Northern Oil and Gas Reports Higher Oil Production for Q3, According to Investing.com

MINNEAPOLIS – Northern Oil and Gas, Inc. (NYSE: NOG) has announced its operational update for the third quarter of 2024, highlighting increased oil production and continued share repurchases. Despite fewer wells being turned-in-line (TIL), the company reported a record oil volume, marking a significant achievement in its operational performance.

Production for the quarter is estimated to have averaged between 121.6 and 121.8 thousand barrels of oil equivalent (MBoe) per day, with oil volumes making up approximately 58.1% to 58.3% of total production. This translates to about 70,775 to 70,925 barrels of oil per day. The company attributes the increase in oil production to a rise in refrac activity and strong well performance, which compensated for the nearly 70% sequential quarter reduction in TILs.

The company’s drilling and completion (D&C) activities have also shown robust growth, with the D&C list expanding to 52.2 net wells-in-process by the end of the quarter, an increase of 11.2 from the previous quarter. This positions the company for a significant uptick in TILs in the fourth quarter, aligning with its annual targets.

Regarding financials, Northern Oil and Gas reported unrealized mark-to-market gains on derivatives estimated at $208.0 to $209.0 million for the third quarter. Realized hedge gains were estimated at $29.5 to $29.7 million. The company has actively managed its hedging program in response to increased volatility in commodity prices, securing substantial hedges for oil and for the remainder of 2024, as well as for 2025 and 2026.

In terms of shareholder returns, Northern Oil and Gas paid roughly $40 million in dividends during the third quarter and repurchased 397,301 shares at an average price of $36.38. Year-to-date, the company’s repurchases total 1.84 million shares, amounting to a value of $69.3 million. The company plans to review its dividend policy by the first quarter of 2025.

The company reiterated its 2024 production and capital expenditure guidance, with any necessary adjustments to be communicated in its third quarter earnings report.

CEO Nick O’Grady expressed confidence in the company’s performance and future prospects, particularly highlighting the successful acquisitions of Point and XCL, which are expected to contribute to the company’s growth.

This operational update is based on preliminary unaudited financial and operating information and is subject to final adjustments following the company’s financial closing procedures and audit processes. The information presented in this press release is based on a press release statement and not an endorsement of the company’s claims.

In other recent news, Northern Oil and Gas demonstrated a robust financial performance in its second quarter 2024 earnings call. The company reported a 31% year-over-year increase in adjusted EBITDA and a 33% growth in cash flow from operations. In addition, Northern Oil and Gas has completed the acquisition of assets in the Uinta Basin from XCL Resources and Altamont Energy. This deal expands the company’s footprint by approximately 15,800 net acres and adds around 116 undeveloped locations with potential for further exploration.

Jefferies has resumed coverage on Northern Oil and Gas shares with a Buy rating, basing their valuation on a 4.3 times enterprise value to two-year forward EBITDA multiple on estimated 2027 EBITDA. The firm’s estimated EBITDA for 2027 is approximately $1.6 billion, which is about 10% lower than the consensus.

Mizuho Securities also initiated coverage of Northern Oil and Gas with an Outperform rating, highlighting the company’s unique non-operating exploration and production model. Despite expectations of a decline in natural gas production, Northern Oil and Gas anticipates per-share growth through 2025 and has proposed a midyear dividend increase. These are the recent developments for Northern Oil and Gas.

InvestingPro Insights

Northern Oil and Gas’s operational update for Q3 2024 aligns with several key metrics and insights from InvestingPro. The company’s record oil volume and increased production are reflected in its strong financial performance. According to InvestingPro data, NOG’s revenue growth for the last twelve months as of Q2 2024 was 17.65%, with quarterly revenue growth in Q2 2024 reaching an impressive 35.1%.

The company’s focus on shareholder returns, including dividends and share repurchases, is supported by InvestingPro Tips. One tip notes that NOG “has raised its dividend for 3 consecutive years,” which is consistent with the company’s commitment to returning value to shareholders. The current dividend yield stands at 4.51%, making it an attractive option for income-focused investors.

NOG’s profitability is also highlighted in the InvestingPro data, with a P/E ratio of 6.49 and a gross profit margin of 80.17% for the last twelve months as of Q2 2024. This aligns with the InvestingPro Tip stating that the company has been “profitable over the last twelve months.”

For investors seeking more comprehensive insights, InvestingPro offers additional tips and metrics. Currently, there are 6 more InvestingPro Tips available for Northern Oil and Gas, providing a deeper understanding of the company’s financial health and market position.

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