Northern Oil & Gas, Inc. (NYSEMKT:NOG) Plunges Despite Increased Production Guidance


Dallas, Texas 12/12/2014 (FINANCIALSTRENDS) – Northern Oil & Gas, Inc. (NYSEMKT:NOG)’s stock plunged nearly 5% in previous session and closed at $5.39. The stock is trading approximately 70% below its 52-week high of $17.43. The fall comes despite improved production guidance, highlighting the impact of declining crude prices and bearish industry outlook.

Northern updated its production guidance, expecting 25% production increase during fiscal 2014 over 2013. This suggest top end of its previous guidance anticipating 20% to 25% YoY growth. The company is also on track to achieve its net well additions target and is anticipating the additions of 44 net wells during the fiscal.

The company reported 184,747 net acres in targeting the Williston Basin Bakken and Three Forks formations in North Dakota and Montana at the end of 3Q14.

Earnings Highlights

During 3Q14, the company reported 26% YoY increase in both its total production to 1.51 Mboe as average daily production to 16,448 Boe. However, average sales price declined 11% to $84.32 per barrel of oil in 3Q14. Given the current Brent crude price of about $66 per barrel, the diminishing price could significantly impact the company’s 4Q14 earnings.

Northern Oil & Gas, Inc. (NYSEMKT:NOG) reported moderate 2% increase in production expenses to $9.73 per Boe during 3Q14. Oil, natural gas and NGL sales increased 11% YoY to $119.2 million, primarily due to increased production in the third quarter of 2014. The company reported strong increase in its net income to $57.98 million in 3Q14 from $1.7 million in 3Q13.


Michael Reger, Chairman and CEO, said that the company reported another strong quarter of drilling and completion activity with the record 359 gross wells in process at the end of 3Q14. The company is monitoring volatility in oil prices and will adjust its capital allocation decisions accordingly. The company is well positioned going into 2015, given its extensive hedge book, capital discipline and liquidity position.