HIGHLIGHTS
-
Production from the Assets is expected to average 6,600 Boe per day
(2-stream) during the second half of 2019
-
The Assets consist of 86.9 net producing wells, 2.7 net wells in
process and 47.5 net undrilled locations within approximately 18,000
net acres in the core of the Williston Basin
-
The Assets are expected to be accretive to earnings, cash flow per
share, and future drilling inventory and will strengthen Northern’s
free cash flow profile
MINNEAPOLIS--(BUSINESS WIRE)--
Northern Oil and Gas, Inc. (NYSE American: NOG) (“Northern”) today
announced that it has entered into a definitive agreement to acquire the
Williston Basin properties of VEN Bakken, LLC (“Seller”). Seller is a
wholly-owned subsidiary of Flywheel Bakken, LLC (formerly Valorem
Energy), a portfolio company of the Kayne Private Energy Income Funds.
The assets to be acquired (the “Assets”) are expected to produce
approximately 6,600 barrels of oil equivalent (“Boe”) per day (2-stream)
during the second half of 2019 and consist of approximately 18,000 net
acres containing 86.9 net producing wells, 2.7 net wells in process, and
47.5 net undrilled locations across the heart of the Williston Basin.
The Assets are expected to generate approximately $44.9 million in cash
flow from operations (unhedged) during the second half of 2019, with an
estimated second half capital expenditure budget of $15.6 million.
Total consideration to be paid to Seller consists of $165 million in
cash, a $130 million 6% three-year senior unsecured note due 2022 and
approximately 5.6 million shares of Northern’s common stock. The cash
and note portions of the consideration are subject to typical closing
and post-closing adjustments. The transaction is expected to close and
be effective on July 1, 2019.
MANAGEMENT COMMENT
“This transaction furthers our stated goals of allocating capital to
generate free cash flow in low commodity prices, keep debt metrics low,
and grow our debt adjusted cash flow per share,” commented Brandon
Elliott, Chief Executive Officer of Northern. “Durable cash flows, core
drilling inventory, hedges and low leverage should help to generate long
term value for shareholders.”
“At an accretive acquisition price of less than 3.5x cash flow, this
asset should see multi-year production growth while being self-funding
and still generating excess free cash flow,” commented Nick O’Grady,
Chief Financial Officer of Northern. “The additional size and scale
provided from this acquisition serve to continue to grow our borrowing
base and reduce our per unit G&A costs to industry leading levels.”
Northern does not anticipate accessing the public equity or debt markets
for this transaction.
Northern will conduct a conference call on Tuesday, April 23, 2019, at
10 a.m. ET to discuss the transaction.
Those wishing to listen to the conference call may do so via the
company’s website, www.northernoil.com,
or by calling Toll-Free U.S. +1 866-373-3407 or International
+1 412-902-1037 and providing the Conference ID 13690263.
Additional financial and asset details can be found on Northern’s
website at: www.northernoil.com.
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 and industry conditions
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 Northern’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 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 (including the transaction described herein),
other risks and uncertainties related to the closing of pending
acquisition transactions (including the transaction described herein),
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 Northern’s operations,
products, services 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.
Source: Northern Oil and Gas, Inc.
Click
here to subscribe to Mobile Alerts for Northern Oil and Gas.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190422005465/en/
Nicholas O'Grady
Chief Financial Officer
(952) 476-9800
ir@northernoil.com
Source: Northern Oil and Gas, Inc.
Released April 22, 2019