Northern Oil And Gas, Inc. · NYSE:NOG
Northern Oil And Gas — Q4 2023 Earnings Presentation
31 slides from Northern Oil And Gas's earnings presentation, Feb 23, 2024
Slide 1: Q4 and Full Year 2023 Earnings Presentation
Q4 and Full Year 2023 Earnings Presentation February 22, 2024 Q4 and Full Year 2023 Earnings Presentation | 1
Slide 2: Contents
Contents I. Q4 and Full Year 2023 Highlights II. Operations & Investment Activity Updates III. Guidance IV. Value Proposition V. Appendix Q4 and Full Year 2023 Earnings Presentation | 2
Slide 3: Q4 2023 Financial & Operating Highlights
Q4 2023 Financial & Operating Highlights Banner Quarter and Year-End Results; Positioned for 2024 Q4 Free Cash Flow(1) Dividend Growth Growth Active Ground Game in Q4, D&C List up 20% YoY $103.6MM • Adjusted EBITDA $401.7MM in Q4, +4% QoQ, 52% YoY +33% • Q4 production +12% QoQ, +45% YoY • Oil produc
Slide 4: Q4 & 2023 Operations Highlights
Q4 & 2023 Operations Highlights Organic completions up 30% vs FY22. Scale driving organic growth. AFEs Wells in Process Well Completions • $1.8B (gross) in Q4 AFEs • Drilling & Completions list • Q4 turn-in-lines of 27.6 net grew 20% vs YE22 to an wells was an all-time high, • Over 95% consent rate
Slide 5: D&C List Contributing to 2024 Momentum
D&C List Contributing to 2024 Momentum NOG’s oil-weighted wells-in-process (D&C) list is up 20% year over year, and the Company’s recent investment cycle is poised to convert into production and cash flow over time. Diversity of regions remains important. Q4 and Full Year 2023 Earnings Presentation
Slide 6: Investment Activity Update
Investment Activity Update Bolt-On Operated M&A consolidation creating follow on opportunities, while private equity exits still playing a role Opportunity Set Ground Game Bolt-On • M&A consolidation creating • Evaluated over 500 • Entered Utica and meaningful opportunities ground game opportunities
Slide 7: Well Performance Continues to Impress
Well Performance Continues to Impress Even with Step-out Activity in ‘23, the Williston Showed Consistency; 2023 Permian Results were Stellar and Improved over 2022 Williston Basin Productivity Permian Basin Productivity 450,000 (1) 450,000 2022 Cum 2022 Cum(1) 400,000 400,000 (1) 2023 Cum 2023 Cum(
Slide 8: Permian Presence More than Doubled in 2023
Permian Presence More than Doubled in 2023 Since 2021, NOG has methodically expanded its presence in the Permian. With the addition of Forge and Novo, NOG has doubled its Permian acreage through two unique joint operating structures further augmented by its recent Northern Delaware acquisition. Year
Slide 9: 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 10: Mascot Update and Development Plan
Mascot Update and Development Plan Strong well performance persists. Planned shut-in activity in 1Q-24 to precede first large batch well development. Expect 17 gross wells in Q2- 24 followed by another 12 gross wells in Q3-24. MPDC and NOG see potential to add locations that could generate future in
Slide 11: Q4 2023 Production by Basin
Q4 2023 Production by Basin NOG’s production mix continues to become more diversified and balanced. Permian expected to take the crown as the largest producing region in 2024. 10% • Production was up 12% versus the prior quarter and up 45% versus Q4’22 • Highest Williston Basin volumes in Company hi
Slide 12: Q4 2023 Production by Commodity and Basin (% Boe)
