{"id":461299,"date":"2026-05-26T18:58:07","date_gmt":"2026-05-26T18:58:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/461299\/"},"modified":"2026-05-26T18:58:07","modified_gmt":"2026-05-26T18:58:07","slug":"nog-announces-strategic-entry-into-canada-with-light-oil-duvernay-acquisition-takes-25-undivided-stake-in-assets-with-long-term-joint-development-agreement","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/461299\/","title":{"rendered":"NOG Announces Strategic Entry into Canada with Light Oil Duvernay Acquisition; Takes 25% Undivided Stake in Assets with Long-Term Joint Development Agreement"},"content":{"rendered":"

MINNEAPOLIS\u2013(BUSINESS WIRE<\/a>)\u2013Northern Oil and Gas, Inc. (NYSE: NOG<\/a>) (\u201cNOG\u201d) today announced that it has agreed to purchase an undivided 25% interest in the Light-Oil Duvernay Assets owned and operated by Parallax Energy Operating Inc. (\u201cParallax\u201d or the \u201cSeller\u201d).<\/p>\n

MANAGEMENT COMMENTS<\/p>\n

\u201cQuality oil inventory is becoming increasingly scarce, and NOG\u2019s scaled non-operated model positions us to access opportunities that most in our sector cannot. Our ability to structure creative, accretive transactions with best-in-class operators is what sets NOG apart. The Duvernay is one of North America\u2019s premier light oil resources \u2014 high-quality, low-cost, long-life inventory with meaningful upside that remains largely untapped. Parallax is led by a team with a demonstrated track record of developing Duvernay assets, backed by Carnelian Energy Capital, one of North America\u2019s leading energy investors. The decision to incorporate equity consideration aligns mutual interests while enhancing our per-share metrics and balance sheet. This transaction is the result of disciplined evaluation of the meaningful opportunities we see in Canada, and a direct reflection of our ability to identify and convert high-quality assets into long-term value for shareholders.\u201d<\/p>\n

LIGHT-OIL DUVERNAY ACQUISITION<\/p>\n

The Assets are comprised of an undivided non-operated interest which includes, net to NOG, ~4,000 Boe per day of production and ~75,000 acres in the Light-Oil Duvernay Shale at an initial unadjusted purchase price of CA$350 million (~US$259 million), subject to typical closing adjustments. The initial unadjusted purchase price will be funded with CA$113 million (~US$83.5) million of NOG common stock issued to the Seller at closing, with the remaining consideration sourced from cash on hand, operating free cash flow and borrowings under NOG\u2019s revolving credit facility.<\/p>\n

In addition, NOG has agreed to additional contingent consideration of CA$25 million (~US$18.5 million), payable in cash or common stock (at NOG\u2019s election) in the first quarter of 2028 if certain average oil prices are achieved through the end of 2027.<\/p>\n

The acquired Assets include over 500 gross high-quality, low breakeven locations. Substantially all the Assets are operated by Parallax, with NOG participating in development pursuant to a long-term Joint Development Agreement with multi-year drilling commitments entered into in connection with the acquisition.<\/p>\n

NOG expects average production for the properties for full year 2027 of ~4,000 Boe per day (2-stream, ~80% oil). Operating costs are expected to be less than $7.50 per Boe\/d, below NOG\u2019s corporate average. NOG expects to incur up to US$40 \u2013 $45 million in capital expenditures on the assets post-closing in 2026, and US$45 \u2013 $50 million in 2027.<\/p>\n

In connection with the transaction, NOG intends to enter into derivatives transactions to hedge currency fluctuations related to operating costs on a multi-year basis. Depending on market conditions, NOG may also repurchase a portion of the stock consideration in the open market.<\/p>\n

The effective date for the transaction is April 1, 2026, and NOG expects to close the transaction late in the second quarter of 2026. As part of the transaction, NOG has formed a wholly-owned Canadian subsidiary, NOG Energy Canada, Ltd.<\/p>\n

ADVISORS<\/p>\n

Citigroup Global Markets acted as exclusive advisor to NOG on the transaction. Kirkland & Ellis LLP and Blakes, Cassels & Graydon LLP are serving as Northern\u2019s legal advisors.<\/p>\n

