Northern Oil and Gas, Inc. Announces Third Quarter 2018 Results, Increases Fourth Quarter 2018 Guidance and Reactivates Stock Repurchase Program MINNEAPOLIS
-
Third quarter production averaged 26,708 Boe per day, an increase of
74% year-over-year and 27% sequentially.
-
Increasing fourth quarter production guidance to a range of 35,000 -
36,000 Boe per day, an increase of over 100% year-over-year and 30%
sequentially.
-
Northern has reactivated its existing stock repurchase program, which
had $108.3 million in remaining authority. Northern has agreed to
repurchase 7.36 million shares from certain shareholders in the fourth
quarter.
-
Third quarter net income was $19.0 million, and adjusted net income
was $34.5 million. Adjusted EBITDA increased 174% year-over-year and
39% sequentially to $97.9 million (non-GAAP).
Northern Oil and Gas, Inc. (NYSE American: NOG) today announced that
third quarter 2018 production averaged 26,708 barrels of oil equivalent
(“Boe”) per day, totaling 2,457,119 Boe, comprised of 84% crude oil.
Third quarter 2018 net income increased to $19.0 million, or $0.06 per
diluted share, compared to a loss of $16.1 million, or ($0.26) per
diluted share in the third quarter of 2017. Third quarter 2018 adjusted
net income increased to $34.5 million, or $0.11 per diluted share, from
$2.2 million or $0.04 per diluted share in the third quarter of 2017.
Adjusted EBITDA increased to $97.9 million, compared to $35.7 million in
the third quarter of 2017. (See “Non-GAAP Financial Measures” below for
additional information.)
Northern’s third quarter 2018 crude oil differential was $4.16 per
barrel below the NYMEX daily average for the period, compared to $6.22
in the third quarter 2017, an improvement of $2.06 per barrel. Lease
operating expense (“LOE”) of $7.39 per Boe for the quarter declined 17%
year-over-year and 3% sequentially, bringing year-to-date LOE at the low
end of the company’s 2018 guidance. General and administrative (“G&A”)
expense of $1.90 per barrel increased 12% sequentially due primarily to
costs associated with recent significant transactions.
As detailed later in the press release, Northern has entered into crude
oil derivative basis swaps for 2019 covering 10,000 barrels of oil per
day at a weighted average differential price of $2.41 per barrel. In
addition the company now has 20,166 barrels of oil per day hedged in the
fourth quarter of 2018 at an average price of $63.66 per barrel and
18,769 barrels of oil per day hedged for 2019 at an average price of
$63.32 per barrel.
MANAGEMENT COMMENT
“The third quarter was another outstanding quarter for Northern as we
reduced unit costs, increased margins and generated significant debt
adjusted growth for our shareholders,” commented Northern’s Chief
Executive Officer, Brandon Elliott. “Our success year-to-date has put us
in an incredible position to continue to execute on our strategy; to
take advantage of dislocations in the markets, including the pursuit of
bolt-on acquisitions, or the opportunity to repurchase our stock at a
significant discount to its intrinsic value. We look forward to closing
out 2018 in a very strong financial position.”
GUIDANCE
Northern is raising its fourth quarter 2018 production guidance to
35,000 - 36,000 Boe per day as a result of increased activity on our
legacy and newly acquired acreage and better than expected production
results. The company now expects to add approximately 7 net organic
wells to production during the fourth quarter, bringing total organic
net well additions for 2018 to between 28 - 31. This is an increase of 3
- 4 additional net wells for the year, with a drilling and completion
(“D&C”) budget of between $230 and $250 million.
