
|
(37,696 |
) |
|
|
(31,968 |
) |
Contingent Consideration Gain |
|
— |
|
|
|
3,931 |
|
Other Income (Expense) |
|
63 |
|
|
|
72 |
|
Total Other Income (Expense) |
|
(37,633 |
) |
|
|
(27,965 |
) |
|
|
|
|
||||
Income Before Income Taxes |
|
181,303 |
|
|
|
206,826 |
|
|
|
|
|
||||
Income Tax Expense |
|
42,746 |
|
|
|
39,012 |
|
|
|
|
|
||||
Net Income |
$ |
138,556 |
|
|
$ |
167,815 |
|
|
|
|
|
||||
Net Income Per Common Share – Basic |
$ |
1.38 |
|
|
$ |
1.89 |
|
Net Income Per Common Share – Diluted |
$ |
1.36 |
|
|
$ |
1.88 |
|
Weighted Average Common Shares Outstanding – Basic |
|
100,266,462 |
|
|
|
88,800,994 |
|
Weighted Average Common Shares Outstanding – Diluted |
|
101,985,074 |
|
|
|
89,108,519 |
|
CONDENSED BALANCE SHEETS |
|||||||
(In thousands, except par value and share data) |
June 30, 2024 |
|
December 31, 2023 |
||||
Assets |
(Unaudited) |
|
|
||||
Current Assets: |
|
|
|
||||
Cash and Cash Equivalents |
$ |
7,778 |
|
|
$ |
8,195 |
|
Accounts Receivable, Net |
|
359,649 |
|
|
|
370,531 |
|
Advances to Operators |
|
21,685 |
|
|
|
49,210 |
|
Prepaid Expenses and Other |
|
2,651 |
|
|
|
2,489 |
|
Derivative Instruments |
|
19,569 |
|
|
|
75,733 |
|
Income Tax Receivable |
|
2,335 |
|
|
|
3,249 |
|
Total Current Assets |
|
413,667 |
|
|
|
509,407 |
|
|
|
|
|
||||
Property and Equipment: |
|
|
|
||||
Oil and Natural Gas Properties, Full Cost Method of Accounting |
|
|
|
||||
Proved |
|
9,111,493 |
|
|
|
8,428,518 |
|
Unproved |
|
37,654 |
|
|
|
36,785 |
|
Other Property and Equipment |
|
8,146 |
|
|
|
8,069 |
|
Total Property and Equipment |
|
9,157,293 |
|
|
|
8,473,372 |
|
Less – Accumulated Depreciation, Depletion and Impairment |
|
(4,891,014 |
) |
|
|
(4,541,808 |
) |
Total Property and Equipment, Net |
|
4,266,279 |
|
|
|
3,931,563 |
|
|
|
|
|
||||
Derivative Instruments |
|
4,107 |
|
|
|
10,725 |
|
Acquisition Deposit |
|
25,500 |
|
|
|
17,094 |
|
Other Noncurrent Assets, Net |
|
15,111 |
|
|
|
15,466 |
|
|
|
|
|
||||
Total Assets |
$ |
4,724,664 |
|
|
$ |
4,484,255 |
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity |
|||||||
Current Liabilities: |
|
|
|
||||
Accounts Payable |
$ |
150,145 |
|
|
$ |
192,672 |
|
Accrued Liabilities |
|
215,833 |
|
|
|
147,943 |
|
Accrued Interest |
|
26,804 |
|
|
|
26,219 |
|
Derivative Instruments |
|
70,726 |
|
|
|
16,797 |
|
Other Current Liabilities |
|
2,061 |
|
|
|
2,130 |
|
Total Current Liabilities |
|
465,569 |
|
|
|
385,761 |
|
|
|
|
|
||||
Long-term Debt, Net |
|
1,874,909 |
|
|
|
1,835,554 |
|
Deferred Tax Liability |
|
112,870 |
|
|
|
68,488 |
|
Derivative Instruments |
|
159,091 |
|
|
|
105,831 |
|
Asset Retirement Obligations |
|
41,409 |
|
|
|
38,203 |
|
Other Noncurrent Liabilities |
|
2,509 |
|
|
|
2,741 |
|
|
|
|
|
||||
Total Liabilities |
$ |
2,656,357 |
|
|
$ |
2,436,578 |
|
|
|
|
|
||||
Commitments and Contingencies |
|
|
|
||||
|
|
|
|
||||
Stockholders’ Equity |
|
|
|
||||
Common Stock, Par Value 100,172,478 Shares Outstanding at 6/30/2024 100,761,148 Shares Outstanding at 12/31/2023 |
|
502 |
|
|
|
503 |
|
Additional Paid-In Capital |
|
1,995,432 |
|
|
|
2,124,963 |
|
Retained Earnings (Deficit) |
|
72,373 |
|
|
|
(77,790 |
) |
Total Stockholders’ Equity |
|
2,068,307 |
|
|
|
2,047,676 |
|
Total Liabilities and Stockholders’ Equity |
$ |
4,724,664 |
|
|
$ |
4,484,255 |
|
Non-GAAP Financial Measures
Adjusted Net Income, Adjusted EBITDA and Free Cash Flow are non-GAAP measures. NOG defines Adjusted Net Income (Loss) as income (loss) before income taxes, 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) 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) 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 June 30, |
