Largest Transaction in Company History to be Highly Accretive to Key Financial Metrics, Adds ~5,600 Net Acres to Delaware Basin Portfolio

Highlights

• Joint acquisition with Earthstone Energy of certain assets of Novo Oil & Gas Holdings an EnCap portfolio company
• NOG purchasing a 33.33% undivided stake in the Novo Assets (the “Acquired Assets”) for $500.0 million in cash
• Current production of ~13,000 Boe per day (2-stream, excluding NGLs, 54% oil)
• ~5,600 net acres, located primarily in Eddy County, NM and eastern Culberson County, TX with significant inventory of future drilling locations
• Cash flow from operations expected to be >$180 million in the next twelve months (starting 8/1/2023), based on recent strip prices, representing a transaction multiple of <2.8x
• Strong free cash flow profile with ~$65 million expected capital spend in the next twelve months (starting 8/1/2023)
• Executed hedges for a significant portion of the production associated with the transaction through 2026 and will continue to add hedges over time
• Assets have significant Tier 1 inventory, with sub-$45 per barrel average breakeven economics
• Transaction to be funded by cash on hand and borrowings under NOG’s Senior Secured Revolving Credit Facility

Northern Oil and Gas has entered into a definitive agreement to acquire a 33.33% undivided stake in the Novo Assets in partnership with Earthstone Energy, Inc. for a purchase price, net to NOG, of $500.0 million in cash, subject to customary closing adjustments.

The Acquired Assets are primarily located in Eddy County, New Mexico and eastern Culberson County, Texas and include approximately 5,600 net acres, 29.2 net producing wells, 7.2 net wells-in-process and 59.9 low-breakeven net undeveloped locations. NOG’s net working interest in the Acquired Assets will be approximately 29%, with an average gross NRI of 77%. The Eddy County assets represent approximately 80% of the allocated value of the transaction. Approximately 98% of the Culberson County allocated value is tied to current production and wells-in-process.

Upon closing and transition of services, the operator of substantially all the assets will be Earthstone, with NOG participating in development pursuant to cooperation and joint operating agreements entered into in connection with the acquisition. Additionally, Earthstone and NOG have formed an area of mutual interest for further consolidation of assets.

Recent production on the Acquired Assets was approximately 13,000 Boe per day (2-stream, 54% oil). For the second half of 2023, NOG expects average production of approximately 11,500 Boe per day (2-stream, 53% oil) and approximately $20 million of capital expenditures. Long term, NOG expects Earthstone to turn in line an average of approximately 6 - 7 wells annually net to NOG, which should sustain production at approximately 10,000 Boe per day (2-stream, excluding NGLs), with consistent oil cuts as a percentage of the total.

The effective date for the transaction is May 1, 2023, and NOG expects to close the transaction in August 2023. As part of the transaction, NOG has placed a $37.5 million deposit in escrow prior to closing. The obligations of the parties to complete the transactions contemplated by the acquisition agreement are subject to the satisfaction or waiver of customary closing conditions.

“Novo is NOG’s largest transaction to date and is among the most accretive, with significant high-quality, long-dated inventory,” commented Nick O’Grady, NOG’s Chief Executive Officer. “We are excited to work alongside our partners at Earthstone developing these assets for the next decade and believe this transaction will drive higher per share profits, free cash flow and shareholder returns for our investors, both immediately and over the long term.”

“With Novo, we continue to showcase NOG’s unique capabilities and access to large, bespoke opportunities,” commented Adam Dirlam, NOG’s President. “Our returns-focused strategy, combined with our scaled data advantage, has fundamentally changed the types of transactions we can pursue. Our reputation as an aligned and balanced partner is affording us participation in the highest quality areas and asset classes with respected operators.”

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