Northern Oil and Gas Q3 Earnings Call Highlights

Key Points

• Northern Oil and Gas raised its 2026 production forecast to 147,000–150,000 barrels of oil equivalent per day after record third-quarter production; it kept its $850 million–$900 million capital budget, expecting spending near the high end.
• Third-quarter adjusted EBITDA rose 11% sequentially and 15% year over year, while improved oil and gas realizations more than offset higher production costs. The company generated about $150 million in free cash flow, its 27th consecutive positive quarter.
• Debt fell by more than $100 million, bringing net leverage below 1.5 times, and the company ended September with over $1.6 billion in liquidity. It also repurchased about 668,000 shares and maintained its $0.45 quarterly dividend.

Northern Oil and Gas NYSE: NOG raised its full-year production forecast after reporting record production and adjusted EBITDA in the third quarter of 2026, as stronger natural gas realizations helped offset higher production expenses.

The company now expects 2026 production of 147,000 to 150,000 barrels of oil equivalent per day. Chief Financial Officer Chad Allen said the increase reflected record third-quarter volumes and strong well performance. Northern Oil and Gas maintained its $850 million to $900 million capital budget but expects spending to land toward the high end because of increased activity and smaller acquisitions.

Adjusted EBITDA rose 11% from the second quarter and 15% from a year earlier, Allen said. Total production increased 7% sequentially and 19% year over year. Oil volumes rose 10% from the second quarter, while natural gas production reached a record and was up 39% from a year earlier.

Improved Gas Prices Lift Margins

Allen said production expenses exceeded the company’s full-year guidance range during the quarter, largely because of elevated processing costs, primarily in the Williston Basin. Those costs rise with stronger natural gas liquids prices. Year-to-date production expenses were $9.77 per barrel of oil equivalent, and the company updated its full-year range to $9.75 to $9.85.

Better commodity realizations more than offset the higher expense rate, Allen said. Oil differentials narrowed to less than $3 per barrel, while gas realizations improved to 98% of Henry Hub pricing from 90% in the second quarter. Permian gas realizations recovered to 85% of Henry Hub from 39% as pressure at the Waha hub eased.

The improved realizations added approximately $12 million during the quarter, Allen said. Cash margin rose sequentially to $30.74 per barrel of oil equivalent.

Chief Executive Officer Nick O’Grady said the company generated approximately $150 million of free cash flow in the quarter, despite higher capital spending. Allen said it was Northern Oil and Gas’ 27th consecutive quarter of positive free cash flow.

Debt Falls as Share Repurchases Continue

Third-quarter budgeted capital expenditures totaled $247.3 million, including $190.7 million for organic drilling and completion and $56.5 million for what the company calls its “ground game” of smaller acquisitions and other transactions.

Total debt fell by more than $100 million during the quarter, and net debt to last-quarter annualized adjusted EBITDA declined below 1.5 times, reaching the company’s stated range one quarter ahead of its year-end goal, Allen said. Northern Oil and Gas ended September with more than $1.6 billion in liquidity.

In August, the company issued $500 million of 7.5% senior notes due in 2034 and used the proceeds to pay down its revolving credit facility. The revolver balance stood at $223 million at quarter-end.

Northern Oil and Gas repurchased approximately 668,000 shares in the quarter at an average price of $23.96, leaving about $227 million under its authorization. Its board declared a quarterly dividend of $0.45 per share, paid on Oct. 30. Allen said third-quarter free cash flow exceeded the dividend payout by more than three times.

O’Grady said the company wants to reduce leverage further while retaining flexibility to repurchase shares. He described the stock as a compelling investment for the company.

Operations and Acquisition Outlook

President Adam Dirlam said the company brought 23.9 net wells online during the quarter, nearly twice the second-quarter total, with almost all in oil-weighted basins. Recent normalized authorization-for-expenditure costs declined 3% from the prior quarter and were more than 5% below the 2025 average, helped by drilling efficiencies and longer laterals, he said.

Dirlam said the company closed 19 ground-game transactions during the quarter. Its year-to-date activity added 15.4 net wells and more than 8,500 net acres. Northern Oil and Gas was also evaluating roughly 14 larger asset packages across seven regions with an estimated total value exceeding $15 billion, he said.

O’Grady said the company was not currently interested in a transaction that would increase leverage. He expects most acquisitions to be made through the regular ground-game budget or on a small scale that would not materially affect leverage. Asset sales could provide funding for acquisitions, he said, but matching the timing of a sale and a purchase was not guaranteed.

Asked about the Uinta Basin, O’Grady said it accounts for about 8% of total production and that the company’s performance there was on track. He described a potential basin slowdown as transitory and said the company was increasing rig activity.

For 2027, O’Grady said it was too early to provide a capital spending outlook, citing commodity-price volatility and uncertainty around potential projects. The company also plans to hold its first investor day in the coming months, with details to follow.

About Northern Oil and Gas (NYSE:NOG)

Northern Oil and Gas, Inc is an independent energy company engaged in the acquisition, development and production of crude oil, natural gas and natural gas liquids in the United States. The company primarily holds non-operated working interests, allowing it to participate in wells drilled and managed by other exploration and production companies while maintaining exposure to a broad portfolio of oil and gas assets.

Northern Oil and Gas has historically focused on properties in the Williston Basin of North Dakota and Montana and has expanded its operations into other major U.S.

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