NOG 4Q18 Earnings

Press release. Summary:

4Q18:

• production increased 117% over the prior year and 36% over the prior quarter, averaging a record of 36,258 barrels of oil equivalent per day
• lease operating expenses and general and administrative expenses were each down 26% per Boe from the prior year
• cash flow from operations, excluding a $10.3 million net increase from changes in working capital, was $107.5 million
• drilling and development capital expenditures totaled $78.2 million, a decrease of 4% from the prior quarter
• net income increased to $218.3 million or $0.58 per diluted share from a $0.37 loss per diluted share the prior year. Adjusted Net Income increased to $94.8 million or $0.25 per diluted share. Adjusted EBITDA increased 157% over the prior year to $124.9 million

Full year:

• production increased 73% over the prior year, averaging a record of 25,555 Boe per day
• cash flow from operations, excluding a $25.7 million net decrease from changes in working capital, was $270.0 million
• drilling and development capital expenditures totaled $260.9 million
• net income increased to $143.7 million or $0.61 per diluted share from a $0.15 loss per diluted share in 2017. Adjusted Net Income increased to $140.7 million or $0.59 per diluted share
• adjusted EBITDA increased 141% over the prior year to $349.3 million

4Q18: doing more with less -- production increased 36% from prior quarter; despite cutting CAPEX 4% from prior quarter

Guidance for 2019 base plan predicated on $50 WTI oil price environment:

• 28 to 32 net wells 
• severe 1H19 weather will result in increased weighting in 2Q19
• CAPEX: $247 to $285 million
• to include: $20 to $25 million in "ground game acquisitions, acreage, workover, etc.
• production will continue to be flat: will range between 34,500 to 35,500 boepd
• higher declines in 1Q19 but production growth will resume in 2Q, 3Q, 4Q19

"Red Queen"? NOG will add 28 to 32 net wells, but production will remain flat, maybe drop a bit on average over the year (2019)