HIGHLIGHTS
- Fourth quarter production of 35,738 Boe per day, up 23% from
the third quarter
- Fourth quarter cash flow from operations of $81.8 million,
excluding $8.8 million spent to reduce net working capital, up 19%
from the third quarter
- Total debt balance reduced by $39.0 million in the fourth
quarter and $178.0 million in total during 2020
- Completed $140.2 million common stock offering and $550.0
million senior notes offering in February 2021. Borrowing capacity
of $373.0 million under revolving credit facility as of March 11,
2021
- Announced entrance into the Marcellus Shale with the pending
acquisition from Reliance Marcellus, LLC
- Signed and closed seventh Permian acquisition since entry into
the basin in September 2020
Northern Oil and Gas, Inc. (NYSE American: NOG) (“Northern”)
today announced the company’s fourth quarter and full year 2020
results.
MANAGEMENT COMMENTS
“Northern enters 2021 in an enviable position,” commented Nick
O’Grady, Northern’s Chief Executive Officer. “The fourth quarter
showed the durability of our strategy, the cash generating power of
our asset base, and our commitment to focusing on return on capital
employed. The flexibility and dynamic nature of our non-operated
business model have never been so clear. We enter 2021 as a
multi-basin company, dedicated to the allocation of capital into
the highest return projects, with a reinvigorated capital structure
that should provide for growth opportunities and a clear path to
our ultimate goal: to responsibly return capital to
shareholders.”
FINANCIAL RESULTS
Fourth quarter Adjusted Net Income was $35.7 million or $0.64
per diluted share, up from $21.5 million or $0.50 per diluted share
in the prior year. Fourth quarter GAAP net loss was $146.2 million
or $3.21 per diluted share. Adjusted EBITDA in the fourth quarter
was $94.3 million.
Full year 2020 Adjusted Net Income was $96.0 million or $1.82
per diluted share. Full year 2020 GAAP net loss was $921.3 million
or $21.55 per diluted share. Full year 2020 Adjusted EBITDA was
$351.8 million. (See “Non-GAAP Financial Measures” below.)
PRODUCTION
Fourth quarter production was 35,738 Boe per day, a 23% increase
from the third quarter. Oil represented 76% of production in the
fourth quarter. Northern estimates that curtailments and shut-ins
reduced the Company’s average daily production by approximately
4,200 Boe per day in the fourth quarter. Northern had 5.9 net wells
turned online during the fourth quarter, compared to 3.4 net wells
turned online in the third quarter of 2020. Full year 2020
production was 33,078 Boe per day.
PRICING
During the fourth quarter, NYMEX West Texas Intermediate (“WTI”)
crude oil averaged $42.63 per Bbl, and NYMEX natural gas at Henry
Hub averaged $2.48 per Mcf. Northern’s unhedged net realized oil
price in the fourth quarter was $35.69 per Bbl, representing a
$6.94 differential to WTI prices. Northern’s fourth quarter
unhedged net realized gas price was $2.13 per Mcf, representing
approximately 86% realizations compared with Henry Hub pricing.
For full year 2020, Northern’s realized oil differential was
$6.63 per Bbl. Northern’s full year unhedged net realized gas price
was $1.14 per Mcf, representing approximately 57% realizations
compared with Henry Hub pricing.
OPERATING COSTS
Lease operating costs were $28.2 million in the fourth quarter
of 2020, or $8.58 per Boe, down 5% on a per unit basis compared to
the third quarter. Fourth quarter general and administrative
(“G&A”) costs totaled $4.4 million, which includes non-cash
stock-based compensation. Cash G&A costs totaled $3.4 million
or $1.04 per Boe in the fourth quarter, down 25% on a per unit
basis compared to the third quarter.
CAPITAL EXPENDITURES AND ACQUISITIONS
Capital spending for the fourth quarter was $48.9 million, made
up of $17.9 million of organic drilling and completion (“D&C”)
capital and $31.0 million of total acquisition spending and other
items, inclusive of ground game D&C spending. Northern had 5.9
net wells turned online in the fourth quarter. Wells in process
totaled 28.1 net wells as of December 31, 2020. On the ground game
acquisition front, Northern closed on 11 transactions during the
fourth quarter totaling 4.6 net wells, 663 net mineral acres and
373 net royalty acres (standardized to a 1/8 royalty interest).
