Earnings estimates for Northern Oil and Gas, Inc. NOG have been revised upward over the past 60 days, reflecting analyst’s confidence in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings has moved 33.3% and 37% north to 36 cents and 37 cents per share, respectively.
Wayzata, MN-based Northern Oil and Gas is an independent energy company involved in the acquisition, exploration, development and production of oil and natural gas properties. During 2017, the company added 354 gross producing wells in the Williston Basin.
Shares of Northern Oil and Gas have soared 99.3% in a year’s time, outperforming the industry’s rally of 20.7%. The stock sports a Zacks Rank #1 (Strong Buy).
The stock has an impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank offer the best investment bets.
Let’s focus on the factors that make Northern Oil and Gas an attractive stock to hold on to for greater returns.
Earnings Results: The company reported earnings of 17 cents per share in first-quarter 2018, beating the Zacks Consensus Estimate of 12 cents by 41.7%.
Positive Earnings Surprise History: Northern Oil and Gas has an impressive earnings surprise history. The bottom line surpassed the Zacks Consensus Estimate in each of the last four reported quarters, the average positive surprise being 160.4%. The consecutive estimate beats reflect the company’s operational excellence.
Acquisition & Capex Plan: Recently, the company closed the acquisition of Salt Creek Oil & Gas, LLC within the core area of the Williston Basin in North Dakota. The total purchase consideration was $40 million in cash. This buyout will likely draw synergies in the form of a $19-million increase in the acquirer’s cash flow from operations in 2018.
The company is focusing on strengthening and growing its drilling and completion activity. It has revised its drilling and completion capital expenditure budget to $172-$187 million, a $20-million rise over the prior guided range for 2018. For the full year, 2018, the company is expecting a total capital outlay of $185-$200 million for acquisitions, workovers and other capital expenditure.
Raised Production Outlook: The company expects to deliver total production between 18,650 and 19,240 boe/d for 2018, representing 26-30% growth from the production level in 2017. This ramped up production is estimated to be generated from an augmented activity as Northern Oil and Gas is projected to add approximately 22-24 net wells to production output for the current year.
Growth Projections: The Zacks Consensus Estimate for current-year earnings per share is pegged at 36 cents per share, reflecting a significant year-over-year surge of 157.1%.
For 2019, the consensus estimate for EPS is pegged at 37 cents per share, depicting a 0.9% year-over-year rise.
Other Stocks to Consider
Some other top-ranked stocks from the Zack Oil-Energy Sector are Azure Power Global Ltd. AZRE, Eni SpA E and Occidental Petroleum Corporation OXY, each sporting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Azure Power pulled off an average positive surprise of 35.48% in all the trailing four quarters. The Zacks Consensus Estimate for 2018 EPS moved up 50% in the last 30 days to 6 cents per share.
Eni SpA delivered an average four-quarter beat of 56.37%. The consensus mark for 2018 EPS has been revised 10.2% upward in the last 30 days to $2.93 per share.
Occidental Petroleum came up with an average four-quarter earnings surprise of 30.18%. The Zacks Consensus Estimate for 2018 EPS has been raised 9.2% in the last 30 days to $4.49 per share.
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