Delaware | 95-3848122 | ||||
(State or Other Jurisdiction of
Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
Large Accelerated Filer ¨
|
Accelerated Filer x
|
|||||||
Non-Accelerated Filer ¨
|
Smaller Reporting Company ¨
Emerging Growth Company ¨
|
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Stock, par value $0.001 | NOG | NYSE American |
Page | |||||||||||
PART I – FINANCIAL INFORMATION | |||||||||||
Item 1. | Condensed Financial Statements (unaudited) | ||||||||||
Condensed Balance Sheets | |||||||||||
Condensed Statements of Operations | |||||||||||
Condensed Statements of Cash Flows | |||||||||||
Condensed Statements of Stockholders’ Equity (Deficit) | |||||||||||
Notes to Condensed Financial Statements | |||||||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||||||||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | ||||||||||
Item 4. | Controls and Procedures | ||||||||||
PART II – OTHER INFORMATION | |||||||||||
Item 1. | Legal Proceedings | ||||||||||
Item 1A. | Risk Factors | ||||||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | ||||||||||
Item 6. | Exhibits | ||||||||||
Signatures |
(In thousands, except par value and share data) | March 31, 2019 | December 31, 2018 | ||||||||||||||||||
ASSETS | (Unaudited) | |||||||||||||||||||
Current Assets: | ||||||||||||||||||||
Cash and Cash Equivalents | $ | 3,944 | $ | 2,358 | ||||||||||||||||
Accounts Receivable, Net | 90,509 | 96,353 | ||||||||||||||||||
Advances to Operators | 43 | 268 | ||||||||||||||||||
Prepaid Expenses and Other | 12,182 | 12,360 | ||||||||||||||||||
Derivative Instruments | 18,578 | 115,870 | ||||||||||||||||||
Income Tax Receivable | 1,205 | 1,205 | ||||||||||||||||||
Total Current Assets | 126,461 | 228,415 | ||||||||||||||||||
Property and Equipment: | ||||||||||||||||||||
Oil and Natural Gas Properties, Full Cost Method of Accounting | ||||||||||||||||||||
Proved | 3,511,605 | 3,431,428 | ||||||||||||||||||
Unproved | 6,997 | 4,307 | ||||||||||||||||||
Other Property and Equipment | 1,003 | 998 | ||||||||||||||||||
Total Property and Equipment | 3,519,605 | 3,436,732 | ||||||||||||||||||
Less – Accumulated Depreciation, Depletion and Impairment | (2,278,914) | (2,233,987) | ||||||||||||||||||
Total Property and Equipment, Net | 1,240,691 | 1,202,745 | ||||||||||||||||||
Derivative Instruments | 17,839 | 61,843 | ||||||||||||||||||
Deferred Income Taxes | 420 | 420 | ||||||||||||||||||
Other Noncurrent Assets, Net | 10,368 | 10,223 | ||||||||||||||||||
Total Assets | $ | 1,395,779 | $ | 1,503,645 | ||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||
Accounts Payable | $ | 154,339 | $ | 135,483 | ||||||||||||||||
Accrued Expenses | 1,823 | 2,769 | ||||||||||||||||||
Accrued Interest | 16,901 | 16,468 | ||||||||||||||||||
Debt Exchange Derivative | 9,225 | 18,183 | ||||||||||||||||||
Derivative Instruments | 5,882 | — | ||||||||||||||||||
Contingent Consideration | 37,160 | 58,069 | ||||||||||||||||||
Other Current Liabilities | 724 | 555 | ||||||||||||||||||
Total Current Liabilities | 226,054 | 231,526 | ||||||||||||||||||
Long-term Debt, Net | 839,229 | 830,203 | ||||||||||||||||||
Derivative Instruments | 4,991 | — | ||||||||||||||||||
Asset Retirement Obligations | 12,364 | 11,946 | ||||||||||||||||||
Other Noncurrent Liabilities | 381 | 105 | ||||||||||||||||||
TOTAL LIABILITIES | $ | 1,083,019 | $ | 1,073,780 | ||||||||||||||||
COMMITMENTS AND CONTINGENCIES (NOTE 8) | ||||||||||||||||||||
STOCKHOLDERS’ EQUITY | |||||||||||
Preferred Stock, Par Value $.001; 5,000,000 Authorized, No Shares Outstanding | — | — | |||||||||
Common Stock, Par Value $.001; 675,000,000 Shares Authorized;
376,800,478 Shares Outstanding at 3/31/2019 378,333,070 Shares Outstanding at 12/31/2018 |
377 | 378 | |||||||||
Additional Paid-In Capital | 1,216,429 | 1,226,371 | |||||||||
Retained Deficit | (904,046) | (796,884) | |||||||||
Total Stockholders’ Equity | 312,760 | 429,865 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,395,779 | $ | 1,503,645 |
Three Months Ended
March 31, |
|||||||||||||||||||||||||||||
(In thousands, except share and per share data) | 2019 | 2018 | |||||||||||||||||||||||||||
