WAYZATA, Minn., Nov. 4 /PRNewswire-FirstCall/ -- Northern Oil and Gas,
Inc. (Amex: NOG) ("Northern Oil") today announced third quarter net earnings
of $871,819, or approximately $0.03 per share on revenue of $1,362,655. These
results represent a 208% increase in earnings compared to the second quarter
of 2008. Revenue increased by approximately 80% compared to the second
quarter of 2008 and general and administrative expenses were approximately 40%
under previously announced budget. The Company has reduced general and
administrative expenses for the second consecutive quarter this year,
demonstrating a strong commitment to cost controls.
Michael Reger, Chief Executive Officer, commented, "We believe the power
of our low-overhead model is apparent in our profit margins in the third
quarter, despite falling commodity prices. We expect to continue to increase
production at an accelerating pace throughout 2009 as we continue to expand
our drilling program. It is important to note that at this point we have only
developed approximately 2% of our entire Bakken acreage inventory; as such, we
have significant opportunity remaining in our acreage position. We expect to
continue to develop our acreage on pace with previously announced guidance.
In addition, we believe our oil price hedges extending through 2008 at
approximately $105 per barrel of oil will assure us continued price protection
during this volatile market period."
Northern Oil recently participated in the successful drilling and
completion of an additional seven oil producing wells in the North Dakota
Bakken trend. The seven wells began producing at an average initial rate of
740 barrels of oil per day.
RECENTLY COMPLETED WELLS
-- The Wayzata 1-13H well, located in Mountrail County, ND is operated by
EOG Resources and produced from the Bakken formation at an initial production
rate of 1,355 barrels of oil per day. Northern Oil holds a 6.25% working
interest in the well.
-- The Shonna 1-15H well, located in Divide County, ND is operated by
Continental Resources and produced from the Bakken formation at an initial
production rate of 403 barrels of oil per day. Northern Oil holds a 15%
working interest in the well.
-- The Voyager 1-18H well, located in Mountrail County, ND is operated by
Slawson Exploration and produced from the Bakken formation at an initial
production rate of 929 barrels of oil per day. Northern Oil holds a 5%
working interest in the well.
-- The Payara 1-21H well, located in Mountrail County, ND is operated by
Slawson Exploration and produced from the Bakken formation (with a single-
stage fracture stimulation) at an initial production rate of 622 barrels of
oil per day. Northern Oil holds a 3% working interest in the well.
-- The Strommen 14-8H well, located in Dunn County, ND is operated by
Marathon Oil and produced from the Bakken formation at an initial production
rate of 632 barrels of oil per day. Northern Oil holds a 3% working interest
in the well.
-- The Voigt 11-15H well, located in Dunn County, ND is operated by
Marathon Oil and produced from the Bakken formation at an initial production
rate of 550 barrels of oil per day. Northern Oil holds a 1% working interest
in the well.
-- The Willard Kovaloff 21-17H well, located in Dunn County, ND is
operated by Marathon Oil and produced from the Bakken formation at an initial
production rate of 695 barrels of oil per day. Northern Oil holds a 1%
working interest in the well.
"Northern Oil continues to achieve consistent success in our non-operated
drilling projects. As we exit 2008, we are beginning to make preparations to
develop our substantial inventory of high working interest drilling units that
we believe now entail less risk than our early wells given the evolution of
the Williston Basin oil fields," Reger added.
With these most-recent seven completions, Northern Oil now holds working
interest in 28 producing wells and has drilled with a 100% success rate in
2008.
ADDITIONAL WELLS DRILLING AND COMPLETING
Northern Oil is also a working interest participant in an additional 15
wells currently drilling or completing in the Bakken and Three Forks/Sanish
formations. The table below summarizes current drilling activity in which
Northern Oil is a working interest participant.
