Northern Oil and Gas NOG reported fourth-quarter 2023 adjusted earnings per share (EPS) of $1.61, which lagged the Zacks Consensus Estimate of $1.64. This was primarily due to weaker commodity prices and a 52.6% increase in operating expenses. However, the bottom line improved from the year-ago level of $1.43. This was primarily due to higher-than-expected production growth.

The company's oil and natural gas sales of $543.4 million missed the Zacks Consensus Estimate of $554 million. The top line, however, improved from the year-ago figure of $445.6 million.

NOG's board of directors declared a quarterly cash dividend of 40 cents per share for stockholders of record as of Mar 28, 2024, to be paid on Apr 30, 2024. The figure was up 18% from that recorded in the first quarter of 2023. Adjusted EBITDA came in at $401.7 million compared with $264.8 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

Realizations

The fourth-quarter production (comprising 60.2% oil) increased 45% from the year-ago level to 114,363 barrels of oil equivalent per day (Boe/d). The figure also surpassed our estimate of 111,200 Boe/d. While oil volume totaled 68,871 barrels per day (up 46.9% year over year), natural gas (and NGLs) amounted to 272,950 thousand cubic feet per day (up 42.4%). Our model estimate for oil volume and natural gas production was pegged at 73,100 Boe/d and 228,700 thousand cubic feet per day, respectively.

The average sales price for crude during the fourth quarter was $74.51 per barrel, indicating a 12.2% decrease from the prior-year quarter’s level of $90.54. The figure was also lower than our expectation of $76.69 per barrel.

The average realized natural gas price was $2.84 per thousand cubic feet compared with $5.64 in the year-earlier period. Our model estimate for the same was pinned at $1.43 per thousand cubic feet.

Costs & Expenses

Total operating expenses in the quarter rose to $309.5 million from $202.8 million in the year-ago period. The figure was higher than our projection of $286.8 million. This was mainly on account of a surge in depreciation and production expenses and production taxes.

In particular, the company’s lease operating (or production) expenses decreased to $9.70 per Boe from the year-ago figure of $10.06. Meanwhile, depreciation outlay increased 35% year over year on a per-barrel basis.

Financial Position

Excluding working capital, cash flow from operations went up 56% year over year to $365.9 million, while organic drilling and development capital expenditures totaled $260 million. The company’s free cash flow for the quarter amounted to $103.6 million.