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Northern (NOG) Q2 Earnings and Revenues Outpace Estimates
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Northern Oil and Gas, Inc. (NOG - Free Report) reported second-quarter 2024 adjusted earnings per share of $1.46, which beat the Zacks Consensus Estimate of $1.20. The outperformance reflects strong production. However, the bottom line declined from the year-ago adjusted profit of $1.49 due to weaker natural gas prices and a 41.4% increase in operating expenses.
The oil and natural gas sales of $561 million beat the Zacks Consensus Estimate of $538 million. The top line increased from the year-ago figure of $416.5 million.
Adjusted EBITDA came in at $413.1 million compared with $315.5 million in the year-ago period.
Northern Oil and Gas, Inc. Price, Consensus and EPS Surprise
The oil and gas exploration and production company repurchased 895,076 shares of common stock at an average price of $38.96 per share during this quarter. Additionally, the company announced a joint acquisition of Uinta Basin properties from XCL Resources, in partnership with SM Energy Company (SM - Free Report) , for $510 million net to NOG.
On Jul 29, NOG’s management announced its intention to get approval from the board of directors for a 5% increase in the quarterly dividend, raising it by 2 cents to 42 cents per share for the third quarter. The board of directors has also approved a new $150 million share repurchase authorization.
The company recently announced a joint acquisition of Delaware Basin properties from Point Energy Partners, in collaboration with Vital Energy, Inc., for $220 million net to NOG.
Realizations
The second-quarter production increased 36% year over year to 123,342 barrels of oil equivalent per day (Boe/d). Additionally, the figure beat our estimate of 119,000 Boe/d.
While oil volume totaled 69,645 barrels per day (up 27% year over year), natural gas (and NGLs) amounted to 322,183 thousand cubic feet per day (up 49%). Our model estimate for oil volume and natural gas production was pegged at 70,200 Boe/d and 294,800 thousand cubic feet per day, respectively.
The average sales price for crude was $77.11 per barrel, indicating a 9% increase from the prior-year quarter’s level of $71.03. However, the figure missed our expectation of $77.8 per barrel.
The average realized natural gas price was $2.47 per thousand cubic feet compared with $3.18 in the year-earlier period. Our model estimate for the same was pinned at $1.5 per thousand cubic feet.
Costs & Expenses
Total operating expenses in the quarter rose to $341.8 million from $241.8 million in the year-ago period. This was mainly on account of a surge in production expenses, production taxes and General and Administrative expenses, depletion, depreciation, amortization and accretion (DD&A) and other expenses. However, the figure was marginally higher than our projection of $341.4 million.
In particular, the company’s lease operating expenses decreased to $8.99 per Boe from the year-ago figure of $10.2. Meanwhile, depreciation outlay increased 22% year over year on a per-barrel basis.
Financial Position
Cash flow from operations totaled $340.5 million. When excluding changes in net working capital, cash flow from operations amounted to $374.2 million, up 33% from that recorded a year ago. The company’s free cash flow for the quarter totaled $133.7 million.
As of Jun 30, Northern had $7.8 million in cash and cash equivalents. The company had a long-term debt of $1.9 billion, with a debt-to-capitalization of 47.5%.
2024 Guidance
Operational Outlook: This Zacks Rank #3 (Hold) company expects its recent acquisitions to enhance operational efficiency, increasing annual production while reducing costs. To support these growth initiatives, the company plans to adjust capital expenditures to accommodate investments in the acquired properties. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Pricing: Stronger-than-expected gas prices, combined with the impact of acquisitions, will result in an upward adjustment to the metric. While recent improvements have partially offset increased transportation costs in the Uinta Basin, the company expects a marginal increase in its oil price for 2024. Northern plans to revise its DD&A rate to reflect the impact of the acquisitions.
Production: NOG anticipates drilling 67.5 to 72.5 net wells and bringing 87.5 to 92.5 net wells turned-in-line in 2024.Annual oil production is projected to range from 70,000 to 73,000 barrels per day.Total production is expected to reach between 115,000 and 120,000 barrels of oil equivalent per day.
Financial Outlook: The company expects capital expenditures for 2024 to be between $825 and $900 million. Production expenses are projected to range from $9.25 to $9.9 per Boe. Production taxes are expected to be 9% to 10% of oil and gas sales. DD&A is anticipated to be $15.5 to $17.5 per Boe. General and administrative expenses (excluding transaction costs) are projected to be 75 cents to 85 cents per Boe, with 25 cents to 30 cents being non-cash.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
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Northern (NOG) Q2 Earnings and Revenues Outpace Estimates
Northern Oil and Gas, Inc. (NOG - Free Report) reported second-quarter 2024 adjusted earnings per share of $1.46, which beat the Zacks Consensus Estimate of $1.20. The outperformance reflects strong production. However, the bottom line declined from the year-ago adjusted profit of $1.49 due to weaker natural gas prices and a 41.4% increase in operating expenses.
