NOG Closes Point Acquisition

Rhea-AI Summary

Northern Oil and Gas (NYSE: NOG) has successfully closed its previously announced acquisition of Delaware Basin assets from Point Energy Partners, a Vortus Investments company, on September 20, 2024. The acquisition, jointly made with Vital Energy, Inc., involved NOG paying $205.0 million in cash at closing, which includes a $22.0 million deposit paid in July 2024. Vital Energy will become the operator of substantially all the acquired assets.

As part of the transaction, NOG and Vital have entered into cooperation and joint operating agreements, which include a multi-year development plan for the Point assets. The closing settlement is subject to post-closing settlements between the parties and reflects preliminary and customary purchase price adjustments.

Positive

• Successful acquisition of Delaware Basin assets
• Joint acquisition with Vital Energy, Inc., potentially sharing risks and resources
• Multi-year development plan in place for acquired assets

Negative

• Significant cash outlay of $205.0 million for the acquisition

Insights

Financial Analyst

The closure of NOG's $205 million acquisition of Delaware Basin assets from Point Energy Partners marks a significant expansion in the company's portfolio. This deal, executed jointly with Vital Energy, strategically positions NOG in the prolific Delaware Basin, potentially enhancing its production and reserves.

Key points to consider:

• The $205 million cash payment, including a $22 million deposit, suggests NOG's strong liquidity position.
• The joint acquisition and multi-year development plan with Vital Energy could lead to operational synergies and cost efficiencies.
• The Delaware Basin is known for its high-quality oil reserves, which could positively impact NOG's future production and revenue streams.
• Investors should monitor how this acquisition affects NOG's debt levels and cash flow in the coming quarters.

Overall, this acquisition appears to be a strategic move to enhance NOG's asset base and long-term growth prospects in a prime oil-producing region.

Oil & Gas Industry Expert

NOG's acquisition in the Delaware Basin is a strategic play that could significantly boost its operational footprint. The Delaware Basin, part of the larger Permian Basin, is renowned for its stacked pay zones and high productivity, making it one of the most sought-after oil and gas regions in the U.S.

Critical aspects to note:

• The partnership with Vital Energy as the operator could leverage their expertise in the region, potentially leading to improved drilling efficiencies and production rates.
• The multi-year development plan suggests a structured approach to asset exploitation, which could provide predictable growth and cash flows.
• This move diversifies NOG's portfolio beyond its traditional focus areas, potentially reducing geographical risk.
• The acquisition's success will depend on factors such as well performance, commodity prices and the effectiveness of the NOG-Vital partnership.

This deal positions NOG to capitalize on the Delaware Basin's potential, but investors should watch for execution risks and the impact on the company's overall production mix and cost structure.

MINNEAPOLIS--(BUSINESS WIRE)-- Northern Oil and Gas, Inc. (NYSE: NOG) (“NOG”) closed its previously announced acquisition of Delaware Basin assets from Point Energy Partners, LLC (“Point”), a Vortus Investments company, on September 20, 2024.

NOG jointly acquired the assets with Vital Energy, Inc. (“Vital”), which will become the operator of substantially all the assets. In connection with the transaction, NOG and Vital entered into cooperation and joint operating agreements, which include a multi-year development plan for the Point assets.

At closing, NOG paid $205.0 million in cash, which includes a $22.0 million deposit paid at signing in July 2024. The closing settlement is net of preliminary and customary purchase price adjustments and remains subject to post-closing settlements between the parties. More information regarding this acquisition can be found in NOG’s July 28, 2024 press release announcing the transaction.

ABOUT NOG

NOG is a real asset company with a primary strategy of acquiring and investing in non-operated minority working and mineral interests in the premier hydrocarbon producing basins within the contiguous United States. More information about NOG can be found at www.noginc.com.

SAFE HARBOR

This press release contains forward-looking statements regarding future events and future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”). All statements other than statements of historical facts included in this release regarding NOG’s dividend plans and practices, financial position, operating and financial performance, business strategy, plans and objectives of management for future operations, industry conditions, indebtedness covenant compliance, capital expenditures, production, cash flow, hedging and other matters are forward-looking statements. When used in this release, forward-looking statements are generally accompanied by terms or phrases such as “estimate,” “guidance,” “project,” “predict,” “believe,” “expect,” “continue,” “anticipate,” “target,” “could,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other words and similar expressions that convey the uncertainty of future events or outcomes. Items contemplating or making assumptions about actual or potential future sales, production, drilling locations, capital expenditures, market size, collaborations, and trends or operating results also constitute such forward-looking statements.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond NOG’s control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: changes in crude oil and natural gas prices, the pace of drilling and completions activity on NOG’s current properties and properties pending acquisition; infrastructure constraints and related factors affecting NOG’s properties; cost inflation or supply chain disruptions; 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 3.625% convertible senior notes due 2029 (the “Convertible Notes”), including the potential impact that the Convertible Notes may have on NOG’s financial position and liquidity, potential dilution, and that provisions of the Convertible Notes could delay or prevent a beneficial takeover of NOG; the potential impact of the capped call transactions undertaken in tandem with the Convertible Notes issuance, including counterparty risk; increasing attention to environmental, social and governance matters; NOG’s ability to consummate any pending acquisition transactions; other risks and uncertainties related to the closing of pending acquisition transactions; NOG’s ability to raise or access capital; cyber-incidents could have a material adverse effect on NOG’s business, financial condition or results of operations; changes in accounting principles, policies or guidelines; events beyond NOG’s control, including a global or domestic health crisis, acts of terrorism, political or economic instability or armed conflict in oil and gas producing regions; and other economic, competitive, governmental, regulatory and technical factors affecting NOG’s operations, products and prices.

NOG has based any forward-looking statements on its current expectations and assumptions about future events. While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond NOG's control. Accordingly, results actually achieved may differ materially from expected results described in these statements. Forward-looking statements speak only as of the date they are made. You should consider carefully the statements under the heading “Risk Factors” in NOG’s Annual Report on Form 10-K for the year ended December 31, 2022, as updated by subsequent reports NOG files with the SEC. NOG does not undertake, and specifically disclaims, any duty to update or revise any forward-looking statements to reflect events or circumstances after the date of such statements, except as may be required by applicable law or regulation.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240923744044/en/

Evelyn Leon Infurna

Vice President of Investor Relations

(952) 476-9800

ir@northernoil.com

Source: Northern Oil and Gas, Inc.

FAQ

When did NOG close the acquisition of Delaware Basin assets from Point Energy Partners?

NOG closed the acquisition of Delaware Basin assets from Point Energy Partners on September 20, 2024.

How much did NOG pay for the Point Energy Partners assets?

NOG paid $205.0 million in cash at closing, which includes a $22.0 million deposit paid in July 2024.

Who will operate the acquired Delaware Basin assets?

Vital Energy, Inc. will become the operator of substantially all the acquired assets.

What agreements did NOG and Vital Energy enter into regarding the acquired assets?

NOG and Vital Energy entered into cooperation and joint operating agreements, which include a multi-year development plan for the Point assets.