Attached files
| file | filename |
|---|---|
| 8-K - NORTHERN OIL AND GAS, INC 8-K 3-28-2011 - NORTHERN OIL & GAS, INC. | form8k.htm |
| EX-99.1 - EXHIBIT 99.1 - NORTHERN OIL & GAS, INC. | ex99_1.htm |
Exhibit 99.2
Northern Oil and Gas, Inc.
Howard Weil 2011
Northern Oil and Gas, Inc. (NYSE/AMEX: NOG)
2
Forward Looking Statements
Statements made by representatives of Northern Oil and Gas, Inc. (“Northern” or the “Company”) during
the course of this presentation that are not historical facts are forward-looking statements. These
statements are based on certain assumptions and expectations made by the Company which reflect
management’s experience, estimates and perception of historical trends, current conditions, anticipated
future developments and other factors believed to be appropriate. Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are beyond the control of the Company,
which may cause actual results to differ materially from those implied or anticipated in the forward-looking
statements. These include risks relating to the global financial crisis, our ability to obtain additional
capital needed to implement our business plan, minimal operating history, loss of key personnel, lack of
business diversification, reliance on strategic, third-party relationships, ability to obtain rights to explore
and develop oil and gas reserves, financial performance and results, our indebtedness under our credit
facility, prices and demand for gas, oil and natural gas liquids, our ability to replace reserves and
efficiently develop our current reserves, our ability to make acquisitions on economically acceptable
terms, and other important factors that could cause actual results to differ materially from those
anticipated or implied in the forward-looking statements. Northern undertakes no obligation to publicly
update any forward-looking statements, whether as a result of new information or future events.
the course of this presentation that are not historical facts are forward-looking statements. These
statements are based on certain assumptions and expectations made by the Company which reflect
management’s experience, estimates and perception of historical trends, current conditions, anticipated
future developments and other factors believed to be appropriate. Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are beyond the control of the Company,
which may cause actual results to differ materially from those implied or anticipated in the forward-looking
statements. These include risks relating to the global financial crisis, our ability to obtain additional
capital needed to implement our business plan, minimal operating history, loss of key personnel, lack of
business diversification, reliance on strategic, third-party relationships, ability to obtain rights to explore
and develop oil and gas reserves, financial performance and results, our indebtedness under our credit
facility, prices and demand for gas, oil and natural gas liquids, our ability to replace reserves and
efficiently develop our current reserves, our ability to make acquisitions on economically acceptable
terms, and other important factors that could cause actual results to differ materially from those
anticipated or implied in the forward-looking statements. Northern undertakes no obligation to publicly
update any forward-looking statements, whether as a result of new information or future events.
3
Presenter
Michael Reger
CEO, Chairman
4
Williston Basin Bakken / Three Forks Focus
Strong Williston Basin Position
Bakken / Three Forks acreage
~151,300 net acres
Participated in 475+ Gross
Bakken / Three Forks wells
Bakken / Three Forks wells
NOG Core Bakken Leasehold: ~151,300 Net Acres
5
6
Key Operating Statistics
|
Q4 2010 Average Net Production (boe/d)
|
~3,700
|
|
Exit Rate (boe/d) (as of 12/31/10)
2011E Average Net Production (boe/d)
|
~5,200
~6,500 - ~7,100
|
|
Net Wells Spud 2010
|
~25.00
|
|
Net Wells Spud (FY 2011E)
3 Net Bakken Wells Available for Drilling:
3 Net Three Forks Wells Available for Drilling:
Total Williston Basin Drilling Exposure:
|
~40.00