OPERATOR WELL NAME NOG WI COUNTY LOCATION STATUS OBJECTIVE
EOG SIDONIA 11.00% MOUNTRAIL 6-158N/90W DRILLING BAKKEN
RESOURCES 1-06H
EOG AUSTIN 5.00% MOUNTRAIL 30-154N/90W COMPLETING BAKKEN
RESOURCES 19-30H
EOG PARSHALL 2.00% MOUNTRAIL 28-152N/90W DRILLING BAKKEN
RESOURCES 11-28H
CONTINENTAL ELVEIDA 10.00% DIVIDE 33-161N/95W COMPLETING THREE
RESOURCES 1-33H FORKS
CONTINENTAL SKACHENKO 6.25% DUNN 31-146N/95W COMPLETING THREE
RESOURCES 1-31H FORKS
CONTINENTAL ARVID 5.00% DIVIDE 35-161N/95W COMPLETING THREE
RESOURCES 1-35 FORKS
SLAWSON BANDIT 27.00% MOUNTRAIL 29-152N/91W DRILLING BAKKEN
EXPLORATION 1-29H
SLAWSON PEACEMAKER 15.00% MOUNTRAIL 8-152N/91W COMPLETING BAKKEN
EXPLORATION 1-8H
HESS BL- 2.50% WILLIAMS 15-155N/96W COMPLETING BAKKEN
CORP- BLANCHARD-
ORATION 155-96
HESS EN-HYNEK 2.00% MOUNTRAIL 1-155N/93W COMPLETING BAKKEN
CORP- -0112H-1
ORATION
MARATHON MARK 5.00% MOUNTRAIL 32-151N/93W COMPLETING BAKKEN
OIL SANDSTROM
COMPANY 14-32H
MARATHON SHOBE 3.00% MOUNTRAIL 20-151N/93W DRILLING BAKKEN
OIL 24-20H
COMPANY
MARATHON JODI 2.00% DUNN 12-145N/95W DRILLING BAKKEN
OIL CARLSON
COMPANY 24-12H
MARATHON NORTON 2.00% DUNN 12-145N/95W DRILLING BAKKEN
OIL 24-12H
COMPANY
CRUSADER OILERS 7.50% RICHLAND 10-21N/59E DRILLING BAKKEN
ENERGY 1H-10
"Northern Oil's current participation in the Bakken and Three Forks/Sanish
formations continues to accelerate and our working interest in wells continues
to increase," added Reger. "We have not seen a reduction in capital being
devoted to the development of the Bakken play despite lower oil prices.
Further, permitting and drilling activity continues to increase particularly
in North Dakota." Northern Oil acreage has now been included in approximately
170 permitted or docketed-for-permit drilling locations.
DRILLING AGREEMENT
On October 30, 2008, Northern Oil executed a drilling agreement with
Slawson Exploration in Mountrail County, North Dakota for a one-well drilling
arrangement. Under that agreement, Northern Oil agreed to sell 120 net acres
in Section 5, Township 151 North, Range 92 West for $3,000 per net acre. Once
the transaction is complete, Northern Oil will control a 42% working interest
in the section. The Jericho 1-5H well, expected to be drilled pursuant to the
agreement, will be a horizontal Bakken well drilled in the 640 acre section.
The agreement is conditioned on Slawson commencing drilling by March 1, 2009.
Reger commented, "This agreement with Slawson is exciting for the company
because it allows us to participate with a 42% working interest in a well
directly offsetting high rate production and substantiates the value of the
subject acreage. Slawson Exploration has a track record of success in close
proximity to this location and we believe this agreement allows us to leverage
their expertise while retaining a significant working interest."
ABOUT NORTHERN OIL AND GAS
Northern Oil and Gas, Inc. is an exploration and production company based
in Wayzata, Minnesota. Northern Oil's core area of focus is the Williston
Basin, specifically the Mountrail County, North Dakota area Bakken and Three
Forks/Sanish trend. Northern Oil's secondary objective is conventional, 3D
driven, oil and gas exploration and development throughout the Rocky Mountain
region.
More information about Northern Oil and Gas, Inc. can be found at
www.NorthernOil.com.
SAFE HARBOR:
This press release contains forward-looking statements regarding future
events and our 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 report regarding our 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 report, forward-looking
statements are generally accompanied by terms or phrases such as "estimate,"
"project," "predict," "believe," "expect," "anticipate," "target," "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, general economic or industry
conditions, nationally and/or in the communities in which our Company conducts
business, changes in the interest rate environment, legislation or regulatory
requirements, conditions of the securities markets, our ability to raise
capital, changes in accounting principles, policies or guidelines, financial
or political instability, acts of war or terrorism, other economic,
competitive, governmental, regulatory and technical factors affecting our
Company's operations, products, services and prices.
We have based these forward-looking statements on our current expectations
and assumptions about future events. While our 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 our control.
CONTACT:
Investor Relations
772-219-7525
SOURCE Northern Oil and Gas, Inc.
Released November 4, 2008