Northern Oil And Gas, Inc. · NYSE:NOG
Northern Oil And Gas — Investor Presentation (December 2015)
30 slides from Northern Oil And Gas's investor presentation, Dec 9, 2015
Slide 1: Company presentation December 2015
Company presentation December 2015
Slide 2: Forward Looking Statements
2 Forward Looking Statements Statements made by representatives of Northern Oil and Gas, Inc. (“Northern” or the “Company”) during the course of this presentation that are not historical facts are forward-looking statements. These statements are based on certain assumptions and expectations made by
Slide 3: Find a place to hide in the storm
find a place to hide in the storm 3
Slide 4: "Non-Op"…what is it?
“Non-Op”…..what is it? Do not drill or operate wellsWe own minority leasehold/working interest (WI) percentage in Drilling Spacing Units (DSU)Operator of the DSU initiates/proposes drill schedule State law requires the operator of the DSU to send all minority Leasehold/WI owners in the DSU a well pr
Slide 5: Benefits of Non-Op
BENEFITS OF NON-OP FLEXIBLE Our option to consent or non-consent a well PROPRIETARY 3,000+ well database gives us an advantage in analyzing wells and acreage EXPERIENCED Each well review has benefit of experience gained from participating in 2,500+ wells to date Non-Op Advantages DISCIPLINED Evaluat
Slide 6: Consent or non-consent a well
consent or non-consent a well 6 Non-ConsentAcreage still HBP even multiple zones with single wellRetain right to participate in other wells/zones in DSUEach well in unit is a standalone decision
Slide 7: Participating well locations and core inventory
Source: Company information for producing wells as of June 30, 2015. Participating well locations “Core” Inventory:200+ Net Locations$35 - $50 WTI BreakevenAvg AFE: ~$7.3 millionAvg EUR: ~750+ MBOE 7
Slide 8: Northern average well profile by year
8 Northern Average Well Profile by Year, Proposed IP Rates up 30% from 2014 Well productivity continues to improve
Slide 9: Disciplined investment decisions
Disciplined investment decisions 9 Average YTD IRR on consented wells of 38%, average for non-consented wells of 9% 43% Increase 16% Decrease Ave EUR for 1280 acre DSUsThrough 9/30/15
Slide 10: Liquidity profile
Liquidity profile 10 $550 million borrowing base reaffirmed – October 20159/30/15 Liquidity of$ 387 Million
Slide 11: Crude oil hedges
crude oil Hedges SWAPS Contract Period Volume (Bbls) Weighted Average Price (per Bbl) 2015: Q4 990,000 $89.82 2016: Q1 450,000 $90.00 Q2 450,000 $90.00 Q3 450,000 $65.00 Q4 450,000 $65.00 11
Slide 12: Lower costs, improving performance
LOWER COSTS IMPROVING Performance 12 Well Costs ($MM) Cash Operating Costs ($/Boe)
Slide 13: Low unit costs
Low Unit costs 13 TPLM data is TTM as of 7/31/2015 TTM Q3’15 Unit Costs per BOE (1) $14.46 $16.53 $17.10 $19.70 $32.05 $19.72
Slide 14: High cash operating margin
High cash operating margin 14 Realized Price is defined as oil, gas and NGL sales, including the effects of realized hedging gains or losses. Data as of 9/30/15.Cash Operating Margin is defined as oil and gas sales, including settled derivatives, less production expenses, production taxes and cash G
Slide 15: High-quality acreage portfolio
High-Quality Acreage portfolio 15 North Dakota Montana Includes acreage classified as held by production, held by operations or developed. Net Acres By County Northern Net Acreage Summary Total Net Acreage: 169,000 (as of 9/30/2015)ND: 137,200 Net AcresMT: 31,900 Net Acres A Solid Foundation
Slide 16: Partnered with leading operators
Partnered with leading operators 16 Percentage of Producing Wells – By Operator Less Than 2% Between 2% and 3% Top 10 Operators 1 Slawson Exploration 2 Continental Resources 3 Whiting Petroleum 4 Hess 5 Oasis Petroleum 6 EOG Resources 7 XTO 8 ConocoPhillips 9 Statoil 10 Emerald Oil, Inc.
