Northern Oil & Gas Reports $155-160M Unrealized Gains, $85-90M Hedge Losses

By Greg Peters • Monday, July 13 13:01 • Permanent Link

Northern Oil and Gas said second-quarter unrealized mark-to-market gains on derivatives were estimated at $155 million to $160 million, while realized hedge losses were estimated at $85 million to $90 million, driven by oil hedges and partly offset by natural gas and basis hedges.

The company said about 7,000 boe per day were shut in during April, May and part of June, mainly on its Novo assets in Culberson County, Texas, and Eddy County, New Mexico, because negative Waha realizations outweighed stronger oil prices. Another 3 net turn-in-lines were deferred to the third quarter.

Even with those disruptions, Northern Oil and Gas said the Williston and Uinta basins came in above internal expectations by 4.0% and 11.5%, respectively. The company now expects second-quarter oil production to average 67.5 mboe to 68.25 mboe per day, while still delivering record gas volumes.

Capital spending in the quarter is expected to land between $190 million and $200 million.

On the acquisition side, the company closed 30 ground-game deals in the quarter, adding more than 2,300 net acres and 6.2 net wells. It said it deployed about $45 million in acquisition costs and associated development capital, with nearly 80% of that capital directed to the Permian, Williston and Uinta basins.

On June 1, Northern Oil and Gas closed its Duvernay joint development acquisition, paying C$237 million in cash, including a previously paid C$37.5 million deposit, plus about 3.7 million common shares priced at $22.06 each.

For shareholder returns, the company repurchased 2.95 million shares in the second quarter, equal to about 3% of outstanding shares, at an average price of $20.37 a share including commissions. About 81% of those repurchases were completed before the dividend record date.

After quarter-end, the board lifted the share repurchase authorization by $150 million, bringing total buyback capacity to about $243 million. Following these announcements, the company's shares moved 4.75%, and are now trading at a price of $19.40. Check out the company's full 8-K submission here.

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