HIGHLIGHTS

• Joint acquisition with Vital Energy, Inc. (“Vital”) of certain assets (the “Point Assets”) of Point Energy Partners, LLC (“Point”), a Vortus Investments company (“Vortus”) for $1.1 billion
• NOG purchasing a 20% undivided stake in the Point Assets (the “Acquired Assets”) for $220 million in cash (all numbers below are net to NOG)
• The Acquired Assets include >4,500 Boe per day (2-stream, excluding NGLs, >75% oil) of recent production and ~4,000 net leasehold and mineral acres, located primarily in Ward County, TX
• Cash flow from operations on the Acquired Assets expected to be >$75 million in the next twelve months (starting 10/1/2024), based on recent strip prices, representing a transaction multiple on the unadjusted purchase price of <2.9x
• Strong free cash flow profile on the Acquired Assets with >$40 million expected over the next twelve months (starting 10/1/2024). See “Non-GAAP Financial Measures” below
• Significant purchase price reduction expected at closing due to April 2024 effective date
• Transaction to be funded by cash flow from operations, 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 20% undivided stake in the Point Assets in the Delaware Basin, in partnership with Vital Energy, Inc., for a purchase price net to NOG of $220.0 million in cash, subject to typical closing adjustments. 

The Acquired Assets are primarily located in Ward County, Texas and include approximately 4,000 net leasehold and mineral acres, 26.4 net producing wells, 1.6 net wells-in-process and ~12.1 low-breakeven net undeveloped locations. Upon closing, the operator of the assets will be Vital, with NOG participating in development pursuant to cooperation and joint operating agreements entered into with Vital in connection with the acquisition.

Recent production on the Acquired Assets was >4,500 Boe per day (2-stream, >75% oil). For the fourth quarter of 2024, NOG expects average production of >3,250 Boe per day (2-stream, >75% oil) and approximately $11.3 million of capital expenditures.

The effective date for the transaction is April 1, 2024, and NOG expects to close the transaction in the late third quarter of 2024. As part of the transaction, NOG has placed a $22.0 million deposit in escrow prior to closing. The obligations of the parties to complete the transactions contemplated by the purchase agreement are subject to the satisfaction or waiver of customary closing conditions.

“This transaction further emphasizes NOG’s position as the most reliable and consistent partner for the purchase and development of high-quality properties,” commented Nick O’Grady, NOG’s Chief Executive Officer. “We are very excited to again work alongside our partners at Vital to develop the Point Assets with strong alignment and cooperation. These assets will be easily funded on-balance sheet and their strong cash flows should provide for immediate growth and significant accretion to per share metrics, shareholder returns and the potential for compounding of growth in the years to come.”

“The Point Assets sit directly in our area of interest and close to our existing Delaware holdings,” commented Adam Dirlam, NOG’s President. “With our partners at Vital, we expect to responsibly develop these assets with an aligned plan that will deliver strong returns for our respective stakeholders over the coming years.”

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