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NORTHERN OIL & GAS, INC. (NOG)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered solid volumes but mixed financials: oil & gas sales were $545.5M (+0.4% y/y), GAAP EPS was $0.71, and Adjusted EPS was $1.11, with Adjusted EBITDA of $406.6M; disruptions (wildfires, takeaway issues, and price-driven deferrals) weighed on realized prices and timing, while oil volumes rose 11% q/q to 78,939 bbl/d .
  • 2025 outlook is back‑half weighted: guidance calls for 130–135 Mboe/d, 75–79 Mbbl/d oil, and $1.05–$1.20B capex, with 106–110 net spuds outpacing 87–91 net oil TILs, setting up a stronger 2026 growth inflection (+~10% total, +~14% oil) on similar/lower capex .
  • Balance sheet/liquidity remain sound: year‑end liquidity was $818.9M; net debt/LQA EBITDA near the high end of the 1.0x–1.5x target now but expected to trend lower through 2025; 2024 shareholder returns totaled nearly $260M via buybacks/dividends .
  • Capital returns stepped up: dividend raised to $0.45 for Q1’25 from $0.42 in Q4’24; NOG repurchased ~694k shares in Q4 and 2.54M in 2024; operational cadence and JV/inorganic pipeline ($8B of live processes) are key stock catalysts into H2’25/2026 .

What Went Well and What Went Wrong

  • What Went Well

    • Oil production rose 11% q/q to 78,939 bbl/d, a company record, driven by full-quarter Point contribution, Uinta closing, and higher TILs (25.8 net) .
    • Adjusted EBITDA of $406.6M and FCF of $96.4M despite price/timing headwinds; 2024 Adjusted EBITDA reached a record $1.62B .
    • Management reaffirmed multi‑year growth path and strategic posture: “We’ve been hit with… extraordinary… events… [but] this is an issue about timing” and “we can double our business over the next several years,” with a heavier 2025 spud program to set up 2026 .

  • What Went Wrong

    • Disruptions (forest fires, refinery outages, freeze‑offs, third‑party takeaway issues) and price-sensitive operator deferrals in the Williston caused timing slippages and slightly higher fixed-cost absorption (LOE $9.62/boe) .
    • Realized oil price fell to $65.40/bbl (–12% y/y), widening corporate differentials modestly with Uinta takeaway costs; gas realizations improved to 81% of Henry Hub but remain exposed to regional basis .
    • Non‑cash MTM derivative loss of ~$59.7M in Q4 reduced GAAP earnings; realized hedge gains of ~$25.5M partially offset .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue – Oil & Gas Sales ($M)$561.0 $513.5 $545.5
GAAP Net Income ($M)$138.6 $298.4 $71.7
Diluted EPS ($)$1.36 $2.96 $0.71
Adjusted Net Income ($M)$147.8 $141.1 $111.8
Adjusted Diluted EPS ($)$1.46 $1.40 $1.11
Adjusted EBITDA ($M)$413.1 $412.4 $406.6
Cash from Operations ($M)$340.5 $385.8 $290.3
Free Cash Flow ($M)$133.7 $177.1 $96.4
Capital Expenditures excl. non‑budgeted ($M)$237.4 $198.0 $258.9
KPIQ2 2024Q3 2024Q4 2024
Avg Daily Production (Boe/d)123,342 121,815 131,777
Oil Production (Bbl/d)69,645 70,913 78,939
Oil Mix (%)57% 58% 59.9%
Net Wells TIL (quarter)30.1 9.5 25.8
Wells in Process (period-end)41.0 52.2 50.4
LOE ($/Boe)$8.99 $9.54 $9.62
Oil Realized Price ($/Bbl)$77.11 $71.82 $65.40
Oil Differential to WTI ($/Bbl)($3.55) ($3.45) ($3.86)
Gas Realization (% of Henry Hub)106% 72% 81%

