Northern Oil And Gas, Inc. · NYSE:NOG
Northern Oil And Gas — Q1 2021 Earnings Presentation
28 slides from Northern Oil And Gas's earnings presentation, May 7, 2021
Slide 1: Q1:21 Earnings Presentation
NYSE American: NOG Q1:21 EARNINGS PRESENTATION NYSE American: NOG
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS NYSE American: NOG 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 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange A
Slide 3: Q1 Takeaways and Guidance; Northern Value Proposition; Appendix
NYSE American: NOG I. Q1 TAKEAWAYS AND GUIDANCE II. NORTHERN VALUE PROPOSITION III. APPENDIX: SUPPLEMENTAL INFO Northern Oil & Gas, Inc. - November 2020 3
Slide 4: Q1:21 Financial & Operating Highlights
Q1:21 FINANCIAL & OPERATING HIGHLIGHTS NYSE American: NOG Q1:21 Earnings Highlights Q1 Free Cash Flow(1) Dividend Established • Strong Free Cash Flow from Another High Return Quarter • Free Cash Flow +43% QoQ. Capex decreased 22% sequentially, while $41.7MM $0.03/share CFFO increased 2%. Annualized
Slide 5: Major Balance Sheet Upgrade Achieved
MAJOR BALANCE SHEET UPGRADE ACHIEVED NYSE American: NOG ($ in millions) $950 million of funded debt (100% of total) due by 2024 ▪ Weighted Avg. Maturity: 2.4 years ▪ Liquidity: $128 million 12/31/20 $128 $532 $288 $65 $65 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Revolver (Drawn) Revolver (U
Slide 6: Ground Game – Differentiated High Return Opportunities
GROUND GAME – DIFFERENTIATED HIGH RETURN OPPORTUNTIES NYSE American: NOG Another Year of Highly Accretive Full Cycle Return Opportunities 2021 Ground Game Wells in Process Acquisitions Free Cash Flow Derivation ($MM) 2021 2022 2023 2024 10 Net Wells Turned-in-Line 1.1 0.2 0.0 0.0 5 Forecasted Produc
Slide 7: Best-in-Class Bakken; Early Permian Results Impress
BEST-IN-CLASS BAKKEN; EARLY PERMIAN RESULTS IMPRESS NYSE American: NOG ➢ High-grading of well locations has led to improved well recoveries across both basins Consistent Williston Basin Productivity Permian Basin Productivity 300,000 300,000 (1) 2017 Cum (1) 2020 Cum (1) 2018 Cum (1) 2021 Cum 250,00
Slide 8: 2021 Guidance
2021 GUIDANCE NYSE American: NOG 2021 Bakken/Permian Guidance 2021 Marcellus Guidance 2021 Corporate Guidance Total Capital Expenditures ($ in $200 - $250 Annual Production (Boe per day) 37,750 - 42,750 Annual Production (Mmcf per day) 75 - 85 millions) Net Wells Added to Production 32 - 34 Net Well
Slide 9: Northern Value Proposition
NYSE American: NOG I. Q1 TAKEAWAYS AND GUIDANCE II. NORTHERN VALUE PROPOSITION III. APPENDIX: SUPPLEMENTAL INFO 9
Slide 10: New Northern: Diversified High Return Non-Op E&P Franchise
NEW NORTHERN: DIVERSIFIED HIGH RETURN NON-OP E&P FRANCHISE NYSE American: NOG ➢ Northern’s Marcellus acquisition creates a national non-op franchise, with a significantly larger base footprint and production diversified across three leading shale plays, high return reinvestment opportunities across
Slide 11: The Northern Investment Proposition
THE NORTHERN INVESTMENT PROPOSITION NYSE American: NOG National non-op franchise – principled ROCE (1) leader (>25.4% in Q1:21) diversified by commodity and geography Strong expected Free Cash Flow(2): >$140MM in 2021 and >$700MM through 2025 Committed to returning capital to shareholders- NOG’s 1st
Slide 12: The New Northern Oil and Gas
THE NEW NORTHERN OIL AND GAS NYSE American: NOG ➢ Northern is the pre-eminent E&P with focus on non-operated model offering superior returns and free cash flow generation ✓ Exposure to set of leading operators in Williston and Permian (~75% production) and Diversified Asset Base With Appalachia (~25
Slide 13: "Shale 3.0" Paradigm Ideal for Active Non-Op Model
“SHALE 3.0” PARADIGM IDEAL FOR ACTIVE NON-OP MODEL NYSE American: NOG Capital Constrained E&P’s reassessing their Non-Op Positions SHALE 3.0 Operators commit to CAPEX levels no more than 70-80% of cash flow. A growth-driven shale strategy simply hasn’t worked. US production BUT, WHY? skyrocketed, bu
Slide 14: Benefits of Northern's Non-Operator Model
BENEFITS OF NORTHERN’S NON-OPERATOR MODEL NYSE American: NOG HIGH RETURN WAY TO PLAY E&P SPACE Peer leading cost structure & Corporate ROCE Unit G&A costs >50% less than operating peers Scalable Model: NOG has only 25 Employees SHALE 3.0 BENIFICIARY LEVERAGING EXPERIENCE Northern is capitalizing on
Slide 15: Returns Metrics Continue to Lead the Pack
