Minnesota
|
95-3848122
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
|
|
Page
|
PART I – FINANCIAL INFORMATION
|
|
|
|
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|
Item 1.
|
Condensed Financial Statements (unaudited)
|
|
|
Condensed Balance Sheets
|
|
|
Condensed Statements of Operations
|
|
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Condensed Statements of Cash Flows
|
|
|
Notes to Condensed Financial Statements
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Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
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Item 4.
|
Controls and Procedures
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PART II – OTHER INFORMATION
|
|
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Item 1.
|
Legal Proceedings
|
|
|
|
|
Item 1A.
|
Risk Factors
|
|
|
|
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Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
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Item 6.
|
Exhibits
|
|
|
|
|
Signatures
|
|
|
March 31, 2018 (unaudited)
|
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and Cash Equivalents
|
$
|
89,472,745
|
|
|
$
|
102,183,191
|
|
Accounts Receivable, Net
|
51,284,262
|
|
|
46,851,682
|
|
||
Advances to Operators
|
3,023,851
|
|
|
604,977
|
|
||
Prepaid and Other Expenses
|
2,454,565
|
|
|
2,333,288
|
|
||
Income Tax Receivable
|
785,016
|
|
|
785,016
|
|
||
Total Current Assets
|
147,020,439
|
|
|
152,758,154
|
|
||
|
|
|
|
||||
Property and Equipment:
|
|
|
|
|
|
||
Oil and Natural Gas Properties, Full Cost Method of Accounting
|
|
|
|
|
|
||
Proved
|
2,641,517,632
|
|
|
2,585,490,133
|
|
||
Unproved
|
1,578,767
|
|
|
1,699,344
|
|
||
Other Property and Equipment
|
1,003,388
|
|
|
981,303
|
|
||
Total Property and Equipment
|
2,644,099,787
|
|
|
2,588,170,780
|
|
||
Less – Accumulated Depreciation, Depletion and Impairment
|
(2,133,433,050
|
)
|
|
(2,114,951,189
|
)
|
||
Total Property and Equipment, Net
|
510,666,737
|
|
|
473,219,591
|
|
||
|
|
|
|
||||
Deferred Income Taxes (Note 9)
|
785,000
|
|
|
785,000
|
|
||
Other Noncurrent Assets, Net
|
5,998,270
|
|
|
5,490,934
|
|
||
|
|
|
|
||||
Total Assets
|
$
|
664,470,446
|
|
|
$
|
632,253,679
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|||||||
Current Liabilities:
|
|
|
|
|
|
||
Accounts Payable
|
$
|
95,148,543
|
|
|
$
|
93,152,297
|
|
Accrued Expenses
|
6,607,642
|
|
|
6,339,425
|
|
||
Accrued Interest
|
18,839,931
|
|
|
4,836,112
|
|
||
Derivative Instruments
|
26,796,245
|
|
|
18,681,891
|
|
||
Asset Retirement Obligations
|
550,443
|
|
|
565,521
|
|
||
Total Current Liabilities
|
147,942,804
|
|
|
123,575,246
|
|
||
|
|
|
|
||||
Long-term Debt, Net
|
980,782,714
|
|
|
979,324,222
|
|
||
Derivative Instruments
|
15,523,889
|
|
|
11,496,929
|
|
||
Asset Retirement Obligations
|
8,869,762
|
|
|
8,562,607
|
|
||
Other Noncurrent Liabilities
|
127,761
|
|
|
135,225
|
|
||
|
|
|
|
||||
Total Liabilities
|
$
|
1,153,246,930
|
|
|
$
|
1,123,094,229
|
|
|
|
|
|
||||
Commitments and Contingencies (Note 8)
|
|
|
|
|
|
||
|
|
|
|
||||
STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
||
Preferred Stock, Par Value $.001; 5,000,000 Authorized, No Shares Outstanding
|
—
|
|
|
—
|
|
||
Common Stock, Par Value $.001; 142,500,000 Authorized (3/31/2018 – 65,937,945
Shares Outstanding and 12/31/2017 – 66,791,633 Shares Outstanding) |
65,938
|
|
|
66,792
|
|
||
Additional Paid-In Capital
|
448,766,213
|
|
|
449,666,390
|
|
||
Retained Deficit
|
(937,608,635
|
)
|
|
(940,573,732
|
)
|
||
Total Stockholders’ Deficit
|
(488,776,484
|
)
|
|
(490,840,550
|
)
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
664,470,446
|
|
|
$
|
632,253,679
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
REVENUES
|
|
|
|
||||
Oil, Natural Gas, and NGL Sales
|
$
|
86,880,814
|
|
|
$
|
48,848,222
|
|
Gain (Loss) on Derivative Instruments, Net
|
(20,271,451
|
)
|
|
16,960,883
|
|
||
Other Revenue
|
4,100
|
|
|
7,742
|
|
||
Total Revenues
|
66,613,463
|
|
|
65,816,847
|
|
||
|
|
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
||
Production Expenses
|
12,488,422
|
|
|
11,674,348
|
|
||
Production Taxes
|
7,922,314
|
|
|
4,461,265
|
|
||
General and Administrative Expenses
|
1,666,875
|
|
|
3,608,943
|
|
||
Depletion, Depreciation, Amortization and Accretion
|
18,630,629
|
|
|
12,828,143
|
|
||
Total Operating Expenses
|
40,708,240
|
|
|
32,572,699
|
|
||
|
|
|
|
||||
INCOME FROM OPERATIONS
|
25,905,223
|
|
|
33,244,148
|
|
||
|
|
|
|
||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
||
Interest Expense, Net of Capitalization
|
(23,106,761
|
)
|
|
(16,303,805
|
)
|
||
Other Income
|
166,635
|
|
|
180
|
|
||
Total Other Income (Expense)
|
(22,940,126
|
)
|
|
(16,303,625
|
)
|
||
|
|
|
|
||||
INCOME BEFORE INCOME TAXES
|
2,965,097
|
|
|
16,940,523
|
|
||
|
|
|
|
||||
INCOME TAX PROVISION (BENEFIT)
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
NET INCOME
|
$
|
2,965,097
|
|
|
$
|
16,940,523
|
|
|
|
|
|
||||
Net Income Per Common Share – Basic
|
$
|
0.05
|
|
|
$
|
0.28
|
|
Net Income Per Common Share – Diluted
|
$
|
0.05
|
|
|
$
|
0.27
|
|
Weighted Average Shares Outstanding – Basic
|
65,215,148
|
|
|
61,446,156
|
|
||
Weighted Average Shares Outstanding – Diluted
|
65,382,772
|
|
|
61,972,123
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net Income