REVENUES | |||||||||||||||||||||||||||||
Oil and Gas Sales | $ | 132,684 | $ | 86,881 | |||||||||||||||||||||||||
Gain (Loss) on Derivative Instruments, Net | (139,623) | (20,271) | |||||||||||||||||||||||||||
Other Revenue | 5 | 3 | |||||||||||||||||||||||||||
Total Revenues | (6,934) | 66,613 | |||||||||||||||||||||||||||
OPERATING EXPENSES | |||||||||||||||||||||||||||||
Production Expenses | 24,666 | 12,488 | |||||||||||||||||||||||||||
Production Taxes | 12,520 | 7,922 | |||||||||||||||||||||||||||
General and Administrative Expense | 6,051 | 1,667 | |||||||||||||||||||||||||||
Depletion, Depreciation, Amortization and Accretion | 45,134 | 18,631 | |||||||||||||||||||||||||||
Total Operating Expenses | 88,371 | 40,708 | |||||||||||||||||||||||||||
INCOME (LOSS) FROM OPERATIONS | (95,305) | 25,905 | |||||||||||||||||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||||||||||||||||
Interest Expense, Net of Capitalization | (19,548) | (23,107) | |||||||||||||||||||||||||||
Debt Exchange Derivative Gain | 6,287 | — | |||||||||||||||||||||||||||
Contingent Consideration Gain | 1,392 | — | |||||||||||||||||||||||||||
Other Income | 12 | 167 | |||||||||||||||||||||||||||
Total Other Income (Expense) | (11,857) | (22,940) | |||||||||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | (107,162) | 2,965 | |||||||||||||||||||||||||||
INCOME TAX PROVISION (BENEFIT) | — | — | |||||||||||||||||||||||||||
NET INCOME (LOSS) | $ | (107,162) | $ | 2,965 | |||||||||||||||||||||||||
Net Income (Loss) Per Common Share – Basic | $ | (0.29) | $ | 0.05 | |||||||||||||||||||||||||
Net Income (Loss) Per Common Share – Diluted | $ | (0.29) | $ | 0.05 | |||||||||||||||||||||||||
Weighted Average Shares Outstanding – Basic | 371,448,566 | 65,215,148 | |||||||||||||||||||||||||||
Weighted Average Shares Outstanding – Diluted | 371,448,566 | 65,382,772 |
Three Months Ended
March 31, |
|||||||||||||||||
(In thousands) | 2019 | 2018 | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||
Net Income (Loss) | $ | (107,162) | $ | 2,965 | |||||||||||||
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities: | |||||||||||||||||
Depletion, Depreciation, Amortization and Accretion | 45,134 | 18,631 | |||||||||||||||
Amortization of Debt Issuance Costs | 1,301 | 1,363 | |||||||||||||||
Amortization of Bond (Premium) Discount on Long-term Debt | (746) | 117 | |||||||||||||||
Deferred Income Taxes | — | — | |||||||||||||||
Loss on the Mark-to-Market of Derivative Instruments | 152,169 | 12,141 | |||||||||||||||
Gain on Debt Exchange Derivative | (6,287) | — | |||||||||||||||
Gain on Contingent Consideration | (1,392) | — | |||||||||||||||
PIK Interest on Second Lien Notes | 1,742 | — | |||||||||||||||
Stock-Based Compensation Expense | 2,751 | (820) | |||||||||||||||
Other | (21) | (40) | |||||||||||||||
Changes in Working Capital and Other Items: | |||||||||||||||||
Accounts Receivable, Net | 5,939 | (4,338) | |||||||||||||||
Prepaid and Other Expenses | 178 | (723) | |||||||||||||||
Accounts Payable | 5,783 | 1,890 | |||||||||||||||
Accrued Interest | 426 | 13,981 | |||||||||||||||
Accrued Expenses | (907) | 354 | |||||||||||||||
Net Cash Provided By Operating Activities | 98,908 | 45,521 | |||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||
Drilling and Development Capital Expenditures | (69,786) | (52,893) | |||||||||||||||
Acquisition of Oil and Natural Gas Properties | (8,122) | (5,107) | |||||||||||||||
Purchases of Other Property and Equipment | (5) | (22) | |||||||||||||||
Net Cash Used for Investing Activities | (77,913) | (58,022) | |||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||
Advances on Revolving Credit Facility | 53,000 | — | |||||||||||||||
Repayments on Revolving Credit Facility | (46,000) | — | |||||||||||||||
Debt Issuance Costs Paid | (70) | (21) | |||||||||||||||
Debt Exchange Derivative Settlements | (894) | — | |||||||||||||||
Contingent Consideration Settlements | (9,778) | — | |||||||||||||||
Repurchases of Common Stock | (15,108) | — | |||||||||||||||
Restricted Stock Surrenders - Tax Obligations | (558) | (188) | |||||||||||||||
