Northern Oil and Gas, Inc. (NYSE: NOG) has announced the pricing of its offering of $175,000,000 aggregate principal amount of additional 3.625% convertible senior notes due 2029, at an issue price of 105.597% of the principal amount thereof. The offering size was increased from the previously announced offering size of $150,000,000 aggregate principal amount of new notes. The new notes will be issued under the same indenture as the company’s $500.0 million aggregate principal amount of 3.625% convertible senior notes due 2029 issued on October 14, 2022.
The company expects to receive approximately $178.4 million from the offering (or approximately $204.0 million if the initial purchasers exercise their option to purchase additional new notes in full), after deducting the initial purchasers’ discounts and the company’s estimated offering expenses. The company intends to use approximately $14.8 million of the net proceeds to fund the cost of entering into the capped call transactions described below. In addition, the company intends to use up to $35.0 million of the net proceeds of the offering to repurchase up to 1.1 million shares of its common stock concurrently with the pricing of the offering in privately negotiated transactions effected through one or more of the initial purchasers of the new notes or their respective affiliates, as the company’s agent. The company intends to use any remaining net proceeds from the offering for general corporate purposes.
The notes will be redeemable, in whole or in part, for cash at the company’s option at any time, and from time to time, on or after April 15, 2026, but only if the last reported sale price per share of the company’s common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
The notes will accrue interest at a rate of 3.625% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2025. The notes will mature on April 15, 2029, unless earlier repurchased, redeemed or converted.
The current conversion rate is 26.9811 shares of common stock per $1,000 principal amount of notes, which represents a conversion price of approximately $37.06 per share of common stock. The conversion price represents a premium of 19% over the last reported sale price of $31.15 per share of the company’s common stock on June 12, 2025. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.
In connection with the pricing of the new notes, the company entered into privately negotiated capped call transactions with one or more of the initial purchasers or their respective affiliates and/or other financial institutions. The capped call transactions will cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the number of shares of the company’s common stock underlying the new notes. The cap price of the capped call transactions will initially be $50.8709 per share, which represents a premium of approximately 63% over the last reported sale price of the company’s common stock of $31.15 per share on June 12, 2025.
The offer and sale of the new notes and any shares of common stock issuable upon conversion of the new notes have not been, and will not be, registered under the securities act or any other securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the new notes or any shares of common stock issuable upon conversion of the new notes.
About NOG: NOG is a real asset company with a primary strategy of acquiring and investing in non-operated minority working and mineral interests in the premier hydrocarbon producing basins within the contiguous United States. As a result of these announcements, the company's shares have moved 0.19% on the market, and are now trading at a price of $31.15. For more information, read the company's full 8-K submission here.
