Northern Oil & Gas Boosts Buyback as Permian Curtailments Trim Output
The oil and gas producer repurchased nearly 3 million shares in the second quarter while Waha-region shut-ins cut estimated oil production to as low as 67,500 barrels a day.
Northern Oil & Gas (NOG) reported second-quarter estimated oil production of 67,500 to 68,250 barrels a day, down from 73,567 barrels a day in the first quarter, as roughly 7,000 barrels of oil equivalent a day of shut-ins in the Waha region and deferred well turn-in-lines weighed on output.
The production decline, concentrated in Culberson County, Texas, and Eddy County, New Mexico, marks a sharp but temporary pullback for the independent producer, which has been steadily shifting its mix toward natural gas. Despite the Permian curtailments, NOG expects record gas volumes in the second quarter, extending a trajectory that saw gas output reach 448,444 thousand cubic feet a day in the first quarter and 392,163 Mcf/d in the fourth quarter of 2024. Outside the Waha region, the Williston and Uinta basins outperformed the company's internal expectations by 4.0% and 11.5%, respectively.
The quarter's financial picture was shaped by hedging. NOG estimated realized hedge losses of $85 million to $90 million in the second quarter, swinging from a $17.6 million loss in the first quarter, driven by oil hedges partially offset by gas and basis positions. Unrealized mark-to-market gains on derivatives of $155 million to $160 million reversed a $521.4 million loss booked in the prior quarter. Capital expenditures fell to an estimated $190 million to $200 million, down from $270.1 million in the first quarter excluding non-budgeted acquisitions.
NOG accelerated its share repurchase program, buying back 2.95 million shares — roughly 3% of shares outstanding — at an average price of $20.37 during the quarter. That pace dwarfed the 326,301 shares repurchased at $21.47 in the fourth quarter of 2024. On July 10, the company expanded its authorized buyback by $150 million to approximately $243 million total.
The Duvernay joint-development acquisition, which closed June 1 for approximately 237 million Canadian dollars in cash plus roughly 3.7 million NOG shares at $22.06 apiece, added about 4,000 barrels of oil equivalent a day of expected 2027 production — approximately 80% oil — along with 75,000 net acres and an estimated 500 gross drilling locations. The deal contributed to a May revision of 2026 annual production guidance to 143,000 to 148,000 Boe/d from a prior 139,000 to 143,000 Boe/d, with oil guidance raised to 71,500 to 73,500 barrels a day. Net wells turned in line for the year were guided to 74.0 to 76.0, up from 68.0 to 72.0.
Full-year capital expenditure guidance held at $850 million to $900 million despite the Duvernay addition, a range the company attributed to cost efficiencies. Oil differentials were guided to $5.25 to $5.60 a barrel, improved from $5.35 to $6.00, primarily on better Williston pricing. Lease operating expenses were guided toward the low end of the prior range at $9.70 to $9.90 a barrel of oil equivalent.
In its Ground Game acquisition program, NOG closed 30 deals in the second quarter adding more than 2,300 net acres and 6.2 net wells for roughly $45 million, compared with 41 deals and 5,100 net acres in the first quarter for $43.6 million — fewer transactions but a similar well count and capital deployed. About 80% of second-quarter Ground Game capital targeted the Permian, Williston, and Uinta basins, a shift toward near-term oil-focused production.
The company's borrowing base on its revolving credit facility rose to $1.975 billion from $1.8 billion in February 2025, with elected commitments increasing to $1.8 billion from $1.6 billion, adding $200 million of liquidity.