Northern Oil and Gas, Inc. (“NOG” or the “Company”) announced that its Board of Directors has declared a cash dividend on the Company’s common stock in the amount of $0.19 per share, representing a 36% increase from the prior quarterly dividend. The dividend is payable on July 29, 2022, to stockholders of record as of the close of business on June 29, 2022.
DIVIDEND GROWTH PLAN ACCELERATION
NOG management has updated its third quarter dividend recommendation to the Board of Directors. Management plans to recommend a dividend of $0.25 per share ($1.00 per share annualized) to the Board of Directors for the third quarter of 2022, a 32% increase over the second quarter dividend, and 14% higher than the previous target of $0.22.
SERIES A CONVERTIBLE PREFERRED STOCK REPURCHASES
In the first quarter of 2022, NOG repurchased $36.3 million of liquidation preference value of its 6.500% Series A Perpetual Cumulative Convertible Preferred Stock from holders. In April 2022, NOG repurchased an additional $3.7 million, for a total year-to-date of $40.0 million liquidation preference value. The current total remaining outstanding face value of Convertible Preferred Stock is $181.9 million, reduced from $221.9 million at December 31, 2021. These repurchases are expected to reduce NOG’s annual preferred dividend payments by $2.6 million and additionally reduce NOG’s diluted common stock share count by approximately 1.8 million shares, based on the current conversion ratio.
SECURITIES REPURCHASE AUTHORIZATIONS
NOG’s Board of Directors has additionally authorized and increased certain securities repurchase authorizations.
- Common Stock: Repurchase Plan authorization increased to $150.0 million from $68.1 million ($150.0 million currently available)
- 6.5% Series A Convertible Preferred Stock: Repurchase Plan authorization increased to $90.0 million from $40.0 million ($50.0 million currently available)
- 8.125% Senior Unsecured Notes due 2028: Repurchase Plan with an initial $50.0 million authorization ($50.0 million currently available)
- Under these authorizations, securities may be repurchased periodically, including in the open market or privately negotiated transactions. The actual timing, manner, number, and value of securities repurchased under these authorizations, if any, will depend on a number of factors, including the availability of free cash flow, the market price of the Company’s securities, general market and economic conditions, applicable legal and contractual requirements, and other business considerations.
“With such significant free cash flow, NOG is maximizing its flexibility to take advantage of market dislocations,” commented Chad Allen, NOG’s Chief Financial Officer. “We are bringing forward cash returns to our investors with higher dividends, and with the Board’s repurchase authorizations, we are simultaneously preparing to find value creation opportunities within our own capital structure. To this point, NOG has already retired $40.0 million of our Preferred Stock year-to-date and will continue to monitor market values and take action where appropriate.”