WAYZATA Nov 5, 2015 (Thomson StreetEvents) -- Edited Transcript of Northern Oil and Gas Inc earnings conference call or presentation Thursday, November 5, 2015 at 4:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Brandon Elliot Northern Oil & Gas, Inc. - EVP Corporate Development, Strategy * Mike Reger Northern Oil & Gas, Inc. - Chairman, CEO * Tom Stoelk Northern Oil & Gas, Inc. - CFO ================================================================================ Conference Call Participants ================================================================================ * Neal Dingmann SunTrust Robinson Humphrey - Analyst * Peter Kissel Howard Weil Incorporated - Analyst * Scott Hanold RBC Capital Markets - Analyst * John Oshenbeck - Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good day, ladies and gentlemen and welcome to today's Northern Oil and Gas third quarter 2015 conference call. At this time all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. (Operator Instructions). As a reminder this conference is being recorded. With us today from the Company is the Chairman and Chief Executive Officer, Mr. Mike Reager, Chief Financial Officer Mr. Tom Stoelk and Executive Vice President, Mr. Brandon Elliot. At this time I would like to turn the call over to Mr. Elliott. Please go ahead, sir. -------------------------------------------------------------------------------- Brandon Elliot, Northern Oil & Gas, Inc. - EVP Corporate Development, Strategy [2] -------------------------------------------------------------------------------- Thanks, Nikita. Good morning, everybody. We are happy to welcome you to Northern's third quarter 2015 earnings call. I will read our Safe Harbor language and then turn the call over to Mike for his opening remarks and then Tom Stoelk, our Chief Financial Officer will walk you through the financial results for the quarter. Please be advised that our remarks today, including the answers to your questions, may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These are subject so risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by these forward-looking statements. Those risks include, among others, matters that we have described in our earnings release as well as in our filings with the SEC including our annual report on Form 10-K and our quarterly reports on Form 10-Q. We disclaim any obligation to update these forward-looking statements. During this conference call we will also make references to certain non-GAAP financial measures including adjusted net income and adjusted EBITDA. Reconciliation of these measures to the closest GAAP measures can be found on the earnings release that we issued last night. With the disclosures out of the way I'll turn the call over to Mike. -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [3] -------------------------------------------------------------------------------- Thanks, Brandon. Good morning and thank you all for joining our call today. The third quarter was another solid quarter for Northern as we continue to bear the fruit of being 80% hedged at $90 a barrel. As we wrap up 2015 and look toward 2016 we will continue to focus on capital preservation with an eye towards remaining flexible and opportunistic in the volatile environment. During the third quarter our positive cash flows allowed us to pay down the balance on our revolving credit facility by $18 million. And after a completion of our recent bank redetermination our borrowing base was reaffirmed at $550 million which provides us of $380 million of current borrowing availability under our current credit facility. We believe this demonstrates the confidence our bank group has in the quality of our assets and in the execution of our strategic plan. We will also continue to leverage our franchise as the largest non-operater in the Bakken play by acquiring acreage and working interest in active drilling units that meet our internal rate of return threshold. Our non-op business model allows us to be very flexible on deployment of our CapEx. We continue to participate in highly economic drilling opportunities as well costs have dropped significantly and drilling activity is focused on the core of the Bakken play where Northwestern holds meaningful lease hold interests. During the third quarter we added 85 gross 2.7 net wells to production. Wells brought online by Conoco in the Corral Creek field in Dunn County, made up 40% of the additions with Slawson's wells in Montreal County making up a significant portion of the rest. All of the wells added to production this quarter were in the core of the gig four Counties of Montreal, McKenzie, Williams and Dunn. Given the current backdrop for oil prices and being cautious on managing cash flow some of our operating partners have elected to delay the completion of certain wells until early 2016. As a result we expect that our number of net well additions in the fourth quarter of 2015 will be similar to the third quarter levels and our 2015 total production will be flat with 2014 levels, which is consistent with previous guidance. Drilling activities have slowed in the Basin resulting in the decline in the wells in process from 22.7 net wells in process at the end of 2014 to 10.1 net wells at the end of the third quarter. The good news is that Continental, XTO, and Whiting comprise almost half of our in-process list with all of our drilled but uncompleted well inventory located in the core of areas of the Bakken. We continue to see excellent performance from wells where high intensity completions were performed as compared to similar wells in the same areas that did not receive the higher intensity completion. As you might expect the bigger frac designs are becoming a larger percentage of our well participation mix. Over the last six months nearly 80% of the