form8k_04122010.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
FORM 8-K
 
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  April 12, 2010
 
 
 
NORTHERN OIL AND GAS, INC.
(Exact name of Registrant as specified in its charter)
 
Nevada
001-33999
95-3848122
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer
Identification No.)

315 Manitoba Avenue – Suite 200
Wayzata, Minnesota
55391
(Address of principal executive offices)
(Zip Code)
 
Registrant’s telephone number, including area code   (952) 476-9800
 
[Missing Graphic Reference]
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 



 
1

 

SECTION 2 – FINANCIAL INFORMATION
 
Item 2.02 – Results of Operations and Financial Condition.
 
On April 12, 2010, Northern Oil and Gas, Inc. (the “Company”) provided an operations update related to drilling and completion activity in the Williston Basin Bakken and Three Forks play.  In connection with this operations update, the Company also provided information regarding its preliminary financial results for first quarter 2010.
 
 
2010 DRILLING ACTIVITY

Since January 1, 2010, the Company has spud 5.15 net wells.  Of those wells, 1.76 net wells are currently drilling but have not reached total depth and 2.05 net wells have been drilled to total depth and are awaiting fracture stimulation to commence production.  This high number of wells awaiting completion was caused by longer time delays from completion of drilling to commencement of oil sales, primarily due to the seasonal backlog of fracture stimulations that typically occurs in early spring as a result of reduced completion activities during the coldest months in North Dakota.

The Company now expects to spud up to 18 net wells in 2010, which represents an increase from previous guidance of 15 net wells.  The Company believes the increase in expected wells is based upon the increasing rig count, which is now at an all-time high of 108 drillings rigs in the North Dakota Bakken play.  The Company’s Chief Executive Officer, Michael Reger, commented “The pace of drilling in the Bakken and Three Forks plays continues to increase.  Given recent announcements by key operators in the plays, we expect 2010 drilling to increase by up to 20% to a total of 18 net Bakken and Three Forks wells.”

FIRST QUARTER 2010 PRODUCTION AND PRELIMINARY FINANCIAL RESULTS

The Company’s first quarter 2010 production increased approximately 10% and oil and gas sales increased approximately 20% compared to fourth quarter 2009.  First quarter 2010 production approximated 125,000 barrels of oil equivalent (“BOE”), an increase from 114,000 BOE in fourth quarter 2009.  First quarter 2010 oil and gas sales were approximately $8.4 million, an increase of approximately 20% from fourth quarter 2009 oil and gas sales of $6,965,622.  First quarter 2010 net earnings are expected to be approximately $0.03 per outstanding share.

COMPLETION ACTIVITY

The Company has experienced significant delays in fracture stimulation appointments for wells across all operators with whom it participates.  The Company believes this trend has been driven primarily by seasonal issues and increased costs of completing during the coldest winter months.  Additionally, the Company believes there has been some constraint in moving fracture stimulation supplies, such as frac sand, into the field due to seasonal conditions.  The Company expects that for the next quarter delay between fracture stimulation and completion may average as much as six weeks.  This is not affecting the pace of drilling and the Company continues to see wells drilled to total depth at an accelerated pace.  However, delays in fracture stimulation have the effect of delaying production additions.

RECENT COMPLETION HIGHLIGHTS

The Company continues to believe that early 24 hour rates are not useful in determining the economics of a well.  The Company is focused on well payout, which, in its core Slawson Exploration drilling program, the Company expects to occur four months on average following commencement of production.   As previously guided, the Company will begin to report well flow rates as far out as 60 days, when available.

The following table outlines well completions as of April 11, 2010.

WELL NAME
OPERATOR
NOG WI
COUNTY/STATE
SPACING
FRAC STAGES
INITIAL PRODUCTION BOEPD
DAYS USED TO COMPUTE AVG. BOEPD
AVG. BOEPD
STALLION #1-1-12H
SLAWSON EXPLORATION
23.00%
MOUNTRAIL, ND
1,280
36
2,735
57
1,153
ZEPHYR #1-36H
SLAWSON EXPLORATION
4.00%
MOUNTRAIL, ND
640
18
1,637
30
971
RIPPER #1-22H
SLAWSON EXPLORATION
2.00%
MOUNTRAIL, ND
640
18
2,369
20
975
LIFFRIG #29-20 1-H TFS
BRIGHAM EXPLORATION
6.25%
MOUNTRAIL, ND
1,280
30
2,477
-
-
MINX #1-29H
SLAWSON EXPLORATION
22.00%
MOUNTRAIL, ND
640
18
1,475
60
544
FOX #1-28H
SLAWSON EXPLORATION
4.50%
MOUNTRAIL, ND
640
18
1,819
30
915
VAN HOOK #100-15H TFS
EOG RESOURCES
10.00%
MOUNTRAIL, ND
640
20
1,585
48
858
KATE #1-19H
CONTINENTAL RESOURCES
12.31%
DUNN, ND
1,262
22
1,503
-
-
NORMAN #1-9H
CONTINENTAL RESOURCES
5.50%
MCKENZIE, ND
1,280
18
1,366
-
-
BAZOOKA #1-20H
SLAWSON EXPLORATION
2.74%
MOUNTRAIL, ND
640
18
1,290
30
750
HOWITZER #1-25H
SLAWSON EXPLORATION
4.00%
MOUNTRAIL, ND
640
18
1,156
60
564
WIZARD #1-35H
SLAWSON EXPLORATION
4.50%
MOUNTRAIL, ND
640
18
1,050
7
873
MACHETE #1-19H
SLAWSON EXPLORATION
17.18%
MOUNTRAIL, ND
640
22
750
20
1,019
COUGAR FEDERAL #1-30H
SLAWSON EXPLORATION
3.81%
MOUNTRAIL, ND
640
18
718
20
1,118
EDWARDS #5992 44-10
OASIS PETROLEUM
21.00%
BURKE, ND
1,280
28
612
-
-
HIGHLAND #1-9H
SINCLAIR OIL AND GAS
62.50%
MOUNTRAIL, ND
640
12
564
-
-
ARVID #2-34H
CONTINENTAL RESOURCES
5.00%
DIVIDE, ND
1,280
18
407
-
-