Net Cash Used for by Financing Activities | (19,409) | (210) | |||||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,586 | (12,710) | |||||||||||||||
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD | 2,358 | 102,183 | |||||||||||||||
CASH AND CASH EQUIVALENTS – END OF PERIOD | 3,944 | 89,473 | |||||||||||||||
Common Stock | Additional Paid-In | Retained | Total Stockholders’ | ||||||||||||||||||||||||||||||||
( In thousands, except share data) | Shares | Amount | Capital | Deficit | Equity (Deficit) | ||||||||||||||||||||||||||||||
December 31, 2018 | 378,333,070 | $ | 378 | $ | 1,226,371 | $ | (796,884) | $ | 429,865 | ||||||||||||||||||||||||||
Issuance of Common Stock | 3,160,200 | 3 | — | — | 3 | ||||||||||||||||||||||||||||||
Restricted Stock Forfeitures | (4,802) | — | — | — | — | ||||||||||||||||||||||||||||||
Stock-Based Compensation | — | — | 2,832 | — | 2,832 | ||||||||||||||||||||||||||||||
Restricted Stock Surrenders - Tax Obligations | (220,531) | — | (558) | — | (558) | ||||||||||||||||||||||||||||||
Repurchases of Common Stock | (5,635,003) | (6) | (15,102) | — | (15,108) | ||||||||||||||||||||||||||||||
Contingent Consideration Settlements | 1,167,544 | 1 | 2,886 | — | 2,887 | ||||||||||||||||||||||||||||||
Net Loss | — | — | — | (107,162) | (107,162) | ||||||||||||||||||||||||||||||
March 31, 2019 | 376,800,478 | $ | 377 | $ | 1,216,429 | $ | (904,046) | $ | 312,760 |
Common Stock | Additional Paid-In | Retained | Total Stockholders’ | ||||||||||||||||||||||||||||||||
( In thousands, except share data) | Shares | Amount | Capital | Deficit | Equity (Deficit) | ||||||||||||||||||||||||||||||
December 31, 2017 | 66,791,633 | $ | 67 | $ | 449,666 | $ | (940,574) | $ | (490,841) | ||||||||||||||||||||||||||
Issuance of Common Stock | 127,999 | — | — | — | — | ||||||||||||||||||||||||||||||
Restricted Stock Forfeitures | (892,086) | (1) | — | — | (1) | ||||||||||||||||||||||||||||||
Stock-Based Compensation | — | — | (712) | — | (712) | ||||||||||||||||||||||||||||||
Restricted Stock Surrenders - Tax Obligations | (89,601) | — | (188) | — | (188) | ||||||||||||||||||||||||||||||
Net Income | — | — | — | 2,965 | 2,965 | ||||||||||||||||||||||||||||||
March 31, 2018 | 65,937,945 | $ | 66 | $ | 448,766 | $ | (937,609) | $ | (488,776) |
Three Months Ended
March 31, |
|||||||||||||||||||||||||||||
(In Thousands, except per share data) | 2019 | 2018 | |||||||||||||||||||||||||||
Net Income (Loss) | $ | (107,162) | $ | 2,965 | |||||||||||||||||||||||||
Weighted Average Common Shares Outstanding: | |||||||||||||||||||||||||||||
Weighted Average Common Shares Outstanding – Basic | 371,449 | 65,215 | |||||||||||||||||||||||||||
Plus: Potentially Dilutive Common Shares Including Stock Options and Restricted Stock | — | 168 | |||||||||||||||||||||||||||
Weighted Average Common Shares Outstanding – Diluted | 371,449 | 65,383 | |||||||||||||||||||||||||||
Net Income (Loss) per Common Share | |||||||||||||||||||||||||||||
Basic | $ | (0.29) | $ | 0.05 | |||||||||||||||||||||||||
Diluted | $ | (0.29) | $ | 0.05 |
Three Months Ended March 31, | |||||||||||||||||
(In thousands) | 2019 | 2018 | |||||||||||||||
Supplemental Cash Items: | |||||||||||||||||
Cash Paid During the Period for Interest | $ | 16,929 | $ | 7,631 | |||||||||||||
Cash Paid During the Period for Income Taxes | — | — | |||||||||||||||
Non-cash Investing Activities: | |||||||||||||||||
Oil and Natural Gas Properties Included in Accounts Payable | 133,872 | 85,068 | |||||||||||||||
Capitalized Asset Retirement Obligations | 226 | 184 | |||||||||||||||
Compensation Capitalized on Oil and Gas Properties | 84 | 54 | |||||||||||||||
Non-cash Financing Activities: | |||||||||||||||||
Issuance of 8.50% Second Lien Notes due 2023 - PIK Interest | 1,738 | — | |||||||||||||||
Contingent Consideration Settlements | 2,887 | — | |||||||||||||||
(In thousands) | ||||||||
Fair value of net assets: | ||||||||
Proved oil and natural gas properties | $ | 341,633 | ||||||
Asset retirement cost | 939 | |||||||
Total assets acquired | 342,572 | |||||||
Asset retirement obligations | (939) | |||||||
Net assets acquired | $ | 341,633 | ||||||
