Northern Oil And Gas, Inc. · NYSE:NOG
Northern Oil And Gas — Q3 2024 Earnings Presentation
33 slides from Northern Oil And Gas's earnings presentation, Nov 6, 2024
Slide 1: Q3 2024 Earnings Presentation
Q3 2024 Earnings Presentation November 5, 2024 Q3 2024 Earnings Presentation | 1
Slide 2: Contents
Contents I. Q3 2024 Highlights II. Operations & Investment Activity Updates III. Guidance IV. Value Proposition V. Appendix Q3 2024 Earnings Presentation | 2
Slide 3: Q3 2024 Financial & Operating Highlights
Q3 2024 Financial & Operating Highlights Steady as she goes with acceleration in oil production and free cash flow as NOG heads into Q4 Free Cash Flow(1) Shareholder Returns Strong financial performance on fewer completions, boosted by well outperformance. Q4 setting up to be a highly active quarter
Slide 4: Q3 2024 Operations Highlights
Q3 2024 Operations Highlights Development activity spooling as the D&C list builds after three consecutive quarters of draws AFEs Wells in Process Well Completions • $1.7B (gross) in AFEs • Drilling & Completions list • Completion activity cooled • Nearly 200 wells evaluated ended the quarter with a
Slide 5: Well Performance Continues to Impress
Well Performance Continues to Impress Williston Basin continues to show improvement in 2024 after a stellar 2023. Permian 2024 reflects an increase in Midland Basin activity which is slightly less productive than the Delaware. Williston Basin Productivity Permian Basin Productivity 450,000 450,000 (
Slide 6: Healthy Build in D&C List Heading into Year-End
Healthy Build in D&C List Heading into Year-End NOG’s oil-weighted wells-in-process (D&C) list rebounding driven by strong organic spud and development activity. Q3 2024 Earnings Presentation | 6
Slide 7: Q3 2024 Production by Basin
Q3 2024 Production by Basin NOG saw increased oil production in Q3 on lower turn-in-lines. Balanced growth in the Williston and Permian sequentially. 14% • Modest growth in Permian and Williston volumes driven by well productivity, despite lower TIL count 40% • Appalachian volumes lower quarter over
Slide 8: Q3 2024 Production and Revenue by Commodity
Q3 2024 Production and Revenue by Commodity Resilient levels of oil production at 70,000+ Bbl / day, despite approximately 70% lower TIL activity, boosted by stronger than expected well performance. The Company maintains its full year production guidance. 9% Production 42% Revenue by by 58% Commodit
Slide 9: Q3 2024 Production by Commodity and Basin (% Boe)
Q3 2024 Production by Commodity and Basin (% Boe) Production mix among the basins remained consistent quarter over quarter. The Company maintains its full year guidance. Williston 30% Appalachian 3% 70% 42% Oil Gas 58% 97% Permian Oil Gas 36% 64% Commodity Type Oil Gas Oil Gas Q3 2024 Earnings Prese
Slide 10: Q3 2024 CapEx by Basin
Q3 2024 CapEx by Basin Disciplined Capital Expenditures for Q3, focused primarily on modest Q3 TIL activity and spud and development activity for an active TIL schedule expected in Q4. Workovers continue to accelerate. The Permian and Williston remain the most active basins for activity given low na
Slide 11: Investment Activity Update
Investment Activity Update Bolt-On Ground Game focused on acreage accumulation to advance optionality over the near-term. Large bolt-on opportunities emerging across multiple basins. Opportunity Set Ground Game Bolt-On • M&A landscape remains • Evaluated over 400 ground • Closed Point JV in late var
Slide 12: XCL Is NOG's Largest & Most Accretive Acquisition To Date
XCL Is NOG’s Largest & Most Accretive Acquisition To Date XCL Asset Locator Map & Key Stats Key Financial Statistics • Purchased 20% undivided interest in XCL assets for $527.5 million, inclusive of the exercise of the Altamont Energy purchase option • Gross NRI: ~80%, net operated WI ~18% • 95% HBP
Slide 13: Point Energy — Adding Scale to NOG and Vital's Positions