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CURRENT DRILLING ACTIVITY

The following table illustrates the wells in which the Company has participated that are drilling or are awaiting completion and have experienced completion delays due to seasonal conditions as of April 11, 2010.  The Company is currently drilling or completing 3.81 net wells.

WELL NAME
OPERATOR
NOG WI
COUNTY/STATE
STATUS
FORMATION
ALLIE 31X-24
XTO ENERGY
7.79%
WILLIAMS, ND
COMPLETING
THREE FORKS
ATLANTIS FEDERAL #1-34-35H
SLAWSON EXPLORATION
1.41%
MOUNTRAIL, ND
COMPLETING
BAKKEN
ABELMANN-STATE #21-16 #1H
BRIGHAM EXPLORATION
2.73%
MCKENZIE, ND
DRILLING
BAKKEN
BADGER #1-9H
SLAWSON EXPLORATION
28.38%
MOUNTRAIL, ND
DRILLING
BAKKEN
BARENTHSEN #6059 44-5H
OASIS PETROLEUM
14.30%
BURKE, ND
DRILLING
BAKKEN
BROCKMEIER #1-1H
CONTINENTAL RESOURCES
6.02%
MCKENZIE, ND
COMPLETING
BAKKEN
BURKE #4-06H
EOG RESOURCES
2.47%
MOUNTRAIL, ND
COMPLETING
BAKKEN
CANNONBALL FEDERAL #1-27-34H
SLAWSON EXPLORATION
0.55%
MOUNTRAIL, ND
COMPLETING
BAKKEN
CLEARWATER #17-01H
EOG RESOURCES
1.82%
MOUNTRAIL, ND
COMPLETING
BAKKEN
CVANCARA #19-18 #1-H
BRIGHAM EXPLORATION
3.16%
WILLIAMS, ND
COMPLETING
BAKKEN
DAKOTA-3 BRUNSELL #16-9H
ZENERGY
1.13%
MOUNTRAIL, ND
DRILLING
BAKKEN
DAKOTA - 3 VAN HOOK R/S #16-4H
ZENERGY
1.69%
MOUNTRAIL, ND
DRILLING
BAKKEN
EN-SKABO TRUST ####-##-####H-1
HESS CORP.
6.56%
MOUNTRAIL, ND
DRILLING
DUAL LATERAL
FERTILE #16-20H
EOG RESOURCES
1.25%
MOUNTRAIL, ND
COMPLETING
BAKKEN
FERTILE #18-30H
EOG RESOURCES
0.64%
MOUNTRAIL, ND
COMPLETING
BAKKEN
FERTILE #34-31H
EOG RESOURCES
10.39%
MOUNTRAIL, ND
COMPLETING
BAKKEN
GILLUND #1-32H
CONTINENTAL RESOURCES
9.62%
DIVIDE, ND
DRILLING
BAKKEN
GLADYS #2-9H
NEWFIELD EXPLORATION
2.60%
MCKENZIE, ND
DRILLING
BAKKEN
HANSON #11-12H
ENCORE OPERATING
1.05%
DUNN, ND
DRILLING
BAKKEN
HM HOVE 34X-33
XTO ENERGY
15.64%
WILLIAMS, ND
COMPLETING
THREE FORKS
HYNEK #5693 42-35H
OASIS PETROLEUM
6.39%
MOUNTRAIL, ND
COMPLETING
BAKKEN
JERICHO #2-5H
SLAWSON EXPLORATION
42.36%
MOUNTRAIL, ND
DRILLING
THREE FORKS
JUGHEAD FEDERAL #1-26H
SLAWSON EXPLORATION
2.81%
MOUNTRAIL, ND
COMPLETING
BAKKEN
KERBAUGH 31X-04
XTO ENERGY
6.51%
WILLIAMS, ND
COMPLETING
THREE FORKS
LAZY DE #34-7H
MARATHON OIL COMPANY
4.54%
DUNN, ND
COMPLETING
BAKKEN
LIBERTY #6-25H
EOG RESOURCES
11.88%
MOUNTRAIL, ND
COMPLETING
BAKKEN
LUNKER FEDERAL #1-33-4H
SLAWSON EXPLORATION
6.40%
MOUNTRAIL, ND
COMPLETING
BAKKEN
MAYHEM #1-19H
SLAWSON EXPLORATION
30.00%
ROOSEVELT, MT
COMPLETING
BAKKEN
MCD #11-29H
FIDELITY EXPLORATION
2.08%
MOUNTRAIL, ND
DRILLING
THREE FORKS
MEAGHER #16-30
KODIAK OIL & GAS
7.46%
SHERIDAN, MT
DRILLING
RED RIVER
MEIERS #44-25H
WHITING OIL & GAS
1.46%
MOUNTRAIL, ND
DRILLING
BAKKEN
MELGAARD #1-14H
CONTINENTAL RESOURCES
15.82%
DIVIDE, ND
DRILLING
THREE FORKS
MESA VERDE #24-22H
BURLINGTON RESOURCES
0.73%
MCKENZIE, ND
DRILLING
BAKKEN
ROHDE #43-1H
WHITING OIL & GAS
10.26%
MOUNTRAIL, ND
COMPLETING
BAKKEN
RS-NELSON FARMS A-156-90-2829H-1
HESS CORP.
1.55%
MOUNTRAIL, ND
DRILLING
DUAL LATERAL
RS-JOHNSON A-157-90-2128H-1
HESS CORP.
19.88%
MOUNTRAIL, ND
DRILLING
DUAL LATERAL
RS-RUDOLPH ###-##-####H-1