Increased production and activity exiting 2018 would allow Northern to
maintain fourth quarter 2018 average daily production volumes flat for
2019 with a drilling and completion budget of approximately $245
million, assuming the addition of between 29 and 31 net wells to
production during the year. Utilizing 2018 cost assumptions for 2019, at
the current commodity strips, the company would generate between $145 -
$200 million of operating cash flow net of all D&C capital expenditures,
representing a free cash flow yield of up to 17% based on current market
capitalization. Additional information regarding Northern’s current
expectations are included in the tables below.
|
|
|
|
Year/Year
|
2018 Production:
|
|
Boe Per Day
|
|
Increase
|
1st Quarter - Actual
|
|
17,995
|
|
35%
|
2nd Quarter - Actual
|
|
21,046
|
|
53%
|
3rd Quarter - Actual
|
|
26,708
|
|
74%
|
4th Quarter - Estimate
|
|
35,000 - 36,000
|
|
109% - 115%
|
Annual - Estimate (average Boe per day)
|
|
25,240 - 25,500
|
|
71% - 72%
|
|
|
|
|
|
2019 Initial Guidance Ranges:
|
|
Low
|
|
High
|
Net Wells Added to Production
|
|
30
|
|
36
|
Production (Boe per day)
|
|
35,500
|
|
37,500
|
Drilling & Completion Capital (D&C) Expenditures (millions)
|
|
$245
|
|
$ 292
|
D&C Capital Expenditures, Including Workovers and Capitalized
Expenses (millions)
|
|
$260
|
|
$ 307
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses Guidance:
|
|
2018
|
|
Change at Midpoint
|
Production Expenses (per Boe)
|
|
$7.50 - $7.75
|
|
$ (0.375)
|
Production Taxes (% of Oil & Gas Sales)
|
|
~ 9.2%
|
|
|
General and Administrative Expense (per Boe):
|
|
|
|
|
Cash
|
|
$1.25 - $1.375
|
|
$ (0.063)
|
Non-Cash
|
|
$0.25 - $0.50
|
|
|
|
|
|
|
|
Average Differential to NYMEX WTI
|
|
$4.75 - $5.75
|
|
|
|
|
|
|
|
THIRD QUARTER 2018 RESULTS
The following tables set forth selected operating and financial data for
the periods indicated.
|
|
Three Months Ended September 30,
|
|
|
2018
|
|
2017
|
|
% Change
|
Net Production:
|
|
|
|
|
|
|
Oil (Bbl)
|
|
2,064,092
|
|
|
1,186,814
|
|
|
74%
|
Natural Gas and NGLs (Mcf)
|
|
2,358,162
|
|
|
1,336,124
|
|
|
76%
|
Total (Boe)
|
|
2,457,119
|
|
|
1,409,501
|
|
|
74%
|
|
|
|
|
|
|
|
Average Daily Production:
|
|
|
|
|
|
|
Oil (Bbl)
|
|
22,436
|
|
|
12,900
|
|
|
74%
|
Natural Gas and NGLs (Mcf)
|
|
25,632
|
|
|
14,523
|
|
|
76%
|
Total (Boe)
|
|
26,708
|
|
|
15,321
|
|
|
74%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
September 30,
|
|
|
2018
|
|
2017
|
Net Sales:
|
|
|
|
|
Oil Sales
|
|
$
|
135,006,253
|
|
|
$
|
50,309,088
|
|
Natural Gas and NGL Sales
|
|
10,409,445
|
|
|
3,948,503
|
|
Gain (Loss) on Settled Derivatives
|
|
(12,922,603
|
)
|
|
3,395,117
|
|
Total Oil, Natural Gas and NGL Sales Including all Derivative
Settlements
|
|
132,493,095
|
|
|
57,652,708
|
|
|
|
|
|
|
Average Sales Prices:
|
|
|
|
|
Average NYMEX Price (per Bbl)(1)
|
|
$
|
69.61
|
|
|
$
|
48.20
|
|
Oil Differential (per Bbl)(2)
|
|
(4.16
|
)
|
|
(6.22
|
)
|
Oil (per Bbl)
|
|
65.45
|
|
|
42.39
|
|
Effect of Gain (Loss) on Settled Derivatives on Average Price (per
Bbl)
|
|
(6.26
|
)
|
|
2.86
|
|
Oil Net of Settled Derivatives (per Bbl)
|
|
59.19
|
|
|
45.25
|
|
Natural Gas and NGLs (per Mcf)
|
|
4.41
|
|
|
2.96
|
|
Realized Price on a Boe Basis Including all Realized Derivative
Settlements
|
|
53.96
|
|
|
40.90
