Delaware | 001-33999 | 95-3848122 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
601 Carlson Parkway, Suite 990 Minnetonka, Minnesota | 55305 |
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Description | |
Press release of Northern Oil and Gas, Inc., dated November 8, 2018. |
Date: November 8, 2018 | NORTHERN OIL AND GAS, INC. By /s/ Erik J. Romslo Erik J. Romslo Executive Vice President, General Counsel and Secretary |
• | Third quarter production averaged 26,708 Boe per day, an increase of 74% year-over-year and 27% sequentially. |
• | Increasing fourth quarter production guidance to a range of 35,000 - 36,000 Boe per day, an increase of over 100% year-over-year and 30% sequentially. |
• | Northern has reactivated its existing stock repurchase program, which had $108.3 million in remaining authority. Northern has agreed to repurchase 7.36 million shares from certain shareholders in the fourth quarter. |
• | Third quarter net income was $19.0 million, and adjusted net income was $34.5 million. Adjusted EBITDA increased 174% year-over-year and 39% sequentially to $97.9 million (non-GAAP). |
2018 Production: | Boe Per Day | Year/Year Increase | |
1st Quarter - Actual | 17,995 | 35% | |
2nd Quarter - Actual | 21,046 | 53% | |
3rd Quarter - Actual | 26,708 | 74% | |
4th Quarter - Estimate | 35,000 - 36,000 | 109% - 115% | |
Annual - Estimate (average Boe per day) | 25,240 - 25,500 | 71% - 72% | |
2019 Initial Guidance Ranges: | Low | High | |
Net Wells Added to Production | 30 | 36 | |
Production (Boe per day) | 35,500 | 37,500 | |
Drilling & Completion Capital (D&C) Expenditures (millions) | $245 | $292 | |
D&C Capital Expenditures, Including Workovers and Capitalized Expenses (millions) | $260 | $307 |
Operating Expenses Guidance: | 2018 | Change at Midpoint | |
Production Expenses (per Boe) | $7.50 - $7.75 | $(0.375) | |
Production Taxes (% of Oil & Gas Sales) | ~ 9.2% | ||
General and Administrative Expense (per Boe): | |||
Cash | $1.25 - $1.375 | $(0.063) | |
Non-Cash | $0.25 - $0.50 | ||
Average Differential to NYMEX WTI | $4.75 - $5.75 |
Three Months Ended September 30, | ||||||||
2018 | 2017 | % Change | ||||||
Net Production: | ||||||||
Oil (Bbl) | 2,064,092 | 1,186,814 | 74 | % | ||||
Natural Gas and NGLs (Mcf) | 2,358,162 | 1,336,124 | 76 | % | ||||
Total (Boe) | 2,457,119 | 1,409,501 | 74 | % | ||||
Average Daily Production: | ||||||||
Oil (Bbl) | 22,436 | 12,900 | 74 | % | ||||
Natural Gas and NGLs (Mcf) | 25,632 | 14,523 | 76 | % | ||||
Total (Boe) | 26,708 | 15,321 | 74 | % |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Net Sales: | |||||||
Oil Sales | $ | 135,006,253 | $ | 50,309,088 | |||
Natural Gas and NGL Sales | 10,409,445 | 3,948,503 | |||||
Gain (Loss) on Settled Derivatives | (12,922,603 | ) | 3,395,117 | ||||
Total Oil, Natural Gas and NGL Sales Including all Derivative Settlements | 132,493,095 | 57,652,708 | |||||
Average Sales Prices: | |||||||
Average NYMEX Price (per Bbl)(1) | $ | 69.61 | $ | 48.20 | |||
Oil Differential (per Bbl)(2) | (4.16 | ) | (6.22 | ) | |||
Oil (per Bbl) | 65.45 | 42.39 | |||||
Effect of Gain (Loss) on Settled Derivatives on Average Price (per Bbl) | (6.26 | ) | 2.86 | ||||
Oil Net of Settled Derivatives (per Bbl) | 59.19 | 45.25 | |||||
Natural Gas and NGLs (per Mcf) | 4.41 | 2.96 | |||||
Realized Price on a Boe Basis Including all Realized Derivative Settlements | 53.96 | 40.90 | |||||
Operating Expenses: | |||||||
Production Expenses | $ | 18,160,937 | $ | 12,605,513 | |||
