Northern’s Q4 Profits Surpass Expectations, Revenue Falls Short; Both Decline Year Over Year

Northern Oil and Gas, Inc. Surpasses Q4 2025 Earnings Expectations

Northern Oil and Gas, Inc. (NOG) posted adjusted earnings of $0.83 per share for the fourth quarter of 2025, exceeding the Zacks Consensus Estimate of $0.71. This strong performance was driven by higher production volumes, with total output coming in 4.2% above expectations. However, earnings were down from $1.40 per share a year earlier, primarily due to lower commodity prices and a significant 68.4% rise in operating costs.

Revenue and Shareholder Returns

The company, based in Minnetonka, Minnesota, reported oil and gas revenues of $447.7 million, which fell short of the consensus estimate of $511 million and was also lower than the $515 million recorded in the same period last year. The decline was mainly attributed to reduced oil and gas sales during the quarter.

The board announced a cash dividend of $0.45 per share, payable on April 30 to shareholders of record as of March 30, 2026.

During the quarter, NOG repurchased 326,301 shares at an average price of $21.47 per share, including commissions. Over the full year, the company bought back nearly 1.95 million shares at an average price of $29.25 each. In total, more than $230.4 million was returned to shareholders in 2025, with $173.4 million distributed as dividends and $57 million spent on share repurchases.

Production Performance

Fourth-quarter production rose 6% year-over-year to 140,064 barrels of oil equivalent per day (Boe/d), surpassing the projected 131,900 Boe/d. Oil output reached 74,703 Boe/d, a 5% decrease from the previous year, while natural gas and natural gas liquids production jumped 24% to 392,163 thousand cubic feet per day. These figures exceeded internal estimates for both oil and gas production.

• Average crude oil sales price: $59.09 per barrel (down 17% from $65.40 last year, but above the expected $58.39).
• Average realized natural gas price: $2.35 per thousand cubic feet (slightly below last year’s $2.42 and under the estimate of $3.50).

Operating Costs and Capital Spending

Total operating expenses surged to $644 million, up from $382.3 million a year ago, driven by higher production costs, increased administrative expenses, asset impairments, and other charges. This figure also exceeded the anticipated $371.4 million.

Capital Expenditures and Well Activity

Capital expenditures for the quarter reached $270.2 million, excluding unplanned acquisitions. Of this, $192.5 million was invested in drilling and completing organic assets, while $77.7 million supported Ground Game initiatives and related development costs. NOG brought 24.2 net wells online during the quarter, and at year-end, 45.6 net wells were in progress.

Financial Overview

Free cash flow for the quarter was $43.2 million. As of December 31, 2025, the company held $14.3 million in cash and cash equivalents, with long-term debt totaling $2.4 billion and a debt-to-capitalization ratio of 53%.

2026 Outlook

NOG, currently rated Zacks Rank #3 (Hold), anticipates that 2026 production and capital spending will depend on commodity prices and operational activity. Expected production ranges are:

• Low-activity scenario: 139,000–143,000 Boe/d
• High-activity scenario: 144,000–148,000 Boe/d
• Oil output: 68,000–72,000 barrels per day (low activity) and 72,000–76,000 barrels per day (high activity)

Projected capital expenditures are $850–$900 million for lower activity, rising to $1–$1.1 billion if development accelerates. Net wells turned in line are expected at 67.5–71.5 (low activity) and 83–87 (high activity), reflecting a flexible approach to development.

Production costs are forecasted at $9.65–$10.10 per Boe (low activity) and $9.45–$9.90 per Boe (high activity). Production taxes are estimated at 7–8% of oil and gas sales. The crude oil price differential to NYMEX WTI is expected to be $5.50–$6.50 per barrel, while natural gas realizations are projected at 75–85% of NYMEX Henry Hub pricing. Depreciation, depletion, and amortization are anticipated at $15–$16 per Boe.

General and administrative expenses are expected to remain steady, with non-cash G&A at $0.25–$0.30 per Boe and cash G&A (excluding acquisition costs) at $0.81–$0.86 per Boe (low activity) and $0.79–$0.84 per Boe (high activity).

Other Notable Energy Sector Earnings

In addition to NOG, several other major energy companies reported their fourth-quarter results:

• Valero Energy Corporation (VLO): This leading refiner and marketer reported adjusted earnings of $3.82 per share, surpassing the consensus estimate of $3.22 and up from $0.64 a year ago. The improvement was driven by higher refining margins, increased ethanol output, and lower overall costs. Valero ended the quarter with $4.7 billion in cash, $8.3 billion in debt, and $2.4 billion in finance lease obligations.
• Baker Hughes Company (BKR): The Houston-based oilfield services provider posted adjusted earnings of $0.78 per share, beating the estimate of $0.67 and improving from $0.70 last year. Strong results were attributed to the Industrial & Energy Technology segment. Baker Hughes reported $321 million in capital expenditures, $3.7 billion in cash, and $5.4 billion in long-term debt, with a debt-to-capitalization ratio of 24.3%.
• Halliburton Company (HAL): Another Houston-based oilfield services firm, Halliburton, reported adjusted net income of $0.69 per share, topping the estimate of $0.54. The improvement was mainly due to cost-cutting measures, though earnings dipped slightly from $0.70 a year ago due to softer North American activity. Capital expenditures were $337 million, below expectations, with $2.2 billion in cash and $7.2 billion in long-term debt (debt-to-capitalization ratio of 40.5%).

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Free Stock Analysis Reports

• Halliburton Company (HAL)
• Valero Energy Corporation (VLO)
• Baker Hughes Company (BKR)
• Northern Oil and Gas, Inc. (NOG)