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
Production Expenses
|
|
$
|
18,160,937
|
|
|
$
|
12,605,513
|
|
Production Taxes
|
|
13,579,169
|
|
|
5,064,761
|
|
General and Administrative Expense
|
|
4,674,467
|
|
|
7,985,719
|
|
Depletion, Depreciation, Amortization and Accretion
|
|
30,258,089
|
|
|
15,357,685
|
|
|
|
|
|
|
Costs and Expenses (per Boe):
|
|
|
|
|
Production Expenses
|
|
$
|
7.39
|
|
|
$
|
8.94
|
|
Production Taxes
|
|
5.53
|
|
|
3.59
|
|
General and Administrative Expense
|
|
1.90
|
|
|
5.67
|
|
Depletion, Depreciation, Amortization and Accretion
|
|
12.31
|
|
|
10.90
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$
|
18,978,573
|
|
|
$
|
(16,087,467
|
)
|
Net Income (Loss) Per Common Share – Diluted
|
|
$
|
0.06
|
|
|
$
|
(0.26
|
)
|
|
|
|
|
|
Adjusted Net Income (Loss)(3)
|
|
$
|
34,488,715
|
|
|
$
|
2,243,648
|
|
Adjusted Net Income (Loss) Per Common Share – Diluted(3)
|
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
|
|
|
|
Adjusted EBITDA(3)
|
|
$
|
97,914,459
|
|
|
$
|
35,733,729
|
|
|
|
|
|
|
|
|
|
|
____________
(1)
|
|
Based on average NYMEX WTI closing prices.
|
(2)
|
|
Average oil price differential to the NYMEX WTI.
|
(3)
|
|
Please see “Non-GAAP Financial Measures” below for additional
information and a reconciliation to the most directly comparable
GAAP Measure.
|
|
|
|
CAPITAL EXPENDITURES & DRILLING ACTIVITY
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
September 30, 2018
|
Capital Expenditures Incurred:
|
|
|
Drilling and Development Capital Expenditures
|
|
$81.6 million
|
Acquisition of Oil and Natural Gas Properties
|
|
$164.1 million
|
Other
|
|
$1.3 million
|
|
|
|
Net Organic Wells Added to Production
|
|
9.3
|
Net Producing Wells (Period-End)
|
|
284.3
|
|
|
|
Net Wells in Process (Period-End)
|
|
19.2
|
|
|
|
Weighted Average AFE for Wells Elected to Year-to-Date
|
|
$8.1 million
|
|
|
|
ACQUISITIONS & ACREAGE
On September 17, 2018, Northern closed on its previously announced
Pivotal acquisition for 25.75 million shares of common stock and $60.6
million in cash, at closing. In addition, in the third quarter, Northern
spent approximately $18.0 million for 2,727 net acres, 4.7 net producing
wells and 4.6 net wells in process.
On October 1, 2018, Northern closed on its previously announced W Energy
acquisition for 51.46 million shares of common stock and $114.8 million
in cash, at closing. In the fourth quarter to-date, Northern has
executed agreements on an additional 3,958 net acres, 0.9 net producing
wells, and 1.3 net wells in process for an additional $9.1 million.
As of September 30, 2018, pro forma to include the W Energy acquisition,
Northern controlled leasehold of approximately 151,978 net acres
targeting the Williston Basin Bakken and Three Forks formations, and
approximately 97% of the company’s North Dakota acreage position, and
approximately 95% of its total acreage position, was developed, held by
production or held by operations.
LIQUIDITY AND CAPITAL MARKETS UPDATE
In early October 2018, Northern closed on a $350.0 million tack-on
issuance of additional 2023 Senior Secured Notes as well as a new 5-year
Revolving Credit Facility (“RBL”) with an initial borrowing base of
$425.0 million. Northern used the proceeds to retire its $360.0 million
First Lien Term Loan and the remainder of its 2020 Senior Unsecured
Notes.