RELIANCE ACQUISITION UPDATE
On February 3, 2021, Northern announced a definitive agreement
to acquire assets from Reliance Marcellus, LLC, a subsidiary of
Reliance Industries, Ltd., for $175.0 million in cash plus 3.25
million common stock warrants. The acquisition has an effective
date of July 1, 2020 and is expected to close in April 2021. EQT
Corporation, the operator of substantially all of the assets, has
elected to exercise its preferential purchase right on a portion of
the assets, which (together with the exercise of other preferential
purchase rights) will reduce the cash purchase price, net to
Northern, by approximately $48.6 million, or 28%. Northern
estimates it retains approximately 99% of the net drilling
inventory on the assets, compared to prior estimates. Due to the
largely developed nature of the properties subject to the
preferential right, over a five-year period, Northern expects they
would have only contributed 10-15% of the long term cash flows from
the acquired properties. Additionally, Northern estimates an 18%
reduction in capital spending on the acquired assets in 2021,
compared to prior estimates. Northern has released detailed updated
guidance for the acquired assets in the guidance section below.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2020, Northern had $1.8 million in cash and
$532.0 million of borrowings outstanding on its revolving credit
facility. Northern had total liquidity of $129.8 million as of
December 31, 2020, consisting of cash and borrowing availability
under the revolving credit facility.
On January 4, 2021, Northern retired $65 million, or 50% of its
VEN Bakken Note. In February 2021, Northern strengthened its
balance sheet through common equity and debt transactions. Northern
issued 14.4 million shares of common equity for gross proceeds of
$140.2 million. Northern also issued $550 million of 8.125% Senior
Unsecured Notes due 2028. With the net proceeds from these
transactions, Northern retired the remaining $65 million of its VEN
Bakken Note and retired $272.1 million, or 95% of its remaining
Senior Secured Notes due 2023 on February 18, 2021. Northern
intends to call or purchase the remaining 2023 Notes on or before
May 15, 2021. Northern used the remainder of the proceeds to retire
debt under its revolving credit facility and for cash on hand.
As of March 11, 2021, Northern had $287.0 million of borrowings
outstanding on its revolving credit facility, leaving $373.0
million of borrowing availability. Northern additionally has $15.7
million Senior Secured Notes due 2023 that remain outstanding, and
$550 million of newly issued Senior Unsecured Notes due 2028.
In April 2021, upon closing of the Reliance acquisition,
Northern will fund the unadjusted cash purchase price of $126.4
million, less the $17.5 million deposit previously paid. The cash
purchase price will be subject to typical closing adjustments,
including an expected reduction for the net cash flows already
received by Reliance from the properties since the effective
date.
2021 ESTIMATED GUIDANCE — EXISTING WILLISTON AND PERMIAN
PROPERTIES
2021 Guidance Ranges:
Annual Production (Boe per day)
37,750 - 42,750
Net Wells Added to Production
32 - 34
Total Capital Expenditures ($ in
millions)
$180 - $225
Operating Expenses Guidance:
Production Expenses (per Boe)
$8.75 - $9.75
Production Taxes
10% of Net Oil Revenues, $0.06
per Mcf for Natural Gas
Oil as a Percentage of Production
Volumes
78 - 80%
Average Differential to NYMEX WTI
$6.50 - $8.50
2021 ESTIMATED GUIDANCE — RELIANCE ASSETS (PENDING
ACQUISITION) — FULL YEAR
2021 Guidance Ranges:
Annual Production (Mmcf per day)
75 - 85
Net Wells Added to Production
3.5 - 3.8
Total Capital Expenditures ($ in
millions)
$20 - $25
Operating Expenses Guidance:
Production, Asset G&A and Marketing
Expenses (per Mcf)
$0.85 - $0.95
Average Differential to NYMEX Henry Hub
(per Mcf)
$0.55 - $0.65
2021 ESTIMATED GUIDANCE — CORPORATE
Q1 Pre-Reliance
Closing
Q2-Q4 Post-Reliance
Closing
General and Administrative Expense (per
Boe):
Cash (excluding any one-time transaction
costs)
$1.10 - $1.20
$0.75 - $0.85
Non-Cash
$0.30
$0.20
FOURTH QUARTER 2020 RESULTS
The following table sets forth selected operating and financial
data for the periods indicated.
