Northern Oil and Gas, Inc. (NYSE: NOG) has announced a definitive agreement to acquire non-operated interests in approximately 3,000 net acres in the Northern Delaware Basin, primarily in Lea and Eddy Counties, New Mexico.  The company currently owns interests in about 90% of the leasehold, with current production averaging around 2,800 barrels of oil equivalent (Boe) per day. With capital expenditures projected between $25 and $30 million for 2024, NOG anticipates significant growth in the coming years, expecting to exceed 3,500 Boe per day in average production from 2025 through 2030.

Expansion into the Appalachian Basin by Northern Oil and Gas

In a separate transaction, NOG has entered into an agreement to acquire non-operated interests in the Appalachian Basin, specifically in Jefferson, Harrison, Belmont, and Monroe Counties, Ohio. The primary target zone is the Point Pleasant/Utica Shale, with current production at approximately 23 million cubic feet equivalent per day. The company plans to spend approximately $14 million in capital expenditures in 2023 and $8 million in 2024. The assets, operated mainly by Ascent Resources, include productive and in-process wells.

The initial acquisition cost of the two deals is set at $170 million in cash, along with 107,657 shares of common stock. These transactions are subject to standard closing adjustments.

Management’s Outlook and Future Plans for NOG’s Acquisitions

Nick O’Grady, CEO of NOG, expressed confidence in the acquisitions, emphasizing their expected accretive value in 2024 and beyond. Adam Dirlam, President of NOG, highlighted the focus on low-breakeven, resilient inventory in both basins. Following the closing of these transactions, NOG’s Permian lands will approach 40,000 net acres, becoming the company’s most active and largest basin in terms of activity and production.

Citi served as financial advisor for the Delaware Basin transaction, while TPH&Co advised the seller. Kirkland & Ellis LLP and Steptoe & Johnson provided legal counsel for the Delaware Basin and Utica transactions, respectively.

These acquisitions by Northern Oil and Gas, Inc. represent a strategic expansion in key oil and gas basins, positioning the company for continued growth and diversification in the energy sector.

  Adam Dirlam, Appalachian Basin, Delaware Basin, New Mexico, Nick O’Grady, Northern Oil and Gas, Ohio, USA, Utica Shale