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Northern Oil and Gas, Inc. (NOG)

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  • P
    Paul
    Northern Oil and Gas, Inc.
    TheStreet lowered it's rating of $NOG from a c to d today, whatever that means. It's embarrassing and I hope all of us make them look like fools this week. By the way, as the share price goes higher, we should expect analyst to lower ratings simply due to the valuation. In the past, this seems to be treated as a sell signal, like when BofA lowered their rating but kept a higher share price target. That makes no sense and the increasing dividend should start to protect us from those short-term triggers as trader tax implications begin to have a greater impact on share price. We are still $7 below the average analyst share price target and $21 below the highest recommendation, while still on the low end of the lowest recommendation. On the earnings call, it was made clear that production was impacted enough from the April storms that revenue would be flat for Q2. It was also made clear that those sales would be passed through in Q3, so I would expect a slight improvement in earnings over Q1 due to the Veritas production offsetting the loss of revenue from the storms, higher prices of hedged oil and gas, higher prices from unhedged oil and gas, lower G&A, and possibly a repurchase of Preferred stock or further debt reduction which will both lower expenses. Higher unhedged oil and gas prices may or may not materialize in Q2 compared to Q1, but we should have a significant jump in Q3. What we need from the market is the realization of a higher multiple of EBITDA or a willingness to pay a higher P/E ratio.
  • P
    Paul
    $NOG conversation
    I've been reviewing past $NOG presentations and playing around with some of the math today. Keep in mind, I'm a lay person when it comes to understanding every facet of how the earnings are impacted by accounting specific to oil and gas, but I keep studying. There are a few things that appear to be super obvious.

    - Let's start with the Q4 '21 baseline of $1.06/share on a weighted average of 70,660,131 shares outstanding.
    - Actual shares outstanding at end of Q4 '21 were 77,341,921. If the average weighted # shares tilts up to that number, that's a ($0.09) downward adjustment to the equivalent earnings in Q4 or ($6.96MM).
    - Current outstanding shares according to Yahoo Finance are 77,250,000, so some shares have been repurchased.
    - $NOG low end of '22 guidance is 70,000 BOE/day. This compares to Q4 '21 production of 64,155 BOE/day and will result in higher earnings. Weather usually affects Q1 production, but this is low end of guidance & includes Veritas & Comstock for entire quarter.
    - Comstock acquisition was added half way into Q4, but $NOG made mention of accelerating cap-x in Q4, so assuming cap-x remains relatively comparable to Q4 in addition to the increase from new Veritas cap-x.
    - Depletion results in production curve declines, but estimates for Comstock were specific, estimated at several hundred less BOE/day compared to first half of 2021. We might think about half or more of the expected production decline for 2022 already occurring in Q1.
    - Based on estimates of Comstock value proposition, operating CF would've been around $11MM for Q4 '21. Since closed 11/16/21, that translates into an additional $11MM for Q1 '22.
    - Veritas closed 1/27/22, so 2 months of earnings in Q1 '22. Estimated $180MM CF in '22, so maybe an additional $32.7MM in Q1 when annualized based on 11 months of estimated earnings for '22.
    - '22 high end cap-x guidance is $415MM or $103.8MM/quarter. Q4 '21 cap-x was $83.7MM. This would lower earnings by ($20.1MM).
    - Cash G&A was $1.20/BOE in Q4 & expected to drop to $0.85 per 2022 guidance. That's about $1.5MM in savings/quarter, although it's not been consistent.
    - Q4 oil hedged at $55.27. Q1 oil hedged at $60.78. Difference on Q4 production is $12.7MM more plus remaining 35% or so unhedged at significantly elevated oil prices in Q1 compared to Q4.
    - Q4 nat gas hedged at $2.87. Q1 nat gas hedged at $3.25 not including costless collars. While Q1 not including costless collars has less volume hedged than Q4, knowing gas prices were significantly higher in Q1 compared to Q4, the difference in the higher hedge price would result in an additional $3.8MM in Q1.
    - Since oil and gas are averaging 65% total production hedged, down from Q4, we should presume significant upside from the 35% difference unhedged.
