- The stock price of Northern Oil & Gas (NOG) increased by 1.56% in the most recent trading session. This is why.
The stock price of Northern Oil & Gas (NOG) increased by 1.56% in the most recent trading session.
Why: Acquisition news
Details: NOG entered into a definitive agreement to acquire certain non-operated interests in the Delaware Basin from Alpha Energy Partners for an initial purchase price of $157.5 million in cash, subject to typical closing adjustments. And NOG expects to fund the acquisition with cash on hand, operating free cash flow, and borrowings under NOG’s revolving credit facility.
NOG may deliver the seller additional cash consideration depending on average front-month NYMEX WTI pricing during the first 6 months of 2023.
This amount will be determined on a sliding scale from zero additional consideration if such pricing is below $75.00 per barrel, up to $22.5 million of additional consideration if such pricing is at least $87.85 per barrel. The additional consideration, if any, would be paid in the third quarter of 2023.
Asset locations: The acquired assets are located in Lea and Eddy counties, NM and Loving County, TX, and include approximately 2,800 acres, 9.6 net producing wells, 2.8 net AFEs and wells-in-process, and approximately 21.2 net undeveloped locations. The primary operator of the assets is Mewbourne Oil, one of the most cost-efficient and active operators in the Northern Delaware Basin. Other operators include Conoco and EOG.
Effective date: The effective date for the transaction is September 1, 2022, and NOG expects to close the transaction in December 2022. The obligations of the parties to complete the transactions contemplated by the purchase agreement are subject to the satisfaction or waiver of customary closing conditions.
Hedging Update: Along with the continuous hedging program, NOG has hedged, as standard practice, a significant portion of the production from the pending transaction. Updated hedge schedules can be found in NOG’s related September Acquisition Presentation at http://ir.northernoil.com.
“NOG continues to execute on creating shareholder value as a proven, reliable and disciplined consolidator of working interests. These assets are squarely in our core focus area and are poised to deliver substantial growth over the coming years, while delivering significant cash flow to bolster shareholder returns.”
— Nick O’Grady, NOG’s Chief Executive Officer
“The Northern Delaware Basin continues to be a key target for our consolidation efforts. This asset has some of the highest quality, lowest-cost inventory we have acquired, and is leveraged to NOG’s top operator in the Permian.”
— Adam Dirlam, NOG’s President