NOG Earnings Grow as Production Hits Record Highs

Northern Oil and Gas Inc. reported a fourth quarter 2023 net income of $388.9 million, up from $145 million for the corresponding quarter a year prior. The company said in a media release that fourth quarter 2023 results had been positively impacted by oil and natural gas sales.

Oil and natural gas sales for the fourth quarter were $543.4 million, an increase of 22 percent over the prior year period. Oil and natural gas sales for full year 2023 were $1.9 billion. Net income for 2023 stood at $923.0 million, versus $773.2 million a year prior.

“NOG closed out 2023 in record fashion”, commented Nick O’Grady, NOG’s Chief Executive Officer. “Our oil and total volumes grew to all-time highs and we generated record cash flow from operations, while we saw our leverage levels decline meaningfully year over year, even in a year of lower commodity prices”.

“As we look out to 2024, our plan delivers standout 20 percent production growth and significant cash generation that will provide flexibility to further enhance returns. We have great options to deliver additional shareholder returns, growth and other value enhancing measures”.

Fourth quarter production was 114,363 barrels of oil per day (boepd), a 45 percent increase from the prior year period. Oil production grew over 5,300 barrels per day (bpd), or 8.0 percent sequentially and represented 60.2 percent of production in the fourth quarter.

NOG had 27.6 net wells turned in line during the fourth quarter, compared to 22.6 net wells turned in line in the third quarter of 2023.

During the fourth quarter, NYMEX West Texas Intermediate (WTI) crude oil averaged $78.53 per barrel, and NYMEX natural gas at Henry Hub averaged $2.92 per Mcf. NOG’s unhedged net realized oil price in the fourth quarter was $74.51 per barrel, representing a $4.02 differential to WTI prices.

Capital spending for the fourth quarter, excluding non-budgeted acquisitions and other items, was $260.0 million. This was comprised of $154.1 million of organic drilling and completion (D&C) capital and $105.9 million of total acquisition spending, inclusive of ground game D&C spending, the company said.

Total 2023 capital expenditures, excluding non-budgeted acquisitions were $917.1 million, above expectations driven by significant ground game opportunities executed and an acceleration of completion activity in the third and fourth quarters.

At the start of February 2024, NOG closed its November 2023 acquisitions of non-operated assets in the Utica and Northern Delaware Basins. At closing, NOG acquired approximately 3,000 net acres in the Delaware Basin as well as producing and in-process properties in both the Delaware and Utica Basins. The initial closing settlements totaled $162.2 million in cash plus a $17.1 million deposit paid at signing in November 2023.

Looking forward to 2024, NOG anticipates approximately 115,000–120,000 boepd of production, an increase of approximately 20 percent at the midpoint from 2023 levels. NOG currently expects total capital spending in the range of $825–$900 million for 2024 with approximately 50 percent of its 2024 budget to be spent on the Permian, 35 percent on the Williston, and one percent on the Appalachian. The remainder of the budget is for Ground Game capital and increased workover and other items, NOG said.

To contact the author, email andreson.n.paul@gmail.com