NOG - Earnings call transcript Q2 2019 | Northern Oil and Gas, Inc.

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Operator

Greetings, and welcome to the Northern Oil and Gas 2019 Earnings Conference Call. [Operator Instructions]. And as a reminder, this conference is being recorded. I would now like to turn the conference over to Brandon Elliott. Thank you. ahead. go Please

Brandon Elliott

morning, Northern's Good happy welcome to Thanks, Quarter everyone. XXXX to Second Earnings you Brenda. We're Call.

materially to today, cause advised Before are and we Safe have from by as We our these disclaim your be our a forward-looking our include meaning reports different statements forward-looking Securities me let report filings expectations actual the these to annual Form forward-looking answers statements that obligation be remarks others, statements. questions any release our uncertainties our that within may get on to statements. contemplated forward-looking Harbor Litigation risks quarterly among the on language. Reform include, subject results, XX-K with These Form including matters Those results including our update to the well earnings described to the could XX-Q. risks as of in the cover Private that Please Act. SEC, we in and

call, conference certain earnings last EBITDA. including net measures we discuss this that measures the in be issued or During investor updated release our our on website. measures, found to adjusted we of these can in income Reconciliations closest night non-GAAP adjusted presentation GAAP and financial the may

way, All the With right. that out let's on. move of

open the lay Q&A Then call. we'll And Mike remarks. is going to First over his departure. a forward Bahram Founder out up will Akradi I the portion going O'Grady for before of call the strategy. his & Nick Reger, on make turning Northern's summary to Chairman half, Chairman Emeritus to the Northern's finally, comment is Northern's for few CFO, comments

Engineering Adam of also to I Accounting in Mike. those that, the Allen, us our well. turn with of Evans, With mentioned, call I Land; EVP to Dirlam, Chad as the our Chief have VP will over Jim addition room In we our and Officer;

Michael Reger

Brandon. Thanks,

never founded I at management, the been than ago, of today. Northern be the better and the more has Northern. First, team current proud I is alignment Board XX it couldn't team, here of years the

Aside in Northern is Basin been oil great able company during the years, a from privilege build the producer and what help top great proud XX of shareholders It's are the in been an tier over the accomplish the dislocated shape honor to equity into and last the we have and market, hands. to XX in past particularly months. Williston

accretive cash go-forward free equivalent the Successfully and acquiring of the over return growing print flow positioning over perfectly deliver investors. Northern's of on of to will I'm that sheet barrels And continue team preferences suited fortifying for public energy evolving Board to strategy, per balance high-quality day. confident is including and this oil assets, $XXX strategy. and shareholders, the of management and million the production recapitalizing XX,XXX

to Lastly, transformation. his Brandon. is thank me commitment the for giving its into that, you, I Bahram with Akradi the company it dedication today to help want and opportunity to Northern to back With transforming and

Brandon Elliott

me are obviously, note, thank And this here. just personal Northern I X.X grateful to to a ago. for us want would appreciate Thanks, We of on it support here Obviously, here you. of and be us Northern. behalf And of Mike. certainly at you none forward years opportunity for on you take were continued to thank team inviting from for over not all obviously, join your

had oil day production by reduced barrels another quarter. with of growth, that X,XXX me year-over-year essentially highlights comment XX% the generating during of strong shut-ins per speaking equivalent first and quarter curtailments the of estimate beyond. remainder our XXXX, Northern of the despite flat and continued the production we year of forward, quarter for the our strategy moving cover So quarter the and some from now let on the

squarely highest of had land opportunities Our our efficiency the we and our a ability highest capital day to guidance the allocating to is production have review we every well program. the game middle in in hold ground return and testament success acquisition to flat see, still we our and proposals the inbound in production both

nonconsented received we our quarter, XX% This the of because did they wells hurdle. investment net meet not

into an As some step out conduct to chose operator Tier is X wells currently a what area.