Fair value of consideration paid for net assets: | ||||||||
Cash consideration | $ | 97,838 | ||||||
Issuance of common stock (51.5 million shares at $4.29 per share) | 220,836 | |||||||
Contingent consideration | 22,959 | |||||||
Total fair value of consideration transferred | $ | 341,633 |
(In thousands) | ||||||||
Fair value of net assets: | ||||||||
Proved oil and natural gas properties | $ | 146,134 | ||||||
Asset retirement cost | 644 | |||||||
Total assets acquired | 146,778 | |||||||
Asset retirement obligations | (644) | |||||||
Net assets acquired | $ | 146,134 | ||||||
Fair value of consideration paid for net assets: | ||||||||
Cash consideration | $ | 48,189 | ||||||
Issuance of common stock (25.8 million shares at $3.44 per share) | 88,592 | |||||||
Contingent consideration | 9,353 | |||||||
Total fair value of consideration transferred | $ | 146,134 |
(In thousands) | 2018 | |||||||||||||||||||||||||
Revenues | $ | 97,627 | ||||||||||||||||||||||||
Net Income | 10,728 |
March 31, 2019 | |||||||||||||||||||||||||||||||||||||||||
(In thousands) | Principal Balance | Unamortized Premium | Debt Issuance Costs, Net | Long-term Debt, Net | |||||||||||||||||||||||||||||||||||||
Second Lien Notes due 2023 | $ | 696,878 | $ | 12,491 | $ | (17,139) | $ | 692,229 | |||||||||||||||||||||||||||||||||
Revolving Credit Facility(1)
|
147,000 | — | — | 147,000 | |||||||||||||||||||||||||||||||||||||
Total | $ | 843,878 | $ | 12,491 | $ | (17,139) | $ | 839,229 | |||||||||||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
Principal Balance | Unamortized Premium | Debt Issuance Costs, Net | Long-term Debt, Net | ||||||||||||||||||||||||||||||||||||||
Second Lien Notes due 2023 | $ | 695,140 | $ | 13,237 | $ | (18,173) | $ | 690,203 | |||||||||||||||||||||||||||||||||
Revolving Credit Facility(1)
|
140,000 | — | — | 140,000 | |||||||||||||||||||||||||||||||||||||
Total | $ | 835,140 | $ | 13,237 | $ | (18,173) | $ | 830,203 |
(in thousands) |
Three Months Ended
March 31, 2019 |
Year Ended December 31, 2018 | |||||||||
Beginning Balance | 378,333 | 66,792 | |||||||||
Repurchases of Common Stock | (5,635) | (7,360) | |||||||||
Stock Options Exercised - Net | — | 63 | |||||||||
Restricted Stock Grants | 3,160 | 3,295 | |||||||||
Debt Exchanges | — | 136,064 | |||||||||
Equity Offerings | — | 96,926 | |||||||||
Stock Consideration for Acquisitions of Oil and Natural Gas Properties | — | 83,731 | |||||||||
Contingent Consideration Settlements | 1,168 | — | |||||||||
Other Surrenders - Tax Obligations | (221) | (267) | |||||||||
Other Forfeitures | (5) | (911) | |||||||||
Ending Balance | 376,800 | 378,333 |
2019 | |||||
Risk-free interest rate | 2.57 | % | |||
Dividend yield | — | % | |||
Expected volatility | 85.00 | % | |||
Company's closing stock price on grant date | $ | 2.71 |
Service-based Awards | Service and Performance-based Awards | Service and Market-based Awards | Service, Performance, and Market-based Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Weighted-average Grant Date Fair Value | Number of Shares | Weighted-average Grant Date Fair Value | Number of Shares | Weighted-average Grant Date Fair Value | Number of Shares | Weighted-average Grant Date Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at December 31, 2018 | 632,759 | $ | 2.72 | 1,018,500 | $ | 2.70 | 1,176,600 | $ | 1.67 | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares granted | 847,200 | 2.71 | — | — | 1,249,500 | 1.82 | 1,063,500 | 0.98 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares forfeited | (4,802) | 3.07 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares vested | (270,353) | 2.97 | (339,500) | 2.70 | (164,206) | 1.67 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at March 31, 2019 | 1,204,804 | $ | 2.66 | 679,000 | $ | 2.70 | 2,261,894 | $ | 1.75 | 1,063,500 | $ | 0.98 |
Three months ended March 31, | |||||||||||||||||
(in thousands) | 2019 | 2018 | |||||||||||||||
Restricted stock award compensation | $ | 2,835 | $ | (832) | |||||||||||||
Less amounts capitalized in oil and natural gas properties | (84) | (54) | |||||||||||||||