|
$
|
2,965,097
|
|
|
$
|
16,940,523
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
|
|
|
|
|
|
||
Depletion, Depreciation, Amortization and Accretion
|
18,630,629
|
|
|
12,828,143
|
|
||
Amortization of Debt Issuance Costs
|
1,362,768
|
|
|
943,407
|
|
||
Amortization/Accretion of 8% Senior Notes Premium/Discount
|
117,183
|
|
|
117,183
|
|
||
Deferred Income Taxes
|
—
|
|
|
—
|
|
||
(Gain) Loss on the Mark-to-Market of Derivative Instruments
|
12,141,314
|
|
|
(17,056,542
|
)
|
||
Share-Based Compensation Expense
|
(819,595
|
)
|
|
613,578
|
|
||
Other
|
(39,976
|
)
|
|
118,976
|
|
||
Changes in Working Capital and Other Items:
|
|
|
|
|
|
||
Accounts Receivable, Net
|
(4,337,895
|
)
|
|
1,894,975
|
|
||
Prepaid and Other Expenses
|
(723,297
|
)
|
|
(888,188
|
)
|
||
Accounts Payable
|
1,889,569
|
|
|
1,639,046
|
|
||
Accrued Interest
|
13,981,122
|
|
|
13,948,257
|
|
||
Accrued Expenses
|
353,758
|
|
|
(1,382,976
|
)
|
||
Net Cash Provided by Operating Activities
|
45,520,677
|
|
|
29,716,382
|
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
||
Purchases of Oil and Natural Gas Properties and Development Capital Expenditures, Net
|
(57,999,427
|
)
|
|
(20,271,464
|
)
|
||
Purchases of Other Property and Equipment
|
(22,085
|
)
|
|
—
|
|
||
Net Cash Used for Investing Activities
|
(58,021,512
|
)
|
|
(20,271,464
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
||
Repayments on Revolving Credit Facility
|
—
|
|
|
(10,000,000
|
)
|
||
Debt Issuance Costs Paid
|
(21,459
|
)
|
|
—
|
|
||
Repurchase of Common Stock – Tax Obligations
|
(188,152
|
)
|
|
(412,217
|
)
|
||
Net Cash Used for Financing Activities
|
(209,611
|
)
|
|
(10,412,217
|
)
|
||
|
|
|
|
||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(12,710,446
|
)
|
|
(967,299
|
)
|
||
|
|
|
|
||||
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD
|
102,183,191
|
|
|
6,486,098
|
|
||
|
|
|
|
||||
CASH AND CASH EQUIVALENTS – END OF PERIOD
|
$
|
89,472,745
|
|
|
$
|
5,518,799
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
||
Cash Paid During the Period for Interest
|
$
|
7,630,556
|
|
|
$
|
1,280,711
|
|
Cash Paid During the Period for Income Taxes
|
$
|
—
|
|
|
$
|
—
|
|
Non-Cash Financing and Investing Activities:
|
|
|
|
|
|
||
Oil and Natural Gas Properties Included in Accounts Payable
|
$
|
85,068,138
|
|
|
$
|
57,107,728
|
|
Capitalized Asset Retirement Obligations
|
$
|
184,305
|
|
|
$
|
127,437
|
|
Non-Cash Compensation Capitalized on Oil and Gas Properties
|
$
|
53,686
|
|
|
$
|
74,395
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Capitalized Certain Payroll and Other Internal Costs
|
$
|
170,850
|
|
|
$
|
204,873
|
|
Capitalized Interest Costs
|
35,065
|
|
|
38,768
|
|
||
Total
|
$
|
205,915
|
|
|
$
|
243,641
|
|
|
Three Months Ended
March 31, |
||||
|
2018
|
|
2017
|
||
Weighted Average Common Shares Outstanding – Basic
|
65,215,148
|
|
|
61,446,156
|
|
Plus: Potentially Dilutive Common Shares Including Stock Options and Restricted Stock
|
167,624
|
|
|
525,967
|
|
Weighted Average Common Shares Outstanding – Diluted
|
65,382,772
|
|
|
61,972,123
|
|
|
|
|
|
||
Restricted Stock and Stock Options Excluded From EPS Due To The Anti-Dilutive Effect
|
67,026
|
|
|
124,018
|
|
|
|
March 31, 2018
|
||||||||||||||
|
|
Principal Balance
|
|
Unamortized Net Discount
|
|
Debt Issuance Costs, Net
|
|
Long-term Debt, Net
|
||||||||
8% Senior Notes
|
|
$
|
700,000,000
|
|
|
$
|
(1,080,771
|
)
|
|
$
|
(6,139,189
|
)
|
|
692,780,040
|
|
|
Term Loan Credit Agreement
|
|
300,000,000
|
|
|
—
|
|
|
(11,997,326
|
)
|
|
288,002,674
|
|
||||
Total
|
|
$
|
1,000,000,000
|
|
|
$
|
(1,080,771
|
)
|
|
$
|
(18,136,515
|
)
|
|
$
|
980,782,714
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
December 31, 2017
|
||||||||||||||
|
|
Principal Balance
|
|
Unamortized Net Discount
|
|
Debt Issuance Costs, Net
|
|
Long-term Debt, Net
|
||||||||
8% Senior Notes
|
|
$
|
700,000,000
|
|
|
$
|
(1,197,954
|
)
|
|
$
|
(6,847,557
|
)
|
|
691,954,489
|
|
|
Term Loan Credit Agreement
|
|
300,000,000
|
|
|
—
|
|
|
(12,630,267
|
)
|
|
287,369,733
|
|
||||
Total
|
|
$
|
1,000,000,000
|
|
|
$
|
(1,197,954
|
)
|
|
$
|
(19,477,824
|
)
|
|
$
|
979,324,222
|
|
•
|
default in any payment of interest on any Note when due, continued for
30 days
;
|
•
|
default in the payment of principal of or premium, if any, on any Note when due;
|
•
|
failure by the Company to comply with its other obligations under the Indenture, in certain cases subject to notice and grace periods;
|
•
|
payment defaults and accelerations with respect to other indebtedness of the Company and certain of its subsidiaries, if any, in the aggregate principal amount of
$25.0 million
or more;
|
•
|
certain events of bankruptcy, insolvency or reorganization of the Company or a significant subsidiary or group of restricted subsidiaries that, taken together, would constitute a significant subsidiary;
|
•
|
failure by the Company or any significant subsidiary or group of restricted subsidiaries that, taken together, would constitute a significant subsidiary to pay certain final judgments aggregating in excess of
$25.0 million
within
60 days
; and
|
•
|
any guarantee of the Notes by a guarantor ceases to be in full force and effect, is declared null and void in a judicial proceeding or is denied or disaffirmed by its maker.
