Northern Oil & Gas Shares Up 6.5% After Q3 Earnings Release


Shares of Northern Oil & Gas, Inc. (NOG) jumped 6.5% after the company reported third-quarter results, closing at $25.41 on November 5.

The company witnessed year-over-year growth across all of its metrics, and also updated its FY21 guidance. However, NOG missed consensus estimates on both earnings and revenue.

The company is involved in the acquisition, exploration, development, and production of crude oil and natural gas properties. Its shares have exploded 513.8% over the past year.

Quarterly Results

NOG reported adjusted earnings of $0.84 per share, up 64.7% year-over-year, but missed analyst estimates of $0.91 per share.

Furthermore, total revenue came in at $131.51 million, up a whopping 177.9% against the same quarter last year, yet missing Street estimates of $195.9 million.

During the quarter, NOG’s total production increased substantially by 98% year-over-year to 57,647 barrels of oil equivalent (BOE) per day.

Commenting on the results, NOG CEO, Nick O’Grady, said, “We delivered record free cash flow yet again and closed a significant Permian acquisition in the third quarter. In October, we announced the signing of another meaningfully accretive transaction, as we relentlessly seek to increase shareholder value. We see significant additional opportunities to further benefit shareholders and remain dedicated to building a diversified, low-leverage entity, with steadily increasing cash returns.”

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Guidance

For the full fiscal year, NOG increased its production guidance to 51,750-53,750 BOE per day, of which, oil is expected to contribute around 63%-64% of the total production. Meanwhile, total capital expenditure is expected to be in the range of $215 million to $250 million.

What’s more, on October 7, NOG announced plans to acquire non-operated interests across over 400 producing wellbores in Williston Basin, North Dakota, for a cash purchase of $154 million. The acquisition is expected to close in mid-to-late November, subject to closing conditions.

Additionally, NOG plans to submit a request to its Board of Directors to increase the quarterly cash common dividend by 33.3% to $0.06 per share, after the acquisition is completed in November.

Street Consensus

With 4 Buys and 1 Hold, NOG commands a Strong Buy consensus rating. The average Northern Oil & Gas price target of $33.40 implies 31.4% upside potential to current levels.

Smart Score

Northern Oil & Gas scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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