NOG Closes Uinta Basin Acquisition

Rhea-AI Summary

Northern Oil and Gas (NYSE: NOG) has closed its acquisition of Uinta Basin assets from XCL Resources and Altamont Energy on October 1, 2024. The deal provides NOG with over a decade of Tier 1 inventory across approximately 15,800 net acres, including 116 net underwritten undeveloped locations and additional exploration potential. NOG partnered with SM Energy in the acquisition, with SM becoming the operator of most assets. The companies have entered into cooperation and long-term joint development agreements. NOG paid $511.2 million in cash at closing, partly funded by a $25.5 million deposit made in June 2024. The transaction remains subject to post-closing settlements.

Positive

• Acquisition of Uinta Basin assets provides over a decade of Tier 1 inventory
• Gained approximately 15,800 net acres with 116 net underwritten undeveloped locations
• Partnership with SM Energy for joint development and operation of assets
• Additional exploration upside potential in the acquired assets

Negative

• Significant cash outlay of $511.2 million for the acquisition
• Post-closing settlements may affect final transaction value

Insights

Financial Analyst

The completion of NOG's Uinta Basin acquisition marks a significant expansion of their asset portfolio. The $511.2 million cash transaction brings substantial resources to NOG, including 15,800 net acres and 116 net underwritten undeveloped locations. This acquisition provides NOG with over a decade of Tier 1 inventory, which is important for long-term growth and sustainability in the oil and gas sector.

The joint acquisition with SM Energy and the subsequent cooperation and joint development agreements are strategic moves that could lead to operational synergies and cost efficiencies. SM Energy's role as the primary operator may allow NOG to benefit from their expertise while maintaining a significant stake in the assets.

Investors should note the potential for additional exploration upside, which could further enhance the value of this acquisition. However, it's important to consider the substantial cash outlay and its impact on NOG's balance sheet and liquidity position. The success of this investment will largely depend on future oil prices and the efficiency of developing these assets.

Market Research Analyst

This acquisition significantly strengthens NOG's position in the Uinta Basin, a region known for its high-quality oil reserves. The deal expands NOG's footprint in a strategic area, diversifying its portfolio beyond its traditional focus on the Williston Basin and Permian Basin.

The market implications are substantial:

• Increased production potential could boost NOG's revenue and cash flow in the coming years
• The decade-long inventory secures NOG's growth trajectory, potentially attracting long-term investors
• Collaboration with SM Energy may lead to knowledge sharing and operational improvements

However, investors should watch for integration challenges and the impact on NOG's financial metrics, particularly debt levels and cash flow. The success of this acquisition could reshape NOG's market perception, potentially positioning it as a more diversified and robust player in the independent oil and gas sector.

MINNEAPOLIS--(BUSINESS WIRE)-- Northern Oil and Gas, Inc. (NYSE: NOG) (“NOG”) closed its previously announced acquisition of Uinta Basin assets from XCL Resources, LLC (“XCL”) on October 1, 2024. The closing included the assets previously owned by Altamont Energy, LLC (“Altamont”). These transactions provide NOG with over a decade of Tier 1 inventory across ~15,800 net acres in the Uinta Basin with ~116 net underwritten undeveloped locations and additional exploration upside potential.

NOG jointly acquired the assets with SM Energy, Inc. (“SM”), which will become the operator of substantially all the assets. In connection with the transaction, NOG and SM entered into cooperation and long-term joint development agreements.

At closing, NOG paid $511.2 million in cash, funded in part by a $25.5 million deposit paid at signing in June 2024. The closing settlement includes the purchase of the Altamont assets, 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 June 27, 2024 and August 7, 2024 press releases announcing the XCL and Altamont transactions.

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; 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; 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, 2023, 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/20241002854888/en/

Evelyn Leon Infurna

Vice President of Investor Relations

(952) 476-9800

ir@northernoil.com

Source: Northern Oil and Gas, Inc.

FAQ

When did Northern Oil and Gas (NOG) close the Uinta Basin acquisition?

Northern Oil and Gas (NOG) closed the Uinta Basin acquisition on October 1, 2024.

How much did NOG pay for the Uinta Basin assets?

NOG paid $511.2 million in cash at closing for the Uinta Basin assets, which included a $25.5 million deposit paid in June 2024.

What assets did NOG acquire in the Uinta Basin?

NOG acquired approximately 15,800 net acres with 116 net underwritten undeveloped locations and additional exploration upside potential in the Uinta Basin.

Who is partnering with NOG in the Uinta Basin acquisition?

NOG is partnering with SM Energy in the Uinta Basin acquisition. SM Energy will become the operator of substantially all the acquired assets.