Three Months Ended
December 31,
2020
2019
% Change
Net Production:
Oil (Bbl)
2,508,618
3,218,885
(22)
%
Natural Gas and NGLs (Mcf)
4,675,896
4,942,194
(5)
%
Total (Boe)
3,287,934
4,042,584
(19)
%
Average Daily Production:
Oil (Bbl)
27,268
34,988
(22)
%
Natural Gas and NGL (Mcf)
50,825
53,720
(5)
%
Total (Boe)
35,738
43,941
(19)
%
Average Sales Prices:
Oil (per Bbl)
$
35.69
$
49.20
(27)
%
Effect of Gain on Settled Derivatives on
Average Price (per Bbl)
14.51
2.71
Oil Net of Settled Derivatives (per
Bbl)
50.20
51.91
(3)
%
Natural Gas and NGLs (per Mcf)
2.13
0.47
353
%
Effect of Gain (Loss) on Settled
Derivatives on Average Price (per Mcf)
(0.20)
—
Natural Gas Net of Settled Derivatives
(per Mcf)
1.93
0.47
311
%
Realized Price on a Boe Basis Excluding
Settled Commodity Derivatives
30.27
39.75
(24)
%
Effect of Gain (Loss) on Settled Commodity
Derivatives on Average Price (per Boe)
10.79
2.15
Realized Price on a Boe Basis Including
Settled Commodity Derivatives
41.06
41.91
(2)
%
Costs and Expenses (per Boe):
Production Expenses
$
8.58
$
8.84
(3)
%
Production Taxes
2.75
3.92
(30)
%
General and Administrative Expense
1.33
2.01
(34)
%
Depletion, Depreciation, Amortization and
Accretion
9.97
15.69
(36)
%
Net Producing Wells at Period
End
475.1
458.7
4
%
FULL YEAR 2020 RESULTS
The following table sets forth selected operating and financial
data for the periods indicated.
Years Ended December
31,
2020
2019
% Change
Net Production:
Oil (Bbl)
9,361,138
11,325,418
(17)
%
Natural Gas and NGLs (Mcf)
16,473,287
16,590,774
(1)
%
Total (Boe)
12,106,686
14,090,547
(14)
%
Average Daily Production:
Oil (Bbl)
25,577
31,029
(18)
%
Natural Gas and NGL (Mcf)
45,009
45,454
(1)
%
Total (Boe)
33,078
38,604
(14)
%
Average Sales Prices:
Oil (per Bbl)
$
32.61
$
50.74
(36)
%
Effect of Gain (Loss) on Settled Oil
Derivatives on Average Price (per Bbl)
20.08
3.92
Oil Net of Settled Oil Derivatives (per
Bbl)
52.69
54.66
(4)
%
Natural Gas and NGLs (per Mcf)
1.14
1.60
(29)
%
Effect of Gain (Loss) on Settled Natural
Gas Derivatives on Average Price (per Mcf)
0.02
—
Natural Gas and NGLs Net of Settled
Natural Gas Derivatives (per Mcf)
1.16
1.60
(28)
%
Realized Price on a Boe Basis Excluding
Settled Commodity Derivatives
26.77
42.67
(37)
%
Effect of Gain (Loss) on Settled Commodity
Derivatives on Average Price (per Boe)
15.55
3.15
Realized Price on a Boe Basis Including
Settled Commodity Derivatives
42.32
45.82
(9)
%
Costs and Expenses (per Boe):
Production Expenses
$
9.61
$
8.44
14
%
Production Taxes
2.46
4.10
(40)
%
General and Administrative Expenses
1.53
1.68
(9)
%
Depletion, Depreciation, Amortization and
Accretion
13.39
14.92
(10)
%
Net Producing Wells at
Period-End
475.1
458.7
4
%
HEDGING
Northern hedges portions of its expected production volumes to
increase the predictability of its cash flow and to help maintain a
strong financial position. The following table summarizes
Northern’s open crude oil commodity derivative contracts scheduled
to settle after December 31, 2020 (excluding basis swaps).
