Northern Oil and Gas(NOG) - 2025 Q2 - Quarterly Results

Business Update Second Quarter Hedging Results and Outlook NOG anticipates significant derivative gains in Q2 2025 and has expanded crude oil and natural gas hedging positions through 2026 to protect its capital program Q2 2025 Estimated Hedging Results | Category | Estimated Amount (Millions) | | :--- | :--- | | Unrealized Mark-to-Market Gains | $65 - $70 | | Realized Hedge Gains | $58 - $63 | - NOG has added new hedges for oil, natural gas, and basis differentials since its Q1 report[2] Average Hedged Volumes (as of release date) | Period | Commodity | Average Hedged Volume per Day | | :--- | :--- | :--- | | 2H 2025 | Oil | > 50,000 Bbls | | 2026 | Oil | > 30,000 Bbls | | 2H 2025 | Natural Gas | > 200 MMBtu | | 2026 | Natural Gas | > 175 MMBtu | Expected Non-Cash Impairment NOG expects a non-cash impairment charge of $112-$120 million in Q2 2025 due to lower oil prices and full-cost accounting rules, with no cash flow impact - A non-cash impairment charge of $112 - $120 million is expected in Q2 2025 due to lower oil prices and full-cost accounting rules[3] - This accounting charge will have no impact on the company's cash flows[3] Commodity Derivative Contracts The company details open derivative contracts for crude oil, natural gas, and NGLs settling after June 30, 2025, utilizing swaps and collars to manage price risk Crude Oil Contracts NOG has hedged significant crude oil volumes through 2026 using swaps and collars, with specific volumes and prices detailed for Q3 2025 Open Crude Oil Derivative Contracts (Post June 30, 2025) | | Swaps | | Collars | | | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Contract Period | Volume (Bbls) | W.A. Price ($/Bbl) | Volume Floor (Bbls) | Volume Ceiling (Bbls) | W.A. Floor Price ($/Bbl) | W.A. Ceiling Price ($/Bbl) | | 2025: Q3 | 2,935,969 | $72.76 | 1,817,970 | 2,304,994 | $69.15 | $77.43 | | 2025: Q4 | 3,029,836 | $72.75 | 1,791,487 | 2,278,511 | $69.15 | $77.55 | | 2026: Q1 | 1,433,726 | $69.84 | 2,446,789 | 3,121,226 | $62.94 | $72.98 | | 2026: Q2 | 1,040,157 | $68.11 | 1,563,977 | 2,245,907 | $63.55 | $71.35 | | 2026: Q3 | 1,419,587 | $69.06 | 1,121,163 | 1,810,587 | $65.01 | $72.33 | | 2026: Q4 | 1,419,587 | $69.04 | 1,121,163 | 1,810,587 | $65.01 | $72.33 | Natural Gas Contracts NOG has extensive natural gas hedges through 2027, including significant swap and collar volumes for Q3 2025 at specified prices Open Natural Gas Derivative Contracts (Post June 30, 2025) | | Swaps | | Collars | | | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Contract Period | Volume (MMBTU) | W.A. Price ($/MMBTU) | Volume Floor (MMBTU) | Volume Ceiling (MMBTU) | W.A. Floor Price ($/MMBTU) | W.A. Ceiling Price ($/MMBTU) | | 2025: Q3 | 9,469,432 | $3.99 | 9,368,137 | 9,368,137 | $3.10 | $4.80 | | 2025: Q4 | 9,953,257 | $4.09 | 9,785,466 | 9,785,466 | $3.19 | $4.89 | | 2026: Q1 | 7,860,000 | $4.13 | 10,278,249 | 10,278,249 | $3.36 | $5.07 | | 2026: Q2 | 6,745,000 | $3.93 | 10,314,706 | 10,314,706 | $3.37 | $5.05 | | 2026: Q3 | 6,440,000 | $4.02 | 9,704,706 | 9,704,706 | $3.39 | $5.02 | | 2026: Q4 | 7,350,000 | $4.25 | 7,054,642 | 7,054,642 | $3.37 | $4.95 | | 2027: Q1 | 450,000 | $3.04 | 1,335,000 | 1,335,000 | $3.00 | $3.86 | | 2027: Q2 | 460,000 | $2.96 | 1,380,000 | 1,380,000 | $3.00 | $3.86 | | 2027: Q3 | 460,000 | $2.96 | 1,380,000 | 1,380,000 | $3.00 | $3.86 | | 2027: Q4 | 455,000 | $2.96 | 915,000 | 915,000 | $3.00 | $3.86 | NGL Contracts NOG has NGL swap contracts extending into 2027, with over 193,000 barrels hedged for 2H 2025 at approximately $36.50/BBL Open NGL Swap Contracts (Post June 30, 2025) | | Swaps | | | :--- | :--- | :--- | | Contract Period | Volume (BBL) | W.A. Price ($/BBL) | | 2025: Q3 | 59,800 | $36.16 | | 2025: Q4 | 133,400 | $36.71 | | 2026: Q1 | 92,250 | $36.00 | | 2026: Q2 | 106,925 | $33.32 | | 2026: Q3 | 96,600 | $33.03 | | 2026: Q4 | 80,500 | $33.32 | | 2027: Q1 | 65,250 | $32.30 | | 2027: Q2 | 59,150 | $30.73 | | 2027: Q3 | 57,500 | $30.69 | | 2027: Q4 | 52,900 | $30.87 | Strategic and Operational Updates Ground Game Update NOG increased 'Ground Game' activity in Q2 2025, completing 22 transactions to add 4.8 net wells and 2,600 net acres for $23.8 million initial capital - The company noted that the volume of acquisition opportunities has expanded compared to a year ago due to weakness in commodity pricing[10] Q2 2025 Ground Game Activity Summary | Metric | Value | | :--- | :--- | | Transactions Completed | 22 | | Net Wells Added | 4.8 | | Net Acres Added | ~2,600 | | Initial Capital | ~$23.8 million | | Incremental Development Capital | ~$7.3 million | Legal Settlement NOG finalized a legal settlement in June 2025, expecting to recognize $81.7 million in revenue and receive a net cash payment of $48.6 million in Q3 2025 Legal Settlement Financial Impact | Item | Amount (Millions) | | :--- | :--- | | Total Settlement (Recorded as Oil & Gas Sales) | ~$81.7 | | Legal Settlement Expenses | ~$33.1 | | Net Cash Settlement Received | $48.6 | - The cash proceeds from the settlement are expected to be received in the third quarter of 2025[11] Company Information and Disclosures About NOG NOG acquires and invests in non-operated minority working and mineral interests within premier US hydrocarbon-producing basins - NOG's business model is focused on non-operated minority interests in top US oil and gas basins[12] Preliminary Information & Safe Harbor The company's financial data is preliminary and unaudited, and the release contains forward-looking statements subject to risks and uncertainties - The Q2 2025 financial information is preliminary and based on estimates; actual results may differ materially[13] - The press release contains forward-looking statements regarding future events and results, which are not guarantees of future performance and are subject to significant risks[14][15][16]