consented wells include plans for this high intensity frac design. So far our data would suggest that we are seeing, and would expect to continue to see, a nearly 25% uplift in EURs with these newer frac designs. This supports our belief that as we move into 2016 our per well productivity should continue to improve as we continue to consent only to those wells in the core of the play. We continue to see new opportunities in this market. We have seen pickup in deal flow, both from the smaller deals that helped build this company as well as larger asset packages. In our opinion, the bid ask spread for the larger deals are still wide but the number and quality of opportunities is increasing. We are still see potential sellers with core acreage positions remaining reluctant to tell in this low commodity price environment. As it relates to the larger asset packages that have been marketed recently, we have seen a predominance of private equity investors being willing to use a price deck above the strip in the out years to bridge the gap with sellers to get these deals done. We continue to actively evaluate every interesting opportunity but believe we may have more success with the smaller transaction size that aren't being openly marketed. Clearly our widespread well participation in the Bakken play provides a substantial database with which to prospect for the new deals. As above data helps illustrate Northern has exposure to some of the best core acreage in the Willison Basin. This acreage position continues to allow attractive development opportunities, even at current commodity prices, and provides a lot of upside optionality when commodity prices begin to recover. With this, I will turn the call over to Tom Stoelk, our CFO, for a rundown of this quarters financials. -------------------------------------------------------------------------------- Tom Stoelk, Northern Oil & Gas, Inc. - CFO [4] -------------------------------------------------------------------------------- Thanks, Mike. Today I'm going to cover some of the financial highlights for the third quarter and provide some commentary on the liquidity and capital expenditures. Adjusted net income for the third quarter of 2015 was $14.6 million, or $0.24 per diluted share, adjusted EBITDA for the third quarter was $71.7 million. Both of these amounts were impacted during this quarter by the lower oil and gas prices. Third quarter production averaged 15,844 barrels of oil equivalent per day in light of the low commodity price environment our annual capital expenditures budget declined approximately 74% in 2015 as compared to our actual CapEx spend in 2014. Despite the reduction in capital spending our year-over-year production growth for the first nine months of the year was 9%. The year-over-year production growth was partially driven by completion of a large well inventory entering this year as well as improved economics and recoveries on the 24.4 net wells that we added to production over the last 12 months. A lower level of well completions during the third quarter caused production levels to be approximately 4% lower than the same period a year ago. Realized price per barrel of oil equivalent, after reflecting our (inaudible) derivative transactions, was $63.62 per BOE for the third quarter. The 14% year-over-year decrease was due to lower commodity prices than a year ago. Partially offsetting the lower commodity prices was an improvement in our average oil differentials to the NYMEX WTI benchmark that averaged $8.24 per barrel in the quarter of 2015 as compared to $12.93 per barrel in the third quarter of 2014. Oil, natural gas and NGL sales, when you include the affect of settled derivatives, totaled $92.7 million in the third quarter which was a 1% sequential decline compared to the second quarter of 2015. Our high level of oil hedged, under fixed price agreements, helped to mitigate the current low price environment. For the third quarter of 2015, we incurred a gain on settled derivatives of $43 million compared to a $7 million loss for the third quarter of 2014. A gain on settled derivatives increased our average realized price per BOE by $29.47 this quarter. Looking at operating expenses, our combined per new knit production expenses, production taxes and G&A for the third quarter declined by $5.56 per BOE or 27% when compared to the third quarter of 2014. The decrease in per unit operating expenses was driven by lower contract labor and maintenance costs and a smaller taxable base for production taxes. General administrative in the third quarter of 2015 reflects approximately $523,000 in restructuring expenses. In September of 2015, we restructured certain operations in response to the current oil and gas commodity environment. These changes which included a reduction in workforce, are expected to result in better utilization of our resources and improve cost efficiencies. With respect to our outlook for the remainder of the year I would direct you to our earnings release from last night which included our current expectations for production, oil differential and operating expenses. Obviously drilling activities have slowed in the Basin with a drop in commodity prices (inaudible) a reduction in drilling and complex costs during the first nine months of 2015 the weighted average authorization for expenditure or the cost of wells we elected to participate in during that period was $7.7 million, that's down approximately 16% compared to the $9.2 million average in 2014. Our capital expenditures during the quarter totaled $27.5 million. We still believe that we're on pace to spend an estimated $140 million of capital budget for this year. Though there is a chance, as operators delay complexes in 2016, we could spend less than that amount. Turning to liquidity. We exited the quarter with $170 