||||||
(In thousands, except share and per share data) |
|
2024 |
|
|
|
2023 |
|
Income Before Income Taxes |
$ |
181,303 |
|
|
$ |
206,826 |
|
Add: |
|
|
|
||||
Impact of Selected Items: |
|
|
|
||||
(Gain) Loss on Unsettled Commodity Derivatives |
|
12,324 |
|
|
|
(30,503 |
) |
Contingent Consideration Gain |
|
— |
|
|
|
(3,931 |
) |
Acquisition Transaction Costs |
|
2,112 |
|
|
|
3,612 |
|
Adjusted Income Before Adjusted Income Tax Expense |
|
195,738 |
|
|
|
176,004 |
|
|
|
|
|
||||
Adjusted Income Tax Expense (1) |
|
(47,956 |
) |
|
|
(43,121 |
) |
|
|
|
|
||||
Adjusted Net Income (non-GAAP) |
$ |
147,782 |
|
|
$ |
132,883 |
|
|
|
|
|
||||
Weighted Average Shares Outstanding – Basic |
|
100,266,462 |
|
|
|
88,800,994 |
|
Weighted Average Shares Outstanding – Diluted |
|
101,985,074 |
|
|
|
89,108,519 |
|
Less: |
|
|
|
||||
Dilutive Effect of Convertible Notes (2) |
|
738,227 |
|
|
|
— |
|
Weighted Average Shares Outstanding – Adjusted Diluted |
|
101,246,847 |
|
|
|
89,108,519 |
|
|
|
|
|
||||
Income Before Income Taxes Per Common Share – Basic |
$ |
1.81 |
|
|
$ |
2.33 |
|
Add: |
|
|
|
||||
Impact of Selected Items |
|
0.14 |
|
|
|
(0.35 |
) |
Impact of Income Tax |
|
(0.48 |
) |
|
|
(0.48 |
) |
Adjusted Net Income Per Common Share – Basic |
$ |
1.47 |
|
|
$ |
1.50 |
|
|
|
|
|
||||
Income Before Income Taxes Per Common Share – Adjusted Diluted |
$ |
1.79 |
|
|
$ |
2.32 |
|
Add: |
|
|
|
||||
Impact of Selected Items |
|
0.14 |
|
|
|
(0.35 |
) |
Impact of Income Tax |
|
(0.47 |
) |
|
|
(0.48 |
) |
Adjusted Net Income Per Common Share – Adjusted Diluted |
$ |
1.46 |
|
|
$ |
1.49 |
|
______________
(1) |
For the three months ended June 30, 2024 and June 30, 2023, this represents a tax impact using an estimated tax rate of |
|
(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 June 30, |
|||||
(In thousands) |
|
2024 |
|
|
2023 |
|
Net Income |
$ |
138,556 |
|
$ |
167,815 |
|
Add: |
|
|
|
|||
Interest Expense |
|
37,696 |
|
|
31,968 |
|
Income Tax Expense |
|
42,746 |
|
|
39,012 |
|
Depreciation, Depletion, Amortization and Accretion |
|
176,612 |
|
|
106,427 |
|
Non-Cash Stock-Based Compensation |
|
3,026 |
|
|
1,151 |
|
Contingent Consideration Gain |
|
— |
|
|
(3,931 |
) |
Acquisition Transaction Costs |
|
2,112 |
|
|
3,612 |
|
(Gain) Loss on Unsettled Commodity Derivatives |
|
12,324 |
|
|
(30,503 |
) |
Adjusted EBITDA |
$ |
413,073 |
|
$ |
315,549 |
|
Reconciliation of Free Cash Flow
|
Three Months Ended June 30, |
||
(In thousands) |
|
2024 |
|
Net Cash Provided by Operating Activities |
$ |
340,477 |
|
Exclude: Changes in Working Capital and Other Items |
|
33,675 |
|
Less: Capital Expenditures (1) |
|
(240,405 |
) |
Free Cash Flow |
$ |
133,748 |
|
_______________
(1) |
Capital expenditures are calculated as follows: |
|
Three Months Ended June 30, |
||
(In thousands) |
|
2024 |
|
Cash Paid for Capital Expenditures |
$ |
223,173 |
|
Less: Non-Budgeted Acquisitions |
|
(21,770 |
) |
Plus: Change in Accrued Capital Expenditures and Other |
|
39,002 |
|
Capital Expenditures |
$ |
240,405 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240730585837/en/
Evelyn Infurna
Vice President of Investor Relations
952-476-9800
ir@northernoil.com
Source: Northern Oil and Gas, Inc.
FAQ
What was NOG's production in Q2 2024?
How much Free Cash Flow did NOG generate in Q2 2024?
What acquisitions did NOG announce in Q2 2024?
What is NOG's updated production guidance for 2024?
Did NOG announce any changes to its dividend?
