Northern Q3 Earnings Beat Estimates, Revenues Miss, Both Down Y/Y

Core Insights - Northern Oil and Gas (NOG) reported third-quarter 2025 adjusted earnings per share of $1.03, exceeding the Zacks Consensus Estimate of 82 cents, driven by strong production despite a decline from the previous year's adjusted profit of $1.40 due to lower oil prices and a significant increase in operating expenses [1][2] Financial Performance - Quarterly sales amounted to $482.2 million, falling short of the Zacks Consensus Estimate of $506 million and down from $513.5 million year-over-year, primarily due to decreased oil and gas sales [2] - The company declared a cash dividend of 45 cents per share, payable on January 30, 2026, to shareholders on record as of December 30, 2025 [2][9] - Free cash flow for the quarter was reported at $118.9 million, with cash and cash equivalents at $31.6 million as of September 30, 2025 [10][9] Production and Sales - Third-quarter production increased by 8% year-over-year to 131,054 barrels of oil equivalent per day (Boe/d), slightly surpassing estimates [4] - Oil volume was 72,348 Boe/d, up 2% year-over-year, while natural gas production rose by 15% to 352,250 thousand cubic feet per day [4] - The average sales price for crude oil was $61.08 per barrel, a 15% decrease from the prior year, but above expectations [5] Costs and Expenses - Total operating expenses surged to $682.4 million from $319.7 million in the previous year, driven by increased production expenses and other costs, exceeding estimates [6] - Capital expenditures for the quarter were reported at $272 million, with significant allocations for drilling and completion activities [7][8] Strategic Initiatives - The company completed 22 ground-game deals, adding over 2,500 net acres and 5.8 net wells during the quarter [3][9] - NOG anticipates a stronger production outlook for 2025, raising its total production range to 132,500-134,000 Boe/d [11] - Capital expenditures are expected to tighten to a range of $950 million to $1.025 billion, indicating a more focused allocation plan [12] Cost Guidance - Production expenses are projected to increase to $9.40-$9.75 per Boe, while production taxes are estimated at 7-8% [13]