million of borrowings on our credit facility and our borrowing base was recently reaffirmed at $550 million, providing us with $380 million of borrowing capacity on this facility with another $7 million of cash on hand the company had available liquidity of approximately $387 million at the end the quarter. We remain financially strong with total debt to trailing 12 months adjusted EBITDA of less than three times. We remain well positioned from liquidity and debt maturity perspective to deal with the lower prices. We maintain a strong hedging position and we have a total of 1.9 million barrels of oil hedged with swaps at an average price of $90 per barrel over the next three quarter. After that we have an additional 900,000 barrels hedged with swaps at average prices of $65 per barrel in the second half of 2016. Obviously that amount of hedging is valuable in this current pricing environment and helps protect our balance sheet. Our asset base is substantially helped by production and is located in an area of some of the lowest break even economics in the U.S. As a non-operator Northern has extensive control over its capital spending because we have the ability to elect on a well by well basis. This provides us the ability to be more selective in allocation of our capital to the highest rate of return projects without the burden of contractual drilling commitments, large operational or administrative staffs or other infrastructure concerns. Given the uncertainty around future oil prices we are continuing to take aggressive steps to protect our balance sheet. By maintaining capital discipline we continue to work hard build resilience given the uncertainty of how long this low price environment will last. By reducing commitment levels and enhancing our liquidity we are navigating this low price environment and at the same time preparing ourselves for future opportunities and value creation. At this time I would like to turn it back to the operator for Q&A. Nikita, if you could please give the Q&A instructions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions). Our first question comes from the line of Neal Dingmann with SunTrust. -------------------------------------------------------------------------------- Neal Dingmann, SunTrust Robinson Humphrey - Analyst [2] -------------------------------------------------------------------------------- Good morning, guys. -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [3] -------------------------------------------------------------------------------- Good morning. -------------------------------------------------------------------------------- Neal Dingmann, SunTrust Robinson Humphrey - Analyst [4] -------------------------------------------------------------------------------- Hi, Mike, when you are looking at, I guess two questions here first. Just on that slide, you know, where you always show the inner circle and outer. Today is everything, you know, how focused is that on, let's call it even the core of the inner, you talk about which ones you are contending to? -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [5] -------------------------------------------------------------------------------- I think anything that we are seeing penciling today is in that red circle on one of our slides in our slide deck on our website. We continue to see, you know, the bulk of the deals that we are buying and that the deals that are attractive to us, acreage and working interest in, within that circle. And it is usually because some folks might not have the capital in this environment to participate in those wells and, you know, given what we just covered with the liquidity position, we are actively adding in that inner core, bulls eye. -------------------------------------------------------------------------------- Neal Dingmann, SunTrust Robinson Humphrey - Analyst [6] -------------------------------------------------------------------------------- Mike and then, just the follow-up as far as, you know, when you look at, I guess going to next year based on different sensitivities how do you see non-consent activities? Percentage wise, are you still consenting to most? -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [7] -------------------------------------------------------------------------------- You know, the year-to-date we have elected to 72% of the well proposals we very received. And then one thing we have been highlighting and that we have also noted is that of the wells that we non-consented, we have, some of those wells haven't been drilled. Therefore at the end of, after 90 days, if we non-consent a well after the well proposal is due, if it hasn't been drilled in 90 days, the well proposal has to be re-sent and that typically means that the operator isn't actually going to drill that well so we get another kick at the cat there. So we are pretty pleased with the way the operators are behaving and their particular capital. We haven't seen a lot of well proposals to drill wells in areas that at this current commodity price would be uneconomic. So we are feeling pretty good and I think our operators are making great decision. -------------------------------------------------------------------------------- Neal Dingmann, SunTrust Robinson Humphrey - Analyst [8] -------------------------------------------------------------------------------- No, makes sense. And then, just lastly, you had a nice debt pay down and kind of alluded to that. I guess, your thoughts going forward if you continue to have this positive cash flow will you continue to do so? -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [9] -------------------------------------------------------------------------------- Yes, I think we will have, we'll kind of stay in the positive cash flow in the first quarter and then