Crude Oil Derivative Price
Swaps
Contract Period
Volume (Bbls)
Volume (Bbls/Day)
Weighted Average Price
(per Bbl)
2021:
Q1
2,190,000
24,333
$55.66
Q2
2,202,208
24,200
$56.37
Q3
2,131,410
23,168
$54.13
Q4
2,122,506
23,071
$53.76
2022(1):
Q1
1,080,000
12,000
$51.29
Q2
932,750
10,250
$51.20
Q3
989,000
10,750
$51.49
Q4
989,000
10,750
$51.49
2023(2):
Q1
112,500
1,250
$51.65
_____________
(1)
We have entered into crude oil
derivative contracts that give counterparties the option to extend
certain current derivative contracts for additional periods.
Options covering a notional volume of 3.1 million barrels for 2022
are exercisable on or about December 31, 2021. If the
counterparties exercise all such options, the notional volume of
our existing crude oil derivative contracts will increase as
follows for 2022: (i) for the first quarter of 2022, by 1,010,250
barrels at a weighted average price of $53.18 per barrel, (ii) for
the second quarter of 2022, by 1,021,475 barrels at a weighted
average price of $53.18 per barrel, (iii) for the third quarter of
2022, by 549,700 barrels at a weighted average price of $51.67 per
barrel, and (iv) for the fourth quarter of 2022, by 549,700 barrels
at a weighted average price of $51.67 per barrel.
(2)
We have entered into crude oil
derivative contracts that give counterparties the option to extend
certain current derivative contracts for additional periods.
Options covering a notional volume of 3.6 million barrels for 2023
are exercisable on or about December 31, 2022. If the
counterparties exercise all such options, the notional volume of
our existing crude oil derivative contracts will increase as
follows for 2023: (i) for the first quarter of 2023, by 1,147,500
barrels at a weighted average price of $50.48 per barrel, (ii) for
the second quarter of 2023, by 796,250 barrels at a weighted
average price of $49.69 per barrel, (iii) for the third quarter of
2023, by 851,000 barrels at a weighted average price of $50.22 per
barrel, and (iv) for the fourth quarter of 2023, by 851,000 barrels
at a weighted average price of $50.22 per barrel.
The following table summarizes Northern’s open natural gas
commodity derivative contracts scheduled to settle after December
31, 2020.
Natural Gas Commodity
Derivative Swaps
Contract Period
Gas (MMBTU)
Volume (MMBTU/Day)
Weighted Average Price (per
Mcf)
2021:
Q1
3,375,000
37,500
$2.47
Q2
5,924,507
65,104
$2.74
Q3
8,979,028
97,598
$2.82
Q4
8,784,210
95,481
$2.82
2022:
Q1
2,700,000
30,000
$2.98
Q2
910,000
10,000
$2.61
Q3
920,000
10,000
$2.61
Q4
920,000
10,000
$2.61
CAPITAL EXPENDITURES & DRILLING ACTIVITY
(In millions, except for net well
data)
Three Months Ended December
31, 2020
Year Ended December 31,
2020
Capital Expenditures Incurred:
Organic Drilling and Development Capital
Expenditures
$17.9
$143.1
Ground Game Drilling and Development
Capital Expenditures
$21.7
$46.1
Ground Game Acquisition Capital
Expenditures
$8.7
$21.6
Other
$0.6
$3.1
Net Wells Turned Online
5.9
17.8
Net Producing Wells (Period-End)
475.1
Net Wells in Process (Period-End)
28.1
Change in Wells in Process over Prior
Period
-0.3
2.3
Weighted Average AFE for Wells Elected
to
$7.2 million
$7.5 million
Capitalized costs are a function of the number of net well
additions during the period, and changes in wells in process from
the prior year-end. Capital expenditures attributable to the
increase of 2.3 in net wells in process during the year ended
December 31, 2020 are reflected in the annual amounts incurred for
drilling and development capital expenditures.
