Northern Oil and Gas(US:NOG)2025-08-01 20:10Glossary of Terms This section defines key technical terms for crude oil, natural gas, well interests, and reserve classifications - Crude oil and natural gas equivalents (Boe) are determined using a ratio of six Mcf of natural gas to one barrel of crude oil, condensate, or NGLs7 - PV-10 is defined as the estimated future net revenue, discounted at 10% per annum, before income taxes and without price or cost escalation, following SEC guidelines42 - Proved reserves are quantities of oil, NGLs, and gas estimated with reasonable certainty to be economically producible from a given date forward from known reservoirs under existing economic conditions. Economic conditions are based on the unweighted arithmetic average of the first-day-of-the-month price for the twelve-month period prior to the report's ending date4651 PART I – FINANCIAL INFORMATION Condensed Financial Statements (unaudited) This section presents Northern Oil and Gas, Inc.'s unaudited condensed financial statements as of June 30, 2025 Condensed Balance Sheets Total assets increased to $5.70 billion by June 30, 2025, with equity rising to $2.41 billion Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $588,357 | $500,743 | | Total Property and Equipment, Net | $5,093,146 | $5,082,170 | | Total Assets | $5,702,493 | $5,603,822 | | Total Current Liabilities | $488,197 | $544,270 | | Long-term Debt, Net | $2,365,942 | $2,369,294 | | Total Liabilities | $3,289,474 | $3,283,387 | | Total Stockholders' Equity | $2,413,019 | $2,320,435 | Condensed Statements of Operations Net income decreased to $99.6 million in Q2 2025, primarily due to a $115.6 million impairment charge and legal expenses Key Operating Results (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $706,809 | $560,766 | $1,308,908 | $957,113 | | Income From Operations | $176,166 | $218,936 | $405,447 | $271,256 | | Net Income | $99,585 | $138,556 | $238,567 | $150,163 | | Net Income Per Share – Diluted | $1.00 | $1.36 | $2.39 | $1.47 | Condensed Statements of Cash Flows Net cash from operating activities was $769.5 million for H1 2025, funding investing and financing activities Summary of Cash Flows (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $769,538 | $732,624 | | Net Cash Used for Investing Activities | ($591,813) | ($630,255) | | Net Cash Used for Financing Activities | ($160,802) | ($102,786) | | Net Increase (Decrease) in Cash | $16,923 | ($417) | Notes to Condensed Financial Statements Notes detail key accounting policies and events, including a legal settlement, impairment, and convertible notes - In June 2025, the company received an $81.7 million legal settlement related to post-production costs, recorded as Oil and Gas Sales, alongside a $33.1 million legal expense89 - A non-cash impairment charge of $115.6 million was recorded on oil and natural gas properties in Q2 2025 due to the full cost method ceiling test, with no comparable charge in 2024106 - On June 17, 2025, the company issued an additional $200.0 million of 3.625% convertible senior notes due 2029, increasing the total principal to $700.0 million138 - Cash dividends of $0.45 per share were declared in January, April, and July 2025, and 1,622,695 shares were repurchased for $50.5 million during the first six months of 2025156157159 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, including production, legal settlement, impairment, and $1.1 billion liquidity Results of Operations Total revenues increased 26% in Q2 2025, but net income decreased due to a $115.6 million impairment charge Q2 2025 vs Q2 2024 Operating Highlights | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Production (MBoe) | 12,203 | 11,224 | 9% | | Oil Sales (in thousands) | $402,672 | $488,690 | (18)% | | Natural Gas & NGL Sales (in thousands) | $171,697 | $72,335 | 137% | | Gain (Loss) on Commodity Derivatives (in thousands) | $128,819 | ($3,428) | N/A | | Total Revenues (in thousands) | $706,809 | $560,766 | 26% | | Impairment Expense (in thousands) | $115,576 | $0 | N/A | | Production Expenses (per