National Bank Capital Markets and RBC Capital Markets acted as financial advisors to Parallax on the transaction. Stikeman Elliot LLP served as Parallax\u2019s legal advisor.<\/p>\n

UPDATED COMPANY GUIDANCE<\/p>\n

NOG is providing updated company guidance proforma for the light-oil Duvernay acquisition in line with the \u201chigh-end\u201d of the former low activity range; consistent with commentary on our first quarter 2026 earnings call.<\/p>\n

Updates to guidance are comprised of:<\/p>\n

As described on Q1 call, stand-alone oil production update consistent with \u201chigh-end of the low case\u201d from prior guidance
\nGas volume increase driven by better well performance and timing
\nMinor contribution from pending Duvernay acquisition (late 2Q assumed closing)
\nCapital expenditures, even inclusive of Duvernay transaction, remain unchanged, driven primarily by cost efficiencies
\nLOE guidance updated toward low end of previous guidance
\nMaterial improvement to oil differentials for the year, driven primarily by Williston pricing
\nOverall gas differentials slightly lower, driven by Waha, mostly offset by Appalachian NGL pricing<\/p>\n

ABOUT NOG<\/p>\n

Northern Oil and Gas (NOG) is the largest publicly traded dedicated non-operator in the United States, built on a differentiated strategy of acquiring non-operated minority working interests and mineral rights across the premier basins of North America. By combining deep industry relationships with disciplined capital allocation, NOG has built a scaled, diversified portfolio that generates durable production and strong cash flow for its shareholders. More information about NOG can be found at www.noginc.com<\/a>.<\/p>\n

ABOUT PARALLAX ENERGY OPERATING INC.<\/p>\n

Parallax Energy Operating Inc., an independent oil and natural gas company based in Calgary, Alberta, formed in partnership with funds managed by Carnelian Energy Capital Management, L.P., is focused on leasing, developing and operating oil and gas properties throughout Western Canada. For more information, please visit www.parallaxenergy.ca<\/a>.<\/p>\n

SAFE HARBOR<\/p>\n

This press release contains forward-looking statements regarding future events and future results that are subject to the safe harbors created under the Securities Act of 1933 (the \u201cSecurities Act\u201d) and the Securities Exchange Act of 1934 (the \u201cExchange Act\u201d). All statements other than statements of historical facts included in this release regarding NOG\u2019s financial position, common stock dividends, including any increases thereto, business strategy, plans and objectives of management for future operations and industry conditions are forward-looking statements. When used in this release, forward-looking statements are generally accompanied by terms or phrases such as \u201cestimate,\u201d \u201cproject,\u201d \u201cpredict,\u201d \u201cbelieve,\u201d \u201cexpect,\u201d \u201ccontinue,\u201d \u201canticipate,\u201d \u201ctarget,\u201d \u201ccould,\u201d \u201cplan,\u201d \u201cintend,\u201d \u201cseek,\u201d \u201cgoal,\u201d \u201cwill,\u201d \u201cshould,\u201d \u201cmay\u201d 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.<\/p>\n

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond NOG\u2019s control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: changes in crude oil and natural gas prices, the pace of drilling and completions activity on NOG\u2019s properties and properties pending acquisition, the effects of the COVID-19 pandemic and related economic slowdown, NOG\u2019s ability to acquire additional development opportunities, changes in NOG\u2019s reserves estimates or the value thereof, general economic or industry conditions, nationally and\/or in the communities in which NOG conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, NOG\u2019s ability to consummate any pending acquisition transactions (including the transactions described herein), other risks and uncertainties related to the closing of pending acquisition transactions (including the transactions described herein), NOG\u2019s ability to raise or access capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, and other economic, competitive, governmental, regulatory and technical factors affecting NOG\u2019s operations, products, services and prices.<\/p>\n

NOG has based these forward-looking statements on its current expectations and assumptions about future events. While 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 NOG\u2019s control. NOG does not undertake any duty to update or revise any forward-looking statements, except as may be required by the federal securities laws.<\/p>\n

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