|
|
Three Months Ended March 31, 2018
|
|
Year Ended December 31, 2017
|
||
Beginning Balance
|
66,791,633
|
|
|
63,259,781
|
|
Restricted Stock Grants (Note 6)
|
127,999
|
|
|
911,355
|
|
Legal Settlement
|
—
|
|
|
3,000,000
|
|
Other Surrenders - Tax Obligations
|
(89,601
|
)
|
|
(270,510
|
)
|
Other Forfeitures
|
(892,086
|
)
|
|
(108,993
|
)
|
Ending Balance
|
65,937,945
|
|
|
66,791,633
|
|
|
Three Months Ended
March 31, 2018 |
|||||
|
Number of
Shares
|
|
Weighted-Average
Price
|
|||
Restricted Stock Awards:
|
|
|
|
|||
Restricted Shares Outstanding at Beginning of Period
|
1,721,533
|
|
|
$
|
3.65
|
|
Shares Granted
|
96,152
|
|
|
2.08
|
|
|
Lapse of Restrictions
|
(285,775
|
)
|
|
3.70
|
|
|
Shares Forfeited
|
(892,086
|
)
|
|
4.00
|
|
|
Restricted Shares Outstanding at End of Period
|
639,824
|
|
|
$
|
2.89
|
|
|
Stock Option Awards
(1)
|
|
Weighted-Average Exercise Price
|
|
Weighted Average Contractual Term
|
|||
Outstanding as of 12/31/2017
|
250,000
|
|
|
$
|
2.79
|
|
|
1.0
|
Granted
|
—
|
|
|
—
|
|
|
|
|
Exercised
|
—
|
|
|
—
|
|
|
|
|
Expired or canceled
|
—
|
|
|
—
|
|
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
|
|
Outstanding as of 3/31/2018
|
250,000
|
|
|
$
|
2.79
|
|
|
0.7
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Current Income Tax Provision (Benefit)
|
$
|
—
|
|
|
$
|
—
|
|
Deferred Income Tax Provision (Benefit)
|
|
|
|
|
|
||
Federal
|
620,000
|
|
|
5,950,000
|
|
||
State
|
137,000
|
|
|
536,000
|
|
||
Valuation Allowance
|
(757,000
|
)
|
|
(6,486,000
|
)
|
||
Total Income Tax Provision (Benefit)
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements at March 31, 2018 Using
|
||||||||||
|
Quoted Prices In Active Markets for Identical Assets (Liabilities)
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
||||||
Commodity Derivatives – Current Asset (crude oil swaps)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity Derivatives – Noncurrent Asset (crude oil swaps)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commodity Derivatives – Current Liabilities (crude oil swaps)
|
—
|
|
|
(26,796,245
|
)
|
|
—
|
|
|||
Commodity Derivatives – Noncurrent Liabilities (crude oil swaps)
|
|
|
(15,523,889
|
)
|
|
|
|||||
Total
|
$
|
—
|
|
|
$
|
(42,320,134
|
)
|
|
$
|
—
|
|
|
Fair Value Measurements at December 31, 2017 Using
|
||||||||||
|
Quoted Prices In Active Markets for Identical Assets (Liabilities)
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
||||||
Commodity Derivatives – Current Asset (crude oil swaps)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity Derivatives – Noncurrent Asset (crude oil swaps)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commodity Derivatives – Current Liabilities (crude oil swaps)
|
|
|
(18,681,891
|
)
|
|
|
|||||
Commodity Derivatives – Noncurrent Liabilities (crude oil swaps)
|
—
|
|
|
(11,496,929
|
)
|
|
—
|
|
|||
Total
|
$
|
—
|
|
|
$
|
(30,178,820
|
)
|
|
$
|
—
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Cash Received (Paid) on Settled Derivatives
|
$
|
(8,130,137
|
)
|
|
$
|
(95,659
|
)
|
Non-Cash Mark-to-Market Gain (Loss) on Derivatives
|
(12,141,314
|
)
|
|
17,056,542
|
|
||
Gain (Loss) on Derivative Instruments, Net
|
$
|
(20,271,451
|
)
|
|
$
|
16,960,883
|
|
Settlement Period
|
|
Oil (Barrels)
|
|
Fixed Price ($)
|
||
Swaps-Crude Oil
|
|
|
|
|
||
04/01/18 – 08/31/18
|
|
100,000
|
|
|
49.99
|
|
04/01/18 – 08/31/18
|
|
100,000
|
|
|
50.04
|
|
04/01/18 – 08/31/18
|
|
100,000
|
|
|
49.99
|
|
04/01/18 – 08/31/18
|
|
100,000
|
|
|
50.17
|
|
04/01/18 – 09/30/18
|
|
180,000
|
|
|
53.99
|
|
04/01/18 – 09/30/18
|
|
180,000
|
|
|
53.99
|
|
04/01/18 – 09/30/18
|
|
183,000
|
|
|
55.19
|
|
04/01/18 – 12/31/18
|
|
135,000
|
|
|
53.30
|
|
04/01/18 – 12/31/18
|
|
275,000
|
|
|
54.80
|
|
04/01/18 – 12/31/18
|
|
275,000
|
|
|
54.09
|
|
04/01/18 – 12/31/18
|
|
275,000
|
|
|
54.42
|
|
10/01/18 – 12/31/18
|
|
92,000
|
|
|
52.50
|
|
10/01/18 – 12/31/18
|
|
92,000
|
|
|
52.55
|
|
10/01/18 – 12/31/18
|
|
46,000
