Northern Oil and Gas Q2 Earnings Call Highlights

Strong second-quarter financial performance: Adjusted EBITDA rose 17% sequentially, while free cash flow increased more than 400% to $159 million. Production grew 9% year over year, despite temporary Permian curtailments caused by weak Waha natural-gas prices. Capital returns remain a priority: Northern Oil and Gas repurchased 2.95 million shares during the quarter and increased its buyback authorization to approximately $243 million. It also paid a $0.45 quarterly dividend, which management said was covered multiple times by free cash flow. Expansion and outlook: The company is integrating its Duvernay acquisition in Canada and continues to add drilling opportunities through acquisitions and leasing. Management projects 2026 adjusted EBITDA of $1.4 billion to more than $1.5 billion, with estimated free cash flow of roughly $375 million to over $500 million. Northern Oil and Gas NYSE: NOG reported higher second-quarter cash flow and production, citing the benefits of its diversified non-operated portfolio despite Permian Basin curtailments tied to weak Waha natural gas economics. Chief Financial Officer Chad Allen said adjusted EBITDA increased 17% sequentially, while free cash flow rose more than 400% from the first quarter. The company generated $159 million of free cash flow during the quarter, according to Allen. Total production increased 9% from a year earlier, supported by record natural gas volumes that rose 35% year over year and 5% sequentially. Allen said the company experienced significant production curtailments in the Permian during the quarter because of challenging Waha pricing, but volumes have begun returning as market conditions improved. Three net wells brought online are expected to contribute during the third quarter. Outside of the Waha-driven curtailments, Northern Oil and Gas said its assets performed ahead of internal expectations in several regions. The Williston and Uinta basins exceeded internal expectations, while Appalachian production reached a record with a full quarter of contributions from the company’s Utica joint development. President Adam Dirlam said early results from the Utica development have been strong. During the question-and-answer session, Chief Technical Officer Jim Evans said the company was seeing performance above internal expectations across its basins, including the Williston, where longer lateral wells have become more efficient. Allen said Northern Oil and Gas’ unhedged net realized oil price improved 36% from the first quarter. Natural gas realizations were 90% of Henry Hub, while realized prices including hedges and Waha basis effects reached 123% of Henry Hub. Strong natural gas liquids pricing also contributed to results. Production expenses per barrel of oil equivalent declined 4% from the prior-year period. The company reported budgeted capital expenditures of $196 million, including $151 million for organic drilling and completion activity and $45 million for its “ground game” acquisition efforts. Normalized well costs were $761 per lateral foot, largely unchanged from the first quarter. Second-quarter spending was weighted toward oil-producing areas, with the Permian accounting for 37% and the Williston 33%. Appalachia and the Uinta each represented 14% of spending, while the recently acquired Duvernay position contributed 2%. Northern Oil and Gas ended the quarter with more than $1 billion in total liquidity. During the quarter, it repurchased 2.95 million shares, or about 3% of shares.