Northern Oil & Gas Update - Feb 6

[dan_s]

Northern Oil and Gas, Inc. (NYSE: NOG) ("NOG") has now closed on both of its previously announced acquisitions of Utica and Northern Delaware Basin assets from private sellers.

Highlights:
Bolt-on acquisitions of core non-operated working interest properties in the Northern Delaware and Appalachian Basins for a combined initial purchase price of $170 million in cash and 107,657 shares of common stock, subject to typical closing adjustments
Combined average expected 2024 production of ~6,500 Boe per day (26% oil, 2-stream)
Combined cash flow from operations for the acquisitions expected to be $57.5 - $62.5 million in 2024, representing a 2.8 - 3.0x purchase price multiple, based on recent commodity strip pricing
Expecting approximately $33 - $38 million in total 2024 capital expenditures on the combined assets
NOG has existing ownership interests in approximately 90% of the Delaware Basin leasehold
Transactions expected to be accretive to key financial metrics in 2024 and on a multi-year basis
Acquisitions to be financed with cash on hand, operating free cash flow and borrowings under NOG’s revolving credit facility
NOG hedged a portion of the expected production on a multi-year basis, at higher than current pricing levels, prior to signing

[dan_s]

Northern Oil and Gas, Inc. (NYSE: NOG) (“NOG” or the “Company”) announced today that it plans to issue its fourth quarter and year-end 2023 financial and operating results on Thursday, February 22, 2024, after the market closes. Additionally, the Company will host a conference call on Friday, February 23, 2024, at 8:00 a.m. Central Time.

My Q4 2023 forecast
> Production of 113,000 Boepd < 72,500 bopd and 243,000 Mcfepd of natural gas & NGLs which NOG reports on a combined basis.
> Revenue of $582 million
> Adjusted Net Income of $189 million (~$1.88/share) < Reported Net Income should be higher since they have a lot of hedges for 2024 to 2026
> Adjusted Operating Cash Flow of 383 million (~$3.81/share)
> Free cash flow for the year 2023 s/b ~$500 million.

NOG is an Aggressive Growth Non-Op company. 40.5% YOY production growth in 2022, ~30% in 2023 and my forecast is ~25% in 2024.

My current valuation is $63/share, which is 4X annualized operating cash flow per share.