|
|
|
54.50
|
|
10/01/18 – 12/31/18
|
|
92,000
|
|
|
52.50
|
|
01/01/19 – 03/31/19
|
|
45,000
|
|
|
54.22
|
|
01/01/19 – 03/31/19
|
|
63,000
|
|
|
53.65
|
|
01/01/19 – 12/31/19
|
|
365,000
|
|
|
51.05
|
|
01/01/19 – 12/31/19
|
|
365,000
|
|
|
51.05
|
|
01/01/19 – 12/31/19
|
|
182,500
|
|
|
52.70
|
|
01/01/19 – 12/31/19
|
|
365,000
|
|
|
51.05
|
|
01/01/19 – 12/31/19
|
|
182,500
|
|
|
52.15
|
|
01/01/19 – 12/31/19
|
|
182,500
|
|
|
52.75
|
|
01/01/19 – 12/31/19
|
|
219,000
|
|
|
57.30
|
|
01/01/19 – 06/30/19
|
|
108,600
|
|
|
57.90
|
|
04/01/19 – 06/30/19
|
|
45,500
|
|
|
53.59
|
|
04/01/19 – 06/30/19
|
|
36,400
|
|
|
53.10
|
|
07/01/19 – 09/30/19
|
|
46,000
|
|
|
53.07
|
|
07/01/19 – 09/30/19
|
|
9,200
|
|
|
52.65
|
|
01/01/20 – 03/31/20
|
|
27,300
|
|
|
51.81
|
|
01/01/20 – 03/31/20
|
|
45,500
|
|
|
54.05
|
|
01/01/20 – 03/31/20
|
|
45,500
|
|
|
54.25
|
|
01/01/20 – 03/31/20
|
|
27,300
|
|
|
54.65
|
|
01/01/20 – 12/31/20
|
|
366,000
|
|
|
49.77
|
|
01/01/20 – 12/31/20
|
|
183,000
|
|
|
51.30
|
|
01/01/20 – 12/31/20
|
|
109,800
|
|
|
51.70
|
|
01/01/20 – 12/31/20
|
|
366,000
|
|
|
49.75
|
|
01/01/20 – 12/31/20
|
|
183,000
|
|
|
51.10
|
|
04/01/20 – 06/30/20
|
|
9,100
|
|
|
51.50
|
|
04/01/20 – 06/30/20
|
|
9,100
|
|
|
54.70
|
|
01/01/21 – 03/31/21
|
|
90,000
|
|
|
52.50
|
|
01/01/21 – 03/31/21
|
|
90,000
|
|
|
53.00
|
|
01/01/21 – 03/31/21
|
|
90,000
|
|
|
52.55
|
|
01/01/21 – 03/31/21
|
|
18,000
|
|
|
53.20
|
|
Year
|
|
Volumes (Bbl)
|
|
Weighted
Average Price ($)
|
||
2018
|
|
2,225,000
|
|
|
53.33
|
|
2019
|
|
2,215,200
|
|
|
52.64
|
|
2020
|
|
1,371,600
|
|
|
50.77
|
|
2021 and beyond
|
|
288,000
|
|
|
52.72
|
|
Type of Crude Oil Contract
|
|
Balance Sheet Location
|
|
March 31, 2018 Estimated Fair Value
|
|
December 31, 2017 Estimated Fair Value
|
||||
Derivative Liabilities:
|
|
|
|
|
|
|
|
|
||
Swap Contracts
|
|
Current Liabilities
|
|
$
|
(26,796,245
|
)
|
|
$
|
(18,681,891
|
)
|
Swap Contracts
|
|
Noncurrent Liabilities
|
|
(15,523,889
|
)
|
|
(11,496,929
|
)
|
||
Total Derivative Liabilities
|
|
|
|
$
|
(42,320,134
|
)
|
|
$
|
(30,178,820
|
)
|
|
Estimated Fair Value at March 31, 2018
|
||||||||||
|
Gross Amounts of
Recognized Assets (Liabilities) |
|
Gross Amounts Offset
in the Balance Sheet |
|
Net Amounts of Assets (Liabilities) Presented in the Balance Sheet
|
||||||
Offsetting of Derivative Assets:
|
|
|
|||||||||
Current Assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Noncurrent Assets
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total Derivative Assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Offsetting of Derivative Liabilities:
|
|
|
|
||||||||
Current Liabilities
|
$
|
(26,796,245
|
)
|
|
$
|
—
|
|
|
$
|
(26,796,245
|
)
|
Noncurrent Liabilities
|
(15,530,627
|
)
|
|
6,738
|
|
|
(15,523,889
|
)
|
|||
Total Derivative Liabilities
|
$
|
(42,326,872
|
)
|
|
$
|
6,738
|
|
|
$
|
(42,320,134
|
)
|
|
Estimated Fair Value at December 31, 2017
|
||||||||||
|
Gross Amounts of
Recognized Assets (Liabilities) |
|
Gross Amounts Offset
in the Balance Sheet |
|
Net Amounts of Assets (Liabilities) Presented in the Balance Sheet
|
||||||
Offsetting of Derivative Assets:
|
|
|
|||||||||
Current Assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-Current Assets
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total Derivative Assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Offsetting of Derivative Liabilities:
|
|
|
|
||||||||
Current Liabilities
|
$
|
(18,681,891
|
)
|
|
$
|
—
|
|
|
$
|
(18,681,891
|
)
|
Non-Current Liabilities
|
(11,496,929
|
)
|
|
—
|
|
|
(11,496,929
|
)
|
|||
Total Derivative Liabilities
|
$
|
(30,178,820
|
)
|
|
$
|
—
|
|
|
$
|
(30,178,820
|
)
|
•
|
Oil price differentials
. The price differential between our Williston Basin well head price and the NYMEX WTI benchmark price is driven by the additional cost to transport oil from the Williston Basin via train, barge, pipeline or truck to refineries.
|
•
|
Gain (loss) on derivative instruments, net.