    - Risk is warrants converting and diluting shares, although that's at least partially offset by the cash that will be received and reinvested in someway.
    - 81,849,627 diluted shares outstanding at end of Q4 '21, with another 1,900,000 warrants issued with Veritas acquisition. These could easily immediately be reinvested to repurchase shares or pay down debt. At $28, we are looking at something like $180MM in future cash infusion.
    - Obviously lots of additional potential adjustments, but quick back of the napkin math could lead to additional $34.6MM or $0.44 EPS. Not sure how depreciation will be impacted with Veritas, but lot's of room for additional offset from much higher oil and gas prices on unhedged production. Add the Q4 $1.06/share to the $0.44/share, and we could be looking at the possibility of $1.50/share for Q1.
    - Obviously my math is super rough, but let's hope for an earnings surprise. Interestingly, 90 days ago the average earnings estimate for Q1 was $1.52. So why did analysts lower their average forecasts to $1.26? Clearly the analysts have been enlightened as to some adjustment to expect in Q1, but most of their estimates for each quarter thereafter are around $1.50 or higher.
    - Last time I tried to estimate EPS, I was off by $0.25/share, so take this with a grain of salt. I believe in where $NOG is going, and it's fun to try to predict what could be. I can't be completely off, since there is still at least 1 analyst with a high estimate of $1.43. Either way, there are a number of clear upsides to earnings this year compared to last year. Stock price has to go up.
  • P
    Paul
    Northern Oil and Gas, Inc.
    @Decker was correct. $NOG just declared the new $0.19 dividend prior to earnings announcement. But they also announced an accelerated dividend plan and a new share buyback plan! Here we go!
  • P
    Paul
    Northern Oil and Gas, Inc.
    Well, in a few swift sentences from the Feds, the market went from anticipating a higher number of rate hikes and one 50 bp increase this next meeting to thinking multiple 50 bp or larger increases in a row. And now Beijing is at risk of major slowdown with Covid restrictions even after Shanghai has been shut down in various ways for a month. I thought the interest rate increases had already been priced in, but clearly there's a sense that the Feds are going to go hard and hammer down to get ahead of inflation at risk of recession. The undersupply challenge didn't go away just like that. The is a big reaction in advance of what could be a few economic challenges, but not likely a huge disruption that completely aniliates demand. In the meantime, $NOG will likely continue to quietly make a record profit this year. It's disappointing to see $NOG get crushed like it has on the cusp of what will certainly be an excellent forward outlook. The dividend is all that much more attractive now, so I'm thankful for it. The share price hasn't been this low for some time. I wonder where the company's differential to organically growing new production through excess cash flow versus buying back shares might be. We haven't seen many buying opportunities like this. All I can say is I wish I had the ability to buy more.
  • P
    Paul
    Northern Oil and Gas, Inc.
    Something to consider: The SPR release is actually beneficial to $NOG profits, because it will help maintain higher pricing further into the future when these barrels are replaced. Higher prices today are not as helpful as higher prices later with the existing hedges. But as those roll off and get replaced with higher priced hedges, watch out! The SPR release is actually good news for us.
  • P
    Paul
    Northern Oil and Gas, Inc.
    Look at other oil stocks. Headlines are record profits, but hedges limited upside and profit could've been even more. The market is stupid. It's never satisfied. More oil companies are paying to get out of hedges literally gambling on oil prices remaining high. I think they will too, but I wouldn't want an oil company to go naked and completely exposed. $NOG needs to be strong and maintain their philosophy. If investors are paying a premium for upside potential that may never materialize without hedges and discounting known, proven cash flow, well that's just stupid. Devon Energy is getting a nice boost from their record earnings report that blew away estimates. In just a couple more days, we'll get to see how $NOG faired. I still think we get an earnings beat.
  • P
    Paul
    Northern Oil and Gas, Inc.
    What a terrible day for stocks. Is $NOG or any of the other oil stocks for that matter really worth 14% less today than they were yesterday? No. But the market panicked today. Thankfully we should have momentum building news within the next two weeks when earnings are announced. China will come out of quarantine sooner rather than later. Our dividend will increase again. Although painful this week, the market will digest the Fed rate hike. And eventually the Federal government will replace the massive strategic reserves they are displacing, which will help jeep oil prices higher for an extended period of time.
