Northern Oil and Gas Acquires 25% Interest in Parallax Energy
Northern Oil and Gas announced that it has agreed to purchase an undivided 25% interest in the Light-Oil Duvernay Assets owned and operated by Parallax Energy Operating. The Assets are comprised of an undivided non-operated interest which includes, net to NOG, ~4,000 Boe per day of production and ~75,000 acres in the Light-Oil Duvernay Shale at an initial unadjusted purchase price of $259M, subject to typical closing adjustments. The initial unadjusted purchase price will be funded with $83.5M of NOG common stock issued to the Seller at closing, with the remaining consideration sourced from cash on hand, operating free cash flow and borrowings under NOG's revolving credit facility. In addition, NOG has agreed to additional contingent consideration of $18.5M, payable in cash or common stock in the first quarter of 2028 if certain average oil prices are achieved through the end of 2027. The acquired Assets include over 500 gross high-quality, low breakeven locations. Substantially all the Assets are operated by Parallax, with NOG participating in development pursuant to a long-term Joint Development Agreement with multi-year drilling commitments entered into in connection with the acquisition. NOG expects average production for the properties for full year 2027 of ~4,000 Boe per day (2-stream, ~80% oil). Operating costs are expected to be less than $7.50 per Boe/d, below NOG's corporate average. NOG expects to incur up to $40-$45M in capital expenditures on the assets post-closing in 2026, and $45M-$50M in 2027. In connection with the transaction, NOG intends to enter into derivatives transactions to hedge currency fluctuations related to operating costs on a multi-year basis. Depending on market conditions, NOG may also repurchase a portion of the stock consideration in the open market. The effective date for the transaction is April 1, and NOG expects to close the transaction late in the second quarter of 2026. As part of the transaction, NOG has formed a wholly-owned Canadian subsidiary, NOG Energy Canada, Ltd.
