Northern Oil And Gas To Buy Williston Basin Bolt-on In $154 Mln Cash Deal; To Propose Dividend Hike

Northern Oil and Gas, Inc. (NOG) Thursday said it has entered into a definitive agreement to acquire Williston Basin Bolt-on for a purchase price of $154 million in cash.

The deal includes non-operated interests across over 400 producing wellbores located primarily in Williams, McKenzie, Mountrail and Dunn Counties. The acquired assets include 65.9 net producing wells. The assets are operated by multiple operators in the Williston Basin, and Northern holds existing ownership positions in 84% of the wellbores acquired.

The effective date for the transaction is October 1, 2021 and Northern expects to close the transaction within 40 days.

October production on the assets is expected to be greater than 4,500 Boe per day and Northern expects average production of more than 4,100 Boe per day in 2022. Northern expects negligible capital expenditures on the assets.

Northern expects to fund the acquisition with cash on hand, operating free cash flow and borrowings under Northern’s revolving credit facility.

The company said it expects a significant increase to its borrowing base from both the acquired and existing assets and will begin the process to expand its elected commitment during its regularly scheduled fall borrowing base redetermination, which it expects to complete in November 2021.

Further, the company noted that, citing the strong, low risk cash flows from the acquired properties, its Management plans to submit a request to the Board for a 33.3% increase to the common stock dividend for the fourth quarter of 2021, for shareholders on record as of December 31, 2021. This anticipated increase to a dividend of $0.06 per share represents a 100% increase since the
initiation of a dividend program in May 2021.

In the deal, Kirkland & Ellis LLP is serving as Northern’s legal advisor.

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