The oil and natural gas sales of $561 million beat the Zacks Consensus Estimate of $538 million. The top line increased from the year-ago figure of $416.5 million.
Adjusted EBITDA came in at $413.1 million compared with $315.5 million in the year-ago period.
Northern Oil and Gas, Inc. Price, Consensus and EPS Surprise
Northern Oil and Gas, Inc. price-consensus-eps-surprise-chart | Northern Oil and Gas, Inc. Quote
The oil and gas exploration and production company repurchased 895,076 shares of common stock at an average price of $38.96 per share during this quarter. Additionally, the company announced a joint acquisition of Uinta Basin properties from XCL Resources, in partnership with SM Energy Company (SM - Free Report) , for $510 million net to NOG.
On Jul 29, NOG’s management announced its intention to get approval from the board of directors for a 5% increase in the quarterly dividend, raising it by 2 cents to 42 cents per share for the third quarter. The board of directors has also approved a new $150 million share repurchase authorization.
The company recently announced a joint acquisition of Delaware Basin properties from Point Energy Partners, in collaboration with Vital Energy, Inc., for $220 million net to NOG.
Realizations
The second-quarter production increased 36% year over year to 123,342 barrels of oil equivalent per day (Boe/d). Additionally, the figure beat our estimate of 119,000 Boe/d.
While oil volume totaled 69,645 barrels per day (up 27% year over year), natural gas (and NGLs) amounted to 322,183 thousand cubic feet per day (up 49%). Our model estimate for oil volume and natural gas production was pegged at 70,200 Boe/d and 294,800 thousand cubic feet per day, respectively.
The average sales price for crude was $77.11 per barrel, indicating a 9% increase from the prior-year quarter’s level of $71.03. However, the figure missed our expectation of $77.8 per barrel.
The average realized natural gas price was $2.47 per thousand cubic feet compared with $3.18 in the year-earlier period. Our model estimate for the same was pinned at $1.5 per thousand cubic feet.
Costs & Expenses
Total operating expenses in the quarter rose to $341.8 million from $241.8 million in the year-ago period. This was mainly on account of a surge in production expenses, production taxes and General and Administrative expenses, depletion, depreciation, amortization and accretion (DD&A) and other expenses. However, the figure was marginally higher than our projection of $341.4 million.
In particular, the company’s lease operating expenses decreased to $8.99 per Boe from the year-ago figure of $10.2. Meanwhile, depreciation outlay increased 22% year over year on a per-barrel basis.
Financial Position
Cash flow from operations totaled $340.5 million. When excluding changes in net working capital, cash flow from operations amounted to $374.2 million, up 33% from that recorded a year ago. The company’s free cash flow for the quarter totaled $133.7 million.
As of Jun 30, Northern had $7.8 million in cash and cash equivalents. The company had a long-term debt of $1.9 billion, with a debt-to-capitalization of 47.5%.
2024 Guidance
Operational Outlook: This Zacks Rank #3 (Hold) company expects its recent acquisitions to enhance operational efficiency, increasing annual production while reducing costs. To support these growth initiatives, the company plans to adjust capital expenditures to accommodate investments in the acquired properties. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Pricing: Stronger-than-expected gas prices, combined with the impact of acquisitions, will result in an upward adjustment to the metric. While recent improvements have partially offset increased transportation costs in the Uinta Basin, the company expects a marginal increase in its oil price for 2024. Northern plans to revise its DD&A rate to reflect the impact of the acquisitions.
Production: NOG anticipates drilling 67.5 to 72.5 net wells and bringing 87.5 to 92.5 net wells turned-in-line in 2024.Annual oil production is projected to range from 70,000 to 73,000 barrels per day.Total production is expected to reach between 115,000 and 120,000 barrels of oil equivalent per day.
Financial Outlook: The company expects capital expenditures for 2024 to be between $825 and $900 million. Production expenses are projected to range from $9.25 to $9.9 per Boe. Production taxes are expected to be 9% to 10% of oil and gas sales. DD&A is anticipated to be $15.5 to $17.5 per Boe. General and administrative expenses (excluding transaction costs) are projected to be 75 cents to 85 cents per Boe, with 25 cents to 30 cents being non-cash.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.