Total stock-based compensation, net | $ | 2,751 | $ | (886) |
Three Months Ended
March 31, |
|||||||||||||||||||||||||||||
(In thousands) | 2019 | 2018 | |||||||||||||||||||||||||||
Current Income Tax Provision (Benefit) | $ | — | $ | — | |||||||||||||||||||||||||
Deferred Income Tax Provision (Benefit) | |||||||||||||||||||||||||||||
Federal | (21,237) | 620 | |||||||||||||||||||||||||||
State | (4,657) | 137 | |||||||||||||||||||||||||||
Valuation Allowance | 25,894 | (757) | |||||||||||||||||||||||||||
Total Income Tax Provision (Benefit) | $ | — | $ | — |
Fair Value Measurements at March 31, 2019 Using | |||||||||||||||||||||||||||||
(In thousands) |
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 price and basis swaps) | $ | — | $ | 18,578 | $ | — | |||||||||||||||||||||||
Commodity Derivatives – Noncurrent Asset (crude oil price swaps) | — | 17,839 | — | ||||||||||||||||||||||||||
Commodity Derivatives – Current Liabilities (crude oil price and basis swaps) | — | (5,882) | — | ||||||||||||||||||||||||||
Commodity Derivatives – Noncurrent Liabilities (crude oil price swaps) | — | (4,991) | — | ||||||||||||||||||||||||||
Contingent Consideration – Current Liabilities | — | — | (37,160) | ||||||||||||||||||||||||||
Debt Exchange Derivatives – Current Liabilities | — | — | (9,225) | ||||||||||||||||||||||||||
Total | $ | — | $ | 25,544 | $ | (46,385) |
Fair Value Measurements at December 31, 2018 Using | |||||||||||||||||||||||||||||
(In thousands) |
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 price and basis swaps) | $ | — | $ | 115,870 | $ | — | |||||||||||||||||||||||
Commodity Derivatives – Noncurrent Asset (crude oil price swaps) | — | 61,843 | — | ||||||||||||||||||||||||||
Contingent Consideration – Current Liabilities | — | — | (58,069) | ||||||||||||||||||||||||||
Debt Exchange Derivatives – Current Liabilities | — | — | (18,183) | ||||||||||||||||||||||||||
Total | $ | — | $ | 177,713 | $ | (76,252) |
(In thousands) | Three Months Ended March 31, 2019 | ||||
Beginning Balance | $ | (76,252) | |||
Debt exchange derivative liability settlements | 2,671 | ||||
Change in fair value of debt exchange derivative liability | 6,287 | ||||
Contingent consideration settlements | 19,517 | ||||
Change in fair value of contingent consideration | 1,392 | ||||
Ending Balance | $ | (46,385) |
Three Months Ended
March 31, |
|||||||||||||||||||||||||||||
(In thousands) | 2019 | 2018 | |||||||||||||||||||||||||||
Cash Received (Paid) on Settled Derivatives | $ | 12,546 | $ | (8,130) | |||||||||||||||||||||||||
Non-Cash Mark-to-Market Loss on Derivatives | (152,169) | (12,141) | |||||||||||||||||||||||||||
Gain (Loss) on Derivative Instruments, Net | $ | (139,623) | $ | (20,271) |
Year | Volumes (Bbl) |
Weighted
Average Price ($) |
||||||||||||
2019 | 5,535,030 | $ | 63.16 | |||||||||||
2020 | 6,428,580 | 59.29 | ||||||||||||
2021 | 2,678,850 | 58.16 | ||||||||||||
2022 and beyond | 135,000 | 55.00 |
Settlement Period | Total Volumes (Bbls) |
Weighted
Average Differential ($/Bbl) |
||||||||||||
04/01/19 – 12/31/19 | 2,841,000 | $ | (2.42) |
Type of Crude Oil Contract | Balance Sheet Location | March 31, 2019 Estimated Fair Value | December 31, 2018 Estimated Fair Value | |||||||||||||||||||||||
Derivative Assets: | (In thousands) | |||||||||||||||||||||||||
Swap Price Contracts | Current Assets | $ | 17,973 | $ | 108,514 | |||||||||||||||||||||
Basis Swap Contracts | Current Assets | 606 | $ | 7,356 | ||||||||||||||||||||||
Swap Price Contracts | Noncurrent Assets | 17,839 | $ | 61,843 | ||||||||||||||||||||||
Total Derivative Assets | $ | 36,417 | $ | 177,713 | ||||||||||||||||||||||
Derivative Liabilities: | ||||||||||||||||||||||||||
Swap Price Contracts | Current Liabilities | $ | (5,882) | $ | — | |||||||||||||||||||||
Swap Price Contracts | Noncurrent Liabilities | (4,991) | — | |||||||||||||||||||||||
Total Derivative Liabilities | $ | (10,873) | $ | — |
Estimated Fair Value at March 31, 2019 | |||||||||||||||||||||||||||||
(In thousands) |
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 | $ | 31,558 | $ | (12,980) | $ | 18,578 | |||||||||||||||||||||||
