HIGHLIGHTS

• Bolt-on acquisition of core non-operated working interest properties in the Northern Delaware Basin for a purchase price of $130.0 million
• Average production of ~2,500 Boe per day (68% oil, 2-stream) expected for 2023, generating an estimated $55 million of unhedged cash flow in 2023 at strip pricing as of October 10, 2022 (~2.4x transaction multiple)
• ~2,100 net acres located in Lea and Eddy Counties, NM and Loving & Winkler Counties, TX with significant Tier-1 inventory (sub-$40 per barrel average breakevens)
• Strong growth and free cash flow profile with ~$25 million capital spending expected on the assets in 2023
• Transaction expected to be accretive to key financial metrics

Northern Oil and Gas today announced the acquisition of Northern Delaware Basin properties.

DELAWARE BASIN ACQUISITION

NOG has entered into a definitive agreement to acquire certain non-operated interests in the Delaware Basin from a private seller for a purchase price of $130.0 million in cash, subject to typical closing adjustments.

The acquired assets are located in Lea and Eddy Counties, New Mexico and Loving and Winkler Counties, Texas, and include approximately 2,100 net acres, 5.3 net producing wells, 2.1 net wells-in-process and approximately 17.2 net undeveloped locations. The primary operator of the assets is Mewbourne Oil, one of the most cost efficient and active operators in the Northern Delaware Basin. Other operators include Coterra and Permian Resources.

The effective date for the transaction is November 1, 2022, and NOG expects to close the transaction in December 2022. The obligations of the parties to complete the transactions contemplated by the purchase agreement are subject to the satisfaction or waiver of customary closing conditions.

“NOG continues to press its advantage as a well-capitalized, reliable and consistent purchaser of high-quality non-operated properties,” commented Nick O’Grady, NOG’s Chief Executive Officer. “More importantly, NOG’s technical team continues to underwrite for returns with precision and focus on the best assets available in the marketplace today.”

“This transaction lies squarely in NOG’s fairway on a number of levels,” commented Adam Dirlam, NOG’s President. “The Assets contain high-quality, low breakeven development that is leveraged to some of NOG’s top operating partners, as our investors have come to expect.”

KeyFacts Energy Industry Directory: Northern Oil and Gas