Northern Oil And Gas, Inc. · NYSE:NOG
Northern Oil And Gas — Q1 2024 Earnings Presentation
31 slides from Northern Oil And Gas's earnings presentation, Apr 30, 2024
Slide 1: Q1 2024 Earnings Presentation
Q1 2024 Earnings Presentation April 30, 2024 Q1 2024 Earnings Presentation | 1
Slide 2: Contents
Contents I. Q1 2024 Highlights II. Operations & Investment Activity Updates III. Guidance IV. Value Proposition V. Appendix Q1 2024 Earnings Presentation | 2
Slide 3: Q1 2024 Financial & Operating Highlights
Q1 2024 Financial & Operating Highlights Solid Results Underscore 2024 Outlook Free Cash Flow(1) Shareholder Returns Production Surprises to the Upside, TIL Conversion, Activity Pull Forwards and Robust Well Performance Contributing to Strong Financial Results $54MM ~$61MM • Adjusted EBITDA $387MM -
Slide 4: Q1 2024 Operations Highlights
Q1 2024 Operations Highlights Accelerating turn-in-lines and growing AFE activity AFEs Wells in Process Well Completions • $1.7B (gross) in AFEs • Drilling & Completions list • Completion activity was ended the quarter with ahead of schedule in Q1, • Over 180 wells evaluated 52.4 net wells in proces
Slide 5: Well Performance Continues to Impress
Well Performance Continues to Impress Williston Basin continues to show improvement in 2024 after a stellar 2023. 2024 Permian reflects a smaller sample set and an increase in Midland Basin activity which is slightly less productive than the Delaware. Williston Basin Productivity Permian Basin Produ
Slide 6: 2024 Starts in Completion Mode as DUCs Are Converted to Sales
2024 Starts in Completion Mode as DUCs Are Converted to Sales NOG’s oil-weighted wells-in-process (D&C) list is normalizing from record levels as the Company sees record seasonal completions. Net AFE activity has begun to increase in March and April with higher oil prices. Q1 2024 Earnings Presentat
Slide 7: Material Growth in Permian Presence
Material Growth in Permian Presence NOG continues to methodically expand its presence in the Permian. NOG has more than doubled its Permian acreage since year-end 2022 augmented by its recent Northern Delaware acquisition, which closed in Q1 2024. Year-End 2021 ~3,400 Net Acres Year-End 2022 ~17,600
Slide 8: Delaware & Utica Acquisitions Closed
Delaware & Utica Acquisitions Closed – Expanding High-Quality, Price Resilient Inventory and Increasing Exposure to Appalachia DELAWARE LOCATOR MAP HIGHLIGHTS • Bolt-on acquisitions of core non-op working interest properties in the Delaware Basin and the Ohio Utica Shale for a combined initial purch
Slide 9: Q1 2024 Production by Basin
Q1 2024 Production by Basin NOG saw increased oil and even greater increase in gas production in Q1. Permian now the largest basin by production for the Company. • Significant uptick in Permian production +5.8% quarter over quarter driven by 14% well outperformance, reduced shut-in activity and pull
Slide 10: Q1 2024 Production by Commodity and Basin (% Boe)
Q1 2024 Production by Commodity and Basin (% Boe) Oil production of 70,000 Bbl / day, higher than expectations for Q1. Production mix in the Williston was unchanged with the Permian seeing incremental gains as shut-ins eased. The Company maintains its full year guidance. Williston 29% Appalachia 71%
Slide 11: Q1 2024 CapEx by Basin
Q1 2024 CapEx by Basin CapEx accelerated in the first half of the year as activity remains strong and Q1 TILs were pulled forward from Q2 6% • 25.3 turn-in-lines (TILs) topped expectations driven by a pull-forward in Permian development activity 26% • In line with conversions, the D&C list is trendi
Slide 12: Enhanced Liquidity Position
Enhanced Liquidity Position NOG has methodically managed its debt structure and maturity wall. Growing high quality asset base has driven increases to credit facility as well as attracting new members to NOG’s banking syndicate. • Consistent reduction in debt multiples since 2018 • No debt maturitie
Slide 13: 2024 Guidance and Capital Budget
2024 Guidance and Capital Budget Providing modest changes to LOE and Oil differentials for the year with a near term outlook for Q2 Production. Annual Production and Oil Production unchanged for 2024. Initial Guidance Updated Guidance UNDERLYING ASSUMPTIONS Annual Production (2-stream, Boe/day) 115,
Slide 14: NOG Value Proposition
PART 2 NOG Value Proposition Q1 2024 Earnings Presentation | 14
Slide 15: The NOG Investment Proposition
The NOG Investment Proposition 1 2 3 4 5 National Non-Op Franchise – offering scale and diversification by Cash Generation - ~$333MM Free Cash Flow1 in last twelve Return of Capital Commitment: Growing Dividend and Shareholder Strong Balance Sheet with Organic De-Levering to Target of <1.0x Net Domi
Slide 16: Benefits of NOG's Non-Operated Model
Benefits of NOG’s Non-Operated Model Efficient Operations Enhance Return Profile Leveraging Data and Experience • Peer leading cost structure & Corporate ROCE • Proprietary database, built from participation in over 10,000 wells • Unit G&A costs are 50% less than • Enables well-informed and experien