We utilize commodity derivative financial instruments to reduce our exposure to fluctuations in the price of oil. Gain (loss) on derivative instruments, net is comprised of (i) cash gains and losses we recognize on settled derivatives during the period, and (ii) non-cash market-to-market gains and losses we incur on derivative instruments outstanding at period end.
|
•
|
Production expenses.
Production expenses are daily costs incurred to bring oil and natural gas out of the ground and to the market, together with the daily costs incurred to maintain our producing properties. Such costs also include field personnel compensation, salt water disposal, utilities, maintenance, repairs and servicing expenses related to our oil and natural gas properties.
|
•
|
Production taxes.
Production taxes are paid on produced oil and natural gas based on a percentage of revenues from products sold at market prices (not hedged prices) or at fixed rates established by federal, state or local taxing authorities. We seek to take full advantage of all credits and exemptions in our various taxing jurisdictions. In general, the production taxes we pay correlate to the changes in oil and natural gas revenues.
|
•
|
Depreciation, depletion, amortization and impairment.
Depreciation, depletion, amortization and impairment includes the systematic expensing of the capitalized costs incurred to acquire, explore and develop oil and natural gas properties. As a full cost company, we capitalize all costs associated with our development and acquisition efforts and allocate these costs to each unit of production using the units-of-production method.
|
•
|
General and administrative expenses.
General and administrative expenses include overhead, including payroll and benefits for our corporate staff, costs of maintaining our headquarters, costs of managing our acquisition and development operations, franchise taxes, audit and other professional fees and legal compliance.
|
•
|
Interest expense.
We finance a portion of our working capital requirements, capital expenditures and acquisitions with borrowings. As a result, we incur interest expense that is affected by both fluctuations in interest rates and our financing decisions. We capitalize a portion of the interest paid on applicable borrowings into our full cost pool. We include interest expense that is not capitalized into the full cost pool, the amortization of deferred financing costs and bond premiums (including origination and amendment fees), commitment fees and annual agency fees as interest expense.
|
•
|
Income tax expense.
Our provision for taxes includes both federal and state taxes. We record our federal income taxes in accordance with accounting for income taxes under GAAP, which results in the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits will not be realized.
|
•
|
the timing and success of drilling and production activities by our operating partners;
|
•
|
the prices and the supply and demand for oil, natural gas and NGLs;
|
•
|
the quantity of oil and natural gas production from the wells in which we participate;
|
•
|
changes in the fair value of the derivative instruments we use to reduce our exposure to fluctuations in the price of oil;
|
•
|
our ability to continue to identify and acquire high-quality acreage and drilling opportunities; and
|
•
|
the level of our operating expenses.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Average NYMEX Prices
(a)
|
|
|
|
||||
Natural Gas (per Mcf)
|
$
|
2.85
|
|
|
$
|
3.06
|
|
Oil (per Bbl)
|
$
|
62.89
|
|
|
$
|
51.78
|
|
(a)
|
Based on average NYMEX closing prices.
|
Year
|
|
Volumes (Bbl)
|
|
Weighted
Average Price ($) |
||
2018
|
|
2,225,000
|
|
|
53.33
|
|
2019
|
|
2,215,200
|
|
|
52.64
|
|
2020
|
|
1,371,600
|
|
|
50.77
|
|
2021 and beyond
|
|
288,000
|
|
|
52.72
|
|
|
Three Months Ended March 31,
|
|||||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
Net Production:
|
|
|
|
|
|
|||||
Oil (Bbl)
|
1,354,602
|
|
|
1,014,095
|
|
|
34
|
%
|
||
Natural Gas and NGLs (Mcf)
|
1,589,514
|
|
|
1,096,971
|
|
|
45
|
%
|
||
Total (Boe)
|
1,619,521
|
|
|
1,196,924
|
|
|
35
|
%
|
||
|
|
|
|
|
|
|
|
|
||
Net Sales:
|
|
|
|
|
|
|
|
|
||
Oil Sales
|
$
|
79,143,313
|
|
|
$
|
44,339,147
|
|
|
79
|
%
|
Natural Gas and NGL Sales
|
7,737,501
|
|
|
4,509,075
|
|
|
72
|
%
|
||
Gain (Loss) on Derivative Instruments, Net
|
(20,271,451
|
)
|
|
16,960,883
|
|
|
(220
|
)%
|
||
Other Revenue
|
4,100
|
|
|
7,742
|
|
|
(47
|
)%
|
||
Total Revenues
|
66,613,463
|
|
|
65,816,847
|
|
|
1
|
%
|
||
|
|
|
|
|
|
|
|
|
||
Average Sales Prices:
|
|
|
|
|
|
|
|
|
||
Oil (per Bbl)
|
$
|
58.43
|
|
|
$
|
43.72
|
|
|
34
|
%
|
Effect of Gain on Settled Derivatives on Average Price (per Bbl)
|
(6.00
|
)
|
|
(0.09
|
)
|
|
6,567
|
%
|
||
Oil Net of Settled Derivatives (per Bbl)
|
52.43
|
|
|
43.63
|
|
|
20
|
%
|
||
Natural Gas and NGLs (per Mcf)
|
4.87
|
|
|
4.11
|
|
|
19
|
%
|
||
Realized Price on a Boe Basis Including all Realized Derivative Settlements
|
48.63
|
|
|
40.73
|
|
|
19
|
%
|
||
|
|
|