those the our and not Our meet indicated rates, evaluation would wells. returns hurdle we nonconsented

guidance markets. helped program operating that the lease the hedging expenses the recent quarter. line negative commodity robust with shut-ins Our level from essentially from effect Operating some in expenses during us saw our volatility except in were the of protect for

for that capital $XXX generating operations our all strengths flow on focused ways, shareholders. several flexible Cash million long-term approximately the returns capital from possible for allocation best in the focused We quarter. our deploy was and on

in meet our investment hurdles. business. invest we as we emphasized, Again, proposal our invested only that I First, inbound base well and we every analyze in already receive those

Second, ground of game we that refer capital small we see These mostly acquisitions interest near-term best, to our proactive, proactively seek leverage the the as we to our source strategy. we'd advantages acquisition incremental working drilled. some deploy opportunities being in deals and wells commonly to are additional capture where what see

of also amount repurchase our a small advantage we reducing further the of debt and future secured bonds, commitments opportunity leverage Finally, our took senior position.

we meet game acquisitions let me only net wells the we in guidance. including shareholders profile stable game net highlights cash and our and strategy We inbound additional you VEN when well updated debt that, the only will not and call with Northern road. flow take ground hopefully, investments, of closed the but acquisition our consistent inbound to that organic down of allocation ground cover to the of and add positioning recently that the evaluate not the and capital we pursue. that over do support our seriously growth. see hurdles, Bakken acquisitions, We wells or proposals in With return-of-capital for investments they some turn can the financial combination are Nick reduction free a be This larger our investment add when also

Nicholas O’Grady

Mike me the and here. bring be Northern and proud to Thanks, Brandon. Mike for very I leader to I'd is XX that helping nonoperated acres a should met a had he ago also of he when moment like to today. years an thank take few idea

the end the been higher tunnel. the quarters lingering Curtailments generated highlights the light have asset We with financial a in over prices good oil summary a few X EMPs this in basis. the and go the challenges visible a realized I but the quick quarter, field, slightly news Despite Northern's past quarter. is in with our performance. on higher a is operating of flows line for first cash than issue over to performed with at Williston starting continued coupled that expectations on have not

productivity XX for value, you investor deferral a can the it July. meaningful performing XXXX. the see website, this return in the this should we've crucially, infrastructure of coming to with At year seen X,XXX slide our increased stage XXX in to per per as a online its posted has slight the present by wells barrels worst, of production coming near-term year. expansion X,XXX the in day major production months curtailments better XXXX expected. the the in day, are of participating capital the on in barrels QX impact And of actually as end we late presentation than will of or while relief and the with robust on But year experience set towards XXXX, we well nearly Furthermore,

sequentially Cash million, this quarter quarter. higher higher were was first at driver EBITDA higher the end differentials main Oil our differentials by expenses over production. The VEN guidance slightly quarter. first than $X.XX the and in of was quarter. Adjusted $XXX,XXX was $XXX.X pricing, BOE the associated in the first after this came towards the in driven for quarter below up midpoint quarter, at with from better This Bakken higher the G&A per being acquisition. transaction the

primarily over mentioned our a above As of of our year-to-date, at aging base. guidance natural been curtailments our has some production stubbornly before, $X in function LOE

drilling in sales capital quarter the was accruals X.X between sales. to we We its but net about cost our has our in line another D&C CapEx our about since this wells point to quarter-to-quarter understand stage D&C X.X with past of quarters, to in quarters build completed wells that previous and build turned has million and continued those talked the -- in number net process of lower than Our the process Wells critical the do count wells with turn in the difference QX. to had up actually of the process. $XX largely in and well expectations at wells in end our for to the and