Q4 2023 Production by Commodity and Basin (% Boe) Oil cut for the quarter was ~60% driven by natural gas production outperformance in Q4 and curtailments at the higher oil cut Mascot field. Williston 30% Appalachia 70% 40% Oil Gas 100% 60% Permian Gas 36% 64% Commodity Type Oil Gas Oil Gas Q4 and Fu
Slide 13: Q4 & Full Year 2023 CapEx by Basin
Q4 & Full Year 2023 CapEx by Basin Capital Expenditures were weighted toward the Permian Basin in Q4 and full year 2023, with strong Ground Game and completions activity in the Basin Q4 2023 FY 2023 • Turn-in-lines (TILs) up 23% versus Q3 23 and a record for NOG 1% 2% • The D&C list declined versus
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. • No debt maturities until 2027 • Issued Common Stock in October 2023,
Slide 15: 2024 Guidance and Capital Budget
2024 Guidance and Capital Budget The Company’s guidance contemplates ~20% year-over-year growth on an approximately flat budget versus 2023 actuals, based on the midpoint of guidance ranges. UNDERLYING ASSUMPTIONS 2024 GUIDANCE PRODUCTION: Annual Production (2-stream, Boe/day) 115,000 – 120,000 • Pr
Slide 16: NOG Value Proposition
PART 2 NOG Value Proposition Q4 and Full Year 2023 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 ~$104MM Free Cash Flow1 in Q4 2023 Return of Capital Commitment: Growing Dividend and Shareholder Strong Balance Sheet with Organic De-Levering and Target of ~1.0x Net Dominant Data & Technical
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 Q4-23 PRODUCTION BY REGION (BOE) non-op franchise that is benefitting from economies of scale; ~19,000 net acres were added to Permian footprint from Q1-23 through Q4-23 Appalachia 10% Williston Region • NOG
Slide 20: 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: ~180,640 Net Acres Permian Basin: ~36,600 Net Acres Appalachian Basin: ~55,000 Net Acres NOG NOG NOG Wells in Progress Wells i
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, despite being acquisit
Slide 22: Appendix: Supplemental Info
PART 3 Appendix: Supplemental Info Q4 and Full Year 2023 Earnings Presentation | 22
Slide 23: Historical Operating & Financial Information
Historical Operating Information Historical Operating & Production 2021 2022 2023 4Q22 4Q23 Financial Information Oil (MBbls) 12,288.4 16,090.1 22,013.0 4,314.6 6,336.2 Natural Gas and NGLs (Mmcf) 44,073.9 68,829.1 84,341.9 17,640.2 25,111.4 Total Production (Mboe) 19,634.1 27,561.6 36,070.0 7,254.6
Slide 24: NON-GAAP Reconciliations: Adjusted EBITDA
Adjusted EBITDA by Year (in thousands) 2021 2022 2023 NON-GAAP Net Income (Loss) Add: $ 6,361 $ 773,237 $ 922,969 Reconciliations: Interest Expense 59,020 80,331 135,664 Income Tax Provision (Benefit) 233 3,101 77,773 Depreciation, Depletion, Amortization and Accretion 140,828 251,272 486,024 Adjust
Slide 25: NON-GAAP Reconciliations: ROCE & Recycle Ratio
NON-GAAP Reconciliations: ROCE & Recycle Ratio 2023 Return on Capital Employed (ROCE) • EBIT: $942.2MM (2023) • + Adj. EBITDA: $1,428.3MM (Full Year 23) • - DD&A: $486.0MM (Full Year 23) Capital EBIT ÷ Employed = 28.4% • Capital Employed: $3,314.3MM (Avg. of YE 22/23) • + Total Assets: $3,679.7MM (A
Slide 26: NON-GAAP Reconciliations: Free Cash Flow
NON-GAAP Reconciliations: Free Cash Flow FREE CASH-FLOW (FCF) (in thousands) 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Net Cash Provided by Operating Activities $ 154,034 $ 210,239 $ 276,766 $ 287,379 $ 269,308 $ 307,786 $ 263,865 $ 342,362 Exclude: Changes in Working Capital and Other Items 80,985 41
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 Floor Million Total Floor
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