Production Taxes | 13,579,169 | 5,064,761 | |||||
General and Administrative Expense | 4,674,467 | 7,985,719 | |||||
Depletion, Depreciation, Amortization and Accretion | 30,258,089 | 15,357,685 | |||||
Costs and Expenses (per Boe): | |||||||
Production Expenses | $ | 7.39 | $ | 8.94 | |||
Production Taxes | 5.53 | 3.59 | |||||
General and Administrative Expense | 1.90 | 5.67 | |||||
Depletion, Depreciation, Amortization and Accretion | 12.31 | 10.90 | |||||
Net Income (Loss) | $ | 18,978,573 | $ | (16,087,467 | ) | ||
Net Income (Loss) Per Common Share – Diluted | $ | 0.06 | $ | (0.26 | ) | ||
Adjusted Net Income (Loss)(3) | $ | 34,488,715 | $ | 2,243,648 | |||
Adjusted Net Income (Loss) Per Common Share – Diluted(3) | $ | 0.11 | $ | 0.04 | |||
Adjusted EBITDA(3) | $ | 97,914,459 | $ | 35,733,729 |
(1) | Based on average NYMEX WTI closing prices. |
(2) | Average oil price differential to the NYMEX WTI. |
(3) | Please see “Non-GAAP Financial Measures” below for additional information and a reconciliation to the most directly comparable GAAP Measure. |
Three Months Ended September 30, 2018 | ||
Capital Expenditures Incurred: | ||
Drilling and Development Capital Expenditures | $81.6 million | |
Acquisition of Oil and Natural Gas Properties | $164.1 million | |
Other | $1.3 million | |
Net Organic Wells Added to Production | 9.3 | |
Net Producing Wells (Period-End) | 284.3 | |
Net Wells in Process (Period-End) | 19.2 | |
Weighted Average AFE for Wells Elected to Year-to-Date | $8.1 million |
Crude Oil Derivative Basis Swaps(1) | ||||
Contract Period | Total Volumes (Bbls) | Weighted Average Differential ($/Bbl) | ||
2019 | 3,650,000 | ($2.41) |
Crude Oil Derivative Swaps | ||||
Contract Period | Volume (Bbls) | Weighted Average Price (per Bbl) | ||
2018: | ||||
4Q | 1,855,300 | $63.66 | ||
2019: | ||||
1Q | 1,775,700 | $62.89 | ||
2Q | 1,797,250 | $63.09 | ||
3Q | 1,666,480 | $63.44 | ||
4Q | 1,612,300 | $63.90 | ||
2020: | ||||
1Q | 1,301,300 | $61.67 | ||
2Q | 1,119,300 | $60.81 | ||
3Q | 947,600 | $61.11 | ||
4Q | 817,880 | $60.15 | ||
2021: | ||||
1Q | 682,200 | $60.42 | ||
2Q | 627,900 | $62.00 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
REVENUES | |||||||||||||||
Oil, Natural Gas, and NGL Sales | $ | 145,415,698 | $ | 54,257,591 | $ | 341,343,390 | $ | 151,486,819 | |||||||
Gain (Loss) on Derivative Instruments, Net | (43,148,073 | ) | (12,663,253 | ) | (105,622,312 | ) | 20,810,662 | ||||||||
Other Revenue | 1,595 | 4,321 | 7,504 | 19,911 | |||||||||||
Total Revenues | 102,269,220 | 41,598,659 | 235,728,582 | 172,317,392 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
Production Expenses | 18,160,937 | 12,605,513 | 45,198,281 | 36,417,402 | |||||||||||
Production Taxes | 13,579,169 | 5,064,761 | 31,633,326 | 13,965,800 | |||||||||||
General and Administrative Expenses | 4,674,467 | 7,985,719 | 9,592,581 | 15,911,802 | |||||||||||
Depletion, Depreciation, Amortization and Accretion | 30,258,089 | 15,357,685 | 71,484,746 | 41,868,280 | |||||||||||
Total Operating Expenses | 66,672,662 | 41,013,678 | 157,908,934 | 108,163,284 | |||||||||||
INCOME FROM OPERATIONS | 35,596,558 | 584,981 | 77,819,648 | 64,154,108 | |||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||
Interest Expense, Net of Capitalization | (20,438,025 | ) | (16,672,632 | ) | (65,948,159 | ) | (49,404,601 | ) | |||||||
Write-off of Debt Issuance Costs | — | — | — | (95,135 | ) | ||||||||||
Loss on the Extinguishment of Debt | (9,542,206 | ) | — | (100,375,181 | ) | — | |||||||||
