NOG Enters into Appalachian Joint Development Program

Rhea-AI Summary

Northern Oil and Gas (NOG) has announced a new joint development program in Appalachia, committing up to $160 million for a 15% working interest at an average net revenue interest of 84%. The program covers drilling activities scheduled for calendar year 2025 with an existing Appalachian operator known for capital efficiency. This strategic move aims to enhance NOG's natural gas development portfolio with improved visibility and development certainty.

Positive

• Strategic expansion into Appalachian gas development with guaranteed drilling schedule
• High net revenue interest of 84% on investment
• Partnership with established, capital-efficient operator
• Clear visibility on 2025 development program

Negative

• Significant capital commitment of $160 million required
• to 15% working interest in the program

Insights

Financial Analyst

This joint development agreement represents a strategic expansion of NOG's natural gas portfolio in the Appalachian region. The $160 million capital commitment for a 15% working interest with a high net revenue interest of 84% demonstrates efficient capital deployment. The structured nature of the deal, focusing on 2025 drilling activities, provides excellent visibility for future production and cash flow planning.

The agreement's timing is particularly strategic, as it allows NOG to lock in development costs in advance while expanding its gas-weighted assets. This diversification helps balance NOG's portfolio and could provide a hedge against oil price volatility. The high net revenue interest suggests favorable economics and royalty burden, which should translate to stronger cash flow generation per dollar invested.

Market Research Analyst

This deal strengthens NOG's position in the Appalachian Basin, one of North America's premier natural gas producing regions. The partnership with a capital-efficient operator suggests potential for strong returns on invested capital. The structured approach to "ground game" acquisitions demonstrates NOG's ability to execute creative deals that provide both growth and visibility.

The timing of this agreement, focused on 2025 drilling, indicates forward-thinking capital allocation and could provide a competitive advantage in securing drilling capacity. This type of strategic planning and partnership approach could become increasingly valuable as operators seek capital partners in the current market environment.

HIGHLIGHTS

• Joint development program with existing Appalachian operator. NOG capital commitment not expected to exceed $160 million, for a 15% working interest at an average net revenue interest of 84% in the program
• Program to cover operator’s Appalachia drilling activities in calendar year 2025
• Adds accretive natural gas development in Appalachia with strong visibility and surety of development

MINNEAPOLIS--(BUSINESS WIRE)-- Northern Oil and Gas, Inc. (NYSE: NOG) (the “Company” or “NOG”) today announced that it has entered a Joint Development Program with one of Appalachia’s most capital efficient operators. The program, which covers drilling activities in calendar year 2025, requires a capital commitment from NOG expected not to exceed $160 million for a 15% working interest.

The program provides for participation in Appalachia wells to be spud during 2025 and offers NOG a high degree of visibility and incremental certainty on its 2025 ground game program while adding to its gas inventory.

MANAGEMENT COMMENTS

“NOG’s ability to offer creative and scaled capital solutions that align with the objectives of our operating partners continues to provide the company with accretive opportunities,” commented Nick O’Grady, NOG’s Chief Executive Officer. “This joint venture deepens our relationship with a substantial operating partner. We believe that our unique market position and strategy enhances our ability to deliver a superior total return option to our stakeholders.”

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 financial position, common stock dividends, business strategy, plans and objectives of management for future operations, industry conditions, 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 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 (including the transactions described herein), 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 (including the transactions described herein); other risks and uncertainties related to the closing of pending acquisition transactions (including the transactions described herein); NOG's ability to raise or access capital; cyber incidents; 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 or elsewhere; and other economic, competitive, governmental, regulatory and technical factors affecting NOG's operations, products and prices.

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. Forward-looking statements speak only as of the date they are made. 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/20241212150275/en/

Evelyn Leon Infurna

Vice President of Investor Relations

(952) 476-9800

ir@northernoil.com

Source: Northern Oil and Gas, Inc.

FAQ

What is NOG's capital commitment in the 2025 Appalachian joint development program?

NOG's capital commitment in the Appalachian joint development program is not expected to exceed $160 million for a 15% working interest.

What is the net revenue interest for NOG in the 2025 Appalachian development program?

NOG will receive an average net revenue interest of 84% in the Appalachian development program.

When will NOG's new Appalachian joint development program begin operations?

The joint development program covers drilling activities scheduled for calendar year 2025.

What is the working interest percentage NOG acquired in the Appalachian program?

NOG acquired a 15% working interest in the Appalachian joint development program.