Northern Oil and Gas reports $81.7 million legal settlement

MINNEAPOLIS - Northern Oil and Gas, Inc. (NYSE:NOG), a $2.76 billion market cap energy company with a "GREAT" financial health score according to InvestingPro, has reached an $81.7 million settlement with an unnamed North Dakota operator over disputed post-production costs previously deducted from revenues, according to a company press release.

The oil and gas producer, which maintains a healthy 78.8% gross profit margin and offers a 6.4% dividend yield, expects to receive net cash proceeds of $48.6 million after deducting approximately $33.1 million in legal settlement expenses. The cash is expected to be received in the third quarter of 2025.

NOG also reported estimated unrealized mark-to-market gains on derivatives of $65-$70 million for the second quarter, along with realized hedge gains of approximately $58-$63 million, driven by the company’s natural gas, crude oil and basis hedges.

The company completed 22 ground game transactions in the second quarter, adding 4.8 net wells and approximately 2,600 net acres across its four major basins. These transactions totaled approximately $23.8 million of initial capital with about $7.3 million in incremental development capital.

NOG expects to take a non-cash impairment charge of $112-$120 million in the second quarter of 2025 under the ceiling test of the full cost pool on its assets, driven by lower average oil prices. The company noted this charge will have no impact on its cash flows. Trading at a P/E ratio of just 4.3, InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report covering this and 1,400+ other US equities.

The company has continued its hedging program, with over 50,000 barrels per day of oil hedged for the second half of 2025 and over 30,000 barrels per day hedged for 2026. Additionally, NOG has hedged over 200 MMBtu per day of natural gas for the second half of 2025 and over 175 million MMBtu per day for 2026.

The preliminary financial information provided is based on estimates and subject to completion of NOG’s financial closing procedures. With revenue growth of 12.5% and strong profitability metrics, investors can access deeper analysis and additional ProTips through InvestingPro’s comprehensive research platform.

In other recent news, Northern Oil and Gas has reported substantial financial developments. The company exceeded earnings expectations for the first quarter of 2025, with earnings before interest, taxes, depreciation, and amortization (EBITDA) and earnings per share (EPS) surpassing Raymond James and Street projections by approximately 11% and 18%, respectively. Additionally, Northern Oil and Gas has increased its credit facility from $1.5 billion to $1.6 billion, with the borrowing base reaffirmed at $1.8 billion, enhancing its financial flexibility. Fitch Ratings has upgraded Northern Oil and Gas’s Long-Term Issuer Default Rating to ’BB-’ from ’B+’, reflecting strong free cash flow. Analyst firms have also updated their outlooks, with Citi raising its price target to $38 and Raymond James lifting it to $36, both maintaining positive ratings. The company also reported results from its Annual Meeting of Stockholders, where eight directors were elected, and other key resolutions were ratified. These developments highlight Northern Oil and Gas’s strategic and operational advancements in the industry.

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