Northern Oil and Gas, Inc. (NYSE MKT:NOG) Q3 2019 Earnings Conference Call - Final Transcript

Nov 12, 2019 • 11:00 am ET


Northern Oil and Gas, Inc. (NYSE MKT:NOG) Q3 2019 Earnings Conference Call - Final Transcript


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Greetings, and welcome to the Northern Oil and Gas third-quarter 2019 conference call. [Operator instructions] As a reminder, this conference is being recorded.

It's now my pleasure to introduce your host, Brandon Elliott. Please go ahead, sir.

Brandon Elliott

All right. Thanks, Kevin. Good morning, everyone. We're happy to welcome you to Northern's third-quarter 2019 earnings call.

Before we get to the results, let me cover our Safe Harbor language. Please be advised that our remarks today, including the answers to your questions may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by these forward-looking statements. Those risks include, among others, matters that we have described in our earnings release, as well as in our filings with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. We disclaim any obligation to update these forward-looking statements.

During this conference call, we may discuss certain non-GAAP financial measures, including adjusted net income and adjusted EBITDA. Reconciliations of these measures to the closest GAAP measure can be found in the earnings release that we issued this morning.

All right. During our call today, I will make a few summary comments before turning the call over to Nick O'Grady for his remarks. Then Northern's Chairman, Bahram Akradi, is going to comment on the ongoing consent solicitation, our exchange and strategy moving forward. And finally, we'll open it up for the Q&A portion of the call. In addition to those I mentioned, we also have Chad Allen, our Chief Accounting Officer; Adam Dirlam, our EVP of Land; and Jim Evans, our VP of Engineering in the room with us as well.

Northern had a solid quarter, with production up 17% sequentially and 53% year-over-year, the 3.75 million barrels of equivalent, averaging 40,786 barrels of oil equivalent per day. This production is despite continued curtailments and shut-ins that we have estimated, reduced our production by approximately 4,500 barrels of equivalent per day during the quarter. This was almost 2,000 BOE per day worse than our initial forecast. Offsetting those headwinds has been the success we have had over the last six months to 12 months in our ground game acquisitions. These acquisitions have helped to offset the curtailed production as some of the net well additions from prior ground game acquisitions have outperformed, both our estimates and initial production, and have come online slightly ahead of our initial plan.

Also, the VEN Bakken acquisition that we closed early in the third quarter has been slightly outperforming our initial forecast. Our hedging program continued to perform as designed and helped to protect us from recent volatility in the oil markets. Natural gas and NGL prices were particularly weak during the quarter.

As we mentioned last quarter, we think infrastructure expansions planned for late this year and into 2020 will bring [Indecipherable] relief, both on the oil