ACREAGE
As of December 31, 2020, Northern controlled leasehold of
approximately 183,527 net acres primarily targeting the Bakken and
Three Forks formations of the Williston Basin, and approximately
90% of this total acreage position was developed, held by
production, or held by operations.
FOURTH QUARTER 2020 EARNINGS RELEASE CONFERENCE CALL
In conjunction with Northern’s release of its financial and
operating results, investors, analysts and other interested parties
are invited to listen to a conference call with management on
Friday, March 12, 2021 at 10:00 a.m. Central Time.
Those wishing to listen to the conference call may do so via the
company’s website, www.northernoil.com, or by phone as follows:
Website:
https://78449.themediaframe.com/dataconf/productusers/nog/mediaframe/43930/indexl.html
Dial-In Number: (866) 373-3407
(US/Canada) and (412) 902-1037 (International) Conference ID: 13717215 - Northern Oil and Gas,
Inc. Fourth Quarter and Year-End 2020 Earnings Call Replay Dial-In Number: (877) 660-6853 (US/Canada)
and (201) 612-7415 (International) Replay
Access Code: 13717215 - Replay will be available through
March 19, 2021
UPCOMING CONFERENCE SCHEDULE
33rd Annual Roth Conference March 15, 2021
SPE A&D Symposium Houston, TX May 13, 2021
UBS Global Oil and Gas Conference May 25, 2021
Wells Fargo Energy Conference June 2-3, 2021
Stifel Cross Sector Insight Conference June 8-10, 2021
RBC Energy Conference June 8-9, 2021
ABOUT NORTHERN OIL AND GAS
Northern Oil and Gas, Inc. is a company with a primary strategy
of investing in non-operated minority working and mineral interests
in oil & gas properties, with a core area of focus in the
premier basins within the United States. 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, operating
and financial performance, 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 production and 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 and properties pending acquisition; Northern’s ability
to acquire additional development opportunities; potential or
pending acquisition transactions, including the Reliance
acquisition; Northern’s ability to consummate pending acquisitions,
including the Reliance acquisition, and the anticipated timing of
such consummation; the projected capital efficiency savings and
other operating efficiencies and synergies resulting from
Northern’s acquisition transactions; integration and benefits of
property acquisitions, including the Reliance acquisition, or the
effects of such acquisitions on Northern’s cash position and levels
of indebtedness; changes in Northern’s reserves estimates or the
value thereof; disruptions to Northern’s business due to
acquisitions and other significant transactions; infrastructure
constraints and related factors affecting Northern’s properties;
ongoing legal disputes over and potential shutdown of the Dakota
Access Pipeline; the COVID-19 pandemic and its related economic
repercussions and effect on the oil and natural gas industry;
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; and financial or political instability, health-related
epidemics, acts of war or terrorism, and other economic,
competitive, governmental, regulatory and technical factors
affecting Northern’s operations, products and prices. Additional
information concerning potential factors that could affect future
results is included in the section entitled “Item 1A. Risk Factors”
and other sections of Northern’s more recent Annual Report on Form
10-K and Quarterly Report on Form 10-Q, as updated from time to
time in amendments and subsequent reports filed with the SEC, which
describe factors that could cause Northern’s actual results to
differ from those set forth in the forward looking statements.
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.
NORTHERN OIL AND GAS,
INC.
