NOG: Announces Core Bolt-On Acquisition -- June 10, 2020

NOG: announces core bolt-on acquisition.

• acquisition expected to produce approximately 1,200 Boe per day in 2021, and wells are expected to be online in the first quarter of 2021 
• all acquisition and development capital included in Northern’s previously stated budget 
• acquisition expected to generate $11.3 million of 2021 cash flow from operations at June 5, 2020 strip prices; expected payback period under 1.5 years 
• Northern has entered additional commodity hedging instruments at prices higher than the strip for 2021 

More:

• Williston Basin
• $1.5 million
• seller: WPX
• 320 acres
• nine gross well proposals to fully develop the unit consisting of 2.1 net wells
• back-of-the-envelope: about $5,000/acre

Break-even estimates:

• Northern entered into additional crude oil derivative swaption transactions (link here) to hedge a portion of the production associated with this and other transactions at an average of $45.48 per barrel for 2021 for 1,500 barrels per day. That average price is approximately $3.85 higher than the underlying strip price used to calculate the estimated cash flow stream described above.