Debt Exchange Derivative Gain | 13,062,852 | — | 13,062,852 | — | |||||||||||
Other Income | 299,394 | 184 | 837,812 | 545 | |||||||||||
Total Other Income (Expense) | (16,617,985 | ) | (16,672,448 | ) | (152,422,676 | ) | (49,499,191 | ) | |||||||
INCOME (LOSS) BEFORE INCOME TAXES | 18,978,573 | (16,087,467 | ) | (74,603,028 | ) | 14,654,917 | |||||||||
INCOME TAX PROVISION (BENEFIT) | — | — | — | — | |||||||||||
NET INCOME (LOSS) | $ | 18,978,573 | $ | (16,087,467 | ) | $ | (74,603,028 | ) | $ | 14,654,917 | |||||
Net Income (Loss) Per Common Share – Basic | $ | 0.06 | $ | (0.26 | ) | $ | (0.40 | ) | $ | 0.24 | |||||
Net Income (Loss) Per Common Share – Diluted | $ | 0.06 | $ | (0.26 | ) | $ | (0.40 | ) | $ | 0.24 | |||||
Weighted Average Shares Outstanding – Basic | 300,517,497 | 61,843,377 | 188,152,998 | 61,645,920 | |||||||||||
Weighted Average Shares Outstanding – Diluted | 301,755,419 | 61,843,377 | 188,152,998 | 61,991,292 |
September 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and Cash Equivalents | $ | 112,965,907 | $ | 102,183,191 | |||
Accounts Receivable, Net | 90,476,380 | 46,851,682 | |||||
Advances to Operators | 2,552,490 | 604,977 | |||||
Prepaid Expenses and Other | 17,960,647 | 2,333,288 | |||||
Income Tax Receivable | 785,016 | 785,016 | |||||
Total Current Assets | 224,740,440 | 152,758,154 | |||||
Property and Equipment: | |||||||
Oil and Natural Gas Properties, Full Cost Method of Accounting | |||||||
Proved | 3,001,638,590 | 2,585,490,133 | |||||
Unproved | 1,236,986 | 1,699,344 | |||||
Other Property and Equipment | 998,192 | 981,303 | |||||
Total Property and Equipment | 3,003,873,768 | 2,588,170,780 | |||||
Less – Accumulated Depreciation, Depletion and Impairment | (2,185,892,937 | ) | (2,114,951,189 | ) | |||
Total Property and Equipment, Net | 817,980,831 | 473,219,591 | |||||
Deferred Income Taxes (Note 9) | 785,000 | 785,000 | |||||
Acquisition Deposit | 20,000,000 | — | |||||
Other Noncurrent Assets, Net | 5,443,131 | 5,490,934 | |||||
Total Assets | $ | 1,068,949,402 | $ | 632,253,679 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||
Current Liabilities: | |||||||
Accounts Payable | $ | 122,279,397 | $ | 93,152,297 | |||
Accrued Expenses | 6,334,045 | 6,339,425 | |||||
Accrued Interest | 10,266,623 | 4,836,112 | |||||
Debt Exchange Derivative | 6,030,363 | — | |||||
Derivative Instruments | 61,637,192 | 18,681,891 | |||||
Contingent Consideration | 8,334,160 | — | |||||
Asset Retirement Obligations | 497,129 | 565,521 | |||||
Total Current Liabilities | 215,378,909 | 123,575,246 | |||||
Long-term Debt, Net | 789,528,047 | 979,324,222 | |||||
Derivative Instruments | 40,844,343 | 11,496,929 | |||||
Debt Exchange Derivative | 260,967 | — | |||||
Contingent Consideration | 1,018,570 | — | |||||
Asset Retirement Obligations | 10,595,758 | 8,562,607 | |||||
Other Noncurrent Liabilities | 112,835 | 135,225 | |||||
Total Liabilities | $ | 1,057,739,429 | $ | 1,123,094,229 | |||
Commitments and Contingencies (Note 8) | |||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||
Preferred Stock, Par Value $.001; 5,000,000 Authorized, No Shares Outstanding | — | — | |||||
Common Stock, Par Value $.001; 9/30/2018 – 675,000,000 Authorized, 334,209,986 Shares Outstanding and 12/31/2017 – 142,500,000 Authorized, 66,791,633 Shares Outstanding | 334,210 | 66,792 | |||||
Additional Paid-In Capital | 1,026,052,523 | 449,666,390 | |||||
Retained Deficit | (1,015,176,760 | ) | (940,573,732 | ) | |||
