Energy Prospectus

FIRST QUARTER HIGHLIGHTS

Record total quarterly production of 134,959 Boe per day (58% oil), up 13% from the first quarter of 2024 < My forecast for Q1 was 129,000 Boepd
Oil volumes of 78,675 Bbl per day, driven by strong well performance < My forecast 75,465 bpd of oil.
Record Appalachian volumes of 113.5 Mmcfe per day
Uinta volumes up over 15% from prior quarter in first period of SM Energy Company’s operatorship < This good news for SM!
GAAP net income of $139.0 million, Adjusted Net Income of $133.4 million and Record Adjusted EBITDA of $434.7 million. See “Non-GAAP Financial Measures” below < Adjusted Net Income compares to my forecast of $102.7 million.
Cash flow from operations of $407.4 million. Excluding changes in net working capital, cash flow from operations was $387.4 million, an increase of 10% from the first quarter of 2024 < Excluding changes in net working capital = "Adjusted Operating Cash Flow. My forecast for Q1 was $340.4 million.
Generated $135.7 million of Free Cash Flow, up 41% from the fourth quarter of 2024. < Very Good!
Capital expenditures of $249.9 million, excluding non-budgeted acquisitions and other items
Completed seven ground game transactions adding over 1,000 acres and 1.1 net wells for $4.8 million, inclusive of associated development costs
Repurchased 499,100 shares of common stock at an average price of $30.07 per share
Reaffirms annual guidance < 130 to 135 MBoepd. My forecast is now based on the top of the range.

SUBSEQUENT EVENTS

On April 1, 2025 NOG closed on its previously announced Upton County, Texas acquisition from a private operator adding 2,275 net acres for total cash consideration of $61.7 million, net of closing adjustments.

I will update the forecast/valuation model tomorrow morning.

Northern met my expectations for Q1, but did not exceed them. Apparently, my Q1 outlook was a bit more optimistic than Dan’s outlook.

Production
• Similar to Dan, Q1 production (134.9 K BoE/d) exceeded my expectation (132.0 K BoE/d), which was based on a production flat compared to Q4 production (131.7 K BoE/d). Northern lacks reserves for growth.
• Considering oil and gas production separate, I see that oil production saw a minor decline from 78.9 K BoE/d (Q4) to 78.7 K BoE/d (Q1).
• The increase in the overall production originated from the gas. Gas production increased with 6.5% from 317 MM scf/d (Q4) to 337 K BoE/d (Q1).
• AS a consequence, the oil content dropped from 59.9% (Q4) to 58.3% (Q1).

Profit
• The adjusted profit ($ 133.4 M) was close to my expectation.
• Realized oil prices ($64.92/bbl) were disappointing. Based on WTI I had expected the oil price about $ 1.40/bbl higher.
• The lower oil price was due higher seasonal differentials in the Permian and the Williston as well as full quarter contribution from the Uinta Basin, which carries higher transportation costs.
• The lower oil income was compensated by higher gas revenues and lower production taxes.
• Northern guidance on production taxes is 8.8-9.0%. Production taxes in Q1 ($ 36.1 M) however were only 6.3% of revenues, thus giving a boost to the net profit of $ 6-7 M. Whether this tax benefit is sustainable remains to be seen.

Shareholder returns
• The Q1 dividend ($ 0.45) and the share buybacks ($ 16 M) combined equate to a high return in Q1 of 2.4%.
• Whether Northern can maintain this rate returns in the rest of 2025 remains to be seen.
• The balance sheet, which has a high debt/EBITDA (1.35) and the low equity ratio (42.3%) does not allow high shareholder returns if the oil price stays in the current $ 60-65/bbl range.
• After 2025 returns may fall as Northern lacks the proven reserves to sustain current production levels.

Northern Oil and Gas, Inc. (NYSE: NOG) ("NOG" or the "Company") today announced that its Board of Directors has declared a cash dividend on the Company's common stock.

DIVIDEND DECLARATION

NOG's Board of Directors has declared a cash dividend in the amount of $0.45 per share, representing a 12.5% increase year-over-year and equal to the prior quarterly dividend. The dividend is payable on July 31, 2025, to stockholders of record as of the close of business on June 27, 2025.

Based on the current share price the annualized dividend yield in now 7.45%

Harry: NOG's "Non-Op" strategy does make it more difficult to model

> My WAG is that natural gas volumes went up because EQT operates a lot of their Appalachia production and EQT "opened the valves" in Q1 to take advantage of higher natural gas prices. Slide 4 of their current slide deck shows that 95 different companies operate their wells, which makes their accounting "complicated". When I was a division CFO at Hess, I considered all non-op production data a Wild Ass Guess (WAG).
> NOG reports natural gas and NGLs on a combined basis. Their Q1 realized NGas+NGLs price was $3.90/mcfe thanks to higher NGL prices. In my forecast, Q2 NGas+NGLs price should be approximately $3.69/mcfe. Since NOG does not report how much of their production is NGLs, it is another reason modeling it is difficult.
> The production tax percentage was lower than NOG's guidance because of the impact of their hedges. Production taxes are on actual sales not including the positive impact of cash settlements on their hedges. Q1 2025 production tax was only 6.12% if realized revenues including the cash settlements on their hedges. For the remainder of 2025, I am using a production tax rate of 7% because NOG has a lot of their oil hedged at much higher prices than the WTI oil price that I am using in my model.
> I am using a $6/bbl differential for oil because I think a lot of their "oil" is condensate which sells at a lower price.
> NOG's proved reserves per their year-end reserve are much lower than proved + probable reserves partly because they are a Non-Op company. With small working interests in a very large number of wells, my WAG is that their 3rd party reserve engineers are using very conservative estimates for proved reserves. SEC rules only allow reserves to be "proved" if they are going to be developed in the next five years. With 95 different operating companies, what would be a pure Wild Ass Guess. In other words, NOG's true "Running Room" is much higher than the December 31, 2024 reserve report implies.

I have been following NOG for over 20 years. I have not liked their Non-Op strategy because of the difficulty in modeling it, but size does matter in this business. NOG is a now a very profitable company that pays a nice dividend, over 7.4% annual yield.