NOG expands Permian presence, enters Ohio Utica shale with $170 million acquisitions

November 26, 2023

(WO) – Northern Oil and Gas, Inc. (NOG) has entered into a definitive agreement with a private party to acquire non-operated interests across approximately 3,000 net acres located primarily in Lea and Eddy Counties, New Mexico.

NOG owns existing interests in approximately 90% of the leasehold. Current production is roughly 2,800 boed (2-stream, about 67% oil). NOG expects 2024 production to average around 2,500 boed (2-stream, about 67% oil), but expects significant future growth on the assets, with average production of more than 3,500 boed for 2025 through 2030. Capital expenditures on the assets are expected to be in the range of $25 - $30 million in 2024, with similar expected levels annually through 2027.

The acquired assets include 13 net producing wells, 1 net well in process and an estimated 26.3 net undeveloped locations, representing approximately 13.5 years of inventory at sustaining capital levels. The undeveloped assets are of extremely high quality, with an average pre-tax PV-10 breakeven of less than $45 per bbl. Mewbourne Oil is the largest operator, controlling approximately 80% of the assets.

Appalachian basin transaction. NOG has entered into a definitive agreement with a separate private party to acquire non-operated interests in Jefferson, Harrison, Belmont, and Monroe Counties, Ohio. The primary target zone is the Point Pleasant/Utica Shale.

Current production is approximately 23 MMcfd (about 3,800 boed, nearly 100% gas), and NOG expects average production in 2024 at slightly higher levels. NOG expects to incur approximately $14 million of capital expenditures on the assets in 2023, and $8 million of capital expenditures in 2024.

The acquired properties include approximately 0.8 net producing wells and 1.7 net wells-in-process. Substantially, all the assets are operated by Ascent Resources, one of the top Utica producers in Ohio.

“After closing, our Permian lands will approach roughly 40,000 net acres and definitively become our most active and largest basin in terms of activity and production,” commented Adam Dirlam, NOG’s President. “Our focus remains on low-breakeven, resilient inventory that works in nearly any price environment, and these assets deliver in spades. On the Appalachian front, we are acquiring assets in the core of the Utica under one of the most prolific operators, with a focus on near-term development. As we continue to build data in the area, there is significant potential for longer term expansion.”

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