STATEMENTS OF
OPERATIONS
Three Months Ended
December 31,
Year Ended December
31,
(In thousands, except share and per
share data)
2020
2019
2020
2019
Revenues
Oil and Gas Sales
$
99,511
$
160,698
$
324,052
$
601,218
Gain (Loss) on Derivative Instruments,
Net
(49,441)
(101,697)
228,141
(128,837)
Other Revenue
4
11
17
21
Total Revenues
50,074
59,013
552,210
472,402
Operating Expenses
Production Expenses
28,204
35,754
116,336
118,899
Production Taxes
9,034
15,827
29,783
57,771
General and Administrative Expenses
4,361
8,118
18,546
23,624
Depletion, Depreciation, Amortization and
Accretion
32,769
63,411
162,120
210,201
Impairment of Other Current Assets
—
(1,571)
—
6,398
Impairment Expense
104,463
—
1,066,668
—
Total Operating Expenses
178,831
121,539
1,393,453
416,893
Income (Loss) From Operations
(128,757)
(62,527)
(841,243)
55,509
Other Income (Expense)
Interest Expense, Net of
Capitalization
(13,358)
(20,393)
(58,503)
(79,229)
Write-off of Debt Issuance Costs
—
—
(1,543)
—
Gain (Loss) on Unsettled Interest Rate
Derivatives
186
—
(1,019)
—
Loss on the Extinguishment of Debt
—
(22,762)
(3,718)
(23,187)
Debt Exchange Derivative Gain
—
—
—
1,390
Contingent Consideration Loss
(169)
(879)
(169)
(29,512)
Financing Expense
—
(1,447)
—
(1,447)
Other Income (Expense)
(25)
69
(12)
158
Total Other Income (Expense)
(13,366)
(45,412)
(64,964)
(131,827)
Loss Before Income Taxes
(142,123)
(107,939)
(906,207)
(76,318)
Income Tax Benefit
—
—
(166)
—
Net Loss
(142,123)
(107,939)
(906,041)
$
(76,318)
Cumulative Preferred Stock
Dividend
(4,031)
(1,029)
(15,266)
(1,029)
Net Loss Attributable to Common
Shareholders
$
(146,154)
$
(108,966)
$
(921,307)
$
(77,347)
Net Loss Per Common Share – Basic*
$
(3.21)
$
(2.71)
$
(21.55)
$
(2.00)
Net Loss Per Common Share – Diluted*
$
(3.21)
$
(2.71)
$
(21.55)
$
(2.00)
Weighted Average Shares Outstanding –
Basic*
45,520,634
40,204,194
42,744,639
38,708,460
Weighted Average Shares Outstanding –
Diluted*
45,520,634
40,204,194
42,744,639
38,708,460
___________
*
Adjusted for the 1-for-10 reverse stock
split effected on September 18, 2020.
The accompanying notes are an integral part of these financial
statements.
NORTHERN OIL AND GAS,
INC.
BALANCE SHEETS
(In thousands, except par value and
share data)
December 31, 2020
December 31, 2019
Assets
Current Assets:
Cash and Cash Equivalents
$
1,428
$
16,068
Accounts Receivable, Net
71,015
108,274
Advances to Operators
476
893
Prepaid Expenses and Other
1,420
1,964
Derivative Instruments
51,290
5,628
Income Tax Receivable
—
210
Total Current Assets
125,629
133,037
Property and Equipment:
Oil and Natural Gas Properties, Full Cost
Method of Accounting
Proved
4,393,533
4,178,605
Unproved
10,031
11,047
Other Property and Equipment
2,451
2,157
Total Property and Equipment
4,406,015
4,191,809
Less – Accumulated Depreciation, Depletion
and Impairment
(3,670,811)
(2,443,216)
Total Property and Equipment, Net
735,204
1,748,593
Derivative Instruments
111
8,554
Deferred Income Taxes
—
210
Other Noncurrent Assets, Net
11,145
15,071
Total Assets
$
872,089
$
1,905,465
Liabilities and Stockholders' Equity
(Deficit)
Current Liabilities:
Accounts Payable
$
35,803
$
69,395
Accrued Liabilities
68,673
110,374
Accrued Interest
8,341
11,615
Derivative Instruments
3,078
11,298
Contingent Consideration
493
—
Other Current Liabilities
1,087
795
Current Portion of Long-term Debt
65,000
—
Total Current Liabilities
182,475
203,477
Long-term Debt, Net
879,843
1,118,161
Derivative Instruments
14,659
8,079
Asset Retirement Obligations
18,366
16,759
Other Noncurrent Liabilities
50
345
Total Liabilities
1,095,393
$
1,346,822
Commitments and Contingencies
Stockholders' Equity (Deficit)
Preferred Stock, Par Value $0.001 ;
5,000,000 Authorized
2,218,732 Shares Outstanding at
12/31/2020
1,500,000 Shares Outstanding at
12/31/2019
2
2
Common Stock, Par Value $0.001;
135,000,000* Authorized;
45,908,779 Shares Outstanding at
12/31/2020
40,608,518* Shares Outstanding at
12/31/2019
448
406
Additional Paid-In Capital
1,556,602
1,431,438
Retained Deficit
(1,780,356)
(873,203)
Total Stockholders’ Equity (Deficit)
(223,304)
558,643
Total Liabilities and Stockholders'
Equity (Deficit)
$
872,089
$
1,905,465
__________
*
Adjusted for the 1-for-10 reverse stock
split effected on September 18, 2020.