Noncurrent Assets | 25,950 | (8,111) | 17,839 | ||||||||||||||||||||||||||
Total Derivative Assets | $ | 57,508 | $ | (21,091) | $ | 36,417 | |||||||||||||||||||||||
Offsetting of Derivative Liabilities: | |||||||||||||||||||||||||||||
Current Liabilities | $ | (18,862) | $ | 12,980 | $ | (5,882) | |||||||||||||||||||||||
Noncurrent Liabilities | (13,102) | 8,111 | (4,991) | ||||||||||||||||||||||||||
Total Derivative Liabilities | $ | (31,964) | $ | 21,091 | $ | (10,873) |
Estimated Fair Value at December 31, 2018 | |||||||||||||||||||||||||||||
(In thousands) |
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 | $ | 116,620 | $ | (750) | $ | 115,870 | |||||||||||||||||||||||
Non-Current Assets | 61,857 | (14) | 61,843 | ||||||||||||||||||||||||||
Total Derivative Assets | $ | 178,477 | $ | (764) | $ | 177,713 | |||||||||||||||||||||||
Offsetting of Derivative Liabilities: | |||||||||||||||||||||||||||||
Current Liabilities | $ | (750) | $ | 750 | $ | — | |||||||||||||||||||||||
Non-Current Liabilities | (14) | 14 | — | ||||||||||||||||||||||||||
Total Derivative Liabilities | $ | (764) | $ | 764 | $ | — |
Three Months Ended March 31, | |||||||||||||||||
2019 | 2018 | ||||||||||||||||
Average NYMEX Prices(1) | |||||||||||||||||
Natural Gas (per Mcf) | $ | 2.93 | $ | 2.85 | |||||||||||||
Oil (per Bbl) | $ | 54.87 | $ | 62.89 |
Year | Volumes (Bbl) |
Weighted
Average Price ($/Bbl) |
||||||||||||
2019 | 5,535,030 | 63.16 | ||||||||||||
2020 | 6,428,580 | 59.29 | ||||||||||||
2021 | 2,678,850 | 58.16 | ||||||||||||
2022 and beyond | 135,000 | 55.00 |
Settlement Period | Total Volumes (Bbls) |
Weighted
Average Differential ($/Bbl) |
||||||||||||
04/01/19 – 12/31/19 | 2,841,000 | (2.42) |
Three Months Ended March 31, | |||||||||||||||||||||||||||||
2019 | 2018 | % Change | |||||||||||||||||||||||||||
Net Production: | |||||||||||||||||||||||||||||
Oil (Bbl) | 2,541,232 | 1,354,602 | 88 | % | |||||||||||||||||||||||||
Natural Gas and NGLs (Mcf) | 3,435,784 | 1,589,514 | 116 | % | |||||||||||||||||||||||||
Total (Boe) | 3,113,863 | 1,619,521 | 92 | % | |||||||||||||||||||||||||
Net Sales (in thousands): | |||||||||||||||||||||||||||||
Oil Sales | $ | 123,613 | $ | 79,143 | 56 | % | |||||||||||||||||||||||
Natural Gas and NGL Sales | 9,070 | 7,738 | 17 | % | |||||||||||||||||||||||||
Gain (Loss) on Settled Derivatives | 12,546 | (8,130) | |||||||||||||||||||||||||||
Loss on Mark-to-Market of Derivative Instruments | (152,169) | (12,141) | |||||||||||||||||||||||||||
Other Revenue | 5 | 3 | |||||||||||||||||||||||||||
Total Revenues | (6,934) | 66,613 | (110) | % | |||||||||||||||||||||||||
Average Sales Prices: | |||||||||||||||||||||||||||||
Oil (per Bbl) | $ | 48.64 | $ | 58.43 | (17) | % | |||||||||||||||||||||||
Effect of Gain (Loss) on Settled Derivatives on Average Price (per Bbl) | 4.94 | (6.00) | |||||||||||||||||||||||||||
Oil Net of Settled Derivatives (per Bbl) | 53.58 | 52.43 | 2 | % | |||||||||||||||||||||||||
Natural Gas and NGLs (per Mcf) | 2.64 | 4.87 | (46) | % | |||||||||||||||||||||||||
Realized Price on a Boe Basis Including all Realized Derivative Settlements | 46.64 | 48.63 | (4) | % | |||||||||||||||||||||||||
Operating Expenses (in thousands): | |||||||||||||||||||||||||||||
Production Expenses | $ | 24,666 | $ | 12,488 | 98 | % | |||||||||||||||||||||||
Production Taxes | 12,520 | 7,922 | 58 | % | |||||||||||||||||||||||||
General and Administrative Expenses | 6,050 | 1,667 | 263 | % | |||||||||||||||||||||||||
Depletion, Depreciation, Amortization and Accretion | 45,134 | 18,631 | 142 | % | |||||||||||||||||||||||||
Costs and Expenses (per Boe): | |||||||||||||||||||||||||||||
Production Expenses | $ | 7.92 | $ | 7.71 | 3 | % | |||||||||||||||||||||||
Production Taxes | 4.02 | 4.89 | (18) | % | |||||||||||||||||||||||||
General and Administrative Expenses | 1.94 | 1.03 | 88 | % | |||||||||||||||||||||||||
Depletion, Depreciation, Amortization and Accretion | 14.49 | 11.50 | 26 | % | |||||||||||||||||||||||||
Net Producing Wells at Period End | 332.5 | 234.7 | 42 | % |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||
Depletion | $ | 14.42 | $ | 11.39 | $ | 3.03 | 27 | % | |||||||||||||||||||||||||||||||||