As of November 5, 2018, Northern had $16.8 million in cash, $175.0
million outstanding on its new RBL and $695.1 million in 2023 Senior
Secured Notes. Northern had total liquidity of $266.8 million as of
November 5, 2018, consisting of cash and borrowing availability under
the new RBL.
HEDGING
Northern hedges portions of its expected production volumes to increase
the predictability of its cash flow and to help maintain a strong
financial position. The following tables summarize Northern’s open crude
oil derivative and basis swap contracts scheduled to settle after
September 30, 2018.
Crude Oil Derivative Basis Swaps(1)
|
Contract Period
|
|
Total Volumes (Bbls)
|
|
Weighted Average Differential ($/Bbl)
|
2019
|
|
3,650,000
|
|
($2.41)
|
|
|
|
|
|
________________
(1) Basis swaps are settled using the TMX UHC 1a index, as
published by NGX.
Crude Oil Derivative Swaps
|
Contract Period
|
|
Volume (Bbls)
|
|
Weighted Average Price (per Bbl)
|
2018:
|
|
|
|
|
4Q
|
|
1,855,300
|
|
$63.66
|
2019:
|
|
|
|
|
1Q
|
|
1,775,700
|
|
$62.89
|
2Q
|
|
1,797,250
|
|
$63.09
|
3Q
|
|
1,666,480
|
|
$63.44
|
4Q
|
|
1,612,300
|
|
$63.90
|
2020:
|
|
|
|
|
1Q
|
|
1,301,300
|
|
$61.67
|
2Q
|
|
1,119,300
|
|
$60.81
|
3Q
|
|
947,600
|
|
$61.11
|
4Q
|
|
817,880
|
|
$60.15
|
2021:
|
|
|
|
|
1Q
|
|
682,200
|
|
$60.42
|
2Q
|
|
627,900
|
|
$62.00
|
|
|
|
|
|
THIRD QUARTER 2018 EARNINGS RELEASE CONFERENCE CALL
In conjunction with Northern’s release of its financial and operating
results, investors, analysts and other interested parties are invited to
listen to a conference call with management on Friday, November 9, 2018
at 9:00 a.m. Central Time.
Those wishing to listen to the conference call may do so via the
company’s website, www.northernoil.com,
or by phone as follows:
Dial-In Number: (855) 638-5677 (US/Canada)
and (262) 912-4762 (International) Conference
ID: 9159627 - Northern Oil and Gas, Inc. Third Quarter 2018
Conference Call Replay Dial-In Number:
(855) 859-2056 (US/Canada) and (404) 537-3406 (International) Replay
Access Code: 9159627 - Replay will be available through November
16, 2018
UPCOMING CONFERENCE SCHEDULE
Seaport Global Securities Energy Day
|
November 11, 2018, San Francisco, CA
|
|
Cowen 8th Annual Energy & Natural Resources Conference
|
December 4 - 5, 2018, New York City, NY
|
|
Capital One Securities 13th Annual Energy Conference
|
December 4 - 6, 2018, New Orleans, LA
|
|
JP Morgan Global High Yield & Leveraged Finance Conference
|
February 25 - 27, 2019, Miami Beach, FL
|
|
ABOUT NORTHERN OIL AND GAS
Northern Oil and Gas, Inc. is an exploration and production company with
a core area of focus in the Williston Basin Bakken and Three Forks play
in North Dakota and Montana. More information about Northern Oil and
Gas, Inc. can be found at www.NorthernOil.com.
SAFE HARBOR
This press release contains forward-looking statements regarding future
events and future results that are subject to the safe harbors created
under the Securities Act of 1933 (the “Securities Act”) and the
Securities Exchange Act of 1934 (the “Exchange Act”). All statements
other than statements of historical facts included in this release
regarding Northern’s financial position, business strategy, plans and
objectives of management for future operations, industry conditions, and
indebtedness covenant compliance are forward-looking statements. When
used in this release, forward-looking statements are generally
accompanied by terms or phrases such as “estimate,” “project,”
“predict,” “believe,” “expect,” “continue,” “anticipate,” “target,”
“could,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or
other words and similar expressions that convey the uncertainty of
future events or outcomes. Items contemplating or making assumptions
about actual or potential future sales, market size, collaborations, and
trends or operating results also constitute such forward-looking
statements.