and the ground success repurchases and capital. made many separately, game $XX.X with discretionary any for to capital, the game Williston this million going some can reduce extensive as flows vain inventory obligations. in shift With years, advantage the operators $XX acquisition total our XXXX. the the our guiding it's million their impact on the strategy million capital grow many them may in prices. ground quarter, investments sweep are year recovers, levered acquisitions cash in of but in it leases The have but to best over associated Northern's game we now, with will one for with this to some to the and progresses, up for approximately pay fully serve spent of come. critical development the is nonoperators operated It's needing acquisition year they that to and levels knowledge of busiest dividends should increasingly easier the the However, the at today ground The capital our coming of with take game while will note the for game respected lowest available. time. combined and model senior strong periods acreage, across been our for ground up X Basin to we set production its investors investors elected is these to the contiguous capital operators this ground years at It's $XX get if opportunity opportunities own years of Northern likely market need in best by strategy particularly for alike, basin, near-term

X We've for and next the Now game Bakken. VEN given with the guidance. ground guidance acquisitions including quarters, production

You'll still cash therefore, productivity and the of But is, to a note, of productivity make the our volumes, it particularly should good the XXXX. is great curtailed the we're from as news of infrastructure constraints return capital the pushing third Regardless, XXXX and continued flows on our much the taking game, relief end will ground it from oil they the tack the and of there the conservative quarter for sales. a and success improve wells outlook. in return strong

G&A expenses most, for a aging and quarter we guidance one those our raise natural high the This simply might expect already overall so of all the to wells. expenses corporate XXX,XXX the in $X.XX is driven modestly assets LOE what LOE million and to remaining were X.X%, second is nearly a the because but VEN of moving previously oil. Taxes is our function not changed do to Bakken and, incurred Please note, will mentioned, of range the approximately impact with third as to $X.XX BOE. low the this remainder because transaction of as of ever crude including from relative year-to-date if are the just prices is $X.XX, occur $X in experienced quarter. as average guidance, not of we'd deal. For fees parts VEN are Bakken in yet from curtailments the the slightly being per Cash a we lowered a lower gas now

full the the below acquisition, in or per quarter, VEN which [indiscernible] G&A the BOE. is from Bakken you'll $X benefit the at cost So see fourth implies

be industry. the Our amongst excluding the run best G&A, looking in these to charges, rate is

$XX On rates strong downward hedging latest than just a shock. book, our and published hedges of we're the averaging of we that a event today, critically spending production These through front, in our the the of prices XXXX dollars the protect us cash flows flexibility under with barrel. current support allow more hedged credit commodity hedging our X/X at will

prepare or We this the continue best for mantra, run with the the hope worst. for to program the

front, track. capital through net with We're remain wells are on On VEN XX original guidance Bakken wells the X.X XX net to and there organically, our to no the adding surprises. deal we

So XX to XX we well additions now XXXX. to net are guiding for

a regards Given assumptions, range in turn made waiting to in these organic D&C of operators later million in capacity, the builds line with Total assumptions. particularly from we've year processing to discussions some for is in million wells sales. $XXX conservative right $XXX to DUC of CapEx

D&C deals also approximately we D&C from we've Given update, of we provide capital a logically to potential million In budget capital to should recent $XX to we closed. that of spent for ground capital. game million, committed ground for range increase of the our associated game $XX guided arise, the would that million elected $XX up acquisition million associated $XX our we've or to

there's spend monies additional actually so And here. assurance we're we'll the no budgeting

game make We the as ground hope the we're we add if net wells the game update expect we year. ground we to during X guidance we've X guiding to additions wells as year acquisitions we continue encompass X.X between as successful and to have sure progresses, recent be. should net that should to investors this We'll but everything, from already the announced, for to believe be from and XXXX success total

given includes is any largely and year to then We In by light beyond, to believe to the acquisition costs comment, ability guide base a and will beginning company our which an model portion and capital sources to the a and allocation the capital, for capital of expect guidance simplify us of value, basis. reporting elective combined. that set drilling guide for on this of CapEx all that acquisition improve XXXX investors go-forward

for a a capital in do for be to it not doing our free transformation moved The XXXX. alone. cried and company spend cash flow that. but model to was XXXX it, reason purposeful. And major returns, a underwent returns of the we're and as and was or control late into We before the to obligation and reason misaligned for destiny from We market of incentives to out

on the long-term focused of for what's health investors. and our best for business are our We

time. company on so. flows, And that we've a have Thanks, difficult we times, shareholders the future adding we this solid over investing returns reward and more is assets In better given will ensure not and solace that let if when with turn me do acquisitions, prepared cash we cash make impact to these add call a a credit we are that making flowing take every are similar, our in in decision return-of-capital By over Bahram. to to profitable. the we production to metrics

