Northern Oil and Fuel, Inc. (NOG) has closed on each acquisitions of property within the Northern Delaware Basin and the Appalachian Basin from undisclosed non-public sellers.
NOG in November 2023 entered right into a definitive settlement to amass non-operated pursuits throughout roughly 3,000 internet acres situated primarily in Lea and Eddy Counties in New Mexico. The corporate owns present pursuits in roughly 90 p.c of the leasehold.
NOG paid $162.6 million in money in combination preliminary closing settlements, with $28.4 million of the closing prices incurred within the fourth quarter of 2023 and the remaining $134.2 million within the first quarter of 2024, the corporate stated in a information launch Monday. The primary quarter closings had been funded partially by a $17.1 million deposit paid at signing of the settlement.
The closing settlements are internet of preliminary and customary buy value changes and stay topic to post-closing settlements between the events, NOG famous. The efficient date for the transaction is November 1, 2023.
The property embrace 13.0 internet producing wells, 1.0 internet effectively in course of and an estimated 26.3 internet undeveloped areas, representing roughly 13.5 years of stock at sustaining capital ranges, in line with the discharge. “The undeveloped property are of extraordinarily prime quality, with a median pre-tax PV-10 breakeven of lower than $45 per barrel”, NOG stated, noting that Mewbourne Oil is the biggest operator, controlling roughly 80 p.c of the property.
The manufacturing for the New Mexico property was measured at round 2,800 barrels of oil equal per day (boepd) consisting of roughly 67 p.c oil. NOG in an earlier assertion stated it expects 2024 manufacturing to common round 2,500 boepd, however anticipates “important future development” on the property, with a median manufacturing of over 3,500 boepd in 2025-2030. The corporate tasks capital expenditures on the property to be within the vary of $25 million to $30 million to be incurred in 2024, with comparable anticipated ranges yearly via 2027.
Additional, NOG entered right into a definitive settlement with an undisclosed, separate non-public celebration to amass non-operated pursuits in Jefferson, Harrison, Belmont, and Monroe Counties in Ohio, with the first goal zone being the Level Nice/Utica Shale. The efficient date for the transaction is November 1.
The manufacturing of the Ohio property is roughly 23 million cubic ft equal per day, which is round 3,800 boepd and roughly one hundred pc gasoline. NOG expects common manufacturing in 2024 to be at barely larger ranges. The corporate stated it expects to incur roughly $8 million of capital expenditures in 2024.
The acquired properties embrace roughly 0.8 internet producing wells and 1.7 internet wells-in-process. Nearly all of the property are operated by Ascent Assets, one of many high Utica producers in Ohio, NOG stated.
In the meantime, NOG’s board declared a money dividend of $0.40 per share, the deliberate quarterly stage for 2024 as beforehand introduced. The dividend is payable on April 30 to stockholders of report as of the shut of enterprise on March 28.
“We proceed to ship on our plan to generate robust free money circulate that may be dynamically allotted to create worth for our traders”, NOG Chief Monetary Officer Chad Allen stated. “On the similar time, via our observe of systematic hedging, we’re defending our underwritten returns. With an improved hedge profile, robust steadiness sheet and important free money circulate, we’ve nice choices to ship development and worth in a number of types. Given our enticing present dividend yield of roughly 5 p.c and a moderated commodity value atmosphere, we plan to prioritize additional development investments and potential share repurchases as we search to maximise complete shareholder return in 2024”.
NOG describes itself as an actual asset firm with the first technique of buying and investing in non-operated minority working and mineral pursuits within the premier hydrocarbon producing basins inside the contiguous USA.
To contact the writer, e-mail rocky.teodoro@rigzone.com