Notes: Q4 GAAP results include a non‑cash derivative MTM loss of $59.7M and $25.5M of cash hedge gains .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Production (Boe/d)FY 2025130,000–135,000 130,000–135,000 Maintained
Oil Production (Bbl/d)FY 202575,000–79,000 75,000–79,000 Maintained
Total Capex ($M)FY 2025$1,050–$1,200 $1,050–$1,200 Maintained
Net Oil Wells TILFY 202587–91 87–91 Maintained
Net Wells TIL (all)FY 202597–99 ——
Net Wells SpudFY 2025106–110 106–110 Maintained
LOE ($/Boe)FY 2025$9.15–$9.40 $9.15–$9.40 Maintained
Prod. Taxes (% of oil & gas sales)FY 20258.5%–9.0% 8.5%–9.0% Maintained
Oil Differential ($/Bbl vs WTI)FY 2025($4.75)–($5.50) ($4.75)–($5.50) Maintained
Gas Realization (% of Henry Hub)FY 202585%–90% 85%–90% Maintained
DD&A ($/Boe)FY 2025$16.50–$17.50 $16.50–$17.50 Maintained
G&A – Non‑cash ($/Boe)FY 2025$0.25–$0.30 $0.25–$0.30 Maintained
G&A – Cash ($/Boe, ex M&A)FY 2025$0.85–$0.90 $0.85–$0.90 Maintained
Cash TaxesFY 2025—“Under $10M” (primarily state) New item
Dividend per shareQ1 2025 vs Q4 2024$0.42 (declared Nov’24) $0.45 (declared Jan’25) Raised

2026 Setup (management commentary): +~10% total production and +~14% oil growth potential on similar/lower capex as spuds exceed TILs in 2025 and completions ramp in H2’25 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Operational cadence & timingQ2: 30.1 TILs; record volumes in Permian/Appalachia . Q3: TILs slowed to 9.5; D&C list grew to 52.2 .Q4: Confluence of disruptions and price-sensitive deferrals; 25.8 TILs; back-half 2025 completion weighting; spuds > TILs to set up 2026 .Back-half weighted; building WIP for 2026.
Pricing/differentialsQ2: Improved oil diffs; strong gas realizations (106%) . Q3: Oil diff $3.45; gas 72% .Q4: Oil diff widened to $3.86 with Uinta takeaway costs; gas 81% .Oil diff modestly wider; gas realizations improving.
LOE/costsQ2: LOE $8.99/boe . Q3: LOE rose to $9.54 on workovers/water .Q4: LOE $9.62; fixed cost absorption from disruptions; Uinta LOE lower than corp avg .Slightly higher, normalizing as ops normalize.
Hedging postureQ2/Q3: Active oil/gas hedges provided stability .Q4: Added oil hedges; 2025 oil largely completed; gas collars allowed upside participation .Disciplined, quarter-by-quarter.
Regional performanceQ2: Permian/Appalachia record volumes . Q3: Permian & Williston strength .Q4: Williston deferrals; Permian +~12% q/q; Uinta takeaway issues resolved; SM now operator .Permian remains growth engine; Uinta progressing.
Inorganic pipeline/JVsQ2/Q3: XCL and Point acquisitions; repurchases .Q4: ~13 processes, ~$8B of assets under evaluation; additional Midland JV; Appalachian drilling JV .Robust pipeline; disciplined allocation.
Tariffs/regulatory—Steel tariffs may push AFE up; magnitude unclear; infrastructure outlook constructive for Permian gas .Watch cost inflation; infra tailwinds possible.
Data/tech/talent—Building data science, geology, engineering capabilities to scale and “wring the towel tighter” .Internal capability expansion.