Bahram Akradi

I to year. all want period the vision during with his helping Reger Mike thank start and then. with company again, First and acquisitions recapitalization crucial his And me to last the energy for since enthusiasm

moves. like I Next, have our the far steps taken to would out summarize we next so and map

significantly free company have poised positive to been transformed beyond, a for As to returning it more XXXX you, evident outlook robust to we to start and has flow NOG capital stable, cash with a shareholders.

a more one notes. renegotiate that until have That and senior shareholders. can for quarter callable. dividend for when and wait notes are to to At the replace those of necessary notes or senior XXXX. XXXX to We worst-case second replace move is be able growing pay our our is initiate May we scenario sustainable to our point, dividend The

for a which a XXXX. The shareholders, to initiate that negotiation can I then able dividend more If sooner win-win we than could bond desirable a months. path the next path several of be we at intend could negotiate to holders, bondholders point, may our which be function May lead be with our and in

With NOG dividend the accretive acquisition basis. our us and front the we the position of our believe, opportunities and now, and in we cash can: EBITDA, start being ground positive grow on one, is flow a plus earnings, production, two, dividend; regular sustainable in

I'll great position exceptional Brandon. opportunity. NOG forward is the months, any call not the Q&A the and while is segment, reflect question a now to the I to our we've it it XX buying Thanks. reflect answering return in price and we stock Brandon? last creating great work does look believe simply today, does not Finally, the done in during

Brandon Elliott

the Q&A Q&A? for I'll call turn instructions give the actually that, you portion operator Brenda, the Thanks, the the of to over call. could Bahram. please if With the for

Operator

Neal [Operator from Dingmann Instructions]. questions of SunTrust. are first our And the with line

Neal Dingmann

releases game nonconsenting. and congrats. at talked Mike, wells discussing today you're you question number discuss, about also active you look of that The all again, today, when the in been Brand, ground you, And press for of and that you've sort then and,

group my you return at this of deals? changes is And bigger discuss So or obviously how deals that on game. cost on you but the now, weighted continue average your to see change if Not required question on could the ground in rate capital? look you was, just based

Brandon Elliott

And I to -- Yes. selective. say, think as think it's Nick I mean, we're be is I continue been. as you we heard busy game stuff as ground ever

lots are, of, right? countercyclically, opportunities the in You've investment kind So in got of we some we that ground view almost almost game. this ways, investing

in raising us. we're excess there to get So selective again, selective XX% more opportunity to the more in door. opportunities to be of out certainly, And see of hurdles. in think being we continue it in I our provides more and to IRR keep as front more that, us mean, I and XX% the and

Neal Dingmann

talked Nick is about that a And I'm bondholders, it will just it Okay. And for you sensitivities free with into lastly talk into have because flow then sensitivities that, free it? just great most about bond. all -- with Bahram of wondering, great, coming cash you cash agree, at or -- Bahram. the out flow sort different Or is there. addressing the maybe play could I --

So that? am closer will to next look I May of mean just you more is -- I'm it wondering, that wondering as just at are play you I that what year, the get how into on factors

Brandon Elliott

us. a what Look, path else make proposition did to team everybody critical am position and do our with acquisition, bondholders We to X.X in. to the grateful we in us. you a did clear get negotiate to a for the able to the did we company this allowed us which bit needed the job exchange We the for I a and last with simple TPG. some phenomenal little deal We that were the -- over We to go back with years. is I'll give thinking. did of a deal unthinkable they work are

Nick both flow the is negotiated With basis. now in had the sense We, with dividend it company be just free cash strategy, the on that a regular creating, a those for. we the in, That's objective said, position company for starting cash the us, what to like to basically could in, move company our that's a pay the focused that covenants growing we time was flow negotiate position second condition make a we today, every of on the lien. our that's positive at were thought, and do. covenants them our not for And what the we in made in do for had to had where

Today, the of obsolete, is situation that condition based on NOG.