Forward-looking statements involve inherent risks and uncertainties, and
important factors (many of which are beyond our company’s control) that
could cause actual results to differ materially from those set forth in
the forward-looking statements, including the following: changes in
crude oil and natural gas prices, the pace of drilling and completions
activity on Northern’s current properties and properties pending
acquisition, Northern’s ability to acquire additional development
opportunities, changes in Northern’s reserves estimates or the value
thereof, general economic or industry conditions, nationally and/or in
the communities in which Northern conducts business, changes in the
interest rate environment, legislation or regulatory requirements,
conditions of the securities markets, Northern’s ability to consummate
any pending acquisition transactions, other risks and uncertainties
related to the closing of pending acquisition transactions, Northern’s
ability to raise or access capital, changes in accounting principles,
policies or guidelines, financial or political instability, acts of war
or terrorism, and other economic, competitive, governmental, regulatory
and technical factors affecting our company’s operations, products and
prices.
Northern has based these forward-looking statements on its current
expectations and assumptions about future events. While management
considers these expectations and assumptions to be reasonable, they are
inherently subject to significant business, economic, competitive,
regulatory and other risks, contingencies and uncertainties, most of
which are difficult to predict and many of which are beyond Northern’s
control. Northern does not undertake any duty to update or revise any
forward-looking statements, except as may be required by the federal
securities laws.
CONDENSED STATEMENTS OF OPERATIONS
|
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2018 AND 2017
|
(UNAUDITED)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
REVENUES
|
|
|
|
|
|
|
|
|
Oil, Natural Gas, and NGL Sales
|
|
$
|
145,415,698
|
|
|
$
|
54,257,591
|
|
|
$
|
341,343,390
|
|
|
$
|
151,486,819
|
|
Gain (Loss) on Derivative Instruments, Net
|
|
|
(43,148,073
|
)
|
|
|
(12,663,253
|
)
|
|
|
(105,622,312
|
)
|
|
|
20,810,662
|
|
Other Revenue
|
|
|
1,595
|
|
|
|
4,321
|
|
|
|
7,504
|
|
|
|
19,911
|
|
Total Revenues
|
|
|
102,269,220
|
|
|
|
41,598,659
|
|
|
|
235,728,582
|
|
|
|
172,317,392
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
Production Expenses
|
|
|
18,160,937
|
|
|
|
12,605,513
|
|
|
|
45,198,281
|
|
|
|
36,417,402
|
|
Production Taxes
|
|
|
13,579,169
|
|
|
|
5,064,761
|
|
|
|
31,633,326
|
|
|
|
13,965,800
|
|
General and Administrative Expenses
|
|
|
4,674,467
|
|
|
|
7,985,719
|
|
|
|
9,592,581
|
|
|
|
15,911,802
|
|
Depletion, Depreciation, Amortization and Accretion
|
|
|
30,258,089
|
|
|
|
15,357,685
|
|
|
|
71,484,746
|
|
|
|
41,868,280
|
|
Total Operating Expenses
|
|
|
66,672,662
|
|
|
|
41,013,678
|
|
|
|
157,908,934
|
|
|
|
108,163,284
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM OPERATIONS
|
|
|
35,596,558
|
|
|
|
584,981
|
|
|
|
77,819,648
|
|
|
|
64,154,108
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
Interest Expense, Net of Capitalization
|
|
|
(20,438,025
|
)
|
|
|
(16,672,632
|
)
|
|
|
(65,948,159
|
)
|
|
|
(49,404,601
|
)
|
Write-off of Debt Issuance Costs
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(95,135
|
)
|
