Northern Oil and Gas, Inc. (NYSE American: NOG) today announced
the retirement of the remainder of its 8% Senior Unsecured Notes
due 2020. Northern’s next dated maturity is for its Senior Secured
Second Lien Notes, due May 2023. In addition, Northern is pleased
to provide updated financial information after closing on its
recent acquisitions and refinancing transactions. Northern is also
providing updated hedging information.
HIGHLIGHTS
- Liquidity and debt maturities improved
with new credit facility and the retirement of remaining unsecured
notes
- Production per share based on fourth
quarter guidance improved significantly
- Hedging expanded to help protect
realized prices and cash flows, including basis hedges
FINANCIAL UPDATE
The table below sets forth selected operating and financial data
both currently and, for comparative purposes, as of June 30, 2018.
Liquidity has increased 14% despite over $450 million in closed
M&A transactions. Cash interest expense is expected to decrease
over 13%. Fourth quarter production is expected to increase 58%
over second quarter levels, as a result of additions from recent
acquisitions and organic growth, a 19% increase on a per share
basis. Higher production should drive free cash flow in the fourth
quarter and beyond, reducing future interest expense further.
June
30, 2018 October 17, 2018 % Change Fundamentals WTI Oil Prices (per
bbl)(1) $ 70.16 $ 69.75 -0.6 % Net Acres 142,248 153,325 7.8 %
Production (boe per day)(2) 21,046 33,250 58.0 % Liquidity(3)(4)(5)
$ 241.0 $ 274.5 13.9 % Annualized Cash Interest Expense on Current
Balances (mm)(4) $ 78.4 $ 67.7 -13.7 % Estimated Acquisition
Adjustments Payable to Northern (mm)(5) $ 0.0 $ (24.5 ) First Lien
Credit Facility (mm)(4) $ 360.0 $ 175.0 -51.4 % Second Lien Notes
due 2023 (mm) $ 344.2 $ 695.1 101.9 % Unsecured Notes due 2020 (mm)
$ 149.8 - Total Debt (mm)(5) $ 854.0 $ 845.6 -1.0 % Share Price(6)
$ 3.33 $ 3.66 9.9 % Shares Outstanding (mm) 290.7 385.7 32.6 %
Market Capitalization (mm)(6) $ 968.1 $ 1,411.3 45.8 % Enterprise
Value $ 1,822.1 $ 2,256.9 23.9 % (1)
Front month NYMEX WTI futures price.
(2)
June 30, 2018 production is actual
production for the second quarter of 2018. October 17, 2018
production is based on Northern’s guidance for the fourth quarter
of 2018 (as of 8/9/2018).
(3)
Liquidity reflects cash plus borrowing
availability under first lien credit facility.
(4)
Borrowings under new revolving credit
facility will fluctuate based on timing and working capital
adjustments.
(5)
Pro forma for expected net payments to be
received in connection with post-closing working capital
adjustments under Pivotal and W Energy acquisitions.
(6)
Based on closing share price on Q2
earnings release of 8/9/2018 and 10/17/2018, respectively.
DEBT EXCHANGE UPDATE
Northern has previously announced a number of debt-for-equity
exchanges since June 2018 to eliminate $100.5 million in total
principal amount of its recently retired 8% senior unsecured notes
due 2020. Northern issued a total of 32.8 million shares of its
common stock upon the initial closings of these exchanges, and
several of the exchanges provided for potential additional future
consideration depending on Northern’s stock price performance.
Currently, approximately 40% of the shares initially issued in
these transactions are no longer subject to the potential for
additional consideration. Based on Northern’s closing share price
on October 17, 2018, any potential additional consideration owed
would be less than $425,000 on all remaining outstanding
exchanges.
UPDATED HEDGING SCHEDULE
Under Northern’s new revolving credit facility, the Company has
greatly expanded its hedging capacity. Commensurate with the
closing of the new facility and the recent acquisitions, combined
with substantially higher commodity prices, Northern has added
substantial price protection for the remainder of 2018 and beyond.
Currently, Northern has 18,769 barrels of oil per day hedged in
2019 at an average price of $63.32. In addition, as in-basin
differentials have widened of late, Northern would note it has
10,000 barrels a day of Clearbrook basis hedges for full year 2019
at an average of -$2.41 off NYMEX WTI. An updated hedge schedule,
excluding the above mentioned basis hedges, is provided below.
June 30, 2018
October 17, 2018
% Change
Daily Production Hedging Schedule Q4 2018 15,014 20,166 34.3
% Average Price $ 60.44 $ 63.66 5.3 %
2019
8,658 18,769 116.8 % Average Price $ 55.85 $ 63.32 13.4 %
2020
4,729 11,437 141.8 % Average Price $ 52.55 $ 61.01 16.1 %
2021
1,730 7,238 318.3 % Average Price $ 55.67 $ 61.18 9.9 %
ABOUT NORTHERN OIL AND GAS
Northern Oil and Gas, Inc. is an exploration and production
company with a core area of focus in the Williston Basin Bakken and
Three Forks play in North Dakota and Montana.
More information about Northern Oil and Gas, Inc. can be found
at www.NorthernOil.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 Northern’s financial position, business
strategy, plans and objectives of management for future operations,
industry conditions, and indebtedness covenant compliance are
forward-looking statements. When used in this release,
forward-looking statements are generally accompanied by terms or
phrases such as “estimate,” “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, 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
Northern’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 Northern’s
properties, Northern’s ability to acquire additional development
opportunities, changes in Northern’s reserves estimates or the
value thereof, general economic or industry conditions, nationally
and/or in the communities in which Northern conducts business,
changes in the interest rate environment, legislation or regulatory
requirements, conditions of the securities markets, Northern’s
ability to raise or access capital, changes in accounting
principles, policies or guidelines, financial or political
instability, acts of war or terrorism, and other economic,
competitive, governmental, regulatory and technical factors
affecting Northern’s operations, products, services and prices.
Northern 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 Northern’s control. Northern does not undertake
any duty to update or revise any forward-looking statements, except
as may be required by the federal securities laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20181018005973/en/
Northern Oil and Gas, Inc.Nicholas O’Grady,
952-476-9800Chief Financial Officerir@northernoil.com
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