1,280 acre spacing = 354 net wells
1,280acre spacing = 354 net wells
708 NET WELLS
|
7
Strategy - Keep It Simple
Maximize Bakken/Three Forks exposure as Non-Operator
Extensive leasehold in Mountrail County, ND
Substantial permitting activity on NOG’s acreage
Continue to partner with experienced operators
Acquire opportunistic acreage and production
First Quarter 2011 - Acquired ~11,100 net acre for ~$1,540 per acre
Maintain financial flexibility and strong balance sheet
December 2010 Capital Raise of $200 million
$125 million cash position
$100 million undrawn credit facility
No Debt
8
Bakken Shale Activity
Favorable developments in the Bakken
North Dakota rig count is at all-time highs: ~ 173 rigs
Three Forks productivity delineating rapidly throughout the field
Completion techniques evolving rapidly (super-fracs widely used)
North Dakota Average Monthly Rig Count
9
Record drilling activity has significantly intensified the pace of
development
development
NOG’s number of net wells drilling, awaiting completion, or
completing continues to grow:
completing continues to grow:
14.17 net wells as of March 28th, 2011
13.32 net wells as of February 25th, 2011
12.06 net wells as of November 29th, 2010
7.2 net wells as of August 9th, 2010
North Dakota - NOG is currently participating in 141 gross wells
drilling or completing (North Dakota rig count: ~ 173 rigs)
drilling or completing (North Dakota rig count: ~ 173 rigs)
Northern’s Bakken Activity
10
Strong Northern Results
25 net wells were spud in 2010
Drilling guidance increased to 40 net wells spud by YE 2011
Production increased 36% sequentially in Q4 2010
Production: 95% oil weighted
Oil Hedges in place through June 2012
Total Swaps: ~1,789,000 barrels @ ~$87
Feb-Dec 2011 Costless Collar: ~451,000 barrels @ $85/101.75
100% success rate in the Bakken/Three Forks play
11
Net wells spud:
40.00
Average production:
6,500 - 7,100 BOE per day
Average estimated well cost:
$6.3 million
Drilling capital plan:
$252 million
Acreage capital plan:
Remain opportunistic
2011 Guidance
12
Northern’s Continued Execution
Cumulative Net Wells Producing & Spud
Average Quarterly Production (BOEPD)
Source: Company Filings
13
Non-Operator Model
Majority interest owner can permit a well on standard spacing without protest
Minority interest owners pooled into pro-rata share of well / drilling unit
Minority interest owner can permit well with support of other minority owners
Majority Interest (Operator)
75% (480 acres)
Minority Interest
(Non-Operator)
25% (160 acres)
640 Acre Section (Drilling Unit)
14
14
Non-Operator Model Continued
Low cost producer
Pay only direct drilling, development and operating costs of wells
Not responsible for many other operator costs
G&G
R&D
Seismic
Illustrative Transaction Timeline (1)
Legal / accounting for production
Engineering
Large operator staff not required
Benefits
Complete well
North Dakota Industrial
Commission issues
permit to drill Bakken
well
Commission issues
permit to drill Bakken
well
Receive authority for
expenditure (“AFE”)
expenditure (“AFE”)
Elect to participate / not
participate in AFE
participate in AFE
Spud well / Make
payment to operator
based on AFE estimate
payment to operator
based on AFE estimate
Receive first payment
from operator 60 days
after completion
from operator 60 days
after completion
Day 0
Day 120
Day 90
Day 60
Day 30
Day 180
Transaction timeline can be shorter or longer depending primarily on factors affecting the successful drilling and completion of a well that are both within and beyond the operator’s control.
15
High-Quality Bakken Operators
OTHERS
Northern Operating Partners (% of Gross Wells)
Risk Diversification + Technology Transfer
16
Investment Highlights
Large Core Bakken / Three Forks Acreage Position With
Significant Drilling Inventory
Significant Drilling Inventory
Numerous Benefits Achieved Through Working With High-
Quality Operating Partners
Quality Operating Partners
Attractive Bakken / Three Forks Economics
Diversification Across Operators
Acreage Acquisition Advantage
Questions & Answers
Northern Oil and Gas, Inc. (NYSE/AMEX: NOG)