|
|
|
|
|
|
||
Operating Expenses:
|
|
|
|
|
|
|
|
|
||
Production Expenses
|
$
|
12,488,422
|
|
|
$
|
11,674,348
|
|
|
7
|
%
|
Production Taxes
|
7,922,314
|
|
|
4,461,265
|
|
|
78
|
%
|
||
General and Administrative Expense
|
1,666,875
|
|
|
3,608,943
|
|
|
(54
|
)%
|
||
Depletion, Depreciation, Amortization and Accretion
|
18,630,629
|
|
|
12,828,143
|
|
|
45
|
%
|
||
|
|
|
|
|
|
|
|
|
||
Costs and Expenses (per Boe):
|
|
|
|
|
|
|
|
|
||
Production Expenses
|
$
|
7.71
|
|
|
$
|
9.75
|
|
|
(21
|
)%
|
Production Taxes
|
4.89
|
|
|
3.73
|
|
|
31
|
%
|
||
General and Administrative Expense
|
1.03
|
|
|
3.02
|
|
|
(66
|
)%
|
||
Depletion, Depreciation, Amortization and Accretion
|
11.50
|
|
|
10.72
|
|
|
7
|
%
|
||
Net Producing Wells at Period End
|
234.7
|
|
|
214.6
|
|
|
9
|
%
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
Change
|
|||||||
Depletion
|
$
|
11.39
|
|
|
$
|
10.58
|
|
|
$
|
0.81
|
|
|
8
|
%
|
Depreciation, Amortization and Accretion
|
0.11
|
|
|
0.14
|
|
|
(0.03
|
)
|
|
(21
|
)%
|
|||
Total DD&A Expense
|
$
|
11.50
|
|
|
$
|
10.72
|
|
|
$
|
0.78
|
|
|
7
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Net Income
|
$
|
2,965,097
|
|
|
$
|
16,940,523
|
|
Add:
|
|
|
|
|
|
||
Impact of Selected Items:
|
|
|
|
|
|
||
(Gain) Loss on the Mark-to-Market of Derivative Instruments
|
12,141,314
|
|
|
(17,056,542
|
)
|
||
Selected Items, Before Income Taxes
|
12,141,314
|
|
|
(17,056,542
|
)
|
||
Income Tax of Selected Items
(1)
|
(3,853,035
|
)
|
|
46,656
|
|
||
Selected Items, Net of Income Taxes
|
8,288,279
|
|
|
(17,009,886
|
)
|
||
Adjusted Net Income (Loss)
|
$
|
11,253,376
|
|
|
$
|
(69,363
|
)
|
|
|
|
|
||||
Weighted Average Shares Outstanding – Basic
|
65,215,148
|
|
|
61,446,156
|
|
||
Weighted Average Shares Outstanding – Diluted
|
65,382,772
|
|
|
61,972,123
|
|
||
|
|
|
|
||||
Net Income Per Common Share – Basic
|
$
|
0.05
|
|
|
$
|
0.28
|
|
Add:
|
|
|
|
|
|
||
Impact of Selected Items, Net of Income Taxes
|
0.12
|
|
|
(0.28
|
)
|
||
Adjusted Net Income (Loss) Per Common Share – Basic
|
$
|
0.17
|
|
|
$
|
—
|
|
|
|
|
|
||||
Net Income Per Common Share – Diluted
|
$
|
0.05
|
|
|
$
|
0.27
|
|
Add:
|
|
|
|
|
|
||
Impact of Selected Items, Net of Income Taxes
|
0.12
|
|
|
(0.27
|
)
|
||
Adjusted Net Income (Loss) Per Common Share – Diluted
|
$
|
0.17
|
|
|
$
|
—
|
|
|
|
|
|
(1)
|
For the
2018
column, this represents a tax impact using an estimated tax rate of
25.5%
, which includes a
$0.8 million
adjustment for a reduction in valuation allowance for the
three
months ended
March 31, 2018
. For the
2017
column, this represents a tax impact using an estimated tax rate of
38.3%
, which includes a
$6.5 million
adjustment for a reduction in valuation allowance for the
three
months ended
March 31, 2017
.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Net Income
|
$
|
2,965,097
|
|
|
$
|
16,940,523
|
|
Add:
|
|
|
|
|
|
||
Interest Expense
|
23,106,761
|
|
|
16,303,805
|
|
||
Income Tax Benefit
|
—
|
|
|
—
|
|
||
Depreciation, Depletion, Amortization and Accretion
|
18,630,629
|
|
|
12,828,143
|
|
||
Non-Cash Share Based Compensation
|
(885,845
|
)
|
|
622,622
|
|
||
(Gain) Loss on the Mark-to-Market of Derivative Instruments
|
12,141,314
|
|
|
(17,056,542
|
)
|
||
Adjusted EBITDA
|
$
|
55,957,956
|
|
|
$
|
29,638,551
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands, unaudited)
|
||||||
Net Cash Provided by Operating Activities
|
$
|
45,521
|
|
|
$
|
29,716
|
|
Net Cash Used for Investing Activities
|
(58,022
|
)
|
|
(20,271
|
)
|
||
Net Cash Provided by (Used for) Financing Activities
|
(210
|
)
|
|
(10,412
|
)
|
||
Net Change in Cash
|
$
|
(12,710
|
)
|
|
$
|
(967
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions, unaudited)
|
||||||
Drilling and Completion Costs
|
$
|
55.7
|
|
|
$
|
19.7
|
|
Acreage and Related Activities
|
2.2
|
|
|
0.5
|
|
||
Other Capital Expenditures
|
0.1
|
|
|
0.1
|
|
||
Total
|
$
|
58.0
|
|
|
$
|
20.3
|
|
•
|
default in any payment of interest on any Note when due, continued for 30 days;
|
•
|
default in the payment of principal of or premium, if any, on any Note when due;
|
•
|
failure by us to comply with our other obligations under the Indenture, in certain cases subject to notice and grace periods;
|
•
|
payment defaults and accelerations with respect to our other indebtedness and certain of our subsidiaries, if any, in the aggregate principal amount of $25 million or more;
|
•
|
certain events of bankruptcy, insolvency or reorganization of our company or a significant subsidiary or group of restricted subsidiaries that, taken together, would constitute a significant subsidiary;
|
•
|
failure by us or any significant subsidiary or group of restricted subsidiaries that, taken together, would constitute a significant subsidiary to pay certain final judgments aggregating in excess of $25 million within 60 days; and
|
•
|
any guarantee of the Notes by a guarantor ceases to be in full force and effect, is declared null and void in a judicial proceeding or is denied or disaffirmed by its maker.
