Northern Q4 Earnings Beat Estimates, Revenues Miss, Both Down Y/Y

Northern Oil and Gas, Inc. NOG reported fourth-quarter 2025 adjusted earnings per share of 83 cents, which beat the Zacks Consensus Estimate of 71 cents. The outperformance reflects strong production, with total output beating the consensus mark by 4.2%. However, the bottom line declined from the year-ago adjusted profit of $1.40, due to weaker year-over-year commodity prices and a 68.4% increase in operating expenses.

The Minnetonka, MN-based oil and gas exploration and production company reported oil and gas sales of $447.7 million, missing the Zacks Consensus Estimate of $511 million. Moreover, the top line decreased from the year-ago figure of $515 million. The year-over-year decline was mainly due to lower oil and gas sales during this quarter.

Northern Oil and Gas, Inc. Price, Consensus and EPS Surprise

Northern Oil and Gas, Inc. price-consensus-eps-surprise-chart | Northern Oil and Gas, Inc. Quote

NOG's board of directors declared a cash dividend of 45 cents per share. The dividend will be distributed on April 30 to its shareholders on record as of the close of business on March 30, 2026.

In this quarter, NOG executed share repurchases totaling 326,301 common shares, with an average purchase price of $21.47 per share, including commissions. For the full year, the company repurchased 1,948,996 shares at a weighted average price of $29.25 per share, also inclusive of commissions.

For the full year ended Dec. 31, 2025, the company delivered more than $230.4 million to its shareholders, including $173.4 million in dividend payments and $57 million through common share buybacks.

NOG’s Production Details

The fourth-quarter production increased 6% year over year to 140,064 barrels of oil equivalent per day (Boe/d). Additionally, the figure beat our estimate of 131,900 Boe/d.

While oil volume totaled 74,703 Boe/d (a 5% decrease year over year), natural gas (and natural gas liquids) amounted to 392,163 thousand cubic feet per day (a 24% increase). Our model estimate for oil volume and natural gas production was pegged at 74,500 Boe/d and 343,900 thousand cubic feet per day, respectively.

The average sales price for crude was $59.09 per barrel, indicating a 17% decrease from the prior-year quarter’s level of $65.40. Moreover, the figure beat our expectation of $58.39 per barrel.

The average realized natural gas price was $2.35 per thousand cubic feet compared with $2.42 in the year-earlier period. Our model estimate for the same was pinned at $3.5 per thousand cubic feet.

NOG’s Costs & Expenses

Total operating expenses in the quarter rose to $644 million from $382.3 million in the year-ago period. This was mainly on account of a surge in production expenses, general and administrative expenses, impairment of oil and gas assets, and other expenses. Moreover, the metric surpassed our estimate of $371.4 million.

Capital Expenditures of NOG

The company reported capital expenditures of $270.2 million for the fourth quarter, excluding non-budgeted acquisitions and other unplanned items. Of this total, $192.5 million was dedicated to drilling and completion activities on organic assets, while $77.7 million was allocated to Ground Game efforts, including associated development costs.

During the fourth quarter, NOG placed 24.2 net wells into production. At year-end 2025, 45.6 net wells were in various stages of development.

NOG’s Financial Position

The company’s free cash flow for the quarter totaled $43.2 million.

As of Dec. 31, 2025, Northern had $14.3 million in cash and cash equivalents. The company had a long-term debt of $2.4 billion, with a debt-to-capitalization of 53%.

NOG’s Guidance

This Zacks Rank #3 (Hold) expects its 2026 production and spending levels to vary depending on commodity prices and activity levels. Total output is projected in the range of 139,000-143,000 Boe/d under a low-activity scenario and 144,000-148,000 Boe/d under a high-activity case. Oil production is forecasted at 68,000-72,000 barrels per day in the low-activity environment and 72,000-76,000 barrels in a higher activity scenario.

Capital expenditures are estimated between $850 million and $900 million in the low-activity case, while a more robust development pace could drive spending to $1-$1.1 billion. Net wells turned in line are expected at 67.5-71.5 in the low-activity scenario and 83-87 in the high-activity case, reflecting the company’s flexible development strategy.

On the cost side, production expenses are anticipated in the range of $9.65-$10.1 per Boe in the lower activity environment and $9.45-$9.9 in the higher activity scenario. Production taxes are projected at 7-8% of oil and gas sales. The crude oil differential to NYMEX WTI is expected at a discount of $5.5-$6.5 per barrel, while natural gas realizations are estimated at 75-85% of NYMEX Henry Hub pricing. Depreciation, depletion and amortization costs are forecasted at $15-$16 per Boe.

General and administrative (G&A) expenses are expected to remain stable. Non-cash G&A costs are projected at 25-30 cents per Boe across both activity scenarios. Cash G&A, excluding transaction-related costs on non-budgeted acquisitions, is estimated at 81-86 cents per Boe in the low-activity case and 79-84 cents in the high-activity scenario.

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Important Energy Earnings at a Glance

While we have discussed NOG’s fourth-quarter results in detail, let us take a look at three other key reports in the energy space.

Valero Energy Corporation VLO, a leading independent refiner and marketer of transportation fuels and petrochemical products, posted fourth-quarter 2025 adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.22. The bottom line improved from the year-ago quarter’s level of 64 cents. The better-than-expected quarterly results can be mainly attributed to a surge in refining margins, higher ethanol production volumes and lower total cost of sales.

Valero Energy had cash and cash equivalents of $4.7 billion at the end of the fourth quarter. As of Dec. 31, 2025, it had total debt of $8.3 billion and finance lease obligations of $2.4 billion.

Baker Hughes Company BKR, a Houston, TX-based oil and gas equipment and services provider, posted fourth-quarter 2025 adjusted earnings of 78 cents per share, which beat the Zacks Consensus Estimate of 67 cents. The bottom line also increased from the year-ago level of 70 cents. The strong quarterly results were primarily driven by solid performance from BKR’s Industrial & Energy Technology business segment.

Baker Hughes Company’s net capital expenditure in the fourth quarter was $321 million. As of Dec. 31, 2025, it had cash and cash equivalents of $3.7 billion. BKR had a long-term debt of $5.4 billion at the end of the reported quarter, with a debt-to-capitalization of 24.3%.

Another Houston, TX-based oil and gas equipment and services provider, Halliburton Company HAL, posted fourth-quarter 2025 adjusted net income per share of 69 cents, beating the Zacks Consensus Estimate of 54 cents. The outperformance primarily reflects successful cost reduction initiatives. However, the bottom line marginally fell from the year-ago adjusted profit of 70 cents due to softer activity in the North American region.

Halliburton reported fourth-quarter capital expenditure of $337 million, well below our projection of $390.4 million. As of Dec. 31, 2025, the company had approximately $2.2 billion in cash and cash equivalents, and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.5.  

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