Northern Oil & Gas (NOG) Q2 Results - July 31

[dan_s]

These are my "Quick Takes" in blue on NOG's Q2 results. I will update my forecast valuation model on Friday or Saturday.

SECOND QUARTER HIGHLIGHTS

Total quarterly production of 134,094 Boe per day (57% oil), up 9% from the second quarter of 2024 < In line with my forecast.

Oil volumes of 76,944 Bbl per day, up 10.5% from the second quarter of 2024 < Slightly lower than my forecast of 77,720 bpd of oil.

Record Appalachian volumes of 123.5 MMcf per day

Uinta volumes up over 18.5% sequentially, marking the second consecutive quarter of double digit growth

GAAP net income of $99.6 million, Adjusted Net Income of $136.3 million and record Adjusted EBITDA of $440.4 million. < Adjusted Net Income beat my forecast of $106.4 million.

Cash flow from operations of $362.1 million. Excluding changes in net working capital, cash flow from operations was $387.0 million, an increase of 3% from the second quarter of 2024 < Beat my forecast of $348.1 million Adjusted Operating Cash Flow. This is the most important stat for me as all of my valuations are based on annualized operating cash flow per share.

Generated $126.2 million of Free Cash Flow. < Very Good! since my full year 2025 FCF forecast is $236 million.

Capital expenditures of $210.0 million, excluding non-budgeted acquisitions and other items, down 12% from the second quarter of 2024

Completed twenty-two ground game transactions adding approximately 2,600 net acres and 4.8 net wells for $31.2 million, inclusive of associated development costs

In April 2025, closed on previously announced Upton County, Texas acquisition adding 2,275 net acres for total cash consideration of $61.7 million, net of closing adjustments.

Raised $211.2 million in a re-opening of 2029 Convertible Notes and repurchased over 1.1 million shares of common stock at an average price of $31.15 per share in conjunction with the offering

Expect to receive a $48.6 million legal settlement, net of legal expenses < Good news!

Updates guidance on operating costs, production levels and capital expenditures

MANAGEMENT COMMENTS

"NOG’s diverse and scaled platform delivered solid results, with strong free cash flow generation and continued growth from our Appalachian and Uinta Basin properties. The Ground Game continues to gain momentum, providing accretive opportunities that should benefit the Company through cycle, featuring both near term development and longer dated inventory rich opportunities. With a focus on creating shareholder value for the long-term, we anticipate incremental growth being focused on the strong backlog of inorganic opportunities available to us in the marketplace today," commented Nick O’Grady, NOG’s Chief Executive Officer.

SECOND QUARTER FINANCIAL RESULTS

Oil and natural gas sales for the second quarter were $574.4 million. Second quarter GAAP net income was $99.6 million or $1.00 per diluted share. Second quarter Adjusted Net Income was $136.3 million or $1.37 per adjusted diluted share. Adjusted EBITDA in the second quarter was $440.4 million, a 7% increase from the second quarter of 2024.
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Bottomline: Everything looks good. NOG deserves a higher valuation multiple.

[dan_s]

NOG’s Board of Directors has declared a cash dividend in the amount of $0.45 per share, representing a 7% increase year-over-year and equal to the prior quarterly dividend. The dividend is payable on October 31, 2025, to stockholders of record as of the close of business on September 29, 2025.

Annualized dividend yield is 6.4% based on the current share price.