Management Commentary

  • CEO framing disruptions as timing, not value destruction: “It had a material effect… but… the oil that was deferred in Q4 is still there… this is an issue about timing” .
  • Multi‑year growth and capital discipline: “We’ve had success in every one of our basins… we can double our business over the next several years… the need for our capital… has never been greater” .
  • Strategy on development cadence: “We’re spudding a significantly greater number of wells than we’re completing this year… completion timing is relatively back‑half weighting… gives us a lot of confidence as you get into 2026” .
  • Uinta asset confidence with SM as operator: “We bought this asset for a 10‑, 15‑year development period… optimal spacing, long laterals… we’re just scratching the surface geologically” .
  • Hedging discipline: “We’ve added judiciously to our oil hedges… bulk of our gas hedges… costless collars… you can both be hedged and participate in the upside” .

Q&A Highlights

  • 2025/2026 cadence: Management expects relatively flat volumes through mid‑2025 with a notable ramp into year‑end as back‑half completions hit; spuds materially exceed TILs in 2025, driving 2026 growth .
  • Uinta expectations: Early operational hiccups/takeaway issues resolved; SM assumed operatorship Jan 1; long‑term development with longer laterals and optimized spacing prioritized over near‑term cadence .
  • Appalachian drilling partnership: One‑year term with mutual 2‑year extension option; bulk of capital in 2025, with first production past mid‑year and peak contribution in 2026 if extended .
  • Workovers/refracs & AFEs: 10–15% of budget earmarked for workovers/refracs, similar to 2024; normalized AFEs saw ~15% benefit y/y with JV scale pushing costs lower .
  • Tariffs and infrastructure: Steel tariffs could pressure AFEs (degree uncertain); potential infrastructure build‑out could aid Permian gas pricing/bottlenecks .
  • Capital returns: Buybacks remain “on the table,” reviewed each quarter with the Board .

Estimates Context

  • Attempts to retrieve S&P Global consensus for Q4 revenue/EPS and prior quarters hit a daily request limit, so comparisons vs. Wall Street consensus are unavailable at this time. We sought “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and related metrics for Q4/Q3/Q2; the API returned an SPGI daily limit exceeded error. If you want, we can refresh later today/tomorrow to incorporate beats/misses from S&P Global.

Key Takeaways for Investors

  • Timing, not trend: Q4 disruptions masked underlying strength; oil volumes accelerated, D&C list remains robust, and back‑half 2025 sets up a 2026 growth inflection on similar/lower capex .
  • Capital efficiency focus: Longer laterals/optimized spacing in Uinta and JV scale are aimed at higher long‑term returns even if near‑term cadence is slower .
  • Permian-led growth with improved gas realizations: Permian volumes +~12% q/q; gas realizations improved to 81% in Q4; watch basis/differential normalization into 2025 .
  • Hedging and liquidity underpin stability: 2025 oil hedges largely in place; strong liquidity ($818.9M) supports capex and opportunistic inorganic moves .
  • Shareholder returns remain a priority: Dividend up to $0.45; buybacks executed when attractive; 2024 capital returns ~ $260M .
  • Inorganic pipeline is a swing factor: ~$8B across 13 processes under evaluation could accelerate inventory depth and growth if deployed with discipline .
  • Near-term trading setup: Expect choppy H1’25 volumes and optics; narrative should improve as H2 completions hit and management reiterates 2026 growth trajectory; watch incremental updates on Uinta execution, Appalachian JV cadence, and differentials .

Appendix: Additional Detail and Cross-Checks

  • Q4 realized prices and costs summary: Oil $65.40/bbl (WTI diff $3.86); gas 81% of Henry Hub; LOE $9.62/boe; production taxes 3.52/boe; DD&A 16.88/boe .
  • Q4 hedge results: Cash received on settled derivatives $25.5M; non‑cash MTM loss ($59.7M) .
  • Liquidity: YE’24 cash $8.9M, revolver borrowings $690.0M; total liquidity $818.9M .
  • 2024 full‑year: Oil & gas sales $2.152B; GAAP net income $520.3M; Adjusted Net Income $531.2M; Adjusted EBITDA $1.619B; avg daily production 124,108 boe/d (+26% y/y) .