Northern Oil and Gas Inc

Northern Oil and Gas Inc (NYSE: NOG) is an independent energy company. The Company is engaged in the acquisition, exploration, development, and production of oil and natural gas properties. Its properties are primarily located in the Bakken and Three Forks formations within the Williston Basin in North Dakota and Montana.

Key Highlights

• Williston Basin Bolt-on Acquisition increased 2022 activity, and shareholder return updates were disclosed by NOG on June 8, 2022. Bolt-on acquisition of high oil-cut, core working interest properties in the Williston Basin from a private party for USD170 million. Over the next twelve months, the average production of >2,500 Boe per day (2-stream, 83 percent oil) is projected from this inventory-rich transaction, which includes 17.5 net undeveloped sites, 2.6 net wells in-process, and 3,500 net acres.
• Northern Oil & Gas, Inc. said that on June 7, 2022, it signed into a revised and restated credit agreement with Wells Fargo, as an administrative agent, and a syndicate of 14 lenders controlling its reserves-based revolving credit facility. The facility's borrowing base has been expanded from USD850.0 million to USD1.3 billion.
• Northern Oil and Gas, Inc. announced on May 4, 2022, that its Board of Directors has declared a USD0.19 per share cash dividend on the Company's common stock, a 36 percent increase over the previous quarterly payout. The dividend will be paid on July 28, 2022, to investors who were on the books as of June 29, 2022.
• The first quarter's oil and natural gas sales totaled USD456.5 million, up 37% from the fourth quarter of 2021. The first-quarter GAAP net loss was USD206.6 million, or USD2.69 per diluted share, including a USD384.2 million non-cash mark-to-market loss on derivatives.
• The first quarter of 2022 had a record Free Cash Flow of USD146.0 million, up 106 percent from the fourth quarter of 2021.
• During the first quarter, USD36.3 million of Preferred Stock was retired, followed by another USD3.7 million in April 2022, for a total of USD40.0 million year-to-date.
• Declared a USD0.19 per share dividend for the second quarter of 2022, up 36% from the first quarter, and management aims to recommend to the Board of Directors a USD0.25 per share dividend for the third quarter of 2022, up 14% from the prior objective and 32% sequentially.

Stock recommendation

NOG's stock price has increased by 86.44% in the past six months and is currently at the higher end of its 52-week range of USD 14.03 to USD 39.10.  As can be seen in the chart below, the price is currently above the short-term (50-day) SMA and long-term (200-day) SMA, with RSI at 61.47, after correcting from the overbought area.

Given the stock's considerable boost in the past six months, financial results, and technical analysis, we propose a "Watch" rating on the stock at its closing price of USD 34.40 as of June 14, 2022.

One Year Technical Chart, as of June 14, 2022. Data Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary

* Closing price as of June 14, 2022.

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decisions should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.