NOG Misses By 9 Cents; Misses on Revenue -- Bakken, North Dakota, USA

Link here.

NOG announced record first quarter oil and gas sales of approximately $27.0 million.  Excluding the effect of unrealized, mark-to-market of oil hedges, Northern Oil had net income of $5.9 million, representing $0.09 per fully diluted share.  Including the effect of unrealized mark-to-market of oil hedges, Northern Oil had a first quarter net loss of $7.1 million, representing a $0.11 loss per share.

NOG is one of several Bakken companies to report an unrealized loss in mark-to-market oi hedges.

Oil and gas sales for the first quarter of 2011 were $27.0 million compared to $8.4 million for the first quarter of 2010, representing a 223% increase.  These results represent a 13% increase in oil and gas sales during the first quarter of 2011 compared to the fourth quarter of 2010.

Production volumes for the first quarter of 2011 were a quarterly record of 356,622 barrels of oil equivalent ("BOE"), representing a 185% increase compared to the first quarter of 2010 and a 5% increase compared to the fourth quarter of 2010.  The first quarter production volumes represent Northern Oil's thirteenth consecutive quarterly increase in production.

For newbies: I would not read too much into the 5% increase over sequential quarters. Drillers in North Dakota lost as much as 30 days production in the first quarter of 2011 due to weather conditions. We should see a much better 2Q11 compared to the first.

This was an interesting comment in light of recent bear raid:

Depletion expense for first quarter 2011 was $6.9 million, or $19.25 per BOE.  As such, Northern Oil's first quarter 2011 depletion expense was consistent with its peer group in the Bakken and Three Forks play.   

And finally:

Production expenses for first quarter 2011 were $5.24 per BOE on an accrued basis, compared to $3.15 per BOE on an accrued basis for the first quarter of 2010 and $3.69 per BOE on an accrued basis for the fourth quarter of 2010. The increase in production expense is primarily due to the continued addition of producing oil and gas properties, exposure to new operators and new development areas, an increase in working interests, mature wells utilizing artificial lift and the general aging of our production.  

The North Dakota Bakken (North Dakota side of the border, not Montana) is only about four years old, so I find that last comment (in bold) interesting.

NOG also announced a $150 million stock repurchase program; no time frame was announced.