The accompanying notes are an integral
part of these financial statements.
Non-GAAP Financial Measures
Adjusted Net Income and Adjusted EBITDA are non-GAAP measures.
Net income (loss) is the most directly comparable GAAP measure for
both Adjusted Net Income and Adjusted EBITDA, and tabular
reconciliations for these measures are included below. Northern
defines Adjusted Net Income (Loss) as net income (loss) excluding
(i) unrealized (gain) loss on unsettled commodity derivatives, net
of tax, (ii) financing expense, net of tax, (iii) impairment of
other current assets, net of tax, (iv) write-off of debt issuance
costs, net of tax, (v) loss on the extinguishment of debt, net of
tax, (vi) debt exchange derivative (gain) loss, net of tax, (vii)
contingent consideration loss, net of tax, (viii) acquisition
transaction costs, net of tax, (ix) impairment expense, net of tax,
and (x) gain (loss) on unsettled interest rate derivatives, net of
tax. Northern defines Adjusted EBITDA as net income (loss) before
(i) interest expense, (ii) income taxes, (iii) depreciation,
depletion, amortization, and accretion, (iv) (gain) loss on
unsettled commodity derivatives, (v) non-cash stock based
compensation expense, (vi) write-off of debt issuance costs, (vii)
loss on the extinguishment of debt, (viii) impairment of other
current assets, (ix) debt exchange derivative (gain) loss, (x)
contingent consideration loss, (xi) financing expense, (xii)
impairment expense, (xiii) (gain) loss on unsettled interest rate
derivatives, and (xiv) cash severance expense. A reconciliation of
each of these measures to the most directly comparable GAAP measure
is included below. Management believes the use of these non-GAAP
financial measures provides useful information to investors to gain
an overall understanding of current financial performance.
Specifically, management believes the non-GAAP financial measures
included herein provide useful information to both management and
investors by excluding certain items that management believes are
not indicative of Northern’s core operating results. In addition,
these non-GAAP financial measures are used by management for
budgeting and forecasting as well as subsequently measuring
Northern’s performance, and management believes it is providing
investors with financial measures that most closely align to its
internal measurement processes.
Pre-tax PV10%, or PV-10, may be considered a non-GAAP financial
measure as defined by the SEC and is derived from the standardized
measure of discounted future net cash flows, which is the most
directly comparable GAAP measure for proved reserves calculated
using SEC pricing. PV-10 is a computation of the Standardized
Measure of discounted future net cash flows on a pre-tax basis.
PV-10 is equal to the Standardized Measure of discounted future net
cash flows at the applicable date, before deducting future income
taxes, discounted at 10 percent. Management believes that the
presentation of PV-10 is relevant and useful to investors because
it presents the discounted future net cash flows attributable to
Northern’s estimated net proved reserves prior to taking into
account future corporate income taxes, and it is a useful measure
for evaluating the relative monetary significance of Northern’s oil
and natural gas properties. Further, investors may utilize the
measure as a basis for comparison of the relative size and value of
Northern’s reserves to other companies. Management uses this
measure when assessing the potential return on investment related
to Northern’s oil and natural gas properties. PV-10, however, is
not a substitute for the Standardized Measure of discounted future
net cash flows. A reconciliation of PV-10 to the Standardized
Measure is included below.
