NYSE American: NOG EnerCom Conference Presentation AUGUST 2019 NYSE American: NOG
FORWARD LOOKING STATEMENTS NYSE American: NOG This presentation contains forward-looking statements regarding future events and future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act ”) . All statements other than statements of historical facts included in this presentation regarding Northern’s financial position, business strategy, plans and objectives of management for future operations, industry conditions, and indebtedness covenant compliance are forward-looking statements. When used in this presentation, forward-looking statements are generally accompanied by terms or phrases such as “estimate,” “project,” “predict,” “believe,” “expect,” “continue,” “anticipate,” “target,” “could,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other words and similar expressions that convey the uncertainty of future events or outcomes. Items contemplating or making assumptions about actual or potential future sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our company’s control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: changes in crude oil and natural gas prices, the pace of drilling and completions activity on Northern’s current properties and properties pending acquisition, infrastructure constraints and related factors affecting Northern’s properties, Northern’s ability to acquire additional development opportunities, changes in Northern’s reserves estimates or the value thereof, general economic or industry conditions, nationally and/or in the communities in which Northern conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, Northern’s ability to consummate any pending acquisition transactions, other risks and uncertainties related to the closing of pending acquisition transactions, Northern’s ability to raise or access capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, and other economic, competitive, governmental, regulatory and technical factors affecting our company’s operations, products and prices. Northern has based these forward-looking statements on its current expectations and assumptions about future events. While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond Northern’s control. Northern does not undertake any duty to update or revise any forward-looking statements, except as may be required by the federal securities laws. Investor Presentation - August 2019 2
NORTHERN OIL & GAS NYSE American: NOG DOMINANT NON-OPERATOR FRANCHISE IN THE WILLISTON BASIN Focused on disciplined growth, free cash flow generation and sustainable shareholder returns BY THE NUMBERS 1 SCALE ACTIVITY CASH FLOW NYSE: NOG (US$) 2 ~182k 35.0 $111 mm Shares 386 mm Outstanding: NET ACRES 3 2Q19 ADJUSTED EBITDA 4 2Q19 PRODUCTION MBOE/D Share Price: $1.50 91% 136 $94 mm Market $584 mm Capitalization: HELD BY PRODUCTION 5 PROVED RESERVES MMBOE 2Q19 CASH FLOW Enterprise Value: FROM OPERATIONS 6 $1,439 mm 1. Data as of 6/30/2019, except reserves data as of 12/31/18. Values are approximate for illustration. 2. Shares Outstanding as of 6/30/2019, Share Price NYSE: NOG as of 8/1/2019. 3. Net acreage data as of 6/30/2019, pro-forma for VEN Bakken transaction. 4. Adjusted EBITDA is a non-GAAP financial measure. Please see the appendix for reconciliation to the most directly comparable GAAP measure. 5. Includes acreage classified as held by production, held by operations or developed Investor Presentation - August 2019 3 6. Excludes cash flows due to changes in working capital.
2Q19: BUSINESS UPDATE NYSE American: NOG Non-operated model continues to demonstrate measured growth with improving capital discipline to drive returns $MM mboe/d ENHANCING EBITDA GROWING PRODUCTION Adjusted EBITDA growing with production 1 Production ramping across Northern acreage +67% 35.0 +57% $111 36.3 34.6 $125 $105 26.7 $98 21.0 $71 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19 Net Debt/Annualized Adjusted EBITDA LOE/Boe MANAGING LEVERAGE STABLE COSTS Exceeding plan, stress tested to flat $45 WTI Participation in cost-efficient wells QoQ inflation driven by production curtailments 2.3x $8.21 1.9x 2.0x $7.92 1.8x $7.60 $7.39 1.7x $6.43 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19 Investor Presentation - August 2019 4 1. Adjusted EBITDA is a non-GAAP financial measure. Please see the appendix for reconciliation to the most directly comparable GAAP Measure.