through 2016, you know, as we sit here today we are probably at about $160 million outstanding on the facility with about $16 million in cash. We have got a semi annual interest payment coming up $28 million first of December but as I look at the facility, I think we will probably finish probably fairly flat given that we have an interest payment but from a positive cash flow standpoint I think we are kind of over the hump and you are going to see that this quarter as well as through 2016. -------------------------------------------------------------------------------- Neal Dingmann, SunTrust Robinson Humphrey - Analyst [10] -------------------------------------------------------------------------------- Great to hear. Thanks, guys. -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [11] -------------------------------------------------------------------------------- Thanks. -------------------------------------------------------------------------------- Operator [12] -------------------------------------------------------------------------------- Thank you. (Operator Instructions). The next question from the line of Peter Kissel with Howard Weil. -------------------------------------------------------------------------------- Peter Kissel, Howard Weil Incorporated - Analyst [13] -------------------------------------------------------------------------------- Hi, guys. Good morning. Thanks for taking the questions. -------------------------------------------------------------------------------- Tom Stoelk, Northern Oil & Gas, Inc. - CFO [14] -------------------------------------------------------------------------------- Morning, Pete. -------------------------------------------------------------------------------- Peter Kissel, Howard Weil Incorporated - Analyst [15] -------------------------------------------------------------------------------- Good morning, guys. I guess, maybe one to start with on the AFBs we've heard operators talk about well costs with the five handle, your average is more in the upper sevens right now. Curious to see, is that more of an operator mix? You highlighted Conoco and Slawson Recently is it the frac designs and maybe more than anything, do you think that that could come down materially, kind of, closer to that five to six range? -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [16] -------------------------------------------------------------------------------- Yeah, I think that 7.7, Pete, is the year-to-date average. The bulk of all of the wells that are in process drilled yet uncompleted. We are seeing a lot of wells with a five handle on them. You know, Slawson continues to be a leader in the efficiencies standpoint. But we are seeing a lot of these wells come in with the higher intensity completions, which we think are going to be in the neighborhood of the low 7.7 range. Right now an average mix. Year-to-date that was the number we shared which is roughly 7.7 so that's a good basket of what we participated in so far. -------------------------------------------------------------------------------- Peter Kissel, Howard Weil Incorporated - Analyst [17] -------------------------------------------------------------------------------- Okay. Great. Thanks, Mike. And then second you mentioned that 60% to 70% of your wells in progress won't be completed until 2016. I'm curious is that an indication of when you think prices are going to improve or is that when costs come down enough to incentivize the completion of those wells or does that come from some sort of dialogue with the operator that you've had? Just curious as to your thoughts there. -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [18] -------------------------------------------------------------------------------- As you know, we don't have an opinion on oil prices here. I wish we knew. But I would say that as the largest non-operator in the play we have great relationships with our operating partners and we continue to talk to them every day as it relates to our mix. We are trying to figure out how we can model and best illustrate what our CapEx will be for the fourth quarter and 2016 and they are pretty open about which quarter and which month they intend to complete some of these wells. Now, if oil prices deteriorate some of theirs estimates for completion in the first, you know, first or second quarter that could get pushed out. The short answer is it is the dialogue we have with our operating partners. -------------------------------------------------------------------------------- Peter Kissel, Howard Weil Incorporated - Analyst [19] -------------------------------------------------------------------------------- Got you. Okay. Thanks for the color, Mike. -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [20] -------------------------------------------------------------------------------- Thanks, Steve. -------------------------------------------------------------------------------- Operator [21] -------------------------------------------------------------------------------- Thank you. The next question from the line of Scott Hanold with RBC Capital Markets. -------------------------------------------------------------------------------- Scott Hanold, RBC Capital Markets - Analyst [22] -------------------------------------------------------------------------------- Hi, good morning. -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [23] -------------------------------------------------------------------------------- Good morning, Scott. -------------------------------------------------------------------------------- Tom Stoelk, Northern Oil & Gas, Inc. - CFO [24] -------------------------------------------------------------------------------- Good morning, Scott. -------------------------------------------------------------------------------- Scott