Wired News – Northern Oil and Gas Acquires Oil Producing Assets in North Dakota from Affiliate of Private Equity Firm Tailwater Capital
LONDON, UK / ACCESSWIRE / July 20, 2018 / If you want access to our free research report on Northern Oil and Gas, Inc. (NYSE: NOG) (“Northern”), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=NOG as the Company’s latest news hit the wire. On July 18, 2018, the Company announced that it has signed an agreement with Pivotal Petroleum Partners (“Pivotal”) to acquire significant oil producing assets in North Dakota. Dallas, Texas-based Pivotal is a privately-held oil and gas Company and a portfolio Company of private equity firm Tailwater Capital LLC. The cash plus stock deal is valued at approximately $151.93 million. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Details of the Transaction
Northern’s acquisition of oil producing assets in North Dakota include a large package of producing wells in the core of the Williston Basin with a current production capacity of over 4,100 barrels of oil equivalent per day (Boepd). The Company has agreed to pay $68.4 million in cash plus 25.75 million shares of Northern to Pivotal for these assets, subject to adjustments at the time of closing. The transaction is effective from June 01, 2018, and is expected to close within 60 days. As per the terms of the acquisition, Pivotal has a 13-month lock-in period for shares of Northern after the close of the deal. The Company will need to make additional payments to Pivotal if the shares of Northern trade below certain price points during the 13-month lock-in period.
Commenting on the acquisition of the assets in North Dakota, Mike Reger, Founder and President of Northern, said:
“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.”
Advantages of the Acquisition
Northern expects that the deal would be highly accretive to its cash flows and earnings per share (EPS) till 2020. The oil producing assets are expected to realize approximately $56 million in cash from operations within the next 12 months’ time. The Company plans to mitigate its risk by entering into hedge agreements for a significant portion of the acquired volumes. On completion of the deal, it is expected to immediately contribute to Northern’s cash flows.
About Tailwater Capital LLC
Dallas, Texas-based Tailwater Capital was founded in 2013 by Edward Herring and Jason Downie. It is a highly specialized middle market private equity firm focused exclusively on the energy industry, and invests in the midstream and upstream sectors. The firm has completed over 65 energy transactions in the energy sector with a transaction value of over $16.6 billion. Tailwater Capital currently manages over $2.6 billion in committed capital, over $800 million of which is available for new investments.
About Northern Oil and Gas, Inc.
Minnetonka, Minnesota-based Northern is an exploration and production organization. It is a leading non-operator franchise in the core of the Bakken and Three Forks plays in the Williston Basin of North Dakota and Montana. Northern has targeted specific areas in the Williston Basin that offer the highest rates of return on oil drilling projects throughout commodity cycles. The leading operators recognize Northern as the “go to” buyer of non-operated positions in the Bakken oil play.
Stock Performance Snapshot
July 19, 2018 - At Thursday’s closing bell, Northern Oil and Gas’ stock marginally rose 0.88%, ending the trading session at $3.45.
Volume traded for the day: 5.24 million shares, which was above the 3-month average volume of 4.21 million shares.
Stock performance in the last month – up 20.63%; previous three-month period – up 94.92%; past twelve-month period – up 200.00%; and year-to-date - up 68.29%
After yesterday’s close, Northern Oil and Gas’ market cap was at $918.05 million.
The stock is part of the Basic Materials sector, categorized under the Oil & Gas Drilling & Exploration industry.
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