Northern Oil and Gas, Inc. Announces Accretive Acquisition With Cash and Stock
Northern Oil and Gas, Inc. (NYSE American: NOG) today announced that it
has entered into a definitive agreement to acquire significant
production in North Dakota, currently producing over 4,100 barrels of
oil equivalent (“Boe”) per day. The asset, primarily a large package of
producing wells, is being acquired from Pivotal Petroleum Partners
(“Pivotal”), a portfolio company of funds managed by Tailwater Capital
LLC. Total consideration at closing will consist of $68.4 million in
cash (subject to customary adjustments) and 25.75 million shares of
Northern common stock. Pivotal will be subject to a lock-up on the
shares over a 13-month post-closing period. The agreement contains a
mechanism for potential additional consideration to be paid during the
13-month lock-up period if Northern’s common stock trades below certain
price targets. The acquisition is expected to close in approximately 60
days, with an effective date of June 1, 2018.
HIGHLIGHTS
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The acquisition is expected to be accretive to cash flow, leverage
metrics, and earnings per share through 2020
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Northern expects the acquired asset to generate approximately $56
million of cash flow from operations over the next twelve months
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Northern expects to enter into commensurate hedge agreements for a
significant portion of the acquired volumes
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Northern expects to become cash flow positive immediately upon closing
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Northern expects to be sub-2.0x Net Debt/Adjusted EBITDA in 2019
MANAGEMENT COMMENT
“This transaction in the core of the Williston Basin is transformative
for Northern, with both strong free cash flow and a high rate of
return,” commented Northern’s Founder and President, Mike Reger. “The
combination of this asset, along with our significant and growing core
inventory of future drilling locations and the outstanding well results
we have seen so far in 2018, will achieve our goal to be cash flow
positive upon closing, with below-peer debt metrics in 2019. We look
forward to welcoming Pivotal as a new, significant shareholder in
Northern.”
ABOUT NORTHERN OIL AND GAS
Northern Oil and Gas, Inc. is an exploration and production company with
a core area of focus in the Williston Basin Bakken and Three Forks play
in North Dakota and Montana.
More information about Northern Oil and Gas, Inc. can be found at www.NorthernOil.com.
ABOUT TAILWATER CAPITAL
Dallas-based Tailwater Capital is a highly specialized, growth-oriented
energy private equity firm with a well-established track record, having
executed more than 65 energy transactions in the upstream and midstream
sectors representing over $16.6 billion in transaction value. Tailwater
currently manages over $2.6 billion in committed capital, over $800
million of which is available for new investments.
More information about Tailwater Capital can be found at www.tailwatercapital.com.
SAFE HARBOR
This press release contains forward-looking statements regarding future
events and future results that are subject to the safe harbors created
under the Securities Act of 1933 (the “Securities Act”) and the
Securities Exchange Act of 1934 (the “Exchange Act”). All statements
other than statements of historical facts included in this release
regarding Northern’s financial position, business strategy, plans and
objectives of management for future operations, industry conditions, and
indebtedness covenant compliance are forward-looking statements. When
used in this release, forward-looking statements are generally
accompanied by terms or phrases such as “estimate,” “project,”
“predict,” “believe,” “expect,” “continue,” “anticipate,” “target,”
“could,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or
other words and similar expressions that convey the uncertainty of
future events or outcomes. Items contemplating or making assumptions
about actual or potential future sales, market size, collaborations, and
trends or operating results also constitute such forward-looking
statements.
Forward-looking statements involve inherent risks and uncertainties, and
important factors (many of which are beyond Northern’s control) that
could cause actual results to differ materially from those set forth in
the forward-looking statements, including the following: changes in
crude oil and natural gas prices, the pace of drilling and completions
activity on Northern’s properties, Northern’s ability to acquire
additional development opportunities, changes in Northern’s reserves
estimates or the value thereof, general economic or industry conditions,
nationally and/or in the communities in which Northern conducts
business, changes in the interest rate environment, legislation or
regulatory requirements, conditions of the securities markets,
Northern’s ability to raise or access capital, changes in accounting
principles, policies or guidelines, financial or political instability,
acts of war or terrorism, and other economic, competitive, governmental,
regulatory and technical factors affecting Northern’s operations,
products, services and prices.
Northern has based these forward-looking statements on its current
expectations and assumptions about future events. While management
considers these expectations and assumptions to be reasonable, they are
inherently subject to significant business, economic, competitive,
regulatory and other risks, contingencies and uncertainties, most of
which are difficult to predict and many of which are beyond Northern’s
control. Northern does not undertake any duty to update or revise any
forward-looking statements, except as may be required by the federal
securities laws.
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