Hanold, RBC Capital Markets - Analyst [25] -------------------------------------------------------------------------------- Mike, you talked about, obviously, you know, a lot of opportunities out there in smaller deal and larger deals and whatnot. Can you just kind of step back and, you know, obviously at these reduced oil prices, what are the strategic priorities there in terms of if something comes up that is a little larger, you know, how do you take a bite out of that and is that even something you want to do at this point? -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [26] -------------------------------------------------------------------------------- You know, I think that as some of the larger deals have been marketed we doing the engineering work we're using, we're essentially using the existing strip to model and make our decision what kind of return we would require from any acquisition whether it is large or small. On the larger transactions we have essentially yet to be successful on anything of any size. We're seeing private equity firms beat us out, from what we understand they're using the strip for a year or two and then they're using, sort of, flat call it 65, 70, 75 tiered up as we go and that is not really reflective of the existing strip. The short answer is that we are going to remain very disciplined and we are going to make our decisions based on our ability to lock in cash flow on those volumes that we're acquiring. What we are seeing, that it is more attractive, are some of these smaller deals that Northern has really built a pretty meaningful franchise around for the last 10 years. So we are going to continue to pick away at this field like we always have. If there is a unique opportunity where we can take a bigger bite of something we're going to be conservative about our, conservative disciplined about the price deck we're going to use. We are just being disciplined. If we don't get anything we don't get anything but we're keep working and we keep evaluating every interesting opportunity that we see. We definitely have our engineers working overtime. -------------------------------------------------------------------------------- Scott Hanold, RBC Capital Markets - Analyst [27] -------------------------------------------------------------------------------- So as you make these decisions it seems like you guys are kind of leaning on the strip a little bit more in terms of whether or not we can do it and (inaudible). Is that a fair statement? -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [28] -------------------------------------------------------------------------------- I think that's probably the best way to look at it at this point. I don't think there' s any clarity. I don't think anybody has any clarity on where oil prices are going to be. So I think the most disciplined way to go about this is to use the strip. -------------------------------------------------------------------------------- Scott Hanold, RBC Capital Markets - Analyst [29] -------------------------------------------------------------------------------- Okay. Olay. Fair enough. And then one other question kind of going back to the AFEs you have in process indicated there was $7.9 million. What are the chances that when those actually costs, do actually shake through that there is going to be some sort of adjustment on those numbers? Is that a highly likely event where it looks like $8 million now but ultimately when these guys drill they're come in at $7 million, $7.5 million? Have you seen a lot of that as you have done your, kind of, accrual adjustments for the year? -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [30] -------------------------------------------------------------------------------- You know we've seen that over the last year, we have seen that occur as we go. But he way we at it's simple, we take the, essentially, the weighted average AFE that was sent to us by the operator and that is just input into the system and that is how we model happen track it. Actuals, obviously, would likely continue to come down when we're sent our joint interest bills those actuals will likely be lower because we've continued to see and we continue to hear from our operators that costs are still trending down. So, again, $7.7 million has been our average, weighted average AFE, year-to-date on the inprocess wells. We think lately that's probably going to be closer to the low sevens and then actuals we'll just see. But we've seen that trend as the wells have been completed and we've seen the joint interest bills flow through. We've seen the trend of lower cost, actually, follow through. -------------------------------------------------------------------------------- Scott Hanold, RBC Capital Markets - Analyst [31] -------------------------------------------------------------------------------- Okay. And you guys obviously were very well hedged and have a good position going into 2016. At what point do you consider more hedges to continue to protect the downside or do you not think it makes sense at the current strip? -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [32] -------------------------------------------------------------------------------- Well, I think all dependent on how much CapEx we are willing to deploy. We feel really comfortable with our ledge book now. Maybe a little over 40% of our production in the first half is hedged at $90.00. The first half of 2016. And then the second half of 2016, a little over 40% of our production is hedged at $65.00. We layered the $65.00 swaps in May when the oil price perked up there to around, the front month perked up lot close to $60.00. We will continue to be opportunistic there. But I would say that we will always be disciplined, if we make any meaningful