Northern Oil and Gas Posts Lower-Than-Expected 4Q Profit, Sales Decline 15%

Northern Oil and Gas reported lower-than-expected 4Q earnings. Moreover, a decline in total production due to the pandemic impacted quarterly sales, which plunged 15% year-over-year. Shares of the Minnesota-based energy company slid 1.4% to close at $14.11 on Friday.

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Northern Oil and Gas’ (NOG) 4Q adjusted earnings of $0.64 per share missed the Street estimates of $0.66 but increased 28% year-over-year. Total production was 35,738 Boe per day, down 19%.

The company’s adjusted EBITDA came in at $94.3 million, down 17.4% year-over-year. (See Northern Oil and Gas stock analysis on TipRanks)

Northern Oil and Gas CEO Nick O’Grady commented, “We enter 2021 as a multi-basin company, dedicated to the allocation of capital into the highest return projects, with a reinvigorated capital structure that should provide for growth opportunities and a clear path to our ultimate goal: to responsibly return capital to shareholders.”

For 2021, the company projects annual production (Boe per day) to be in the range of 37,750 to 42,750. Total capital expenditures are anticipated to be in the range of $180 million to $225 million.

Following the 4Q results, Raymond James analyst John Freeman reiterated a Buy rating and a price target of $20 (41.7% upside potential) on the stock.

Freeman commented, “There were no big surprises this quarter with production coming in right in the middle of their range and capex landing just below the middle.”

Northern Oil and Gas shares have exploded almost 78% over the past year, while the stock still scores a Strong Buy consensus rating based on 4 unanimous Buys. That’s alongside an average analyst price target of $15.50, which implies about 10% upside potential to current levels.

What’s more, Northern Oil and Gas scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.