RETURNS METRICS CONTINUE TO LEAD THE PACK NYSE American: NOG High Return Business Driven by Low G&A Burden Peer-Leading ROCE (2021)… Raymond James E&P Research Coverage 35% 30% 25% Non-operator model allows us to 20% 15% run a lean cost structure and cash 10% efficient business, generating 5% indust
Slide 16: NOG Committed to Good Governance
NOG COMMITTED TO GOOD GOVERNANCE NYSE American: NOG ENVIRONMENTAL SOCIAL GOVERNANCE • Operators are selected for • Separate CEO and Chairman environmental and safety • NOG employees provided roles records free health care and paid family leave • Significant shareholder • North Dakota has been a repr
Slide 17: Diversified Base & Partnered with Basin Leaders
DIVERSIFIED BASE & PARTNERED WITH BASIN LEADERS NYSE American: NOG ➢ Leverage to some of the best performing operators in multiple basins % OF NET PRODUCING WELLS BY OPERATOR OTHERS (<3%) Key Takeaways ✓ Q1:21 production of 38,417 boepd is 16% 23% comprised of 45+ different operators ✓ >60% of Q1 20
Slide 18: Non-Op of Scale with Improving Cost Structure
NON-OP OF SCALE WITH IMPROVING COST STRUCTURE NYSE American: NOG ➢ Participation in the highest quality wells with stable AFE costs generates consistent production & higher IRRs Organic Net Wells added to Production Production (mBoe/d) Wells In Process @ Period End Material, but measured Consistent
Slide 19: Current Bakken Snapshot
CURRENT BAKKEN SNAPSHOT NYSE American: NOG ➢ Portfolio of high-quality acreage in the heart of the basin with interests in over 7,000 gross Bakken/Three Forks oil wells NET ACREAGE SUMMARY 9% 9% 8% 182,610 NET ACRES 91% 91% 92% North Dakota Montana HBP 1 % Non-HBP ND % HBP 1 ND % Non-HBP 91% HELD BY
Slide 20: Strong Bakken Inventory Drives NAV Upside
STRONG BAKKEN INVENTORY DRIVES NAV UPSIDE NYSE American: NOG Undeveloped Locations By Operator Undeveloped Locations By Reservoir OTHERS 111.8 155.1 TF3 41.6 86.2 TF2 25.6 113.6 28.6 BKKN 32.3 320.5 78.4 46.2 TF1 73.5 280.0 56.9 61.1 Undeveloped Locations By County Key Takeaways ✓ Over 60% of 756 fu
Slide 21: 2020 PUD Wells Exceeding Reserve Auditor Expectations
2020 PUD WELLS EXCEEDING RESERVE AUDITOR EXPECTATIONS NYSE American: NOG 220 220 2020 Internal Type Curve 200 200 180 180 160 160 Cumulative Oil Production (mbbls) 140 140 Well Count 120 Performance of wells 120 classified as PUD at YE20 that 100 are now online Audited Type Curve 100 80 2020 Interna
Slide 22: Appendix: Supplemental Info
NYSE American: NOG I. Q1 TAKEAWAYS AND GUIDANCE II. NORTHERN VALUE PROPOSITION III. APPENDIX: SUPPLEMENTAL INFO 22
Slide 23: Northern's Senior Management Team
NORTHERN’S SENIOR MANAGEMENT TEAM NYSE American: NOG Nicholas O’Grady: Chief Executive Officer ➢ Nicholas O’Grady has served as Chief Executive Officer since January 2020, following ~18 months as the Company’s Chief Financial Officer. Mr. O’Grady leads the Northern team in all respects of the busine
Slide 24: Hedge Profile
HEDGE PROFILE NYSE American: NOG ➢ Northern 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 PRICE SWAPS NATURAL GAS DERIVATIVE PRICE SWAPS Total Hedged Contract T
Slide 25: Historical Operating & Financial Information
HISTORICAL OPERATING & FINANCIAL INFORMATION NYSE American: NOG HISTORICAL OPERATING INFORMATION YEAR ENDED DECEMBER 31, THREE MONTHS ENDED, 2015 2016 2017 2018 2019 2020 March 31, 2020 March 31, 2021 PRODUCTION Oil (MBbls) 5,168.7 4,325.9 4,537.3 7,790.2 11,325.4 9,361.1 3,138.4 2,630.2 Natural Gas
Slide 26: Non-GAAP Reconciliations: Adjusted EBITDA & Other
NON-GAAP RECONCILIATIONS: ADJUSTED EBITDA & OTHER NYSE American: NOG Adjusted EBITDA by Year (in thousands) 2015 2016 2017 2018 2019 2020 Net Income (Loss) $ (975,355) $ (293,494) $ (9,194) $ 143,689 $ (76,318) $ (906,041) Add: Interest Expense 58,360 64,486 70,286 86,005 79,229 58,503 Income Tax Pr
Slide 27: Non-GAAP Reconciliations: ROCE & Recycle Ratio
NON-GAAP RECONCILIATIONS: ROCE & RECYCLE RATIO NYSE American: NOG Q1:21 Return on Capital Employed (ROCE) • EBIT: $270.2MM (Q1:21 annualized) • + Adj. EBITDA: $98.77MM Capital • - DD&A: $31.22MM EBIT ÷ Employed = 25.4% • Capital Employed: $1,063MM (Avg. of Q1:20/21) • + Total Assets: $1,258MM (Avg.)
Slide 28: Non-GAAP Reconciliations: Free Cash Flow
NON-GAAP RECONCILIATIONS: FREE CASH FLOW NYSE American: NOG Q1:21 Free Cash Flow (FCF) (in thousands) 1Q21 Net Cash Provided by Operating Activities $ 62,766 Exclude: Changes in Working Capital and Other Items 20,814 Less: Capital Expenditures (1) (38,085) Less: Series A Preferred Dividends (3,830)