|
Settlement Period
|
|
Oil (Barrels)
|
|
Fixed Price ($)
|
||
Swaps-Crude Oil
|
|
|
|
|
||
04/01/18 – 08/31/18
|
|
100,000
|
|
|
49.99
|
|
04/01/18 – 08/31/18
|
|
100,000
|
|
|
50.04
|
|
04/01/18 – 08/31/18
|
|
100,000
|
|
|
49.99
|
|
04/01/18 – 08/31/18
|
|
100,000
|
|
|
50.17
|
|
04/01/18 – 09/30/18
|
|
180,000
|
|
|
53.99
|
|
04/01/18 – 09/30/18
|
|
180,000
|
|
|
53.99
|
|
04/01/18 – 09/30/18
|
|
183,000
|
|
|
55.19
|
|
04/01/18 – 12/31/18
|
|
135,000
|
|
|
53.30
|
|
04/01/18 – 12/31/18
|
|
275,000
|
|
|
54.80
|
|
04/01/18 – 12/31/18
|
|
275,000
|
|
|
54.09
|
|
04/01/18 – 12/31/18
|
|
275,000
|
|
|
54.42
|
|
10/01/18 – 12/31/18
|
|
92,000
|
|
|
52.50
|
|
10/01/18 – 12/31/18
|
|
92,000
|
|
|
52.55
|
|
10/01/18 – 12/31/18
|
|
46,000
|
|
|
54.50
|
|
10/01/18 – 12/31/18
|
|
92,000
|
|
|
52.50
|
|
01/01/19 – 03/31/19
|
|
45,000
|
|
|
54.22
|
|
01/01/19 – 03/31/19
|
|
63,000
|
|
|
53.65
|
|
01/01/19 – 12/31/19
|
|
365,000
|
|
|
51.05
|
|
01/01/19 – 12/31/19
|
|
365,000
|
|
|
51.05
|
|
01/01/19 – 12/31/19
|
|
182,500
|
|
|
52.70
|
|
01/01/19 – 12/31/19
|
|
365,000
|
|
|
51.05
|
|
01/01/19 – 12/31/19
|
|
182,500
|
|
|
52.15
|
|
01/01/19 – 12/31/19
|
|
182,500
|
|
|
52.75
|
|
01/01/19 – 12/31/19
|
|
219,000
|
|
|
57.30
|
|
01/01/19 – 06/30/19
|
|
108,600
|
|
|
57.90
|
|
04/01/19 – 06/30/19
|
|
45,500
|
|
|
53.59
|
|
04/01/19 – 06/30/19
|
|
36,400
|
|
|
53.10
|
|
07/01/19 – 09/30/19
|
|
46,000
|
|
|
53.07
|
|
07/01/19 – 09/30/19
|
|
9,200
|
|
|
52.65
|
|
01/01/20 – 03/31/20
|
|
27,300
|
|
|
51.81
|
|
01/01/20 – 03/31/20
|
|
45,500
|
|
|
54.05
|
|
01/01/20 – 03/31/20
|
|
45,500
|
|
|
54.25
|
|
01/01/20 – 03/31/20
|
|
27,300
|
|
|
54.65
|
|
01/01/20 – 12/31/20
|
|
366,000
|
|
|
49.77
|
|
01/01/20 – 12/31/20
|
|
183,000
|
|
|
51.30
|
|
01/01/20 – 12/31/20
|
|
109,800
|
|
|
51.70
|
|
01/01/20 – 12/31/20
|
|
366,000
|
|
|
49.75
|
|
01/01/20 – 12/31/20
|
|
183,000
|
|
|
51.10
|
|
04/01/20 – 06/30/20
|
|
9,100
|
|
|
51.50
|
|
04/01/20 – 06/30/20
|
|
9,100
|
|
|
54.70
|
|
01/01/21 – 03/31/21
|
|
90,000
|
|
|
52.50
|
|
01/01/21 – 03/31/21
|
|
90,000
|
|
|
53.00
|
|
01/01/21 – 03/31/21
|
|
90,000
|
|
|
52.55
|
|
01/01/21 – 03/31/21
|
|
18,000
|
|
|
53.20
|
|
Year
|
|
Volumes (Bbl)
|
|
Weighted
Average Price ($)
|
||
2018
|
|
2,225,000
|
|
|
53.33
|
|
2019
|
|
2,215,200
|
|
|
52.64
|
|
2020
|
|
1,371,600
|
|
|
50.77
|
|
2021 and beyond
|
|
288,000
|
|
|
52.72
|
|
Period
|
|
Total Number of Shares
Purchased
(1)
|
|
Average Price Paid Per Share
|
|
Total Number of Shares
Purchased as Part of Publicly
Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
(2)
|
||||
Month #1
|
|
|
|
|
|
|
|
|
||||
January 1, 2018 to January 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$ 108.3 million
|
Month #2
|
|
|
|
|
|
|
|
|
|
|
|
|
February 1, 2018 to February 28, 2018
|
|
397
|
|
|
2.29
|
|
|
—
|
|
|
108.3 million
|
|
Month #3
|
|
|
|
|
|
|
|
|
|
|
|
|
March 1, 2018 to March 31, 2018
|
|
89,204
|
|
|
2.10
|
|
|
—
|
|
|
108.3 million
|
|
Total
|
|
89,601
|
|
|
$
|
2.10
|
|
|
—
|
|
|
$ 108.3 million
|
(1)
|
All shares purchased reflect shares surrendered in satisfaction of tax obligations in connection with the vesting of restricted stock awards.
