Northern Oil and Gas(NOG) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2025 was $387.1 million, with free cash flow of $118.9 million, marking the 23rd consecutive quarter of positive free cash flow, totaling over $1.9 billion during this period [16] - The company reported a net loss of $129 million, reflecting a non-cash impairment charge of $319 million [16] - Oil production averaged approximately 72,000 barrels per day, up 2% from Q3 2024 but down 6% sequentially, while gas production reached record volumes of approximately 352 MMCF per day, up 15% from Q3 2024 [15][16] Business Line Data and Key Metrics Changes - Total average daily production for Q3 2025 was approximately 131,000 BOE per day, up 8% year-over-year but down 2% from Q2 2025 [14][15] - The company increased its annual production guidance to a range of 132,500-134,000 BOE per day due to expected net well additions in Q4 [15] Market Data and Key Metrics Changes - The Permian Basin accounted for about two-thirds of organic activity, with the Williston and Appalachia making up the remainder [8] - The company has seen a more balanced DNC list, with the Permian now representing 40% of wells in process, while Appalachia, Williston, and Uinta each account for roughly 20% [9] Company Strategy and Development Direction - The company remains focused on disciplined capital allocation, prioritizing long-term value creation over growth [4][5] - Recent acquisitions, including a minerals and royalty deal, are aimed at adding low-risk assets that are resilient to short-term commodity market fluctuations [5][11] - The company is actively managing risks such as commodity exposure through a well-structured hedge program [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the business and the potential for growth in the energy sector, emphasizing the importance of being return-driven [4][6] - The outlook for 2026 is expected to be stable, with potential growth in gas production, while oil activity remains flat [21][22] Other Important Information - The company has tightened its full-year CapEx guidance to a range of $950 million-$1.025 billion, with $272 million spent in Q3 2025 [17][18] - Liquidity at the end of the quarter was approximately $1.2 billion, consisting of $32 million in cash and over $1.1 billion available on a revolving credit facility [18] Q&A Session Summary Question: Outlook for 2026 - Management indicated that the outlook for 2026 is stable, with expectations of maintaining similar oil volumes and substantial gas growth [21][22] Question: Update on Q4 well completions - Management confirmed that they are on track with well completions, with many late Q3 wells expected to contribute significantly to Q4 production [26][27] Question: Comparison of current M&A activity to previous years - Management noted that the current M&A landscape is broader and more diverse than in previous years, with opportunities across multiple basins [28][29] Question: Impact of oil and gas prices on activity - Management stated that oil activity remains stable while gas activity is growing, with no imminent changes expected due to current price levels [31][32] Question: Continued build in wells in progress - Management indicated that the number of wells in progress is expected to remain stable unless there is a significant change in commodity prices [45][46]