Energy Prospectus

To get a better understanding of the impact to NOG of the Ohio Utica Shale Asset acquisition go through the slides at this link:
https://noginc.com/investor-relations/events-and-presentations/default.aspx

Infinity Natural Resources, Inc. (INR) will be the operator of the acquired assets.

Neal Dingmann, a highly respected energy sector analyst at William Blair, likes the deal and he is the only analyst that has submitted a fresh report to Tip Ranks. He maintains his BUY rating for NOG.

I have updated my forecast/valuation model for NOG. My valuation increases by $1.50 to $45.00 per share for NOG.

This is a significant transaction, but NOG should be able to hold their dividends at $0.45/quarter ($1.80/year) for annualized yield of ~7.5%.

I am a big fan of "Running Room" so I increased my valuation multiple to 3.25 X annualized operating cash flow per share. It is still a low multiple for a company of this size and quality.

The Wall Street Gang is not a fan of the Non-Op strategy, but NOG does it very well.

NOG's 2026 production should be ~145,000 Boepd with a mix of 51% oil and 49% NGas and NGLs, which they report on a combined basis.

My updated forecast/valuation model should be posted to the EPG website soon. It will be under the Sweet 16 tab.
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I will need to spend more time on updating the Antero Resources (AR) and Antero Midstream (AM) models. Since we have a Houston luncheon it might be Wednesday before I can get to them. I do expect their big acquisition in their core area to be accretive.

On December 10th I spent two more hours going over my forecast/valuation model for NOG and I have lowered my current valuation from $45 to $42 just because of the additional debt that NOG will be taking on to close the Utica Shale Acquisitions from Antero Resources (AR) and Antero Midstream (AM). The balance sheet is still in good shape, but it does have additional commodity price risk.

I definitely like the acquisitions being made by NOG, AR and AM. They are all growth companies with a lot of high-quality Running Room.

My valuation multiple is just 3X annualized operating cash flow per share, which is a very low multiple for a profitable upstream company that is also free cash flow positive.

As I have posted before, the Wall Street Gang does not like the Non-Op strategy because it is much more difficult to forecast what all of NOG's operators will do, especially with so much uncertainty on where oil prices will be next year. That said, if NOG's actual results do match my forecast, there is significant upside for this stock.

I added NOG to the Sweet 16 on 1-1-2022 at a share price of $9.02. Since that date the share price has increased ~173% and the Company's production as more than doubled. NOG has also paid out some very nice dividends, which will continue.