NOG Announces Acquisition -- VEN Bakken -- April 22, 2019

Updates

July 2, 2019: NOG -- acquisition closed; VEN Bakken; outperforming prior expectations; highlights:

• Production from the acquired assets is now expected to average approximately 6,650 barrels of oil equivalent (“Boe”) per day in the third quarter of 2019 and approximately 7,000 Boe per day in the fourth quarter of 2019, an increase from Northern’s prior estimate of 6,600 Boe per day (2-stream). 
• The acquired assets now consist of 87.8 net producing wells, an increase of 0.9 net wells, and 4.1 net wells in process, an increase of 1.4 net wells. In addition, Northern now estimates that the acquired assets include an additional 45.6 net undrilled locations of future drilling inventory. 

Original Post

 
Note: prior to acquisition, NOG said to be producing about 36K boepd; this acquisition should add about 7,000 boepd (about 20%).

• NOG market cap prior to acquisition: $1.027 billion
• acquisition may have cost about $300 million  
• debt prior to acquisition: $850 million

Press report, link here.

• 18,000 net acres ($310 million / 18,000 = $17,000/acre; on cash flow, perhaps $15,500/acre)
• 86.9 net producing wells
• 2.7 net wells in process
• 47.5 net undrilled locations
• should average 6,600 boepd (2-stream) during 2H19
• seller: Williston Basin properties of VEN Bakken, a wholly-owned subsidiary of Flywhell Bakken, LLC, a portfolio company of the Kayne Private Energy Income Funds
• assets should generate $44.9 million in cash flow during 2H19; with an estimated 2H19 CAPEX of $15.6 million
• buyer: NOG; $165 million in cash; a $130 million 6% three-year senior unsecured note due 2022 and approximately 5.6 million shares of NOG common stock ($15 million +$165 million + $130 million = $310 million)

On that news, NOG went from slightly "positive" to jumping almost 5% before market close and adding another 3/4 percent after hours.

• April 22, 2019: acquires 18K net acres; $300 million; $17K/acre; if it produces 6,600 boepd as anticipated, that's quite a jump in production
• January, 2019, corporate presentation; 151,978 net acres; 4Q18 mid-point guidance, 35,500 boepd; 3Q18: 26,708 boepd; total proved reserves have increased 79% year-over-year; most of that due to acquisitions; now at 135.5 million boe;

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