NOG: Williston Basin Bolt-On Acquisition; Increased 2022 Activity; Shareholder Return Update -- June 7, 2022

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Bolt-on acquisition:

• $170 million "initial" purchase price from private party
• seller may earn an additional $5 million in contingent payments in 2023 if WTI exceeds $92.50 on December 30, 2022
• average production over next twelve months: 2,500 boepd, 2-stream; ~ 83% oil)
• 17.5 net undeveloped locations
• includes 2.6 net wells in process
• 3,500 net acres
• acquired assets in Dunn, McKenzie, and Williams counties
• assets operated primarily by MRO, CLR, and COP
• back-of-the-envelope:
• flowing price:
• $170  million / 2,500 boepd = $65,000 per flowing boepd
• $170 million / 3,500 net acres = $50,000 / acre
• unhedged cash flow, forward one year; around $75 million
• strong free cash flow with about $25 million annual sustaining capital expenditures to maintain produciton
• $6 million + to drill / complete a Bakken well; with inflation, maybe $8 million

On-going operations (2022):

• spud wells to grow to 65 net wells, a 10-well increase compared to original forecast
• average wellhead IRR expected to exceed 100%
• annual production: 77K on high end, up from 76K on high end
• total CAPEX: $470 million on high end, up from $415 million on high end
• net wells turned-in-line: 56.5 on high end, up from 52 on high end

Shareholder returns:

• purchasing preferred stock has reduced annualized dividend payments by $3.6 million per year