Northern Oil and Gas (NOG) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered record production of 123,342 Boe/d, up 36% year-over-year, and Adjusted EBITDA of $413.1M, up 31% year-over-year, with free cash flow reaching $133.7M, up 148% sequentially.

• Return on capital for Q2 was 25.1%, with disciplined capital allocation and robust per-share growth despite commodity volatility.

• Major acquisitions in the Uinta and Delaware basins, including a 20% interest in XCL Resources for $510M and Point Energy Partners for $220M, are expected to close in H2 2024 and drive future growth.

• Over $75M was returned to shareholders in Q2 via dividends and share repurchases, with a new $150M repurchase program and a recommended dividend increase.

• The company maintains a strong balance sheet with over $1.3B in liquidity and low leverage, supporting ongoing growth and capital returns.

Financial highlights

• Q2 2024 oil and gas sales were $561M, with net income of $138.6M and net income per diluted share of $1.36.

• Free cash flow was $133.7M, up 2.8x year-over-year; operating cash flow for H1 2024 was $732.6M.

• Lease operating expenses per Boe declined 12% year-over-year to $8.99.

• Net debt to LQA EBITDA improved to 1.1x, with total liquidity of $1.3B at quarter end.

• Capital expenditures were $237.4M in Q2, with 59% allocated to the Permian, 37% Williston, and 4% Appalachian.

Outlook and guidance

• 2024 production guidance raised to 120,000–124,000 Boe/d and oil production to 73,000–76,000 Bbl/d, reflecting pending acquisitions.

• CapEx guidance increased to $890M–$970M; LOE per Boe guided to $9.15–$9.40.

• Free cash flow expected to remain elevated through 2024 as new wells come online.

• Pending acquisitions expected to close October 1, 2024, increasing production and reducing per unit costs.

• Hedged approximately 75% of crude oil and 61% of natural gas production for H2 2024.