Northern Oil and Gas, Inc. Announces Accretive Acquisition With Cash and Stock
July 18 2018 - 7:52AM
Business Wire
Northern Oil and Gas, Inc. (NYSE American: NOG) today announced
that it has entered into a definitive agreement to acquire
significant production in North Dakota, currently producing over
4,100 barrels of oil equivalent (“Boe”) per day. The asset,
primarily a large package of producing wells, is being acquired
from Pivotal Petroleum Partners (“Pivotal”), a portfolio company of
funds managed by Tailwater Capital LLC. Total consideration at
closing will consist of $68.4 million in cash (subject to customary
adjustments) and 25.75 million shares of Northern common stock.
Pivotal will be subject to a lock-up on the shares over a 13-month
post-closing period. The agreement contains a mechanism for
potential additional consideration to be paid during the 13-month
lock-up period if Northern’s common stock trades below certain
price targets. The acquisition is expected to close in
approximately 60 days, with an effective date of June 1, 2018.
HIGHLIGHTS
- The acquisition is expected to be
accretive to cash flow, leverage metrics, and earnings per share
through 2020
- Northern expects the acquired asset to
generate approximately $56 million of cash flow from operations
over the next twelve months
- Northern expects to enter into
commensurate hedge agreements for a significant portion of the
acquired volumes
- Northern expects to become cash flow
positive immediately upon closing
- Northern expects to be sub-2.0x Net
Debt/Adjusted EBITDA in 2019
MANAGEMENT COMMENT
“This transaction in the core of the Williston Basin is
transformative for Northern, with both strong free cash flow and a
high rate of return,” commented Northern’s Founder and President,
Mike Reger. “The combination of this asset, along with our
significant and growing core inventory of future drilling locations
and the outstanding well results we have seen so far in 2018, will
achieve our goal to be cash flow positive upon closing, with
below-peer debt metrics in 2019. We look forward to welcoming
Pivotal as a new, significant shareholder in Northern.”
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.
ABOUT TAILWATER CAPITAL
Dallas-based Tailwater Capital is a highly specialized,
growth-oriented energy private equity firm with a well-established
track record, having executed more than 65 energy transactions in
the upstream and midstream sectors representing over $16.6
billion in transaction value. Tailwater currently manages
over $2.6 billion in committed capital, over $800
million of which is available for new investments.
More information about Tailwater Capital can be found at
www.tailwatercapital.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/20180718005422/en/
Northern Oil and Gas, Inc.Nicholas O’Grady, 952-476-9800Chief
Financial Officernogrady@northernoil.com
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