Slide 17: Leading Non-Op Upstream Franchise
Leading Non-Op Upstream Franchise • NOG’s acquisitions have created a high-return, national Q1-24 PRODUCTION BY REGION (BOE) non-op franchise that is benefitting from economies of scale Appalachia • NOG is positioned to continue to capitalize on increased 14% Williston Region non-operated opportunit
Slide 18: Focus on the Highest-Quality Areas
Focus on the Highest-Quality Areas No requirement for contiguous acreage allows NOG to participate in prime drilling opportunities across basins or regions. Williston Basin: ~178,200 Net Acres Permian Basin: ~39,600 Net Acres Appalachian Basin: ~54,200 Net Acres NOG NOG NOG Wells in Progress Wells i
Slide 19: A Differentiated Upstream Investment Growth Platform
A Differentiated Upstream Investment Growth Platform Operating leverage at work: NOG had record high volumes and record low Adjusted Cash G&A per Boe(1) in 2023. PRODUCTION CONTINUES TO RAMP… WHILE MAINTAINING PEER-LEADING LOW CASH G&A(1) Reducing overhead unit cash G&A costs, with ability to reduce
Slide 20: NOG's Drakkar System Empowers our Data Driven Investment Process
NOG’s Drakkar System Empowers our Data Driven Investment Process Drakkar is an internal, proprietary data science system developed in partnership with technology industry leaders. The system enables us to optimize daily operations and informs our investment management decisions. Inputs Outputs Lan
Slide 21: Sustainability Framework Meaningfully Improved
Sustainability Framework Meaningfully Improved NOG made significant strides in its environmental, social and governance1 framework and is setting the standard for publicly-traded non-operating E&P companies. Our 2022 ESG report was completed using various sustainability reporting frameworks and two
Slide 22: Appendix: Supplemental Info
PART 3 Appendix: Supplemental Info Q1 2024 Earnings Presentation | 22
Slide 23: Historical Operating & Financial Information
Historical Operating Information Historical Operating & 2021 2022 2023 1Q23 1Q24 Production Oil (MBbls) 12,288.4 16,090.1 22,013.0 4,847.8 6,386.5 Financial Information Natural Gas and NGLs (Mmcf) Total Production (Mboe) Revenue 44,073.9 19,634.1 68,829.1 27,561.6 84,341.9 36,070.0 18,101.3 7,864.7
Slide 24: NON-GAAP Reconciliations: Adjusted EBITDA & Other
NON-GAAP Reconciliations: Adjusted EBITDA & Other Adjusted EBITDA by Quarter (in thousands) Adjusted EBITDA by Year (in thousands) 1Q23 2Q23 3Q23 4Q23 1Q24 2021 2022 2023 Net Income (Loss) $ 340,191 $ 167,815 $ 26,111 $ 388,853 $ 11,606 Net Income (Loss) $ 6,361 $ 773,237 $ 922,969 Add: Add: Interes
Slide 25: NON-GAAP Reconciliations: ROCE & Recycle Ratio
NON-GAAP Reconciliations: ROCE & Recycle Ratio Q1-24 Return on Capital Employed (ROCE) • Adj. EBIT: $852.3MM (Q1 24 annualized) • + Adj. EBITDA: $387.0MM (Q1 2024) Capital • - DD&A: $174.0MM (Q1 2024) EBIT ÷ Employed = 23.7% • Capital Employed: $3,601.7MM (Avg. of Q1/23 and Q1/24) • + Total Assets:
Slide 26: NON-GAAP Reconciliations: Free Cash Flow
NON-GAAP Reconciliations: Free Cash Flow FREE CASH FLOW (FCF) (in thousands) 1Q23 2Q23 3Q23 4Q23 1Q24 Net Cash Provided by Operating Activities $ 269,308 $ 307,786 $ 263,865 $ 342,362 $ 392,147 Exclude: Changes in Working Capital and Other Items 26,864 (27,410) 83,131 23,549 (39,665) Less: Capital E
Slide 27: Hedge Profile—SWAPS
Hedge Profile—SWAPS NOG continues to execute a strategy built around the safeguard of returns during a commodity down-cycle, while retaining flexibility to capture the opportunistic upside CRUDE OIL DERIVATIVE SWAPS NATURAL GAS DERIVATIVE SWAPS Barrels per Day Total Hedged Weighted Average Price Con
Slide 28: Hedge Profile—COLLARS and PUTS
Hedge Profile—COLLARS and PUTS NOG continues to execute a strategy built around the safeguard of returns during a commodity down-cycle, while retaining flexibility to capture the opportunistic upside CRUDE OIL DERIVATIVE COLLARS & PUTS NATURAL GAS DERIVATIVE COLLARS & PUTS Total Floor Total Ceiling
Slide 29: Hedge Profile—Basis SWAPS
Hedge Profile—Basis SWAPS NOG continues to execute a strategy built around the safeguard of returns during a commodity down-cycle, while retaining flexibility to capture the opportunistic upside MIDLAND-CUSHING BASIS SWAP WAHA BASIS SWAP Barrels per Day Total Hedged Volumes Weighted Average Price Mi
Slide 30: Important Disclosures
Important Disclosures Forward Looking Statements This presentation contains forward-looking statements regarding future events and future results that are subject to the safe harbors created under the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934,
Slide 31: Important Disclosures
Important Disclosures Industry and Marketing Data Although all information and opinions expressed in this presentation, including market data and other statistical information (including estimates and projections relating to addressable markets), were obtained from sources believed to be reliable an