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Northern (NOG) Q4 Earnings and Revenues Miss Estimates
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Northern Oil and Gas (NOG - Free Report) reported fourth-quarter 2023 adjusted earnings per share (EPS) of $1.61, which lagged the Zacks Consensus Estimate of $1.64. This was primarily due to weaker commodity prices and a 52.6% increase in operating expenses. However, the bottom line improved from the year-ago level of $1.43. This was primarily due to higher-than-expected production growth.
The company's oil and natural gas sales of $543.4 million missed the Zacks Consensus Estimate of $554 million. The top line, however, improved from the year-ago figure of $445.6 million.
NOG's board of directors declared a quarterly cash dividend of 40 cents per share for stockholders of record as of Mar 28, 2024, to be paid on Apr 30, 2024. The figure was up 18% from that recorded in the first quarter of 2023. Adjusted EBITDA came in at $401.7 million compared with $264.8 million in the year-ago period.
Northern Oil and Gas, Inc. Price, Consensus and EPS Surprise
The fourth-quarter production (comprising 60.2% oil) increased 45% from the year-ago level to 114,363 barrels of oil equivalent per day (Boe/d). The figure also surpassed our estimate of 111,200 Boe/d. While oil volume totaled 68,871 barrels per day (up 46.9% year over year), natural gas (and NGLs) amounted to 272,950 thousand cubic feet per day (up 42.4%). Our model estimate for oil volume and natural gas production was pegged at 73,100 Boe/d and 228,700 thousand cubic feet per day, respectively.
The average sales price for crude during the fourth quarter was $74.51 per barrel, indicating a 12.2% decrease from the prior-year quarter’s level of $90.54. The figure was also lower than our expectation of $76.69 per barrel.
The average realized natural gas price was $2.84 per thousand cubic feet compared with $5.64 in the year-earlier period. Our model estimate for the same was pinned at $1.43 per thousand cubic feet.
Costs & Expenses
Total operating expenses in the quarter rose to $309.5 million from $202.8 million in the year-ago period. The figure was higher than our projection of $286.8 million. This was mainly on account of a surge in depreciation and production expenses and production taxes.
In particular, the company’s lease operating (or production) expenses decreased to $9.70 per Boe from the year-ago figure of $10.06. Meanwhile, depreciation outlay increased 35% year over year on a per-barrel basis.
Financial Position
Excluding working capital, cash flow from operations went up 56% year over year to $365.9 million, while organic drilling and development capital expenditures totaled $260 million. The company’s free cash flow for the quarter amounted to $103.6 million.
As of Dec 31, Northern had $8.2 million in cash and cash equivalents. It had a long-term debt of $1.8 billion with a debt-to-capitalization of 47.3%.
Guidance
NOG’s output is now anticipated in the 115,000-120,000 Boe/d range for 2024 compared with the previous guidance of 96,000-100,000 Boe/d. NOG anticipates growth in its 2024 well-spud count in the band of 67.5-72.5.
The company plans to allocate around 50% of its total capital spending, which is projected to be between $825 million and $900 million, to the Permian, 35% to the Williston, and 1% to the Appalachian.
Zacks Rank and Key Picks
Currently, NOG carries a Zacks Rank #5 (Strong Sell).
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SUBCY offers offshore project services for the energy industry, specializing in subsea field development, covering project management, design, engineering, procurement, fabrication, survey, installation and commissioning of seabed production facilities.
Energy Transfer is valued at $49.47 billion. The company currently pays a dividend of $1.26 per share, or 8.58%, on an annual basis.
ET is an independent energy company, principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.
Murphy USA is valued at around $8.57 billion. In the past year, its shares have risen 55.7%.
MUSA is involved in the marketing of retail motor fuel products and convenience merchandise, operating retail stores under the brands Murphy USA, Murphy Express and QuickChek.