Reconciliation of Adjusted Net Income
Three Months Ended
December 31,
Years Ended December
31,
(In thousands, except share and per
share data)
2020
2019
2020
2019
Net Income (Loss)
$
(142,123)
$
(107,937)
$
(906,041)
$
(76,318)
Add:
Impact of Selected Items:
(Gain) Loss on Unsettled Commodity
Derivatives
84,923
110,408
(39,878)
173,214
Impairment Expense
104,463
—
1,066,668
—
Financing Expense
—
1,447
—
1,447
Impairment of Other Current Assets
—
(1,571)
—
6,398
Write-off of Debt Issuance Costs
—
—
1,543
—
Loss on the Extinguishment of Debt
—
22,762
3,718
23,187
Debt Exchange Derivative (Gain) Loss
—
—
—
(1,390)
(Gain) Loss on Unsettled Interest Rate
Derivatives
(186)
—
1,019
—
Contingent Consideration Loss
169
879
169
29,512
Acquisition Transaction Costs
—
—
—
1,763
Selected Items, Before Income Taxes
189,368
133,925
1,033,240
234,130
Income Tax of Selected Items(1)
(11,575)
(4,497)
(31,164)
(36,898)
Selected Items, Net of Income Taxes
177,793
129,429
1,002,076
197,232
Adjusted Net Income
$
35,670
$
21,492
$
96,035
$
120,914
Weighted Average Shares Outstanding –
Basic
45,520,634
40,204,204
42,744,639
38,708,460
Weighted Average Shares Outstanding –
Diluted
55,381,388
43,056,527
52,659,217
39,482,135
Net Income (Loss) Per Common Share –
Basic
(3.12)
$
(2.68)
$
(21.20)
$
(1.97)
Add:
Impact of Selected Items, Net of Income
Taxes
3.91
3.21
23.45
5.09
Adjusted Net Income Per Common Share –
Basic
$
0.79
$
0.53
$
2.25
$
3.12
Net Income (Loss) Per Common Share –
Diluted
(2.57)
$
(2.51)
$
(17.21)
$
(1.93)
Add:
Impact of Selected Items, Net of Income
Taxes
3.21
3.01
19.03
4.99
Adjusted Net Income Per Common Share –
Diluted
$
0.64
$
0.50
$
1.82
$
3.06
______________
(1)
For the 2020 columns, this
represents a tax impact using an estimated tax rate of 24.5% for
the three and twelve months ended December 31, 2020, and includes
an adjustment of $34.8 million and $222.0 million, respectively,
for changes in our valuation allowance. For the 2019 columns, this
represents a tax impact using an estimated tax rate of 24.5% for
the three and twelve months ended December 31, 2019, and includes
an adjustment of $28.3 million and $20.5 million, respectively, for
changes in our valuation allowance.
Reconciliation of Adjusted EBITDA
Three Months Ended
December 31,
Year Ended December
31,
(In thousands)
2020
2019
2020
2019
Net Income (Loss)
$
(142,123)
$
(107,937)
$
(906,041)
$
(76,318)
Add:
Interest Expense
13,358
20,393
58,503
79,229
Income Tax Provision (Benefit)
—
—
(166)
—
Depreciation, Depletion, Amortization and
Accretion
32,769
63,411
162,120
210,201
Impairment of Other Current Assets
—
(1,571)
—
6,398
Non-Cash Stock-Based Compensation
936
3,674
4,119
7,955
Write-off of Debt Issuance Costs
—
—
1,543
—
Loss on the Extinguishment of Debt
—
22,762
3,718
23,187
Debt Exchange Derivative (Gain) Loss
—
—
—
(1,390)
Contingent Consideration Loss
169
879
169
29,512
Financing Expense
—
1,447
—
1,447
Cash Severance Expense
—
759
—
759
(Gain) Loss on Unsettled Interest Rate
Derivatives
(186)
—
1,019
—
(Gain) Loss on Unsettled Commodity
Derivatives
84,923
—
(39,878)
173,214
Impairment Expense
104,463
—
1,066,668
—
Adjusted EBITDA
$
94,309
$
114,225
$
351,774
$
454,193
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210312005040/en/
Mike Kelly, CFA Chief Strategy Officer 952-476-9800
ir@northernoil.com
Northern Oil and Gas (AMEX:NOG)
Historical Stock Chart
From Aug 2024 to Sep 2024
Northern Oil and Gas (AMEX:NOG)
Historical Stock Chart
From Sep 2023 to Sep 2024