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Northern Oil and Gas NOG reported first-quarter 2025 adjusted earnings per share of $1.33, which beat the Zacks Consensus Estimate of $1.12. The bottom line also increased from the year-ago reported figure of $1.28. This outperformance was primarily driven by stronger-than-expected production, especially in natural gas, and higher-than-anticipated prices for natural gas. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Oil and natural gas sales of $577 million beat the Zacks Consensus Estimate of $559 million. Moreover, the top line increased from the year-ago figure of $532 million. The year-over-year growth was primarily driven by higher oil and gas sales, along with other revenue sources.
Northern Oil and Gas, Inc. price-consensus-eps-surprise-chart | Northern Oil and Gas, Inc. Quote
On April 30, 2025, NOG's board of directors declared a cash dividend of 45 cents per share, reflecting a 12.5% increase from the previous year and consistency with the payment in the prior quarter. The dividend will be distributed on July 31, 2025, to its shareholders on record as of the close of business on June 27.
In the first quarter, the company set a new production record in the Appalachian region, reaching 113.5 million cubic feet equivalent of gas per day. Production in the Uinta Basin also grew more than 15% from the previous quarter, showing solid early results under SM Energy's new leadership.
The company brought in $407.4 million in operating cash flow. It also produced $135.7 million in free cash flow, a 41% increase from the fourth quarter of last year.
In the first quarter of 2025, the company repurchased 499,100 shares of common stock on the open market at an average price of $30.07 per share, including commissions.
The company completed seven small deals that added more than 1,000 acres and 1.1 net wells for $4.8 million, including development costs.
On April 1, 2025, NOG completed its previously announced acquisition in Upton County, TX, purchasing 2,275 net acres from a private operator for a total cash payment of $61.7 million, after closing adjustments.
The first-quarter production increased 13% year over year to 134,959 barrels of oil equivalent per day (Boe/d). Additionally, the figure beat our estimate of 131,200 Boe/d.
While oil volume totaled 78,675 Boe/d (up 12% year over year), natural gas (and natural gas liquids) amounted to 337,706 thousand cubic feet per day (up 14%). Our model estimate for oil volume and natural gas production was pegged at 76,500 Boe/d and 328,200 thousand cubic feet per day, respectively.
The average sales price for crude was $64.92 per barrel, indicating an 11% decrease from the prior-year quarter’s level of $72.92. The figure also missed our expectation of $71.02 per barrel.
The average realized natural gas price was $3.86 per thousand cubic feet compared with $2.47 in the year-earlier period. Our model estimate for the same was pinned at $2.19 per thousand cubic feet.
Total operating expenses in the quarter rose to $372.8 million from $344 million in the year-ago period. This was mainly on account of a surge in production expenses, general and administrative expenses, depletion, depreciation, amortization and accretion, and other expenses. Moreover, the total exceeded our estimate of $366 million.
The company reported capital expenditures of $249.9 million in the first quarter, excluding non-budgeted acquisitions and other items. This total consisted of $245.1 million in drilling and completion (D&C) capital focused on organic assets and $4.8 million related to Ground Game activity, including associated development costs. D&C spending was largely in line with expectations, supported by strong spud activity and steady AFE participation.
The company reported that 57% of its first-quarter capital expenditures were allocated to the Permian Basin, followed by 20% to the Williston Basin, 15% to the Uinta Basin and 8% to the Appalachian Basin. On the Ground Game acquisition front, NOG completed seven transactions during the quarter through various structures, acquiring a total of 1,015 net acres and 1.1 net current and future-development wells.
The company’s free cash flow for the quarter totaled $135.7 million. As of March 31, Northern had $33.6 million in cash and cash equivalents. The company had a long-term debt of $2.3 billion, with a debt-to-capitalization of 49%.
Based on its full-year 2025 guidance, the company anticipates a daily annual production of oil equivalent ranging from 130,000 barrels to 135,000 barrels, with daily oil production specifically expected to be between 75,000 barrels and 79,000 barrels.
The company's total capital expenditures for the year are projected to fall within the range of $1,050 million to $1,200 million. Furthermore, it expects to bring 87-91 net oil wells and a total of 97-99 net wells into production, while commencing drilling operations on 106-110 net wells.
In terms of operating expenses, the production cost per barrel of oil equivalent is estimated to be between $9.15 and $9.40. Production taxes are anticipated to represent 8.5% to 9% of oil and gas sales. The average price received for oil is expected to be at a discount of $4.75-$5.50 per barrel compared with the WTI benchmark and the average natural gas realization is projected to be 85% to 90% of the NYMEX Henry Hub price per thousand cubic feet (Mcf).
The company also forecasts depletion, depreciation and amortization expenses to be between $16.50 and $17.50 per barrel of oil equivalent. Finally, general and administrative expenses per barrel of oil equivalent are anticipated to be 25 cents to 30 cents for non-cash items and 85 cents to 90 cents for cash expenses, excluding transaction costs related to unbudgeted acquisitions.
While we have discussed NOG’s first-quarter results in detail, let us take a look at three other key reports in this space.
Oil and gas equipment and services provider, Liberty Energy LBRT, reported a first-quarter 2025 adjusted net income of 4 cents per share, which marginally beat the Zacks Consensus Estimate of 3 cents. Liberty's outperformance indicated operational efficiencies as well as increased utilization of frac and wireline fleets. However, the bottom line underperformed the year-ago quarter’s reported figure of 48 cents due to a decline in service activity.
As of March 31, Liberty had approximately $24.1 million in cash and cash equivalents. The pressure pumper’s long-term debt of $210 million represented a debt-to-capitalization of 9.6%.
Another oil and gas equipment and services provider, Halliburton Company HAL, posted first-quarter 2025 adjusted net income per share of 60 cents. The figure met with the Zacks Consensus Estimate but was down from the year-ago quarter’s profit of 76 cents (adjusted). The numbers reflect softer activity in the region of North America, partly offset by international growth. Meanwhile, Halliburton’s revenues of $5.4 billion decreased 6.7% year over year but beat the Zacks Consensus Estimate of $5.3 billion.
As of March 31, 2025, Halliburton had approximately $1.8 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.8.
Houston, TX-based oil and gas equipment and services provider, Baker Hughes BKR, reported first-quarter 2025 adjusted earnings of 51 cents per share, which beat the Zacks Consensus Estimate of 47 cents. The bottom line also improved from the year-ago level of 43 cents.
As of March 31, 2025, Baker had cash and cash equivalents of $3,277 million. Baker had a long-term debt of $5,969 million at the end of the reported quarter, with a debt-to-capitalization of 25.9%.
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This article originally published on Zacks Investment Research (zacks.com).
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