On November 5, 2024, Northern Oil & Gas Inc (NOG, Financial) released its 8-K filing detailing its third-quarter 2024 financial results. The independent energy company, which focuses on the acquisition, exploration, development, and production of crude oil and natural gas properties across the Williston, Permian, and Appalachian Basins, reported significant achievements in production and financial metrics.
Performance Overview
Northern Oil & Gas Inc (NOG, Financial) reported a GAAP net income of $298.4 million, translating to $2.96 per diluted share, significantly exceeding the analyst estimate of $1.27 per share. The company's adjusted net income was $141.1 million, or $1.40 per adjusted diluted share, also surpassing expectations. Revenue for the quarter was $513.5 million, slightly below the estimated $541.54 million.
Production and Financial Achievements
The company achieved record oil production of 70,913 barrels per day, contributing to a total production of 121,815 barrels of oil equivalent (Boe) per day, marking a 19% increase from the same period last year. This growth was driven by strong well performance in the Williston and Permian Basins, despite a decrease in well completions compared to the previous quarter.
Free cash flow reached a record $177.1 million, a 32% increase from the second quarter of 2024, underscoring the company's robust cash generation capabilities. Adjusted EBITDA was reported at $412.4 million, a 7% increase year-over-year, highlighting the company's operational efficiency and financial strength.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Income (GAAP) | $298.4 million | N/A | N/A |
| Adjusted Net Income | $141.1 million | N/A | N/A |
| Adjusted EBITDA | $412.4 million | N/A | 7% |
| Free Cash Flow | $177.1 million | N/A | 32% |
| Production (Boe/day) | 121,815 | 102,327 | 19% |
Operational Insights and Challenges
Despite achieving record oil volumes, Northern Oil & Gas Inc (NOG, Financial) faced challenges with lower natural gas volumes due to decreased activity in the Appalachian Basin. The company's unhedged net realized oil price was $71.82 per barrel, reflecting a $3.45 differential to NYMEX WTI prices. Natural gas prices were also impacted by lower benchmark prices and wider regional basis differentials.
Strategic Developments and Future Outlook
During the quarter, Northern Oil & Gas Inc (NOG, Financial) completed significant acquisitions, including a joint acquisition with SM Energy Company of Uinta Basin properties for $519.0 million. The company also repurchased 397,301 shares of common stock, reflecting its commitment to returning value to shareholders.
“During the third quarter we generated record oil volumes and free cash flow despite limited completion activity and a period of weaker commodity prices. Importantly, we notched multiple achievements on the business front executing on acquisitions of two high-quality growth assets,” commented Nick O’Grady, NOG’s Chief Executive Officer.
With a strong asset base and continued focus on strategic acquisitions, Northern Oil & Gas Inc (NOG, Financial) is well-positioned to deliver differentiated returns and growth for its investors. The company's ability to generate substantial free cash flow and maintain a strong financial position underscores its resilience in a challenging market environment.
Explore the complete 8-K earnings release (here) from Northern Oil & Gas Inc for further details.