Loss on the Extinguishment of Debt
|
|
|
(9,542,206
|
)
|
|
|
—
|
|
|
|
(100,375,181
|
)
|
|
|
—
|
|
Debt Exchange Derivative Gain
|
|
|
13,062,852
|
|
|
|
—
|
|
|
|
13,062,852
|
|
|
|
—
|
|
Other Income
|
|
|
299,394
|
|
|
|
184
|
|
|
|
837,812
|
|
|
|
545
|
|
Total Other Income (Expense)
|
|
|
(16,617,985
|
)
|
|
|
(16,672,448
|
)
|
|
|
(152,422,676
|
)
|
|
|
(49,499,191
|
)
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE INCOME TAXES
|
|
|
18,978,573
|
|
|
|
(16,087,467
|
)
|
|
|
(74,603,028
|
)
|
|
|
14,654,917
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX PROVISION (BENEFIT)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
$
|
18,978,573
|
|
|
$
|
(16,087,467
|
)
|
|
$
|
(74,603,028
|
)
|
|
$
|
14,654,917
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Per Common Share – Basic
|
|
$
|
0.06
|
|
|
$
|
(0.26
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
0.24
|
|
Net Income (Loss) Per Common Share – Diluted
|
|
$
|
0.06
|
|
|
$
|
(0.26
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
0.24
|
|
Weighted Average Shares Outstanding – Basic
|
|
|
300,517,497
|
|
|
|
61,843,377
|
|
|
|
188,152,998
|
|
|
|
61,645,920
|
|
Weighted Average Shares Outstanding – Diluted
|
|
|
301,755,419
|
|
|
|
61,843,377
|
|
|
|
188,152,998
|
|
|
|
61,991,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED BALANCE SHEETS
|
SEPTEMBER 30, 2018 AND DECEMBER 31, 2017
|
(UNAUDITED)
|
|
|
|
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
ASSETS
|
|
|
|
|
Current Assets:
|
|
|
|
|
Cash and Cash Equivalents
|
|
$
|
112,965,907
|
|
|
$
|
102,183,191
|
|
Accounts Receivable, Net
|
|
90,476,380
|
|
|
46,851,682
|
|
Advances to Operators
|
|
2,552,490
|
|
|
604,977
|
|
Prepaid Expenses and Other
|
|
17,960,647
|
|
|
2,333,288
|
|
Income Tax Receivable
|
|
785,016
|
|
|
785,016
|
|
Total Current Assets
|
|
224,740,440
|
|
|
152,758,154
|
|
|
|
|
|
|
Property and Equipment:
|
|
|
|
|
Oil and Natural Gas Properties, Full Cost Method of Accounting
|
|
|
|
|
Proved
|
|
3,001,638,590
|
|
|
2,585,490,133
|
|
Unproved
|
|
1,236,986
|
|
|
1,699,344
|
|
Other Property and Equipment
|
|
998,192
|
|
|
981,303
|
|
Total Property and Equipment
|
|
3,003,873,768
|
|
|
2,588,170,780
|
|
Less – Accumulated Depreciation, Depletion and Impairment
|
|
(2,185,892,937
|
)
|
|
(2,114,951,189
|
)
|
Total Property and Equipment, Net
|
|
817,980,831
|
|
|
473,219,591
|
|
|
|
|
|
|
Deferred Income Taxes (Note 9)
|
|
785,000
|
|
|
785,000
|
|
Acquisition Deposit
|
|
20,000,000
|
|
|
—
|
|
Other Noncurrent Assets, Net
|
|
5,443,131
|
|
|
5,490,934
|
|
|
|
|
|
|
Total Assets
|
|
$
|
1,068,949,402
|
|
|
$
|
632,253,679
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
Current Liabilities:
|
|
|
|
|
Accounts Payable
|
|
$
|
122,279,397
|
|
|
$
|
93,152,297
|
|
Accrued Expenses
|
|
6,334,045
|
|
|
6,339,425
|
|
Accrued Interest
|
|
10,266,623
|
|
|
4,836,112
|
|
Debt Exchange Derivative
|
|
6,030,363
|
|
|
—
|
|
Derivative Instruments
|
|
61,637,192
|
|
|
18,681,891
|
|
Contingent Consideration
|
|
8,334,160
|
|
|
—
|
|
Asset Retirement Obligations
|
|
497,129
|
|
|
565,521
|
|
Total Current Liabilities
|
|
215,378,909
|
|
|
123,575,246
|
|
|
|
|
|
|
Long-term Debt, Net
|
|
789,528,047
|
|
|
979,324,222
|
|
Derivative Instruments
|
|
40,844,343
|
|
|
11,496,929
|
|
Debt Exchange Derivative
|
|
260,967
|
|
|
—
|
|
Contingent Consideration
|
|
1,018,570
|
|
|
—
|
|
Asset Retirement Obligations
|
|
10,595,758
|
|
|
8,562,607
|