So the see work, flow than cash will the free just the you we as can -- like cash flow, do XXXX significantly than the we cash XXXX higher wait, said, I cash be scenario, be flow flow. worst-case significantly you it'll grow higher free the the

keep the continually goal And to team under bonds with debt-to-EBITDA. then will debt-to-EBITDA has basically that get larger no that company company is the then revolver -- we we Xx, confident as and below And as our Xx long has that a the a peace have keep bonds which the and smaller is I'm stated. is the that and we either bond and redo

or So else dividends size or of -- or restrictive covenants lot the of buyback make terms the sure and the anything revolver. of then are share in a the

All has away. go to of those

to that shareholders something opportunity well, to what able exactly negotiate So win-win next XXXX, attack the starting the creates but XX I'm if for also than a bondholders May only days. that's I in the going sooner not reasonable am

-- and the Plan is to that by the And go XX becomes go That's pay callable. and pay the quarter we work, time then ahead B end a and quarter. of goal. May by prepared time second then do the become can if second May off it just callable our dividend doesn't for will it's just the We'll everything that -- XX in we

I but able details And have like a I'm give a for what there necessary is you so for can get out the sustainably, to give -- I that large I'm we're I what able we shareholders our something return-of-capital to a for are other And -- more smell feel depending work, just company. return. XX-year And work do it, my sure the objective shareholders get we to a to of than T-Bill it. do because on better tell basis, than be would adjustments return negotiate, steady personal to the I and to that better close, able reliably me. I that ongoing to can't necessary shareholder, than it love want an today we're nice on it, all bill, can be make to to is taste

Operator

is question Our Whitfield next Derrick of from the Stifel. line with

Derrick Whitfield

time Mike to Nick, online the company. with XXXX in the that And specific radiate your just congrats progress scheduled on that expected Northern's for could to speak some come midstream, Brandon Perhaps during or second curtailments? the are early you your expansions are and to half

Brandon Elliott

Yes. players There also The some are, I going the addition, on gas major plant basin. Morgan, [indiscernible]. NGL and major expansions. in has believe, Beacon six in for expansions processing

Some time this will online. those to late plans It turn the take sales wells quarter. for some on those to even come may as of obviously in come

issue. investors went, makes plants all going panic oh a I last what the the for whole in a And first gosh, quarter those and when all to would X quarter XX. went say it last, I year the the thing and year, were and looked of them to it said fourth differentials that, minus on was at with is I really a is of about you believe about, later this full the and in that investors come last temporary this of would that year. in lot are year But had Some discussions in next of

same way. are is me particularly, see plants little today And because panicking humorous largely these we think a about this I coming the actually to online.

material years with it access X Basin expansion These should associated likely plants X another the of capacity. the and or out NGL for that's set

when potential yields frankly, you'll gas improve, all of if -- So well NGL as modestly done shut-in, is also the and that curtailed, I some where even it's [indiscernible] as don't there's we pricing would we what being but improve existing see back. production our we're held -- being that know know expect

basin. should really positivity on the have material a this So entire

Derrick Whitfield

LOE Great. for that's I then expect production to attributable perhaps stand transaction Nick, the and as And project XXXX, you, guidance understand the largely curtailments? revised to you XXXX? throughout the to with that do regarding VEN year and into How

Nicholas O’Grady

Yes.

