Northern Oil and Gas spending over $5 billion to expand in Texas, New Mexico, Utah

The acquisition and diversification strategy has worked. Analysts covering NOG expect it to report annual revenue for 2024 of $2.2 billion and adjusted net income of $594 million. Since 2018 that’s a compound annual growth of 22% and 27% respectively. With the growth NOG now produces enough free cash flows to reward shareholders with one of the higher dividend rates in the sector. They recently raised their quarterly dividend to 42 cents a share, up 11% from a year ago.

Another good thing about the nonoperator model is it could conceivably work with other energy markets. The greening of the US energy system is still a long way a way and natural gas may prove to be a bridge of sorts, but new new markets are also developing.

“We really are getting to this point in US energy, which is that inventory is becoming a problem. So the Permian Basin is 60 to 70 percent drilled at this point,” O’Grady said.

O’Grady says that operators are doing amazing things in the Williston to keep production going, “but it is in the eighth inning of its life.”

O’Grady says a lot of those emerging technologies from an investment perspective are still in the early stages and NOG has been more of a late-stage entrant. Still, it is studying those markets.

“We’ve looked at almost everything under the sun,” O’Grady said. “We could own a nonoperated interest in everything. …I would say this, that as a company, you know, over time, I think we’ll invest in whatever the future is.”