Point Energy — Adding Scale to NOG and Vital's Positions NOG and Vital Central & Southern Delaware Basin Map Key Financial Statistics • Joint acquisition with Vital Energy of certain assets of Point Energy Partners, LLC for $1.1 billion. NOG purchased an undivided 20% interest for an unadjusted init
Slide 14: 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, with debt ratio ef
Slide 15: 2024 Guidance and Capital Budget
2024 Guidance and Capital Budget Reaffirmed Production and CapEx Guidance, which includes the impact of XCL and Point Acquisitions Prior Guidance Revised Guidance Annual Production (2-stream, Boe/day) 120,000 – 124,000 120,000 – 124,000 PRODUCTION: • Production guidance unchanged Annual Oil Producti
Slide 16: NOG Value Proposition
PART 2 NOG Value Proposition Q3 2024 Earnings Presentation | 16
Slide 17: The NOG Investment Proposition
The NOG Investment Proposition 1 2 3 4 5 National Non-Op Franchise – offering scale and diversification by Cash Generation - >$468MM 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 18: 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 19: Leading Non-Op Upstream Franchise
Leading Non-Op Upstream Franchise • NOG’s acquisitions have created a high-return, national Q3-24 PRODUCTION BY REGION (BOE) non-op franchise that is benefitting from economies of scale Appalachia • NOG is positioned to continue to capitalize on increased Williston 14% 40% Region non-operated opport
Slide 20: Focus on the Highest-Quality Areas
Focus on the Highest-Quality Areas No requirement for contiguous acreage allows NOG to participate North1 East ~195k Net Acres ~52k Net Acres in prime drilling opportunities Williston Appalachian across basins or regions1 • As a non-operated E&P company, NOG is un- burdened by the need to have large
Slide 21: 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 22: 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 23: 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 24: Appendix: Supplemental Info
PART 3 Appendix: Supplemental Info Q3 2024 Earnings Presentation | 24
Slide 25: Historical Operating & Financial Information
Historical Operating Information 2021 2022 2023 3Q23 3Q24 Historical Operating & Production Oil (MBbls) 12,288.4 16,090.1 22,013.0 5,847.9 6,524.0 Financial Information Natural Gas and NGLs (Mmcf) 44,073.9 68,829.1 84,341.9 21,397.0 28,098.2 Total Production (Mboe) 19,634.1 27,561.6 36,070.0 9,414.1
Slide 26: NON-GAAP Reconciliations: Adjusted EBITDA & Other
NON-GAAP Reconciliations: Adjusted EBITDA & Other Adjusted EBITDA by Quarter (in thousands) 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Net Income (Loss) $ 340,191 $ 167,815 $ 26,111 $ 388,853 $ 11,606 $ 138,556 $ 298,446 Add: Interest Expense 30,143 31,968 37,040 36,513 37,925 37,696 36,837 Income Tax Provi
Slide 27: NON-GAAP Reconciliations: ROCE & Recycle Ratio
NON-GAAP Reconciliations: ROCE & Recycle Ratio Q3-24 Return on Capital Employed (ROCE) • Adj. EBIT: $907.0MM (Q3 24 annualized) • + Adj. EBITDA: $412.4MM (Q3 2024) Capital • - DD&A: $185.7MM (Q3 2024) EBIT ÷ Employed = 21.8% • Capital Employed: $4,168.6MM (Avg. of Q3/23 and Q3/24) • + Total Assets:
Slide 28: NON-GAAP Reconciliations: Free Cash Flow
NON-GAAP Reconciliations: Free Cash Flow FREE CASH FLOW (FCF) (in thousands) 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Net Cash Provided by Operating Activities $ 269,308 $ 307,786 $ 263,865 $ 342,362 $ 392,147 $ 340,477 $ 385,761 Exclude: Changes in Working Capital and Other Items 26,864 (27,410) 83,131 2
Slide 29: 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 Million British Total Hedged Contract Barrels per Day T
Slide 30: 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 Floor Million Total Floor
Slide 31: 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 Weighted Average Contract Million
Slide 32: 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 33: 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