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Northern (NOG) Acquires Non-Operated Interests in Two Basins
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Northern Oil and Gas, Inc. (NOG - Free Report) announced two strategic acquisitions. It has secured non-operated interests in the Northern Delaware and Appalachian basins for a combined initial purchase price of $170 million in cash and 107,657 shares of common stock. This strategic expansion is expected to boost NOG's production and financial performance in the years to come.
Northern Delaware Basin Acquisition
NOG's acquisition in the Northern Delaware Basin encompasses non-operated interests spanning approximately 3,000 net acres, primarily located in Lea and Eddy Counties, NM. The acquired assets currently generate an average production of around 2,800 barrels of oil equivalent (Boe) per day. NOG anticipates a slight decline in production to an average of 2,500 Boe per day in 2024. The company already owns approximately 90% of the Delaware Basin leasehold and is optimistic about the long-term growth potential of these assets.
Appalachian Basin Acquisition
The second acquisition expands NOG's presence in the Appalachian Basin, securing non-operated interests in Jefferson, Harrison, Belmont, and Monroe Counties, OH. These assets currently contribute an average production of 23 million cubic feet of gas equivalent (MMcfe) per day. NOG expects production to remain stable in 2024 and plans to invest around $14 million in capital expenditures (in these assets) during 2023.
Transaction Details and Closing Conditions
NOG's swift and decisive action in securing these valuable assets was evident in the transactions’ effective date — Nov 1, 2023.
For the Northern Delaware Basin Acquisition, NOG has placed a substantial $17.1 million deposit, with the remaining funding scheduled for closing in the first quarter of 2024, subject to standard closing conditions.
The effective date for the Appalachian Basin transaction was Nov 1, 2023, with an anticipated closure in the fourth quarter of 2023, subject to the satisfaction of typical closing conditions.
Strategic Implications
These acquisitions align with NOG's strategy of acquiring and investing in high-quality, non-operated minority working and mineral interests in premier hydrocarbon-producing basins within the contiguous United States. The strategic expansion is expected to yield several benefits, which have been discussed below.
Increased Production and Revenue: The acquired assets are expected to contribute to a substantial increase in NOG's production and revenue streams.
Enhanced Financial Performance: The acquisitions are anticipated to be accretive to key financial metrics, including earnings per share and cash flow, in 2024 and on a multi-year basis.
Diversified Portfolio: The expansion into the Appalachian Basin broadens NOG's geographic footprint and diversifies its asset portfolio.
Long-Term Growth Potential: NOG is confident about the long-term growth potential of the acquired assets, particularly in the Northern Delaware Basin.
Overall, Northern's strategic acquisitions are a testament to its commitment to growth and value creation for shareholders. The company's focus on acquiring high-quality, non-operated interests in premier basins is expected to drive its financial performance and solidify its position as a leading player in the oil and gas industry.
Liberty Energy is valued at $3.35 billion. LBRT currently pays a dividend of 20 cents per share, or 1.01% on an annual basis.
LBRT is a leading provider of hydraulic fracturing and other auxiliary services to North American onshore exploration and production companies.
Oceaneering International is worth approximately $2.12 billion. In the past year, its shares have risen 39.9%.
The company provides engineered services and products, and robotic solutions to the offshore energy, defense, aerospace, manufacturing and entertainment industries worldwide.
USA Compression Partners is valued at around $2.51 billion. USAC currently pays a dividend of $2.10 per unit, or 8.23% on an annual basis.
USAC provides natural gas compression services. The company offers compression services to oil companies and independent producers, processors, gatherers, and transporters of natural gas and crude oil. It also operates stations.
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Northern (NOG) Acquires Non-Operated Interests in Two Basins
Northern Oil and Gas, Inc. (NOG - Free Report) announced two strategic acquisitions. It has secured non-operated interests in the Northern Delaware and Appalachian basins for a combined initial purchase price of $170 million in cash and 107,657 shares of common stock. This strategic expansion is expected to boost NOG's production and financial performance in the years to come.
Northern Delaware Basin Acquisition
NOG's acquisition in the Northern Delaware Basin encompasses non-operated interests spanning approximately 3,000 net acres, primarily located in Lea and Eddy Counties, NM. The acquired assets currently generate an average production of around 2,800 barrels of oil equivalent (Boe) per day. NOG anticipates a slight decline in production to an average of 2,500 Boe per day in 2024. The company already owns approximately 90% of the Delaware Basin leasehold and is optimistic about the long-term growth potential of these assets.
Appalachian Basin Acquisition
The second acquisition expands NOG's presence in the Appalachian Basin, securing non-operated interests in Jefferson, Harrison, Belmont, and Monroe Counties, OH. These assets currently contribute an average production of 23 million cubic feet of gas equivalent (MMcfe) per day. NOG expects production to remain stable in 2024 and plans to invest around $14 million in capital expenditures (in these assets) during 2023.
Transaction Details and Closing Conditions
NOG's swift and decisive action in securing these valuable assets was evident in the transactions’ effective date — Nov 1, 2023.
For the Northern Delaware Basin Acquisition, NOG has placed a substantial $17.1 million deposit, with the remaining funding scheduled for closing in the first quarter of 2024, subject to standard closing conditions.
The effective date for the Appalachian Basin transaction was Nov 1, 2023, with an anticipated closure in the fourth quarter of 2023, subject to the satisfaction of typical closing conditions.
Strategic Implications
These acquisitions align with NOG's strategy of acquiring and investing in high-quality, non-operated minority working and mineral interests in premier hydrocarbon-producing basins within the contiguous United States. The strategic expansion is expected to yield several benefits, which have been discussed below.
Increased Production and Revenue: The acquired assets are expected to contribute to a substantial increase in NOG's production and revenue streams.
Enhanced Financial Performance: The acquisitions are anticipated to be accretive to key financial metrics, including earnings per share and cash flow, in 2024 and on a multi-year basis.
Diversified Portfolio: The expansion into the Appalachian Basin broadens NOG's geographic footprint and diversifies its asset portfolio.
Long-Term Growth Potential: NOG is confident about the long-term growth potential of the acquired assets, particularly in the Northern Delaware Basin.
Overall, Northern's strategic acquisitions are a testament to its commitment to growth and value creation for shareholders. The company's focus on acquiring high-quality, non-operated interests in premier basins is expected to drive its financial performance and solidify its position as a leading player in the oil and gas industry.
Zacks Rank and Key Picks
Currently, NOG carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like Liberty Energy Inc. (LBRT - Free Report) and Oceaneering International, Inc. (OII - Free Report) , each sporting a Zacks Rank #1 (Strong Buy), and USA Compression Partners, LP (USAC - Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Liberty Energy is valued at $3.35 billion. LBRT currently pays a dividend of 20 cents per share, or 1.01% on an annual basis.
LBRT is a leading provider of hydraulic fracturing and other auxiliary services to North American onshore exploration and production companies.
Oceaneering International is worth approximately $2.12 billion. In the past year, its shares have risen 39.9%.
The company provides engineered services and products, and robotic solutions to the offshore energy, defense, aerospace, manufacturing and entertainment industries worldwide.
USA Compression Partners is valued at around $2.51 billion. USAC currently pays a dividend of $2.10 per unit, or 8.23% on an annual basis.
USAC provides natural gas compression services. The company offers compression services to oil companies and independent producers, processors, gatherers, and transporters of natural gas and crude oil. It also operates stations.