Slide 17: High intensity completions
High intensity completions Completion Trends:~80% of new consented wells are planned high intensity completions ~25% increase in EURs with new completion design2016 per-well productivity expected to improve 17 Source: NDIC and DrillingInfo
Slide 18: Improved recoveries across the basin
Improved recoveries across the basin 18 North Dakota Play to Date Completion Comparison 27% Uplift 19% Uplift NOG Internal Estimates
Slide 19: Embracing the challenges
Embracing the challenges Capital Discipline2015 budget down 74% vs. 2014 actual capex spend2015 production expected to be flat vs. 2014 levelsMaintain Liquidity$387 million of available liquidity (up $18 million versus prior quarter)8% senior notes do not mature until 2020Allocate capital only to hi
Slide 20: 2015 Guidance & recent developments
2015 GUIDANCE & Recent developments 20 CapEx Decreases 74% Production Flat Capital Expenditures & Production Capital Expenditures by Quarter Capital Expenditures:Drilling and Completion $120 millionAcreage & Other $20 millionProduction:Total Production ~5.8 MMBoe Operating Expenses for 4Q15LOE ($ pe
Slide 21: Why Northern today?
Why Northern today? 21 ENDURANCE DURABILITY OPTIONALITY Northern’s non-op business modelAccess to core acreage and best in class operatorsConsent v Non-Consent capital allocation processLiquidityAbility to adjust spending up or down based on rate of return
Slide 22: Appendix: Supplemental information
APPENDIX: Supplemental information 22
Slide 23: Corporate profile
CORPORATE PROFILE 23 As of 10/31/2015As of 12/3/15As of 9/30/15As of 12/31/14 NYSE MKT: NOG Shares Outstanding (Fully-Diluted)(1) ~62.9 million Market Capitalization(2) ~$302 million Enterprise Value(2) ~$1,180 billion Adjusted EBITDA (TTM) $291.2 million Net Producing Wells(3) 201.9 net Average Q3
Slide 24: Production and cash flow
production and cash flow 24 Adjusted EBITDA ($ millions) Adjusted EBITDA 72% CAGR Annual Production 67% CAGR Annual Production (Boepd) Cash Flow from Operation ($ millions) Growth in production, cash flow, and EBITDA through cyclesFocus capital on high return, organic growth, funded by cash flow and
Slide 25: Williston Basin activity
Williston Basin activity 25 Daily Production (Mboe/d) Active Horizontal Rig Count NDICAnnualized figure based on actual data through August 2015 North Dakota Wells Spud(1) North Dakota Monthly Wells Spud and Rig Count(1) North Dakota Active Horizontal Rig Count and Production(1) Actual Est.
Slide 26: Getting production to market
Getting production to market 26 NDIC Takeaway Capacity (Mbopd) (1) Takeaway Capacity Options Pipeline and rail provide multiple destinations for Bakken crudeNew pipelines in 2016/2017 provide excellent optionality for low cost transportationGiven the pipe and rail options, there is ample capacity fo
Slide 27: Historical operating information
Historical operating information 27 Year Ended December 31, First 9 months 2011 2012 2013 2014 2015 Production Oil (MBbls) 1,792.0 3,465.3 4,046.7 5,150.9 3,904.8 Natural Gas and NGLs 800.2 1,768.9 2,572.3 3,682.8 3,559.6 Total Production (Mboe) 1,925.3 3,760.1 4,475.4 5,764.7 4,498.1 Realized Oil P
Slide 28: Cash operating margin reconciliation
Cash operating margin reconciliation ($/Boe, except % Margin) Year Realized Price* Production Expense Production Taxes Cash G&A Margin % Margin 2010 66.39 3.70 6.16 4.09 52.44 79.0% 2011 75.85 6.77 7.43 3.88 57.77 76.2% 2012 78.79 8.61 7.58 2.64 59.96 76.0% 2013 79.77 9.35 7.81 2.63 59.98 75.2% 2014
Slide 29: Adjusted EBITDA by quarter
adjusted ebitda by quarter Quarter Ended September 30, June 30, March 31, December 31, In thousands 2015 2015 2015 2014 Net Income $(323,242) $(250,061) $(229,739) $103,584 Add Back: Interest Expense 16,154 14,388 11,737 11,258 Income Tax Provision (78) (66,867) (135,480) 62,967 Depreciation, Deplet
Slide 30: Adjusted EBITDA by year
adjusted ebitda by year 2014 2013 2012 2011 2010 (In Thousands) Net Income $ 163,746 $ 53,067 $ 72,285 $ 40,611 $ 6,917 Add Back: Interest Expense 42,106 32,709 13,875 586 583 Income Tax Provision 99,367 30,768 43,002 26,835 4,419 Depreciation, Depletion, Amortization and Accretion 172,884 124,383 9
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