So There that. I think assets, LOE to that's a $XX. closer is an have the the VEN they benefit from that comes

of older you Some have just program are a it those why that's declines, -- lower that's vintage it's meaning higher -- an costs. has obviously but unit

for The assets other in but they additional part corporate that, is average. that cost better pricing have some our yields typically gas than also processing those

So some benefit there. you'll see

I XXXX, could is you this of where beyond. half year, the kind of I I do second some if to the be rest we're potentially think for think, some out perhaps and guidance flat into that terms relief of it the our it rest and up, that think back for and in moderation into of I XXXX would in largely if combination of, guess, of remainder mean the year. looking the the -- -- from flat

Derrick Whitfield

primarily attributable to inbound sneak XX% nonconsent And prepared QX. comments if noted Brandon in, one on his guys operator? referenced Were [indiscernible] -- think did you elected the of more outs step Northern helpful. one in to the could Very in I I low well, that

Brandon Elliott

and operator county, one yes, -- One Yes. divide BSU.

Operator

Capital. from comes of Northland with question next Jeff line Grampp the your And

Jeffrey Grampp

stuff And think XXXX obviously you quicker is start ground and near of, going count, but topic, given should the of got it What a have it know look I any could than in like tend weather well you years conceptually wanted of, guys to today? put in on we guys little kind out I approach expect of, sense to do year-over-year? slower the relief, just you XXXX, completed stands haven't But What's the has midstream formally kind -- seasonally maybe with the fair completions. past? anything game start curious, some a in it is to little to in know,

Nicholas O’Grady

Nick. it's Jeff,

always think I that a is weather Williston wildcard.

And we a what of counter cruddy -- the depends. into weather is those have and very second kind get so a, quarter, production. we possible lot have you're strong really that suggesting, really you first of, completions it while possible It's quarter and also have pushed that out normal it

So I it's for a early think little that.

to I impact XXXX, not mean have of we impact, when the think, an in but I terms the a think on it for cadence. it the year, guide have I might huge impact may

And best is generally think quarter the our us so I that in report we part fourth March. for

And that what by idea of looks have good we'll then, a so like.

abundance wildcard. say, think winter safe would the of So some because I in I an of caution, is it's a always activity that push to always

Jeffrey Grampp

Okay, that. And that's up. my fair. I appreciate follow

can an I opinion lots is kind the in buyers' that that of, mean, down had of, this game? on longevity year? is I And you obviously the is, the what Or the have have success kind did this guys guys in game? that the You do an of, of steps game see kind guys a ground you with of some abnormally this, market you ground of, opportunities. on good was in high multiyear, that, curious, maybe tailwind kind ground year guys think up budget, XXXX? seen

Nicholas O’Grady

in soon. I I away observing mean, do just I going today, would say, here this this what we're that the by think think public of been think their an has own I next year center where the to industry and are cash terms and much really it'll closer prices year, I depend how has anytime don't gotten markets obligations. and oil abnormal flow judging is on that equity

to returns. obviously shareholder free portion and which stated, want portion if we're we beyond. that But early what at we think a look a a XXXX to say it's allocate this. to I And our flow So as Bahram is I little entity would to cash a are,

it we'll how be an pretty And on we so thoughtful going forward. absolute budget basis dollar about

Operator

are The Raymond Lenny next from questions the line Rice. of with Johnson

Leonard Raymond

Just question. one quick

following game's the the update provide guys VEN can your late. of you current as appetite on on focus closing large-scale Bakken ground So acquisition the acquisition an for side been But the deal? of a

Nicholas O’Grady

Those opportunities out moment. we think the it's I at Lenny, satiated fairly there, but Nick. feel are

I your did. -- thinking -- the that deal wouldn't -- I think breath the tickle we we've got hold soon. we're And we're I do death anytime to anything don't with going

Leonard Raymond

quick, are there. the out then said And you just opportunities

right You all right basin? you like, out the saw there. in Is all see, the How there you that much million? now number used a $XXX all numbers

Nicholas O’Grady

billion of assets $X out stranded worth there.