|
Other Noncurrent Liabilities
|
|
112,835
|
|
|
135,225
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
1,057,739,429
|
|
|
$
|
1,123,094,229
|
|
|
|
|
|
|
Commitments and Contingencies (Note 8)
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
Preferred Stock, Par Value $.001; 5,000,000 Authorized, No Shares
Outstanding
|
|
—
|
|
|
—
|
|
Common Stock, Par Value $.001; 9/30/2018 – 675,000,000 Authorized,
334,209,986 Shares Outstanding and 12/31/2017 – 142,500,000
Authorized, 66,791,633 Shares Outstanding
|
|
334,210
|
|
|
66,792
|
|
Additional Paid-In Capital
|
|
1,026,052,523
|
|
|
449,666,390
|
|
Retained Deficit
|
|
(1,015,176,760
|
)
|
|
(940,573,732
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
11,209,973
|
|
|
(490,840,550
|
)
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
$
|
1,068,949,402
|
|
|
$
|
632,253,679
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
Adjusted Net Income and Adjusted EBITDA are non-GAAP measures. Northern
defines Adjusted Net Income as net income (loss) excluding (i) (gain)
loss on the mark-to-market of derivative instruments, net of tax, (ii)
write-off of debt issuance costs, net of tax, (iii) loss on the
extinguishment of debt, net of tax, (iv) debt exchange derivative gain,
net of tax, and (v) certain legal settlements, net of tax. Northern
defines Adjusted EBITDA as net income (loss) before (i) interest
expense, (ii) income taxes, (iii) depreciation, depletion, amortization
and accretion, (iv) (gain) loss on the mark-to-market of derivative
instruments, (v) non-cash share based compensation expense, (vi)
write-off of debt issuance costs, (vii) loss on the extinguishment of
debt, and (viii) debt exchange derivative gain. A reconciliation of each
of these measures to the most directly comparable GAAP measure is
included below. Management believes the use of these non-GAAP financial
measures provides useful information to investors to gain an overall
understanding of current financial performance. Specifically, management
believes the non-GAAP financial measures included herein provide useful
information to both management and investors by excluding certain
expenses and unrealized commodity gains and losses that management
believes are not indicative of Northern’s core operating results. In
addition, these non-GAAP financial measures are used by management for
budgeting and forecasting as well as subsequently measuring Northern’s
performance, and management believes it is providing investors with
financial measures that most closely align to its internal measurement
processes.
Reconciliation of Adjusted Net Income
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net Income (Loss)
|
|
$
|
18,978,573
|
|
|
$
|
(16,087,467
|
)
|
|
$
|
(74,603,028
|
)
|
|
$
|
14,654,917
|
|
Add:
|
|
|
|
|
|
|
|
|
Impact of Selected Items:
|
|
|
|
|
|
|
|
|
(Gain) Loss on the Mark-to-Market of Derivative Instruments
|
|
30,225,470
|
|
|
16,058,370
|
|
|
72,302,715
|
|
|
(15,170,174
|
)
|
Write-off of Debt Issuance Costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95,135
|
|
Loss on the Extinguishment of Debt
|
|
9,542,206
|
|
|
—
|
|
|
100,375,181
|
|
|
—
|
|
Debt Exchange Derivative Gain
|
|
(13,062,852
|
)
|
|
—
|
|
|
(13,062,852
|
)
|
|
—
|
|
Legal Settlements
|
|
—
|
|
|
3,589,431
|
|
|
—
|
|
|
3,589,431
|
|
Selected Items, Before Income Taxes
|
|
26,704,824
|
|
|
19,647,801
|
|
|
159,615,044
|
|
|
(11,485,608
|
)
|
Income Tax of Selected Items(1)