acquisition or begin to meaningfully deploy more CapEx we have no problem locking in the first couple of years of cash flows at the strip that we are using to evaluate those opportunities and those drilling projects. -------------------------------------------------------------------------------- Scott Hanold, RBC Capital Markets - Analyst [33] -------------------------------------------------------------------------------- Thanks. -------------------------------------------------------------------------------- Tom Stoelk, Northern Oil & Gas, Inc. - CFO [34] -------------------------------------------------------------------------------- Thanks, Scott. -------------------------------------------------------------------------------- Operator [35] -------------------------------------------------------------------------------- (Operator Instructions). The next question from the line of [John Oshenbeck]. -------------------------------------------------------------------------------- Tom Stoelk, Northern Oil & Gas, Inc. - CFO [36] -------------------------------------------------------------------------------- Good morning, John. -------------------------------------------------------------------------------- John Oshenbeck, - Analyst [37] -------------------------------------------------------------------------------- Good morning, everyone. I had a bigger question about the Bakken in general, since you all have such a large footprint there. What's your sense of total in ducts the play and how do you think operators are thinking about adding ducts and putting them online going forward? -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [38] -------------------------------------------------------------------------------- Well, I think the way we are hearing it from our operators is that our operators are planning their budget throughout, they are starting to plan their budgets (inaudible) 2016 and they are giving pretty good idea of what they're complete assuming similar oil prices. Obviously if oil prices deteriorate I think they get pushed out and if oil prices improve for one reason for another I think that they may start accelerating the completion of those ducts. -------------------------------------------------------------------------------- Tom Stoelk, Northern Oil & Gas, Inc. - CFO [39] -------------------------------------------------------------------------------- Yes, I also think that as we're approaching year end they're delaying a number of those wells just for budgetary reasons and to try to keep the CapEx down. So I think right now you're probably seeing a little bit higher level of uncompleteds out there and that will probably normalize once we get into the first quarter, you know, weather permitting and things a like that. -------------------------------------------------------------------------------- John Oshenbeck, - Analyst [40] -------------------------------------------------------------------------------- Great. And those ones that you say that they could potentially be deferring right now in Q4, do you think, you know, maybe you see an uptick in activity in Q1 just since things all got pushed out into the following quarter? -------------------------------------------------------------------------------- Mike Reger, Northern Oil & Gas, Inc. - Chairman, CEO [41] -------------------------------------------------------------------------------- I think it just depends on a couple of things. Primarily oil prices. But, again, the first quarter is typically your trickiest weather quarter. So we're modeling our ducts and our estimate for new wells that we'll participate in more back end loaded. But you know typically the second, third, and fourth quarter are better quarters for completions and weather. First quarter can be tricky. -------------------------------------------------------------------------------- Brandon Elliot, Northern Oil & Gas, Inc. - EVP Corporate Development, Strategy [42] -------------------------------------------------------------------------------- John, this is Brandon. Normally, I think, what we have seen is a, probably like a, 65/35 split for the back half of net well adds, weighted to the back half 65%. We're just kind of assuming that is a normal pattern but, as Mike said, obviously probably weather in 1Q and 2Q is the key driver. -------------------------------------------------------------------------------- John Oshenbeck, - Analyst [43] -------------------------------------------------------------------------------- Got you. Appreciate it. Makes sense. Really appreciate the color. -------------------------------------------------------------------------------- Brandon Elliot, Northern Oil & Gas, Inc. - EVP Corporate Development, Strategy [44] -------------------------------------------------------------------------------- Thanks. -------------------------------------------------------------------------------- Operator [45] -------------------------------------------------------------------------------- Thank you. At this time I'm showing no further questions. I would like to turn the call over to Mr. Brandon Elliott for closing remarks. -------------------------------------------------------------------------------- Brandon Elliot, Northern Oil & Gas, Inc. - EVP Corporate Development, Strategy [46] -------------------------------------------------------------------------------- Thanks, Nikita, thanks, everyone for their participation in the call today and your answers to Northern Oil & Gas. Nikita will give you the replay information and we look forward to talking with you all again soon. Everybody have a good day and the rest of the week. -------------------------------------------------------------------------------- Operator [47] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now all disconnect.
|