Northern Oil and Gas, Inc. NOG recently brought in pleasant news for investors, as it provided encouraging updates regarding fourth-quarter results.
The company expects fourth-quarter 2018 output to be at the upper end of its guided range of 35,000-36,000 barrels of oil equivalent per day (Boe/d). This also indicates a massive jump from the year-ago production level of 16,742 Boe/d. This ramped up production is driven by acquisition benefits and augmented activities, as Northern Oil and Gas has brought around eight net wells online in the quarter, bringing the total net well additions to nearly 30 in 2018.
Northern Oil and Gas — whose activities are primarily focused on the Williston Basin, as well as Bakken and Three Forks plays in North Dakota and Montana — has been consistently making efforts to boost long-term growth prospects in its core operating region via entering into prudent acquisition deals in 2018. These include the $114.8-million buyout of W Energy Partners, along with snapping up Williston acreage from Salt Creek Oil & Gas LLC and Pivotal Petroleum. In addition to boosting the company’s acreage and production capacity, these acquisitions are likely to be accretive to earnings per share, cash flow and leverage metrics through 2020.
Moreover, Northern Oil and Gas’ full-year lease operating expenses per barrel are anticipated below the lower end of the guided range of $7.0-$7.75. On a further positive note, the company generated robust cash flows during the quarter and expects to maintain the momentum this year as well. To protect its cash flows amid the volatility of the commodity prices, the company has increased its 2019 hedged oil volumes at an average of more than $63 a barrel. Notably, the Zacks Consensus Estimate for the firm’s 2018 and 2019 earnings growth is pegged at 285.71% and 21.30%, respectively. While most of the energy stocks took a beating in 2018, shares of Northern Gas and Oil moved up 10.2%, handily outperforming the stocks in the industry that posted a cumulative decline of 36.4%.
While Northern Oil and gas currently carries Zacks Rank #3 (Hold), investors can opt for better-ranked players like Shell Midstream Partners, L.P. (SHLX ), Gran Tierra Energy Inc. (GTE ) and Bellatrix Exploration Ltd. (BXE ), each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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