Northern Oil and Gas, Inc. Announces Completion of Senior Notes Exchange Transaction
MINNEAPOLIS–(BUSINESS WIRE)–Northern Oil and Gas, Inc. (NYSE American: NOG) today announced that it
has completed its previously announced exchange transaction with certain
holders of its 8% senior unsecured notes, including the requirement to
raise an additional $140 million of new equity capital.
HIGHLIGHTS OF THE TRANSACTION
-
$497 million of existing senior unsecured notes has been exchanged for
approximately (i) $344 million of senior secured notes due 2023 and
(ii) $155 million of Northern common stock -
Northern raised an additional $145 million of gross proceeds from the
sale of its common stock, including a $52 million private placement
that closed simultaneously with the closing of the exchange transaction -
As of March 31, 2018, pro forma for the exchange and related
transactions, Northern has approximately $265 million of cash on hand
and has reduced net debt by approximately $268 million, while also
extending the maturity on $344 million of the companyÔÇÖs debt from 2020
to 2023
ÔÇ£Completing this exchange transaction, along with the associated equity
raise, is a significant step that improves our balance sheet by reducing
debt, increasing liquidity and extending debt maturity,ÔÇØ commented
NorthernÔÇÖs Chairman, Bahram Akradi. ÔÇ£The improvements to our balance
sheet will allow us to execute on our ground game acquisition strategy
and further our position as the natural non-op consolidator in the
Williston Basin.ÔÇØ
The following table sets forth Northern's capitalization as of March 31,
2018, on an actual basis, and on a pro forma basis to give effect to the
exchange and related transactions.
| As of March 31, 2018 | ||||
| (In thousands) | ||||
| Actual |
Pro forma |
|||
| Cash and Cash Equivalents(1) | $ | 89,473 | $ | 264,875 |
| Long-Term Debt: | ||||
|
First lien term loan due 2022(2) |
$ | 300,000 | $ | 360,000 |
| Second lien notes due 2023 | – | 344,279 | ||
| Senior unsecured notes due 2020 | 700,000 | 203,317 | ||
| Total Long-Term Debt | $ | 1,000,000 | $ | 907,596 |
|
Net Debt(3) |
$ |
910,527 |
$ |
642,721 |
| Common Stock – Shares Outstanding | 65,938 | 266,114 | ||
|
_______________________ |
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|
(1) Pro forma cash and cash equivalents reflect estimated fees |
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|
(2) In conjunction with the exchange, Northern agreed to draw an |
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|
(3) Calculated as total long-term debt, less cash and cash |
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EXCHANGE TRANSACTION
Upon closing of the exchange transaction, Northern exchanged
approximately $497 million aggregate principal amount of its 8% senior
unsecured notes due 2020 (the ÔÇ£Existing NotesÔÇØ) for a combination of
approximately $344 million aggregate principal amount of second lien
senior secured notes due 2023 (the ÔÇ£New NotesÔÇØ) and 103,249,915 shares
of NorthernÔÇÖs common stock. The New Notes will mature in May 2023. The
New Notes will bear cash interest at a rate of 8.5% per annum, and
additional interest at a rate of 1% per annum that is payable in kind
(PIK), provided that the PIK interest shall cease to accrue if Northern
achieves specified total debt-to-EBITDAX metrics. The New Notes are
secured by a second priority lien on substantially the same collateral
that secures NorthernÔÇÖs obligations under its first lien credit facility.
In connection with the closing of the exchange transaction, Northern
also closed on a $52 million private placement of its common stock.
NorthernÔÇÖs common stock was issued at $1.50 per share in both the
exchange and the private placement, which was the same price as the
public offering price in NorthernÔÇÖs $93.4 million underwritten common
stock offering that closed in April 2018. Together, the private
placement and the public offering satisfied the closing condition under
the exchange agreement that required Northern to raise at least an
additional $140 million of gross proceeds from the issuance of equity.
ABOUT NORTHERN OIL AND GAS
Northern Oil and Gas, Inc. is an exploration and production company with
a core area of focus in the Williston Basin Bakken and Three Forks play
in North Dakota and Montana. More information about Northern Oil and
Gas, Inc. can be found at www.NorthernOil.com.
SAFE HARBOR
This press release contains forward-looking statements regarding future
events and future results that are subject to the safe harbors created
under the Securities Act of 1933 (the ÔÇ£Securities ActÔÇØ) and the
Securities Exchange Act of 1934 (the ÔÇ£Exchange ActÔÇØ). All statements
other than statements of historical facts included in this release
regarding NorthernÔÇÖs financial position, business strategy, plans and
objectives of management for future operations, industry conditions, and
indebtedness covenant compliance are forward-looking statements. When
used in this release, forward-looking statements are generally
accompanied by terms or phrases such as ÔÇ£estimate,ÔÇØ ÔÇ£project,ÔÇØ
ÔÇ£predict,ÔÇØ ÔÇ£believe,ÔÇØ ÔÇ£expect,ÔÇØ ÔÇ£continue,ÔÇØ ÔÇ£anticipate,ÔÇØ ÔÇ£target,ÔÇØ
ÔÇ£could,ÔÇØ ÔÇ£plan,ÔÇØ ÔÇ£intend,ÔÇØ ÔÇ£seek,ÔÇØ ÔÇ£goal,ÔÇØ ÔÇ£will,ÔÇØ ÔÇ£should,ÔÇØ ÔÇ£mayÔÇØ 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 NorthernÔÇÖs control) that
could cause actual results to differ materially from those set forth in
the forward-looking statements, including the following: changes in
crude oil and natural gas prices, the pace of drilling and completions
activity on NorthernÔÇÖs properties, NorthernÔÇÖs ability to acquire
additional development opportunities, changes in NorthernÔÇÖs reserves
estimates or the value thereof, general economic or industry conditions,
nationally and/or in the communities in which Northern conducts
business, changes in the interest rate environment, legislation or
regulatory requirements, conditions of the securities markets,
NorthernÔÇÖs ability to raise or access capital, changes in accounting
principles, policies or guidelines, financial or political instability,
acts of war or terrorism, and other economic, competitive, governmental,
regulatory and technical factors affecting NorthernÔÇÖs operations,
products, services and prices.
Northern has based these forward-looking statements on its current
expectations and assumptions about future events. While 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 NorthernÔÇÖs
control. Northern does not undertake any duty to update or revise any
forward-looking statements any forward-looking statements, except as may
be required by the federal securities laws.
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Contacts
Northern Oil and Gas, Inc.
Brandon Elliott, CFA, 952-476-9800
Interim
President
[email protected]