Depreciation, Amortization and Accretion | 0.07 | 0.11 | (0.04) | (36) | % | ||||||||||||||||||||||||||||||||||||
Total DD&A Expense | $ | 14.49 | $ | 11.50 | $ | 2.99 | 26 | % |
Three Months Ended
March 31, |
|||||||||||||||||||||||||||||
(In thousands, except share and per share data) | 2019 | 2018 | |||||||||||||||||||||||||||
Net Income (Loss) | $ | (107,162) | $ | 2,965 | |||||||||||||||||||||||||
Add: | |||||||||||||||||||||||||||||
Impact of Selected Items: | |||||||||||||||||||||||||||||
Loss on the Mark-to-Market of Derivative Instruments | 152,169 | 12,141 | |||||||||||||||||||||||||||
Debt Exchange Derivative Gain | (6,287) | — | |||||||||||||||||||||||||||
Contingent Consideration Gain | (1,392) | — | |||||||||||||||||||||||||||
Selected Items, Before Income Taxes | 144,490 | 12,141 | |||||||||||||||||||||||||||
Income Tax of Selected Items(1) | (9,506) | (3,853) | |||||||||||||||||||||||||||
Selected Items, Net of Income Taxes | 134,984 | 8,288 | |||||||||||||||||||||||||||
Adjusted Net Income | $ | 27,822 | $ | 11,253 | |||||||||||||||||||||||||
Weighted Average Shares Outstanding – Basic | 371,448,566 | 65,215,148 | |||||||||||||||||||||||||||
Weighted Average Shares Outstanding – Diluted | 372,715,932 | 65,382,772 | |||||||||||||||||||||||||||
Net Income (Loss) Per Common Share – Basic | $ | (0.29) | $ | 0.05 | |||||||||||||||||||||||||
Add: | |||||||||||||||||||||||||||||
Impact of Selected Items, Net of Income Taxes | 0.36 | 0.12 | |||||||||||||||||||||||||||
Adjusted Net Income Per Common Share – Basic | $ | 0.07 | $ | 0.17 | |||||||||||||||||||||||||
Net Income (Loss) Per Common Share – Diluted | $ | (0.29) | $ | 0.05 | |||||||||||||||||||||||||
Add: | |||||||||||||||||||||||||||||
Impact of Selected Items, Net of Income Taxes | 0.36 | 0.12 | |||||||||||||||||||||||||||
Adjusted Net Income Per Common Share – Diluted | $ | 0.07 | $ | 0.17 |
Three Months Ended
March 31, |
|||||||||||||||||||||||||||||
(In thousands) | 2019 | 2018 | |||||||||||||||||||||||||||
Net Income (Loss) | $ | (107,162) | $ | 2,965 | |||||||||||||||||||||||||
Add: | |||||||||||||||||||||||||||||
Interest Expense | 19,548 | 23,107 | |||||||||||||||||||||||||||
Income Tax Provision (Benefit) | — | — | |||||||||||||||||||||||||||
Depreciation, Depletion, Amortization and Accretion | 45,134 | 18,631 | |||||||||||||||||||||||||||
Non-Cash Stock-Based Compensation | 2,751 | (886) | |||||||||||||||||||||||||||
Debt Exchange Derivative Gain | (6,287) | — | |||||||||||||||||||||||||||
Contingent Consideration Gain | (1,392) | — | |||||||||||||||||||||||||||
Loss on the Mark-to-Market of Derivative Instruments | 152,169 | 12,141 | |||||||||||||||||||||||||||
Adjusted EBITDA | $ | 104,761 | $ | 55,958 |
Three Months Ended
March 31, |
|||||||||||||||||
2019 | 2018 | ||||||||||||||||
(in thousands, unaudited) | |||||||||||||||||
Net Cash Provided by Operating Activities | $ | 98,908 | $ | 45,521 | |||||||||||||
Net Cash Used for Investing Activities | (77,913) | (58,022) | |||||||||||||||
Net Cash Provided by Financing Activities | (19,409) | (210) | |||||||||||||||
Net Change in Cash | $ | 1,586 | $ | (12,710) |
Three Months Ended
March 31, |
|||||||||||||||||
2019 | 2018 | ||||||||||||||||
(in millions, unaudited) | |||||||||||||||||
Drilling and Development Capital Expenditures | $ | 69.6 | $ | 55.7 | |||||||||||||
Acquisition of Oil and Natural Gas Properties | 8.1 | 2.2 | |||||||||||||||
Other Capital Expenditures | 0.2 | 0.1 | |||||||||||||||
Total | $ | 77.9 | $ | 58.0 |
Settlement Period | Oil (Barrels) | Weighted Average Price ($) | ||||||||||||
Swaps-Crude Oil | ||||||||||||||
2019: | ||||||||||||||
Q2 | 1,888,250 | $ | 62.95 | |||||||||||
Q3 | 1,850,480 | 63.08 | ||||||||||||
Q4 | 1,796,300 | 63.47 | ||||||||||||
2020: | ||||||||||||||
Q1 | 1,779,050 | $ | 60.20 | |||||||||||
Q2 | 1,688,050 | 59.22 | ||||||||||||
Q3 | 1,568,600 | 59.10 | ||||||||||||
Q4 | 1,392,880 | 58.41 | ||||||||||||
2021: | ||||||||||||||
Q1 | 1,019,700 | $ | 58.72 | |||||||||||
Q2 | 969,150 | 59.63 | ||||||||||||
Q3 | 345,000 | 55.28 | ||||||||||||
Q4 | 345,000 | 55.28 | ||||||||||||