Operator

are Kelly with of the Seaport. next from questions Our line Mike

Michael Kelly

next best congrats, in and your venture. off, what First Northern, of luck in Mike, you built

First this, question, [indiscernible] better we heard are Bakken state you risk? guidance the why with current that I'm given equipped question do and second And at in think me yesterday was, intimately going client that a to from Whiting isn't Northern's the handle steal what you from constraints, the to just half guys about to a and it.

Brandon Elliott

in. it's Mike, chime I'll start then Brandon. Yes. let and I'll Nick

I obviously, think operator-by-operator this -- exposure basin. basis with one, across we the watched our an on

well in, about back. we infrastructure pretty heard prepared bit comes stance additions We're So production we've in on obviously, certainly little And conservative -- Nick half. a in when as the dialed taking back it what the pretty that think remarks. on gauged we think got you our said a

and Nick? rest we half. back we've say would good feel I got about in So where it the pretty

Nicholas O’Grady

greatly mean it's varies from understand the important Bakken that the I I to part Yes. think context one to another.

you in there particularly McKenzie areas in developing operators basin, that to So portions, in been parts have are may look certain County. And portions. mentioned, GOR gassier as that the maybe there bull's-eye high-gas are oilier

are extreme right parts some if And the parts normally those you other of were developing with and of now, -- pointing fine then capacity. you So of are face operating parts there may just that of field curtailments. there are

a for curtailments terms back are we're across make that things assets obviously And our are is whack But and operators, we've the monitoring right. of completion sure all. not the to there personnel. our the of So example, and And accordingly. with any just the we're it's have doesn't an It say, that The pretty occur. we're flywheel guidance, mean land to hard cadence, in risking always other entire I been that that material experiencing time would particular. at say always in bench assets. between a assured, of rest cadence taken the flywheel unexpected cadence here we I'd nonoperators thing lot this we're DUC But basin. our They half just try engineering a the

driven our a by largely, is that. so growth And in quarter-to-quarter of part lot

think about on. I it. pretty of that good the when potential but feel feel a we see depending timing So to we'll lot think I greater, on that assets is have heck Candidly, comes we the of a that the

Michael Kelly

second our XXXX? million flow flow. in where saw going XXXX to And are flow switching to conservative updated in over view more $XX free of cash has free model cash be even and you and bus quarter, in a annualized commodities with cash We it much

significantly is flow higher. cash free Our

in XXXX? curious of, opportunities X, the approach? this on you to, above kind the in this could to if see by be So ground talk dictated about come the bucketed Or something I'm this of where more game? is kind up with if really balance of be you'll formal that's going

Nicholas O’Grady

here and by Mike, guys large. financial we're

And in that. so response we believe think formulaic I to

so be what will once in any towards period. renegotiating about think very beginnings year. a people able Bahram can we're when the strategy return that those have be to lay we'll of comfort be that And think bonds, we we're should I mentioned, And that of that -- through or out a the sensible, moving I as that refinancing confidence feel

Operator

Instructions]. [Operator

questions Imperial come with the next Our line of Jason from Capital. Wangler

Jason Wangler

can some just Nick, you the and in I pulls wanted about second to pushes kind about there. second of ask, of during Maybe talk the obviously lien quarter. the

some far As kind facility you getting back think the going as And the how that just in? about versus second of lien of forward? paying

Nicholas O’Grady

the look, any return think the buying which down paying second obviously return-on-capital and is not you're I IRR a lien obvious, -- Jason, basis, as I revolver, on mean, offset liquidity. is creating Yes. the

in we those over that lien our those But is So bonds things be difficult about it's be important. of fact the to I feature to When revolver. ask extremely to have is caps it and the people dividends, -- that time. it's want second biggest swallow don't are the mindful that dismissive,

whereas appropriate it higher is are but revolver cost bonds not for those And our capped. today. are support we it created, reserve much our so when a substantially obvious to capital, would today those reasons And where base its lower are than with

that those those liquidity with say when then from dealing would bonds constraints is what exist simply dealing we and the so freed And I with are tethers, anymore. don't obviously