NORTHERN’S LONG TERM VISION NYSE American: NOG Aspirational goals for the next five years FIVE YEAR EBITDA TARGETS COMBINING ORGANIC GROWTH Adjusted EBITDA WITH STRATEGIC GROUND GAME $750 mm $mm INVESTMENT DRIVES SUSTAINABLE SHAREHOLDER RETURNS $443 mm SOURCES CORE TENETS BOLT-ON ORGANIC ACQUISITIONS GROWTH 1. Stay within 1.0x - 2.0x Debt/EBITDA 2. Deliver returns to shareholders that GROUND GAME grow commensurate with cash flow 3. Equity markets not required - no dilution unless accretive 2Q 2019 2023E Annualized Goal Investor Presentation - August 2019 5
INDUSTRY LEADING MARGINS AT LOW G&A COSTS NYSE American: NOG Northern actively works to minimize its G&A costs, ensuring one of the GROSS INCOME MARGIN vs. G&A/BOE (FY 2018) lowest $/boe in the Williston basin Our position as a non-operator gives us the flexibility to work with the Partnering only with the highest-efficiency operators in the most cost-efficient operators on the highest return wells highest quality wells drives Northern’s margins up at lower costs Northern has consistently kept G&A costs <$2/boe for the last 5 quarters $/boe Peers 1 NOG while maintaining high EBITDA margins vs. regional peers HIGHER $1 MARGINS LOWER G&A COSTS PER BOE COSTS Northern has consistently demonstrated a G&A $2 of <$2/bbl, a leader among its basin peers $/boe $6 Peer Avg. 1 NOG $5 $4.5 $3 $4.3 $4.1 $4 $3.3 $3.1 $3 Peer Avg. $4 $1.9 $1.9 $1.7 $2 $1.5 $1.0 $1 $5 $0 50% 60% 70% 80% 90% 100% 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 Gross Income Margin 1 Peers are Williston basin E&Ps and include BSM, CLR, DNR, EOG, ERF-TX, HES, HK, OAS, QEP, WLL, WPX Investor Presentation - August 2019 6 Source: FactSet & CapIQ. Gross Income Margin is calculated as Gross Profit / Total Revenues.
RESERVES UNDERPIN VALUE PROPOSITION NYSE American: NOG Participation in highest-quality wells ensures optimal exposure to high-volume regional reservoirs Growing reserves across portfolio Proved reserve growth of 79% YoY Working Interest acquisitions provide incremental reserve access opportunities PROVED RESERVES 200 (mmboe) +33% 181 180 OIL 160 GAS 45 +79% 136 140 11 23 120 30 net well adds per year ’19 – ‘23 100 58 76 80 NOG Internal Type 13 136 60 Curve Estimates (9) 113 40 63 20 0 SEC Case YE2017 2018 2018 Oil 2018 Gas SEC Case . - NOG Internal Case 1 Production Adds Adds YE2018 Investor Presentation - August 2019 7 1. Assumes incremental impact of additional wells if projected in a 5 year NOG drill schedule
NORTHERN’S PROVED DEVELOPED VALUE NYSE American: NOG Northern’s Proved Developed Reserves alone underpin the current market enterprise value PROVED DEVELOPED RESERVES PV-10 VALUE NORTHERN’S PROVED DEVELOPED RESOURCES ($ millions) 1PDP 2PDNP $1,930 ALONE CONTINUE TO EXCEED ITS DEBT $1,641 $294 BALANCES, EVEN AT LOWER PRICES $268 SEC pricing $1,636 6-30-2019 $1,373 FORWARD HEDGING PROGRAM HAS LOCKED $289 IN HIGHER THAN CURRENT MARKET PRICES $263 NORTHERN VEN BAKKEN Column1 NORTHERN STAND ALONE PRO FORMA DESPITE SIGNIFICANT PUD + PROBABLE + POSSIBLE INVENTORY, LITTLE TO NO CREDIT $1,511 ASCRIBED BY MARKET TODAY $1,279 $216 $198 $55/bbl flat pricing PDNP RESERVES REPRESENT PRIMARILY WELLS $1,295 $1,082 $231 CURRENTLY IN PROCESS $213 NORTHERN VEN BAKKEN Column1 NORTHERN STAND ALONE PRO FORMA Investor Presentation - August 2019 9 Note: SEC price is $61.39/bbl and $3.02/Mmbtu. Flat price is $55/bbl and $2.50/Mmbtu.
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