  • P
    Paul
    $NOG conversation
    Look at what is happening to $EQT stock price. It's like the market forgot $NOG made a major natural gas acquisition in 2021 and partnered with $EQT. Just remember, $NOG will benefit along with $EQT on the Marcellus shale investment. Natural gas may just be where we get future earnings surprises.
  • P
    Paul
    Northern Oil and Gas, Inc.
    Buy $NOG before Monday (3/28) close to get the dividend.
  • P
    Paul
    Northern Oil and Gas, Inc.
    Raymond James analyst John Freeman maintains $NOG at strong buy & raises share price target to $45 from $43.
  • P
    Paul
    Northern Oil and Gas, Inc.
    I don't know if there is a correlation in the Keystone XL news and $NOG share price drop the last 2 days, but whoever is selling on that news is short-sighted. I'm irritated I'm fully loaded up and can't re-buy the dip, but anxious to see how much higher NOG will go. If we can get to $25/share in the next 2 months, that's a 30% ROI plus you're locked in at a lower cost basis for a much higher dividend yield in the future. And if we get an earnings beat in 2 months and an improved forecast, which was alluded to on the last earnings call, we could see calls for a higher share price target. Holding firm!
  • P
    Paul
    $NOG conversation
    CLR is trading at a 14.58x Forward 2021 PE Ratio. Don't look at GAAP earnings. Look at adjusted earnings.
    Hedging makes GAAP analysis less consistent. $NOG is less than 6x Forward 2021 PE Ratio. There's additional inherent value to be had in NOG.
  • P
    Paul
    Northern Oil and Gas, Inc.
    Simply Wallstreet article today regarding $NOG dividend = dumb. Hard to believe professional investment sources would publish information that clearly hasn't been researched.
  • Y
    YB
    Northern Oil and Gas, Inc.
    Northern Oil and Gas +7% as stock offering may have been pulled https://seekingalpha.com/news/3341287?source=ansh $NOG
    Northern Oil and Gas (NYSEMKT:NOG) +6.9% premarket on speculation that the company's planned public stock offering has been withdrawn. Earlier this week, NOG had announced plans for a public offering
    Northern Oil and Gas (NYSEMKT:NOG) +6.9% premarket on speculation that the company's planned public stock offering has been withdrawn. Earlier this week, NOG had announced plans for a public offering
    seekingalpha.com
  • B
    BigOil
    $NOG conversation
    Saw this on Twitter, but no link. Can anyone confirm?

    Northern Oil and Gas $NOG has been upgraded to Strong Buy. PT $24
  • B
    Brock
    $ET conversation
    $ET $NOG $XOM $ENB All are about to prosper from Colonial shutdown.
  • B
    BigOil
    $NOG conversation
    RBC Capital Analyst Reiterates Buy

    Scott Hanold, analyst at RBC Capital, reiterates Buy Rating on $NOG with a price target of $35
  • P
    Paul
    Northern Oil and Gas, Inc.
    Who wants to speculate how much $NOG jumps on the day it's announced DAPL is no longer at risk of closing?
  • P
    Paul
    Northern Oil and Gas, Inc.
    Remember last week when Barry said $NOG fair value was $12? And yet he supposedly covered a short position at just under $16. Obviously he is a fraud, and the market firmly disagrees with a lower value. Despite temporary pullbacks from time-to-time, we are beginning to see new 52 week highs like today. I've started comparing $NOG to other companies in the same space, and I see more compelling reasons for further price appreciation than not. It makes sense that price targets have been raised as high as $25 by analysts.
  • S
    SVQ
    $CPE conversation
    Dedicated to all those trolls that come to this board and post TESLA, APPLE and so on are the best of the best, and CPE is just a piece of ####.
    Good luck TESLA holders...
    PS: i´d like a green world for my nephews, but oil will stay with us for many years
    https://finance.yahoo.com/news/tesla-bear-says-stock-is-detached-from-reality-predicts-87-price-target-180905935.html
    $CPE $QPE $CDEV $LPI $NOG $TSLA