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Northern (NOG) Updates on Q1 Capital Allocation and Hedging

Northern Oil and Gas Inc. (NOGrecently provided updates on its first quarter's hedging results and capital allocation matters. The company periodically enters into derivative agreements to hedge a portion of its exposure to commodity price fluctuations. For the first quarter of 2023, unrealized mark-to-market gains on derivatives are expected at $140.0 million and realized derivative hedge gains are estimated at $13.6 million.

The company allotted around $26.4 million during the first quarter of 2023 for the buyback of securities, including NOG common stock and senior unsecured notes due 2028.

During the same quarter, the company bought back 287,751 shares of common stock at a weighted average price of $27.82 per share. The average closing and quarter end prices, as adjusted for the first-quarter dividend payment, were $30.81 per share and $30.35 per share, respectively. At the end of the quarter, the company had $87.5 million of available funds left under its active common stock buyback authorization.

During the abovementioned period, NOG repurchased and retired $19.1 million of its 8.125% Senior Unsecured Notes due 2028 (the “Notes”) for an average price of 96.4% of par value. On Mar 16, 2023, the company’s board of directors extended the notes repurchase authorization by $100.0 million, bringing the total available amount under the program to $105.1 million.


According to Nick O'Grady, CEO of NOG, the volatility seen in the capital and commodities markets in the first quarter presented considerable possibilities for the company and its investors. In order to deliver a superior overall return for its investors, NOG will pursue a measured approach in 2023 that will balance growth, enhance cash distributions, leverage levels and tactical securities repurchases.

Northern is slated to release first-quarter 2023 results on May 4. The Zacks Consensus Estimate for NOG’s earnings is pegged at $1.52 per share on revenues of $398.2 million.

Zacks Rank & Key Picks

NOG currently carries a Zack Rank #3 (Hold).

Some better-ranked stocks for investors interested in the energy sector are CVR Energy CVI, Par Pacific Holdings Inc. PARR, each sporting a Zacks Rank #1 (Strong Buy) and Valero Energy Corporation VLO carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

CVR Energy, a diversified holding company with its main office in Sugar Land, TX, is an independent refiner and marketer of high value transportation fuels. Over the past seven days, CVI has seen an upward revision in earnings estimates for 2023.

Par Pacific, a growth-oriented company, combines knowledge of corporate financing with experience in the oil and gas sector. With 94,000 barrels per day of active refining capacity and a logistical system that includes an SPM, storage, barges, pipelines and trucking operations, PARR owns and manages one of Hawaii's biggest energy networks. Over the past 30 days, the company has witnessed an upward revision in earnings estimates for 2023 and 2024.

Valero Energy is a global manufacturer and marketer of transportation fuels and petrochemical products. With 15 refineries spread across Canada, the United States and the United Kingdom, it has a daily refining capacity of 3.1 million barrels. Over the past seven days, VLO has seen an upward revision in earnings estimates for 2023 and 2024.

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