|
(2)
|
In May 2011, our board of directors approved a stock repurchase program to acquire up to $150 million shares of our outstanding common stock. In total, we have repurchased 3,190,268 shares under this program through
March 31, 2018
at a weighted average price of $13.06 per share.
|
Exhibit No.
|
|
Description
|
|
Reference
|
|
Amended and Restated Articles of Incorporation of Northern Oil and Gas, Inc. dated June 1, 2016
|
|
Incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016
|
|
|
By-Laws of Northern Oil and Gas, Inc.
|
|
Incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 2, 2010
|
|
|
Specimen Stock Certificate of Northern Oil and Gas, Inc.
|
|
Incorporated by reference to Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K filed with the SEC on February 29, 2012
|
|
|
Indenture, dated May 18, 2012, between Northern Oil and Gas, Inc. and Wilmington Trust, National Association, as trustee (including Form of 8.000% Senior Note due 2020)
|
|
Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 18, 2012
|
|
|
Indenture, dated May 18, 2015, between Northern Oil and Gas, Inc. and Wilmington Trust, National Association, as trustee (including Form of 8.000% Senior Note due 2020)
|
|
Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 18, 2015
|
|
|
Exchange Agreement, dated January 31, 2018, by and among Northern Oil and Gas, Inc. and the Noteholders party thereto
|
|
Incorporated by reference to Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K filed with the SEC on February 23, 2018
|
|
|
First Amendment to Exchange Agreement, dated March 20, 2018, by and among Northern Oil and Gas, Inc., and the Noteholders party thereto
|
|
Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 21, 2018
|
|
|
Second Amendment to Exchange Agreement, dated April 2, 2018, by and among Northern Oil and Gas, Inc., and the Noteholders party thereto
|
|
Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 4, 2018
|
|
|
Limited Waiver and Amendment to Credit Agreement, dated March 18, 2018, by and among Northern Oil and Gas, Inc., the lenders party thereto and TPG Specialty Lending, Inc., as administrative agent and collateral agent
|
|
Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 19, 2018
|
|
|
Calculation of Ratio of Earnings to Fixed Charges
|
|
Filed herewith
|
|
|
Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
Certification of the Principal Financial Officer and Principal Accounting Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
Certification of the Principal Executive Officer and Principal Financial Officer and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
101.INS
|
|
XBRL Instance Document
|
|
Filed herewith
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
Filed herewith
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith
|
Date:
|
May 7, 2018
|
|
By:
|
/s/ Brandon Elliott
|
|
|
|
|
Brandon Elliott, Interim President, Principal Executive Officer
|
|
|
|
|
|
Date:
|
May 7, 2018
|
|
By:
|
/s/ Chad Allen
|
|
|
|
|
Chad Allen, Interim Chief Financial Officer, Chief Accounting Officer, Principal Financial Officer, Principal Accounting Officer
|
|
Year Ended December 31,
|
|
Three Months Ended
March 31, 2018
|
||||||||||||||||||||
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
|||||||||||||
Earnings (Deficit) Before Income Taxes
|
$
|
84,834,650
|
|
|
$
|
263,112,945
|
|
|
$
|
(1,177,778,745
|
)
|
|
$
|
(294,895,887
|
)
|
|
$
|
(10,763,788
|
)
|
|
$
|
2,965,097
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges
|
38,688,300
|
|
|
46,517,384
|
|
|
59,869,939
|
|
|
64,854,615
|
|
|
70,450,324
|
|
|
23,145,873
|
|
||||||
Subtract:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitalized Interest
|
5,976,981
|
|
|
4,409,544
|
|
|
1,506,172
|
|
|
356,196
|
|
|
147,775
|
|
|
35,065
|
|
||||||
Total Earnings (Deficit) Before Fixed Charges
|
117,545,969
|
|
|
305,220,785
|
|
|
(1,119,414,978
|
)
|
|
(230,397,468
|
)
|
|
59,538,761
|
|
|
26,075,905
|
|
||||||
Fixed Charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest Expense
|
32,709,056
|
|
|
42,105,676
|
|
|
58,360,387
|
|
|
64,485,623
|
|
|
70,286,341
|
|
|
23,106,761
|
|
||||||
Capitalized Interest
|
5,976,981
|
|
|
4,409,544
|
|
|
1,506,172
|
|
|
356,196
|
|
|
147,775
|
|
|
35,065
|
|
||||||
Estimated Interest Component of Rent
|
2,263
|
|
|
2,164
|
|
|
3,380
|
|
|
12,796
|
|
|
16,208
|
|
|
4,047
|
|
||||||
Total Fixed Charges
|
38,688,300
|
|
|
46,517,384
|
|
|
59,869,939
|
|
|
64,854,615
|
|
|
70,450,324
|
|
|
23,145,873
|
|
||||||
Ratio of Earnings (Deficit) to Fixed Charges
(1)
|
3.0x
|
|
|
6.6x
|
|
|
(18.7)x
(2)
|
|
|
(3.6)x
(2)
|
|
|
0.9x
(2)
|
|
|
1.1x
|
|
(1)
|
The Company had no preferred stock outstanding for any period presented, and accordingly, the ratio of earnings to combined fixed charges and preferred stock dividends is the same as the ratio of earnings to fixed charges.
|
(2)
|
Earnings were insufficient to cover fix charges by approximately $10.9 million for the year ended December 31, 2017. Earnings were insufficient to cover fixed charges by approximately $295.3 million and $1,179.3 million for the years ended December 31, 2016 and 2015, respectively, due primarily to a non-cash impairment charge.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Northern Oil and Gas, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: May 7, 2018
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By: /s/ Brandon Elliott
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Brandon Elliott
Principal Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Northern Oil and Gas, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Dated: May 7, 2018
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By: /s/ Chad Allen
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Chad Allen
Principal Financial Officer and Principal Accounting Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated: May 7, 2018
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By: /s/ Brandon Elliott
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Brandon Elliott
Principal Executive Officer
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Dated: May 7, 2018
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By: /s/ Chad Allen
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Chad Allen
Principal Financial Officer and Principal Accounting Officer
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