Northern Oil and Gas (NYSE:NOG) executives used the company’s fourth-quarter and full-year 2025 earnings call to emphasize balance sheet positioning, a growing natural gas and Appalachia footprint, and a wider-than-usual range of potential 2026 activity outcomes amid oil price uncertainty.
Management: 2026 likely marks an oil-cycle trough, with capital flexibility a priority
Chief Executive Officer Nick O’Grady said 2025 results held up despite a weaker commodity backdrop, noting Adjusted EBITDA increased 1% year-over-year even as average oil prices were down about 14%. He also pointed to a 2% year-over-year reduction in share count and modest net debt reduction, despite more than $340 million of acquisitions completed during the year, including the company’s “Ground Game” activity.
He said NOG expects 2026 to mark the trough of the oil cycle and outlined two broad potential paths: a period of middling prices that eventually leads higher, or a sharper near-term decline that ultimately produces the same outcome. In either scenario, he said NOG expects to emerge stronger, citing hedging and the company’s ability to defer development.
Dividend commentary and “Ground Game” evolution
O’Grady also addressed investor “rumors” that the dividend could be in question, calling the chatter “totally unfounded.” He said the dividend was designed for a “significantly weaker environment” than current conditions, and that the company would be at cash-flow break-even during the cycle trough after paying the dividend. He added that the company is “dedicated to sustaining and growing” the dividend over the long term, while acknowledging the need to manage risk.
Looking ahead, O’Grady said NOG’s Ground Game approach will “definitively evolve in 2026,” shifting in some cases from leasing toward drill-ready projects. He said drill-ready projects that looked unattractive in 2025 are “slowly becoming a much better place to be,” while leasing remains active for longer-term positioning.
He also said NOG is satisfied with its strategic portfolio position and expects to prioritize discretionary capital toward Ground Game opportunities, while continuing to evaluate M&A as assets come to market.
Operations: activity, wells in process, and a larger Appalachia footprint
President Adam Dirlam said fourth-quarter operations were in line with expectations as activity ramped exiting 2025, even as some operators deferred completions due to commodity prices. NOG added 24.2 net wells to production in the quarter and ended the year with 45.6 net wells in process, down 7.8 net wells after accelerated completions.
Dirlam said the Permian accounts for more than a third of wells in process, Appalachia just under a quarter, with the Williston and Uinta comprising the remainder. He added that the company has 13 net wells that have been elected to but not yet spud, with roughly two-thirds in the Permian.
He said operators have continued to drive down normalized costs, with wells in process and elected AFEs averaging around 13,000 feet and normalized well costs down nearly 5% quarter-over-quarter. He also said NOG elected more than 95% of well proposals during the quarter, with expected returns “significantly higher” than the company’s hurdle rate.
On Appalachia, Dirlam highlighted an acceleration in activity during 2025 and said NOG is positioned to increase activity after closing its Utica acquisition in late February. Pro forma for the transaction, he said NOG increased its Appalachian footprint by 45% to approximately 90,000 net acres, including more than 100 identified gross locations on the Antero asset alone.
For 2026, Dirlam said NOG provided guidance as a range of outcomes and expects activity to be roughly split by basin based on current wells in process and operator conversations:
- Permian: 40%
- Appalachia: 25%
- Williston: 25%
- Uinta: 10%
He said well activity is expected to be relatively evenly weighted between the first and second half of the year, while spending is forecast to be more front-end loaded at a 60/40 split. He also said the company expects the “usual downtick” in the first quarter due to fourth-quarter activity, weather, and curtailments, then higher activity in the second quarter with a relatively flat cadence thereafter.
Ground Game and M&A: record Q4 transactions, with smaller deals emphasized
Dirlam said NOG has remained highly engaged on business development and is now working on its “fifth major joint acquisition” with Infinity following the integrated upstream and midstream Utica transaction. He said the asset’s inventory has average break-evens below $2 and is expected to be a focus as the company pursues development plans “beyond 2030.” He also pointed to potential incremental value from undeveloped acreage and midstream fee potential.
He noted several large assets in the market totaling roughly $6 billion, but said many are not the right fit for NOG. He said the Ground Game is expected to remain central as NOG leverages proprietary infrastructure and pursues smaller acquisitions and joint development opportunities.