Boe) | $9.95 | $8.99 | 11% | | DD&A (per Boe) | $16.86 | $15.73 | 7% | - Oil and gas sales for Q2 2025 included an $81.7 million legal settlement; excluding this, sales would have declined by 12% due to an 18% decrease in realized prices, partially offset by a 9% production increase239240 - A non-cash impairment charge of $115.6 million was recorded in Q2 2025 due to the full cost ceiling test, with no comparable charge in Q2 2024250 Liquidity and Capital Resources Total liquidity was $1.1 billion as of June 30, 2025, supported by note issuance and share repurchases - Total liquidity as of June 30, 2025, was $1.1 billion, comprising $1.1 billion of borrowing availability under the Revolving Credit Facility and $25.9 million of cash273 Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $769,538 | $732,624 | | Net Cash Used for Investing Activities | ($591,813) | ($630,255) | | Net Cash Used for Financing Activities | ($160,802) | ($102,786) | - In H1 2025, financing activities included a $210.0 million net repayment on the Revolving Credit Facility, $86.0 million in dividend payments, and $50.0 million in stock repurchases, partially offset by $211.2 million in net proceeds from additional convertible notes286 Quantitative and Qualitative Disclosures about Market Risk The company manages market risks from commodity price volatility and interest rates using derivative contracts - The company utilizes derivative contracts to hedge a significant portion of its anticipated future production, thereby reducing exposure to commodity price volatility298299 Open Crude Oil Hedging Summary (Swaps & Collars) as of June 30, 2025 | Period | Swap Volume (Bbls) | Avg. Swap Price ($/Bbl) | Collar Volume (Floor, Bbls) | Avg. Floor Price ($/Bbl) | Avg. Ceiling Price ($/Bbl) | | :--- | :--- | :--- | :--- | :--- | :--- | | Q3 2025 | 2,935,969 | $72.76 | 1,817,970 | $69.15 | $77.43 | | Q4 2025 | 3,029,836 | $72.75 | 1,791,487 | $69.15 | $77.55 | | 2026 | 5,313,057 | ~$69.08 | 6,953,106 | ~$64.00 | ~$72.25 | Open Natural Gas Hedging Summary (Swaps & Collars) as of June 30, 2025 | Period | Swap Volume (MMBTU) | Avg. Swap Price ($/MMBTU) | Collar Volume (Floor, MMBTU) | Avg. Floor Price ($/MMBTU) | Avg. Ceiling Price ($/MMBTU) | | :--- | :--- | :--- | :--- | :--- | :--- | | Q3 2025 | 9,469,432 | $3.99 | 9,368,137 | $3.10 | $4.80 | | Q4 2025 | 9,798,257 | $4.08 | 9,785,466 | $3.19 | $4.89 | | 2026 | 25,640,000 | ~$4.04 | 37,352,303 | ~$3.37 | ~$5.03 | - A 1% increase in short-term interest rates on floating-rate debt outstanding at June 30, 2025, would result in approximately $4.1 million in additional annual interest expense313 Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025 - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025315 - No material changes to the company's internal control over financial reporting occurred during the quarter ended June 30, 2025316 PART II – OTHER INFORMATION Legal Proceedings The company is subject to various litigation claims and regulatory proceedings arising in the ordinary course of business - The company states it is subject to litigation from time to time in the ordinary course of business317 Risk Factors No material changes to risk factors were reported since the Annual Report on Form 10-K - No material changes to risk factors were reported since the Annual Report on Form 10-K for the year ended December 31, 2024318 Unregistered Sales of Equity Securities and Use of Proceeds In Q2 2025, the company repurchased shares, with $160.3 million remaining for future repurchases Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Approx. Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | | April 2025 | — | $— | $195.3 million | | May 2025 | — | $— | $195.3 million | | June 2025 | 1,123,595 | $31.15 | $160.3 million | | Total | 1,123,595 | $31.15 | $160.3 million | Other Information No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during Q2 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025327 Exhibits This section lists exhibits filed with the Form 10-Q, including agreements and certifications