2022: | ||||||||||||||
Q1 | 135,000 | $ | 55.00 | |||||||||||
Settlement Period | Total Volumes (Bbls) |
Weighted
Average Differential ($/Bbl) |
||||||||||||
04/01/19 – 12/31/19 | 2,841,000 | $ | (2.42) |
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, 2019 to January 31, 2019 | 5,635,003 | $ | 2.89 | 5,635,003 | $ 68.1 million | |||||||||||||||||||||
Month #2 | ||||||||||||||||||||||||||
February 1, 2019 to February 28, 2019 |
21,373(1)
|
2.54 | — | 68.1 million | ||||||||||||||||||||||
Month #3 | ||||||||||||||||||||||||||
March 1, 2019 to March 31, 2019 |
199,158(1)
|
2.53 | — | 68.1 million | ||||||||||||||||||||||
Total | 5,855,534 | $ | 2.87 | 5,635,003 | $ 68.1 million |
Exhibit No. | Description | Reference | ||||||||||||
Purchase and Sale Agreement, dated April 18, 2019, by and between Northern Oil and Gas, Inc. and VEN Bakken, LLC | Incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 22, 2019 | |||||||||||||
Share Repurchase Agreement, dated January 4, 2019, by and between Northern Oil and Gas, Inc. and W Energy Partners LLC | Filed herewith | |||||||||||||
Restated Certificate of Incorporation of Northern Oil and Gas, Inc. dated August 24, 2018 | Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 27, 2018 | |||||||||||||
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 May 15, 2018 | |||||||||||||
Second Amendment to the Amended and Restated Credit Agreement, dated January 14, 2019, by and among Northern Oil and Gas, Inc., Royal Bank of Canada, and the lenders party thereto | Filed herewith | |||||||||||||
Third Amendment to the Amended and Restated Credit Agreement, dated April 18, 2019, by and among Northern Oil and Gas, Inc., Royal Bank of Canada, and the lenders 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 22, 2019 | |||||||||||||
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 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 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 10, 2019 | By: | /s/ Brandon Elliott | |||||||||||
Brandon Elliott, Chief Executive Officer and principal executive officer
(on behalf of Registrant) |
||||||||||||||
Date: | May 10, 2019 | By: | /s/ Chad Allen | |||||||||||
Chad Allen, Chief Accounting Officer and principal accounting officer |
COMPANY:
NORTHERN OIL AND GAS, INC.
By: /s/ Nick O'Grady
Name: Nick O'Grady
Title: CFO
|
SELLER:
W ENERGY PARTNERS LLC
By: /s/ Shane Hannabury
Name: Shane Hannabury
Title: President
|
BORROWER:
|
NORTHERN OIL AND GAS, INC.
By: /s/ Nicholas O’Grady
Name: Nicholas O’Grady
Title: Chief Financial Officer
|
|
ROYAL BANK OF CANADA,
as Administrative Agent
By: /s/ Rodica Dutka
Name: Rodica Dutka
Title: Manager, Agency Services Group
|
|
ROYAL BANK OF CANADA,
as Issuing Bank and a Lender
By: /s/ Don J. McKinnerney
Name: Don J. McKinnerney
Title: Authorized Signatory
|
|
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as a Lender
By: /s/ Sarah Thomas
Name: Sarah Thomas
Title: Director
|
|
CAPITAL ONE, NATIONAL ASSOCIATION
as a Lender
By: /s/ Scott Machey
Name: Scott Machey
Title: Director
|
|
ABN AMRO CAPITAL USA LLC,
as a Lender
By: /s/ Beth Johnson
Name: Beth Johnson
Title: Executive Director
By: /s/ Darrell Holley
Name: Darrell Holley
Title: Managing Director
|
|
CADENCE BANK, N.A.,
as a Lender
By: /s/ Anthony Blanco
Name: Anthony Blanco
Title: SVP
|
|
CATHAY BANK,
as a Lender
By: /s/ Stephen V Bacala II
Name: Stephen V Bacala II
Title: Vice President
|
|
MORGAN STANLEY BANK, N.A.,
as a Lender
By: /s/ Jack Kuhns
Name: Jack Kuhns
Title: Authorized Signatory
|
|
GOLDMAN SACHS LENDING
PARTNERS LLC, as a Lender
By: /s/ Jamie Minieri
Name: Jamie Minieri
Title: Authorized Signatory
|
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 10, 2019 |
By: /s/ Brandon Elliott
|
||||
Brandon Elliott
Principal Executive Officer
|
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 10, 2019 |
By: /s/ Nicholas O'Grady
|
||||
Nicholas O'Grady
Principal Financial Officer
|
Dated: May 10, 2019 |
By: /s/ Brandon Elliott
|
||||
Brandon Elliott
Principal Executive Officer
|
Dated: May 10, 2019 |
By: /s/ Nicholas O'Grady
|
||||
Nicholas O'Grady
Principal Financial Officer
|