NOG -- Announces Bolt-On Acquisitions -- November 21, 2023

Locator: 46124NOG.

Press release. 

HIGHLIGHTS 

• bolt-on acquisitions of core non-operated working interest properties in the Northern Delaware and Appalachian Basins for a combined initial purchase price of $170 million in cash and 107,657 shares of common stock
• combined average expected 2024 production of ~6,500 Boe per day (26% oil, 2-stream) 
• combined cash flow from operations for the acquisitions expected to be $57.5 - $62.5 million in 2024, representing a 2.8 - 3.0x purchase price multiple 
• expecting approximately $33 - $38 million in total 2024 capital expenditures on the combined assets 
• NOG has existing ownership interests in approximately 90% of the Delaware Basin leasehold 
• transactions expected to be accretive to key financial metrics in 2024 and on a multi-year basis 
• acquisitions to be financed with cash on hand, operating free cash flow and borrowings under NOG’s revolving credit facility 
• NOG hedged a portion of the expected production on a multi-year basis, at higher than current pricing levels, prior to signing 

Coincidentally, earlier today: 

RBN Energy: Williams' Transco Corridor expansions give Appalachian gas producers a way out. Archived.

Appalachian natural gas producers got good news earlier this month: Williams announced it was moving forward with the Southeast Supply Enhancement project, a large-scale expansion of southbound capacity out of the Northeast on its Transco Pipeline system.

Not only that, but it super-sized the project to 1.4 Bcf/d of capacity — nearly double the 800 MMcf/d it had offered in an open season held this summer.

The project is one of several brownfield expansions planned to provide additional supply access in Transco’s premium Zone 5 market area, which runs through Virginia and North Carolina — and the first large-scale takeaway expansion to be announced in the area since the long-delayed Mountain Valley Pipeline (MVP) was cleared for completion following years of regulatory and legal hurdles.

In today’s RBN blog, we provide the latest on the Transco Corridor expansions.

When it comes to midstream development in the Northeast, Appalachian gas producers have learned by now not to hold their breath.

The region is notorious for its staunch environmental opposition to hydrocarbon infrastructure projects and its propensity for sending gas pipeline projects to the trash pile. However, against all odds, midstream development in the region has thawed in recent months, in large part spurred by the unlikely advancement of MVP (dashed blue-and-black line in Figure 1), the long-embattled project to move up to 2 Bcf/d from the Appalachia gas supply basin to the Transco Corridor.