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Northern Oil (NOG) Q2 Earnings & Sales Outperform Estimates

·4-min read

Northern Oil and Gas NOG, the independent oil and gas producer, reported second-quarter 2022 adjusted earnings per share (EPS) of $1.72, beating the Zacks Consensus Estimate of $1.57, primarily attributable to greater net production and much higher commodity prices compared with the last quarter.  Moreover, the bottom line improved considerably from the year-ago profit of 92 cents.

The company's oil and natural gas sales of $549.6 million beat the Zacks Consensus Estimate of $410 million. The top line also skyrocketed from the year-ago figure of $225.7 million.

In good news for investors, Northern instituted a 36% dividend hike compared with the previous quarter. It declared a regular quarterly cash dividend for NOG’s common stock of 19 cents per share for stockholders of record as of Jun 29, 2022. Its adjusted EBITDA rose about 6.2% sequentially to $272.5 million.

Production & Price Realizations

The second-quarter production (comprising 57.5% oil) surged about 33% from the year-ago level to 72,689 barrels of oil equivalent per day (Boe/d) and surpassed the Zacks Consensus Estimate of 71,133 Boe/d. While the oil volume came in at 41,777 barrels per day (up 25.3% year over year), natural gas totaled 185,478 thousand cubic feet per day (up 45.3%).

The average sales price for crude oil in the second quarter was $106.26 per barrel, reflecting a 75% hike from the prior-year realization of $60.73. The average realized natural gas price was $8.63 per thousand cubic feet compared with $3.57 in the year-earlier period.

Northern Oil and Gas, Inc. Price, Consensus and EPS Surprise

Northern Oil and Gas, Inc. Price, Consensus and EPS Surprise
Northern Oil and Gas, Inc. Price, Consensus and EPS Surprise

Northern Oil and Gas, Inc. price-consensus-eps-surprise-chart | Northern Oil and Gas, Inc. Quote

Financial Position

Excluding working capital, cash flow from operations jumped 7% from the last quarter’s figure to $252.2 million, while Northern's organic drilling and development capital expenditure totaled $119.1 million. The company's free cash flow for the quarter was $114.3 million.

As of Jun 30, the owner of non-operating, minority interests in thousands of oil and gas wells had $1.47 million in cash and cash equivalents. The company had long-term debt of $1.1 billion.

Guidance

Northern's output for 2022 is now anticipated in the 73,000-77,000 Boe/d range compared with the previous guidance in the band of 71,000-76,000 Boe/d.

NOG updated its total capital spending guidance for 2022 from the $350-$415 million range to the $405-$470 million band.

However, the company maintained this year's oil-mix guidance of 59.5-61.5%.

Zacks Rank

Northern Oil and Gas currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshot of Other Energy Players

Shell plc SHEL reported second-quarter earnings per ADS (on a current cost of supplies basis, excluding items – the market’s preferred measure) of $3.06. The bottom line beat the Zacks Consensus Estimate of $2.91 due to stronger commodity prices and refining margins.

Shell has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Value, Growth and B for Momentum. SHEL is expected to see earnings growth of 126.5% in 2022.

Chevron Corporation CVX reported adjusted second-quarter EPS of $5.82, beating the Zacks Consensus Estimate of $5.02. The outperformance was driven by robust commodity prices and product margins, which propelled both CVX’s segments to record a better-than-expected bottom line.

As of Jun 30, Chevron had $12 billion in cash and cash equivalents and total debt of $26.2 billion, with a debt-to-total capitalization of 14.6%. Further, Chevron paid out $2.8 billion in dividends and bought back $2.5 billion worth of its shares in the second quarter.

TotalEnergies SE TTE reported second-quarter 2022 operating earnings of $3.75 per share, meeting the Zacks Consensus Estimate. The improvement was due to an increase in commodity prices.

In the second quarter of 2022, TotalEnergies acquired $2,464 million worth of assets and sold assets valued at $388 million. TTE bought back shares worth $2 billion in the second quarter. TotalEnergies expects to invest $16 billion in 2022, out of which 25% will be allocated to further strengthen renewable operations and electricity.


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