Bahram Akradi

And I is X sort in want of in of, limitations wanted these, we years. because only the Bahram. we X.X reason The to years, with to dealing add, this accomplished are it's covenants today, bonds we accomplish have everything

not when it's of therefore, it's a we I this mean, and opportunity in become those just fast sooner. company, wrong, to there have of we strategies we objectives very it. laid positive. we just the deal ahead anything we flow expectation our That's make own out the with and We goals fast how And exchange. because negotiated are to our were over-performed we grow things have cash the could it able terms how is way

bad is we're to, So here. We have this. news kind there is with great all news, of, just -- no this deal in

do appropriate the fees. way for one going next shareholders? path, of the else. opinion, This can't are bunch think deal really a and days of path have to picture XXX obviously But clear most going last cost-effective One what we're we for the somewhere to of between step is aren't my whole most is most anything we is pay our the I before other, of of a or just to XX step, the in a our days sensible shareholders which We company.

But excited that have terms you we component here, the pictures So issued the how have to in And hopefully, to be clear and of I piece in is we cash dealing when and much, to we'll third will It's now. all -- will end we end again, gone said, with that months one path And extra significantly to lot October, more a will by you all totally pay more of everything October. from call, with on on jump three acquisitions, be have guys of share out. for of [indiscernible] those the like more much shake again. by is report will everything the that Q, we by more or clear that that that. end happening the is I'm start to shares in next of a

Jason Wangler

longer then under Nick, guys you to just just Are And threshold on confirm liens. quickly pay the second that? you no want to take. the I the

Nicholas O’Grady

Confirmed.

Operator

from our the And questions of next line Phillips are Securities. Johnston with Capital One

Phillips Johnston

net My to sales question's just of the as cadence half second the worth/wealth on year. of in

I XX math's the in think that you're timeframe around that if is or so wells in right. expecting

is or think bit weighted it little quarter? we each XX in towards QX or a so should about more Or So QX?

Brandon Elliott

Probably slightly cadence to slightly more normal which, weather QX, related more QX. again, weighted somewhat to but yes,

Nicholas O’Grady

we fourth impact have within come just the when And quarter, remembered an more to in the on that if September, came obviously it's going on on fellas, on depending they quarter. of

So of translate into instantly it necessarily production. cadence doesn't the

Brandon Elliott

you we've mentioned. That's right. Plus clearly got curtailments the that issue

Phillips Johnston

like it Okay. organic net over seems well And million fallback $X well still so [indiscernible] or given just guidance. then, your a in you trending

Brandon Elliott

We AFEs $X.X down saw actually the consented came XQ bit. in that actually to million, Yes. a come stuff down the we little

consenting but, average provide a of again, later wells downward those may So bit to well little cost are that we're hopefully, now.

slightly more XXXX, but trending cost, down. direction, well ads good in those good is So probably and the are or likely which late'XX XXXX in

Operator

would floor comments. the you. the our now back question-and-answer to I over session. management closing end turn of Thank reached We've for like to

Brandon Elliott

and please busy take the have the several you, note pretty we your participation right. the and for call, interest in months, schedule you conferences around Obviously, All everyone, Thank next in -- country. the Gas. Northern Oil a

And release. in some of press our are included those details

to please forward information. on some you everyone to attending today. look you our we can travels and of on appreciate We Brenda, talking seeing again you replay plan next the So give quarter.

Operator

Thank you the XXXXXXXX. disconnect lines. now your XXX-XXX-XXXX, Certainly, please to code, digital dial enter participation, you access may replay, or access XXX-XXX-XXXX and for your

Northern Oil and Gas (NOG) 2 Aug 192019 Q2 Earnings call transcript