In the fourth quarter alone, Dirlam said NOG added more than 6,000 net acres and 1.2 net wells across 33 transactions, a quarterly record. For full-year 2025, he said the company added 12.8 net wells and more than 12,300 acres, while evaluating more than 700 opportunities. He added that a number of committed transactions are slated to close early in 2026 and cited early conversion of recent acreage into development, including 14 well proposals in Ohio that he said showed some of the strongest economics across the portfolio.
Financial results: production growth led by gas; liquidity expanded and maturities extended
Chief Financial Officer Chad Allen said fourth-quarter results were “down the fairway,” with NOG outperforming internal estimates on production and EBITDA for the quarter and full year. Fourth-quarter total average daily production was 140,000 Boe/d, up 7% sequentially and up 6% year-over-year. Full-year 2025 production averaged 135,000 Boe/d, up 9% versus 2024 and above the high end of guidance, driven primarily by the ramp in gas assets.
Allen said fourth-quarter oil production rose 3% sequentially to 75,000 barrels per day but was 5% lower year-over-year due to deferred wells as operators became more price sensitive. Gas production in the quarter reached 392 MMcf/d, up 11% sequentially and up 24% from the prior year, marking a third consecutive quarter of record gas volumes tied to the Appalachian JV. For full-year 2025, he reported oil production of 75,646 barrels per day and gas production of 356 MMcf/d.
On earnings and cash flow, Allen reported:
- Q4 Adjusted EBITDA: $367 million
- Q4 Free Cash Flow: $43 million
- Full-year Adjusted EBITDA: $1.63 billion
- Full-year Free Cash Flow: $424 million
- Q4 Adjusted net income: $82 million, or $0.83 per diluted share (excluding a $270 million non-cash impairment charge)
- Full-year Adjusted net income: $453 million, or $4.57 per diluted share
Allen said GAAP net income was impacted by $703 million of non-cash impairment charges recorded during 2025 under the full-cost accounting “ceiling test,” driven by lower average oil prices. He said the charges are not indicative of asset quality and noted the company is evaluating a change in accounting method to Successful Efforts to align with peers and improve comparability.
On costs and realizations, Allen said fourth-quarter oil differentials averaged $5.05 per barrel versus $3.89 in the third quarter, reflecting seasonal widening in the Williston offset by improvement in the Permian. Natural gas realizations were 58% of benchmark in the quarter due to Waha weakness, lower NGL prices, and a lower NGL-to-gas ratio; full-year gas realizations were 79% versus 93% in 2024. Lease operating costs were $9.30 per Boe in the fourth quarter and $9.61 per Boe for the year.
Fourth-quarter capital spending, excluding non-budgeted acquisitions and other, was $270 million, with 44% allocated to the Permian, 26% to the Williston, 8% to the Uinta, and 22% to Appalachia. Full-year 2025 capex (excluding non-budgeted acquisitions and other) totaled $1.0 billion, including $174 million of Ground Game investment.
Allen also outlined several financing actions aimed at liquidity and maturity management, including extending the revolving credit facility maturity to November 2030, increasing the borrowing base to $1.975 billion, and raising the elected commitment to $1.8 billion. He said NOG issued $725 million of notes at a 7 7/8% coupon in October and retired nearly all of its 2028 notes; the remaining $20 million is expected to be redeemed at par on March 4. After closing the Utica acquisition, he said NOG has more than $1 billion of liquidity available.
Management said it is providing two guidance ranges for 2026—low-activity and high-activity scenarios—due to limited visibility on commodity prices and shifting operator behavior. In Q&A, O’Grady said timing uncertainty is elevated, noting 13 net wells have been consented but not spud and that behavior has “been moving around substantially in real time.” He also said Ground Game activity could help fill the gap between scenarios and that the company will communicate updates throughout the year.
In closing remarks, O’Grady said NOG’s assets are performing well, liquidity is “abundant,” and the investment opportunity set remains strong, with the company expecting to keep investors informed on activity in the coming weeks.
About Northern Oil and Gas (NYSE:NOG)
Northern Oil and Gas, Inc is a publicly traded independent energy company focused on the acquisition, exploration and development of oil and natural gas resources in the United States. The company’s primary operations are concentrated in the Williston Basin, where it secures acreage positions and partners with drilling operators to advance upstream projects. Through strategic leasehold acquisitions and joint ventures, Northern Oil and Gas seeks to expand its footprint in both conventional and unconventional reservoirs.
Northern Oil and Gas employs horizontal drilling and hydraulic fracturing technologies to develop unconventional resource plays, particularly in the Bakken, Three Forks and Red River formations of North Dakota and Montana.
