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Mar 31, 2020
Northern Oil and Gas Q1 2020 Earnings Report
Announced first quarter results and provided 2020 guidance.
Key Takeaways
Northern Oil and Gas reported a first quarter net income of $368.3 million, or $0.74 per diluted share, driven by a $345.1 million mark-to-market gain on unsettled commodity derivatives. Production increased 28% year-over-year, averaging 43,735 Boe per day, with oil production representing 79% of the total at 34,488 Bbls per day. The company also reduced its Senior Secured Notes by $90.2 million during the quarter and anticipates $175 to $200 million in total capital expenditures for 2020.
First quarter production increased 28% over the prior year, averaging 43,735 barrels of oil equivalent (“Boe”) per day
Cash flow from operations, excluding $7.1 million from changes in working capital, totaled $93.6 million, which was a 7% increase over the prior year and exceeded first quarter capital expenditures of $86.7 million
Senior Secured Notes reduced by $90.2 million in the first quarter; signed agreements to retire an additional $6.1 million subsequent to quarter-end
Over 27,000 barrels per day of remaining 2020 oil production hedged at over $58 per barrel (“Bbl”) average prices
Northern Oil and Gas
Northern Oil and Gas
Northern Oil and Gas Revenue by Segment
Revenue by Segment
Oil and Gas Sales Revenue
CapyFin.com Forward Guidance
Northern anticipates $350 to $410 million in Adjusted EBITDA for 2020 and expects $55 to $60 million of total book interest expense for 2020. Northern anticipates approximately $175 to $200 million in total capital expenditures for 2020.
Positive Outlook
- Strong oil hedge position
- Significant free cash flow in 2020 and 2021
- $50 million of “reserve capital” for completions of its drilled but uncompleted inventory in the event of a substantial rise in commodity prices north of $40 WTI
- Board of Directors has elected to defer payment of the dividends on its Perpetual Preferred Stock and any potential common stock dividends until oil returns to economic levels
- This should save the Company approximately $15 million for 2020
Challenges Ahead
- Rapid deterioration in oil prices during the COVID-19 pandemic
- Operators continue to curtail and shut-in production in response to low wellhead prices
- Plans are fluctuating and the timeframe for them is fluid
- Overall levels of production
- In-basin pricing differentials