Total Stockholders’ Equity (Deficit) | 11,209,973 | (490,840,550 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 1,068,949,402 | $ | 632,253,679 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net Income (Loss) | $ | 18,978,573 | $ | (16,087,467 | ) | $ | (74,603,028 | ) | $ | 14,654,917 | |||||
Add: | |||||||||||||||
Impact of Selected Items: | |||||||||||||||
(Gain) Loss on the Mark-to-Market of Derivative Instruments | 30,225,470 | 16,058,370 | 72,302,715 | (15,170,174 | ) | ||||||||||
Write-off of Debt Issuance Costs | — | — | — | 95,135 | |||||||||||
Loss on the Extinguishment of Debt | 9,542,206 | — | 100,375,181 | — | |||||||||||
Debt Exchange Derivative Gain | (13,062,852 | ) | — | (13,062,852 | ) | — | |||||||||
Legal Settlements | — | 3,589,431 | — | 3,589,431 | |||||||||||
Selected Items, Before Income Taxes | 26,704,824 | 19,647,801 | 159,615,044 | (11,485,608 | ) | ||||||||||
Income Tax of Selected Items(1) | (11,194,682 | ) | (1,316,686 | ) | (21,106,686 | ) | (1,222,555 | ) | |||||||
Selected Items, Net of Income Taxes | 15,510,142 | 18,331,115 | 138,508,358 | (12,708,163 | ) | ||||||||||
Adjusted Net Income | $ | 34,488,715 | $ | 2,243,648 | $ | 63,905,330 | $ | 1,946,754 | |||||||
Weighted Average Shares Outstanding – Basic | 300,517,497 | 61,843,377 | 188,152,998 | 61,645,920 | |||||||||||
Weighted Average Shares Outstanding – Diluted | 301,755,419 | 62,114,238 | 188,709,068 | 61,991,292 | |||||||||||
Net Income (Loss) Per Common Share – Basic | $ | 0.06 | $ | (0.26 | ) | $ | (0.40 | ) | $ | 0.24 | |||||
Add: | |||||||||||||||
Impact of Selected Items, Net of Income Taxes | 0.05 | 0.30 | 0.74 | (0.21 | ) | ||||||||||
Adjusted Net Income Per Common Share – Basic | $ | 0.11 | $ | 0.04 | $ | 0.34 | $ | 0.03 | |||||||
Net Income (Loss) Per Common Share – Diluted | $ | 0.06 | $ | (0.26 | ) | $ | (0.40 | ) | $ | 0.24 | |||||
Add: | |||||||||||||||
Impact of Selected Items, Net of Income Taxes | 0.05 | 0.30 | 0.74 | (0.21 | ) | ||||||||||
Adjusted Net Income Per Common Share – Diluted | $ | 0.11 | $ | 0.04 | $ | 0.34 | $ | 0.03 |
(1) | For the 2018 columns, this represents a tax impact using an estimated tax rate of 24.5% for the three and nine months ended September 30, 2018, which includes a $4.7 million and $18.0 million adjustment for a change in valuation allowance for the three and nine months ended September 30, 2018, respectively. For the 2017 columns, this represents a tax impact using an estimated tax rate of 37.0% and 38.6% for the three and nine months ended September 30, 2017, respectively, which includes |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net Income (Loss) | $ | 18,978,573 | $ | (16,087,467 | ) | $ | (74,603,028 | ) | $ | 14,654,917 | |||||
Add: | |||||||||||||||
Interest Expense | 20,438,025 | 16,672,632 | 65,948,159 | 49,404,601 | |||||||||||
Income Tax Provision (Benefit) | — | — | — | — | |||||||||||
Depreciation, Depletion, Amortization and Accretion | 30,258,089 | 15,357,685 | 71,484,746 | 41,868,280 | |||||||||||
Non-Cash Share Based Compensation | 1,534,948 | 3,732,509 | 1,973,141 | 5,265,868 | |||||||||||
Write-off of Debt Issuance Costs | — | — | — | 95,135 | |||||||||||
Loss on the Extinguishment of Debt | 9,542,206 | — | 100,375,181 | — | |||||||||||
Debt Exchange Derivative Gain | (13,062,852 | ) | — | (13,062,852 | ) | — | |||||||||
(Gain) Loss on the Mark-to-Market of Derivative Instruments | 30,225,470 | 16,058,370 | 72,302,715 | (15,170,174 | ) | ||||||||||
Adjusted EBITDA | $ | 97,914,459 | $ | 35,733,729 | $ | 224,418,062 | $ | 96,118,627 |