NYSE American: NOG Q2 2019 Supplemental Earnings 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, 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. Northern Oil & Gas 2 nd Quarter 2019 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 Shares ~164k 35.0 $111 mm 386 mm Outstanding: 2Q19 ADJUSTED EBITDA 3 NET ACRES 2Q19 PRODUCTION MBOE/D Share Price: $1.50 Market 90% 136 $94 mm $584 mm Capitalization: PROVED RESERVES MMBOE 2Q19 CASH FLOW HELD BY PRODUCTION Enterprise Value: $1,439 mm FROM OPERATIONS 4 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. Adjusted EBITDA is a non-GAAP financial measure. Please see the appendix for reconciliation to the most directly comparable GAAP measure. 4. Excludes cash flows due to changes in working capital. Northern Oil & Gas 2 nd Quarter 2019 Presentation - August 2019 3 5. Includes acreage classified as held by production, held by operations or developed
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 Adjusted EBITDA is a non-GAAP financial measure. Please see the appendix for reconciliation to the most directly comparable GAAP Measure. Northern Oil & Gas 2 nd Quarter 2019 Presentation - August 2019 4 1.
NORTHERN OIL & GAS – WHY NORTHERN’S BETTER NYSE American: NOG Changing the way the market RETURNS FOCUS thinks about E&P BETTER BETTER BUSINESS BASIN MODEL BETTER BETTER LT CAPITAL GROWTH ALLOCATION POTENTIAL Northern Oil & Gas 2 nd Quarter 2019 Presentation - August 2019 5
THE NON-OPERATOR MODEL: WHAT WE DO NYSE American: NOG A flexible and moderated approach to E&P, offering capital discipline, cost control & protection from downside exposure We do not drill wells or We acquire minority working operate rigs interests in drilling units & wells Ability to control capital ‘Small, big company’ advantages expenditures higher & lower with only 23 employees Northern Oil & Gas 2 nd Quarter 2019 Presentation - August 2019 6
DIFFERENTIATED E&P PLATFORM NYSE American: NOG PROACTIVELY MANAGED OIL-LEVERED VISIBLE LONG-TERM DISCIPLINED CAPITAL WILLISTON PRODUCER GROWTH POTENTIAL ALLOCATION BALANCE SHEET Multi-year well inventory Diverse operator group Selective capex allocation Broad hedging program Working interest Bakken & Three Forks Low-cost organic growth Maintaining liquidity acquisitions Experienced leadership Shareholder return focus Improving credit metrics Non-op consolidation potential As a non-operator, Northern has an exceptionally high level of capital allocation flexibility We seek to capture & participate in only the highest-return opportunities across the Williston Basin Northern Oil & Gas 2 nd Quarter 2019 Presentation - August 2019 7
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 $443 mm SOURCES CORE TENETS BOLT-ON ORGANIC ACQUISITIONS GROWTH 1. Stay within 1.0x - 2.0x Debt/EBITDA 2. Deliver returns to shareholders that GROUND GAME grow commensurate with cash flow 3. Equity markets not required - no dilution unless accretive 2Q 2019 2023E Annualized Goal Northern Oil & Gas 2 nd Quarter 2019 Presentation - August 2019 8
UPDATING 2019 GUIDANCE NYSE American: NOG Northern outperformed in 2018. In 2019, we continue the same exciting progress and update our guidance accordingly 2018 ACTUALS 2019 PREVIOUS 2019 GUIDANCE UPDATE PRODUCTION Avg. Daily Prod. (Boe) 25,555 35,000 - 36,000 UPDATING GUIDANCE ACROSS 38,650 - 39,150 % Oil 84% 82% ~ 80% - 81% THE REMAINDER OF 2019 % Nat Gas 16% 18% ~ 19% - 20% INCOME STATEMENT ($/BOE) Differential to WTI ($7.12) ($4.50) - ($6.50) ($4.50) - ($6.50) CONTINUING MEASURED Lease Operating Expense $7.15 $6.75 - $7.75 $8.00 - $8.50 PRODUCTION GROWTH IN 2H19 G&A Cash $1.15 $1.00- $1.25 $0.95 - $1.15 G&A Non-Cash $0.42 ~ $0.50 ~ $0.50 33.5 ORGANIC & 4 Prod. Taxes (% Rev.) 9.2% ~ 9.1% ~ 9.3% CAPITAL EXPENDITURES ($MM) GROUND GAME NET WELL Total Development Capital $260.9 $227 - $260 $265 - $285 ADDITIONS IN 2019 1 M&A and Other Capex $587.6 $20 - $25 $25 - $50 Ground Game D&C Capex - - $30 - $60 WELL ACTIVITY PROJECT ~52% YOY INCREASE Net Organic Well Additions 2 31.2 28 – 32 33 - 34 IN PRODUCTION 1 Ground Game 2019E Wells - - 3 - 5 Ground Game 2020E Wells - - 3 - 6+ 1. Mid point of 2019 guidance Northern Oil & Gas 2 nd Quarter 2019 Presentation - August 2019 9 2. Includes in process wells from VEN Bakken acquisition
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