|
|
(11,194,682
|
)
|
|
(1,316,686
|
)
|
|
(21,106,686
|
)
|
|
(1,222,555
|
)
|
Selected Items, Net of Income Taxes
|
|
15,510,142
|
|
|
18,331,115
|
|
|
138,508,358
|
|
|
(12,708,163
|
)
|
Adjusted Net Income
|
|
$
|
34,488,715
|
|
|
$
|
2,243,648
|
|
|
$
|
63,905,330
|
|
|
$
|
1,946,754
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding – Basic
|
|
300,517,497
|
|
|
61,843,377
|
|
|
188,152,998
|
|
|
61,645,920
|
|
Weighted Average Shares Outstanding – Diluted
|
|
301,755,419
|
|
|
62,114,238
|
|
|
188,709,068
|
|
|
61,991,292
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Per Common Share – Basic
|
|
$
|
0.06
|
|
|
$
|
(0.26
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
0.24
|
|
Add:
|
|
|
|
|
|
|
|
|
Impact of Selected Items, Net of Income Taxes
|
|
0.05
|
|
|
0.30
|
|
|
0.74
|
|
|
(0.21
|
)
|
Adjusted Net Income Per Common Share – Basic
|
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
$
|
0.34
|
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Per Common Share – Diluted
|
|
$
|
0.06
|
|
|
$
|
(0.26
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
0.24
|
|
Add:
|
|
|
|
|
|
|
|
|
Impact of Selected Items, Net of Income Taxes
|
|
0.05
|
|
|
0.30
|
|
|
0.74
|
|
|
(0.21
|
)
|
Adjusted Net Income Per Common Share – Diluted
|
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
$
|
0.34
|
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_____________
(1)
|
|
For the 2018 columns, this represents a tax impact using an
estimated tax rate of 24.5% for the three and nine months ended
September 30, 2018, which includes a $4.7 million and $18.0 million
adjustment for a change in valuation allowance for the three and
nine months ended September 30, 2018, respectively. For the 2017
columns, this represents a tax impact using an estimated tax rate of
37.0% and 38.6% for the three and nine months ended September 30,
2017, respectively, which includes a $6.0 million and $5.7 million
adjustment for a change in valuation allowance for the three and
nine months ended September 30, 2017, respectively.
|
|
|
|
Reconciliation of Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net Income (Loss)
|
|
$
|
18,978,573
|
|
|
$
|
(16,087,467
|
)
|
|
$
|
(74,603,028
|
)
|
|
$
|
14,654,917
|
|
Add:
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
20,438,025
|
|
|
16,672,632
|
|
|
65,948,159
|
|
|
49,404,601
|
|
Income Tax Provision (Benefit)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Depreciation, Depletion, Amortization and Accretion
|
|
30,258,089
|
|
|
15,357,685
|
|
|
71,484,746
|
|
|
41,868,280
|
|
Non-Cash Share Based Compensation
|
|
1,534,948
|
|
|
3,732,509
|
|
|
1,973,141
|
|
|
5,265,868
|
|
Write-off of Debt Issuance Costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95,135
|
|
Loss on the Extinguishment of Debt
|
|
9,542,206
|
|
|
—
|
|
|
100,375,181
|
|
|
—
|
|
Debt Exchange Derivative Gain
|
|
(13,062,852
|
)
|
|
—
|
|
|
(13,062,852
|
)
|
|
—
|
|
(Gain) Loss on the Mark-to-Market of Derivative Instruments
|
|
30,225,470
|
|
|
16,058,370
|
|
|
72,302,715
|
|
|
(15,170,174
|
)
|
Adjusted EBITDA
|
|
$
|
97,914,459
|
|
|
$
|
35,733,729
|
|
|
$
|
224,418,062
|
|
|
$
|
96,118,627
|
|
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View source version on businesswire.com: https://www.businesswire.com/news/home/20181108005908/en/ Copyright Business Wire 2018
Source: Business Wire
(November 8, 2018 - 4:15 PM EST)
News by QuoteMedia
www.quotemedia.com
|