NOG Resources Expects More Oil, Gas This Year

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February 14, 2025--Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Northern Oil and Gas Resources (NOG) (NYSE:NOG) (Minneapolis, Minnesota) said total production was up last year, lifted largely by crude oil, though spending plans this year could be geared toward shale natural gas.

NOG said its oil production was around 78,000 barrels of oil equivalent per day (Boe/d), an 11% increase from the third quarter. The company said that production last year was disrupted by wildfires that tore through the Rocky Mountain range, impacting its operations in the North Dakota shale patch.

Despite those issues, the company said its production from the Permian Basin increased by 12% since the third quarter. The company was short on specifics, though the U.S. Energy Information Administration (EIA), the data arm of the Energy Department, expects Permian crude oil production will average 6.6 million barrels per day (BBL/d), representing slightly less than half of the total U.S. production.

NOG had pegged as much as $900 million in spending last year, with the Permian accounting for 59% of its spending over the three-month period ending June 30.

NOG said it expected total oil production to be slightly higher than during the fourth quarter, with total production volumes targeted at 135,000 Boe/d.

A spending program of around $1 billion for the year, meanwhile, is supporting NOG's drilling operations in the Appalachia basin, the largest inland gas producer in the continental United States.

Appalachia, spread out over parts of Ohio, Pennsylvania, New York and West Virginia, is expected to yield around 35.5 billion cubic feet of natural gas per day this year, representing about 30% of the U.S. total.

Last year, NOG paid $511.2 million in cash to XCL Resources (Houston, Texas) for more than a decade's worth of prime inventory spread out across 15,800 net acres in the Uinta Basin, spread out over parts of eastern Utah.

Utah accounts for only about 1% of total U.S. crude oil production, but 16% of what's produced from the Rocky Mountain region.

"Utah's crude oil production declined in 2020 following the drop in petroleum demand and oil prices during the COVID-19 pandemic, but the state's output recovered and in 2023 reached a new high, surpassing the prior year's record output," analysis from the EIA read.

Utah also hosts some of the largest natural gas fields in the country, though output may have peaked by 2012 despite recent gains.

NOG added that it expects seasonal factors, such as the cold weather currently covering the Uinta and Bakken formation, to impact production during the first quarter, but a significant ramp-up is expected for the rest of the year.

The company said it realized an average natural gas price of $3.60 per million British thermal units during the fourth quarter, about 80% of the average price for the U.S. benchmark Henry Hub during the period. It took about $56 per barrel in West Texas Intermediate (WTI), the U.S. benchmark for the price of oil. WTI averaged $60 per barrel during the fourth quarter.

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