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Northern (NOG) Q4 Earnings and Revenues Miss Estimates
Northern Oil and Gas (NOG - Free Report) reported fourth-quarter 2023 adjusted earnings per share (EPS) of $1.61, which lagged the Zacks Consensus Estimate of $1.64. This was primarily due to weaker commodity prices and a 52.6% increase in operating expenses. However, the bottom line improved from the year-ago level of $1.43. This was primarily due to higher-than-expected production growth.
The company's oil and natural gas sales of $543.4 million missed the Zacks Consensus Estimate of $554 million. The top line, however, improved from the year-ago figure of $445.6 million.
NOG's board of directors declared a quarterly cash dividend of 40 cents per share for stockholders of record as of Mar 28, 2024, to be paid on Apr 30, 2024. The figure was up 18% from that recorded in the first quarter of 2023. Adjusted EBITDA came in at $401.7 million compared with $264.8 million in the year-ago period.
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
Realizations
The fourth-quarter production (comprising 60.2% oil) increased 45% from the year-ago level to 114,363 barrels of oil equivalent per day (Boe/d). The figure also surpassed our estimate of 111,200 Boe/d. While oil volume totaled 68,871 barrels per day (up 46.9% year over year), natural gas (and NGLs) amounted to 272,950 thousand cubic feet per day (up 42.4%). Our model estimate for oil volume and natural gas production was pegged at 73,100 Boe/d and 228,700 thousand cubic feet per day, respectively.
The average sales price for crude during the fourth quarter was $74.51 per barrel, indicating a 12.2% decrease from the prior-year quarter’s level of $90.54. The figure was also lower than our expectation of $76.69 per barrel.
The average realized natural gas price was $2.84 per thousand cubic feet compared with $5.64 in the year-earlier period. Our model estimate for the same was pinned at $1.43 per thousand cubic feet.
Costs & Expenses
Total operating expenses in the quarter rose to $309.5 million from $202.8 million in the year-ago period. The figure was higher than our projection of $286.8 million. This was mainly on account of a surge in depreciation and production expenses and production taxes.
In particular, the company’s lease operating (or production) expenses decreased to $9.70 per Boe from the year-ago figure of $10.06. Meanwhile, depreciation outlay increased 35% year over year on a per-barrel basis.
Financial Position
Excluding working capital, cash flow from operations went up 56% year over year to $365.9 million, while organic drilling and development capital expenditures totaled $260 million. The company’s free cash flow for the quarter amounted to $103.6 million.
As of Dec 31, Northern had $8.2 million in cash and cash equivalents. It had a long-term debt of $1.8 billion with a debt-to-capitalization of 47.3%.
Guidance
NOG’s output is now anticipated in the 115,000-120,000 Boe/d range for 2024 compared with the previous guidance of 96,000-100,000 Boe/d. NOG anticipates growth in its 2024 well-spud count in the band of 67.5-72.5.
The company plans to allocate around 50% of its total capital spending, which is projected to be between $825 million and $900 million, to the Permian, 35% to the Williston, and 1% to the Appalachian.
Zacks Rank and Key Picks
Currently, NOG carries a Zacks Rank #5 (Strong Sell).
Investors interested in the energy sector might look at some better-ranked stocks like Subsea 7 S.A. (SUBCY - Free Report) , Energy Transfer LP (ET - Free Report) and Murphy USA Inc. (MUSA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Subsea 7 is valued at $4.20 billion. The company currently pays a dividend of 38 cents per share, or 2.78%, on an annual basis.
SUBCY offers offshore project services for the energy industry, specializing in subsea field development, covering project management, design, engineering, procurement, fabrication, survey, installation and commissioning of seabed production facilities.
Energy Transfer is valued at $49.47 billion. The company currently pays a dividend of $1.26 per share, or 8.58%, on an annual basis.
ET is an independent energy company, principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.
Murphy USA is valued at around $8.57 billion. In the past year, its shares have risen 55.7%.
MUSA is involved in the marketing of retail motor fuel products and convenience merchandise, operating retail stores under the brands Murphy USA, Murphy Express and QuickChek.