HESS CORP.
8.85%
MOUNTRAIL, ND
DRILLING
DUAL LATERAL
SAETZ #14-20H
MARATHON OIL COMPANY
2.45%
DUNN, ND
COMPLETING
BAKKEN
SCHILKE #8-24H
PEAK GRASSLANDS, LLC.
5.24%
MCKENZIE, ND
DRILLING
BAKKEN
SIDONIA #7-25H
EOG RESOURCES
10.00%
MOUNTRAIL, ND
COMPLETING
BAKKEN
SIDONIA #8-26H
EOG RESOURCES
5.00%
MOUNTRAIL, ND
COMPLETING
BAKKEN
SIDONIA #13-08H
EOG RESOURCES
2.03%
MOUNTRAIL, ND
DRILLING
BAKKEN
SIDONIA #29-34H
EOG RESOURCES
4.22%
MOUNTRAIL, ND
COMPLETING
BAKKEN
SIDONIA #33-33H
EOG RESOURCES
2.71%
MOUNTRAIL, ND
COMPLETING
BAKKEN
SIDONIA #34-31H
EOG RESOURCES
2.16%
MOUNTRAIL, ND
COMPLETING
BAKKEN
SNIPER FEDERAL #1-6-7H
SLAWSON EXPLORATION
21.41%
MOUNTRAIL, ND
COMPLETING
BAKKEN
SUMMERFIELD #15-15H
AMERICAN OIL & GAS
5.10%
DUNN, ND
COMPLETING
BAKKEN
TOMCAT #1-2H
SLAWSON EXPLORATION
2.50%
MOUNTRAIL, ND
COMPLETING
BAKKEN
WHIRLWIND #1-31H
SLAWSON EXPLORATION
19.74%
MOUNTRAIL, ND
COMPLETING
BAKKEN
 
 
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SAFE HARBOR

This report contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”).  All statements other than statements of historical facts included in this report regarding the Company’s financial position, business strategy, plans and objectives of management for future operations and industry conditions are forward-looking statements.  When used in this report, forward-looking statements are generally accompanied by terms or phrases such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “target,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other words and similar expressions that convey the uncertainty of future events or outcomes.  Items contemplating or making assumptions about, actual or potential future sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond the Company’s control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which the Company conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our Company’s operations, products, services and prices.

The Company has based these forward-looking statements on its current expectations and assumptions about future events.  While the Company’s management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control.

A copy of the press release which the Company issued reporting the foregoing information is attached as Exhibit 99.1. The information in this Item 2.02, and the press release attached hereto as Exhibit 99.1, shall be deemed to be "filed" under the Securities Exchange Act of 1934, as amended.


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SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS
 
Item 9.01 – Financial Statements and Exhibits
 
(d) Exhibits.
 
Exhibit Number
 
Description
99.1
 
Press Release dated April 12, 2010

 
5

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 12, 2010
NORTHERN OIL AND GAS, INC.
By/s/ Michael L. Reger
Michael L. Reger, Chief Executive Officer
 

 
 

 
6

 


EXHIBIT INDEX

Exhibit Number
 
Title of Document
 
Method of Filing
99.1
 
Press Release dated April 12, 2010
 
Filed Electronically


 
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