Northern Oil and Gas, Inc. NOG reported fourth-quarter 2024 adjusted earnings per share of $1.11, which marginally missed the Zacks Consensus Estimate of $1.13. The bottom line also declined from the year-ago reported figure of $1.61. This was primarily due to weaker commodity prices and a 23.6% increase in operating expenses.
Oil and natural gas sales of $545 million missed the Zacks Consensus Estimate of $553 million. However, the top line increased from the year-ago figure of $543 million, driven by a higher-than-expected average sales price of Natural Gas and NGLs. The average sales price of Natural Gas and NGLs exceeded the Zacks Consensus Estimate by 17.5%.
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NOG’s adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) were $406.6 million compared with $401.7 million in the year-ago period. Additionally, the figure beat our estimate of $397.6 million.
Northern Oil and Gas, Inc. Price, Consensus and EPS Surprise
Northern Oil and Gas, Inc. price-consensus-eps-surprise-chart | Northern Oil and Gas, Inc. Quote
The oil and gas exploration and production company repurchased 693,658 shares of common stock at an average price of $36.28 per share, including commissions in this quarter. Year to date, NOG has repurchased 2,535,391 shares at a weighted average price of $37.27, including commissions. This resulted in total shareholder returns of almost $260 million, combining both share buybacks and dividends for the year.
In January 2025, NOG's board of directors declared a regular quarterly cash dividend of 45 cents per share on its common stock, representing a 7% increase from the prior quarter. The dividend will be paid to its stockholders of record as of March 28, with payment scheduled for April 30, 2025.
On Feb. 11, 2025, NOG made a deal to buy assets in Upton County, TX, from one of its existing private partners for $40 million in cash, with some adjustments at closing. The assets include about 2,275 net acres in the Midland Basin. NOG will work with its partner to develop these properties. The company expects to finalize the deal within 60 days, as long as all usual closing conditions are met. The development costs for these assets in 2025 are included in NOG's initial capital spending plan.
NOG’s Q4 Production Details
The fourth-quarter production increased 15% year over year to 131,777 barrels of oil equivalent per day (Boe/d). Additionally, the figure marginally beat our estimate of 131,300 Boe/d.
While oil volume totaled 78,939 Boe/d (up 15% year over year), natural gas (and natural gas liquids) amounted to 317,000 thousand cubic feet per day (up 16%). Our model estimate for oil volume and natural gas production was pegged at 78,700 Boe/d and 315,500 thousand cubic feet per day, respectively.
The average sales price for crude was $65.40 per barrel, indicating a 12.2% decrease from the prior-year quarter’s level of $74.51. The figure also missed our expectation of $67.14 per barrel.
The average realized natural gas price was $2.42 per thousand cubic feet compared with $2.84 in the year-earlier period. Our model estimate for the same was pinned at $1.80 per thousand cubic feet.
In the fourth quarter, NOG brought 25.8 net wells online compared with 9.5 net wells in the third quarter of 2024. The company’s fourth-quarter performance benefited from the full contribution of the Point acquisition, the addition of assets from the XCL acquisition and an increase in turn-in-line activity. In 2024, the company’s production averaged 124,108 Boe/d, a 26% increase from the year before.
NOG’s Costs & Expenses
Total operating expenses in the quarter rose to $382.3 million from $309.5 million in the year-ago period. This was mainly on account of a surge in production expenses, general and administrative expenses, depletion, depreciation, amortization and accretion (DD&A) and other expenses.
In particular, the company’s lease operating expenses decreased to $9.62 per Boe from the year-ago figure of $9.70. Meanwhile, depreciation outlay increased 17% year over year on a per-barrel basis.
NOG’s Capital Expenditures
During the fourth quarter, the company reported capital spending of $258.9 million, excluding non-budgeted acquisitions and other items. This amount included $197.3 million allocated for organic drilling and completion (D&C) capital and $61.6 million for total acquisition spending, which also covered ground game D&C expenses.
NOG turned in line 25.8 net wells during the fourth quarter, with 50.4 net wells in the process as of Dec. 31, 2024. Total capital expenditures for 2024, excluding non-budgeted acquisitions, reached $990.1 million, surpassing expectations due to substantial ground game opportunities and continued high levels of workover activity.
NOG’s Financial Position
The company generated $290.3 million in cash flow from operations. Excluding changes in net working capital, cash flow from operations totaled $358.9 million.
The company’s free cash flow for the quarter totaled $96.4 million. As of Dec. 31, Northern had $8.3 million in cash and cash equivalents. The company had a long-term debt of $2.4 billion, with a debt-to-capitalization of 50.5%.
Guidance for 2025 of Northern
Annual oil production is anticipated in the range of 75,000-79,000 barrels per day, while total production is expected to reach between 130,000 Boe/d and 135,000 Boe/d.
NOG currently has a Zacks Rank #3 (Hold). The company expects total capital spending for the year to be between $1,050 million and $1,200 million, with about 66% of the budget allocated to the Permian, 20% to the Williston, 7% to the Appalachian and 7% to the Uinta.
Production expenses are expected to be in the range of $9.15-$9.40 per Boe, while production taxes are anticipated to be 8.5% to 9% of oil and gas sales. DD&A is expected to range from $16.5-$17.5 per Boe.
General and administrative expenses, excluding transaction costs, are expected to be between 85 cents and 90 cents per Boe, with 25-30 cents of this being non-cash.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Acquisition of NOG
On Oct. 2, 2024, NOG announced that it has completed the purchase of Uinta Basin assets from XCL Resources, LLC ("XCL"), including assets previously owned by Altamont Energy, LLC ("Altamont"). The acquisition added more than 15,800 net acres in the Uinta Basin, with around 116 undeveloped locations and additional exploration potential. NOG paid $511.3 million in cash at the time of closing. SM Energy, Inc. SM also joined in acquiring the assets and will be the operator of most of them. NOG and SM agreed to work together on the development of these assets.
Important Earnings at a Glance
While we have discussed NOG’s fourth-quarter results in detail, let us take a look at three other key reports of this space.
Oil and gas equipment and services provider Liberty Energy LBRT reported a fourth-quarter 2024 adjusted net income of 10 cents per share, which marginally beat the Zacks Consensus Estimate of 9 cents, due to a year-over-year decrease in costs and expenses. However, the bottom line underperformed the year-ago quarter’s reported figure of 54 cents, due to poor equipment and service execution, along with lower activity.
As of Dec. 31, Liberty had approximately $20 million in cash and cash equivalents. The pressure pumper’s long-term debt of $190.5 million represented a debt-to-capitalization of 8.8%.
Energy infrastructure provider Kinder Morgan KMI reported fourth-quarter adjusted earnings per share of 32 cents, shy of the Zacks Consensus Estimate of 33 cents. The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures and lower crude, CO2 and NGL volumes. KMI’s fourth-quarter DCF was $1.3 billion, up from $1.2 billion a year ago.
As of Dec. 31, 2024, Kinder Morgan reported $88 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For 2025, Kinder Morgan anticipates a net income of $2.8 billion, up 8% from the prior-year level, and an adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates budgeted adjusted EBITDA of $8.3 billion, up 4% from the previous-year level.
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