Northern Oil and Gas : XCL Joint Acquisition

XCL Joint Acquisition

June 2024

XCL Acquisition Overview(1) | Scaled Entry with Significant Runway

Undivided interest in high quality Uinta Basin properties to be operated by SM Energy in a joint acquisition. With its significant, long-lived and low-breakeven inventory, XCL sets milestones as NOG's largest and most accretive acquisition to date

$510 MM

PURCHASE PRICE

97.6

NET UNDEVELOPED LOCATIONS(3)

20%

UNDIVIDED INTEREST

~9,300

NET ACRES | UP TO 17

BENCHES

>$170MM

NTM CASH FLOW FROM

OPERATIONS(2)

>10,500

2024 RECENT

PRODUCTION BOE/DAY

<3.0x

TRANSACTION

MULTIPLE

OPERATING

PARTNER

1. Purchase agreement signed June 27, 2024. Transaction effective date May 1, 2024. Company anticipates closing transaction in late Q3 or early Q4 2024, subject to satisfaction of customary closing conditions. All data reflects NOG's net interest in the assets.
2. NTM starting October 1, 2024. NYMEX strip as of 6/24/2024.XCL Joint Acquisition June 2024 | 23) Normalized for 10,000 foot laterals, excludes wells-in-process.

XCL Is NOG's Largest & Most Accretive Acquisition To Date

XCL Asset Locator Map & Key Stats

	WY
NV UT	CO	UTAH
AZ	NM

Duchesne

Uintah

Key Stats	XCL Net to NOG (20%)
Net Acres	9,300
Net Production (Boe/d | % Oil)(1)	>10,500 | >85%
NTM Cash Flow from Operations ($MM)(1)	>$170
NTM FCF ($MM)(1)	>$85
Net Undeveloped Locations(2)	97.6

1. NTM starts October 1, 2024. NYMEX Strip as of 6/24/2024.
2. As of 5/1/2024 effective date, normalized for 10,000 foot laterals, excludes wells-in-process.

Key Financial Statistics

• Agreement to purchase 20% undivided interest in XCL assets for $510 MM
• Gross NRI: ~80%, net operated WI ~18%
• 95% HBP (78% fee, 16% tribal, 5% state, 1% federal) with all surface on fee acreage
• >$170 MM of cash flow from operations in the next 12 months(1)
• ~$85 MM expected capital spend in next 12 months(1), ~$45 MM post-closing in 2024
• Expect steady production of >10,000 Boe/d in 2025
• May 1, 2024 effective date, expected to close in late 3Q24 or early 4Q24, subject to satisfaction of closing conditions
• NOG to fund transaction with cash on hand and borrowings under NOG's Senior Secured Revolving Credit Facility
• Net Debt / LQA Adj. EBITDA remains <1.5x

Governance & Operator

• Partnership governed by cooperation and joint development agreement, with AMI in place
• NOG and SM Energy have jointly agreed to a future development plan
• SM to operate substantially all of the assets

Investment Rationale

• Accretive to all key financial metrics (<3.0x transaction multiple)
• Strong free cash flow with >$85 MM of NTM unlevered, unhedged asset level FCF(1)
• Significant long-dated Tier 1 inventory at a sub-$50 per barrel break-even price
• Provides entry into prolific oily Uinta Basin with additional growth opportunities

XCL Joint Acquisition June 2024 | 3

Uinta Inventory Competes With Core Permian

Uinta Basin combines core Delaware Basin productivity with the attractive cost structure of the Midland Basin

Type Curve Comparison | 10,000' Normalized Cumulative Oil

1,000

(Mbbl)	800
600
Oil	400
Cum.
200
	0

XCL Uteland Butte wells pay out in average of 18 months

Uteland Butte Core

Uinta Basin

Core Stateline Wolfcamp A

Delaware Basin

Core Midland Co. Wolfcamp A

Midland Basin

0

10

20

30

40

50

60

70

80

90

100

Producing Month

Single Well Economics by Basin(1) | 10,000' Normalized

Well Costs by Basin ($000s) | 10,000' Normalized

		Core Midland	Core Delaware
	Uteland Butte	Basin	Basin
Oil EUR (Mbbl)	~820	~590	~900
% Oil	85%	74%	69%
IRR (%)	176%	162%	200%
PV-10 ($MM)	$14.2	$10.7	$19.6
DC&E ($MM)	$8.0	$8.0	$10.5
DROI-10 (x)	1.8x	1.3x	1.9x

$8,000

Uteland Butte Core

Uinta Basin

$10,500

$8,000

Core	Core
Midland Basin	Delaware Basin

XCL Joint Acquisition June 2024 | 4

1. NYMEX Strip as of 6/24/2024: 2024 - $80.08 WTI / $3.14 HH; 2025 - $75.30 WTI / $3.61 HH; 2026 - $71.11 WTI / $3.87 HH; 2027 - $68.42 WTI / $3.89 HH; 2028+ - $66.71 WTI / $3.82 HH.

Uinta Stacked Pay | Opportunity Rich Asset Play

More zones across a thicker column translates into significant future organic development opportunities

UINTA BASIN (30-40 WELLS PER MILE)

DELAWARE BASIN (24-36 WELLS PER MILE)

WILLISTON BASIN (10-12 WELLS PER MILE)

5-6 wells/mile per bench

~350

Garden Gulch		2-3 wells/mile per bench
		Garden Gulch		Upper

Avalon

4-6 wells/mile per bench	~400 ft
Avalon

Bakken

RESD cutoff: 20 ohm

Middle Bakken

Three Forks

ft

Douglas Creek		Douglas Creek Upper		~1,200ft
	Douglas Creek Middle		Cube
	Douglas Creek Lower
Castle		3-4 wells/mile per bench
Peak		Castle Peak			Lower Cube
Uteland
Butte		Castle Peak Lime		~1,100 ft
			Uteland Butte
			Upper Wasatch 5
			Lower Wasatch 5
			Wasatch 4
Wasatch
	2-3 wells/mile per bench
			Wasatch 3		~1,300 ft	Deep
			Upper Flagstaff
			Lower Flagstaff
Flagstaff
RESD cutoff: 8 ohm

1st Bone

Spring

2nd Bone

Spring

3rd Bone

Spring

WFMP

A

WFMP

B

RESD cutoff: 20 ohm

4-6 wells/mile per bench		~1,100ft
2nd Bone Spring
1st Bone Spring

4-6 wells/mile per bench		~1,600
3rd Bone Spring
Wolfcamp A
Wolfcamp B		ft

• Uinta represents one of the last remaining stacked pay growth opportunities in the L48
• All oil-weighted Uinta stacked pay is available for development across the XCL position - typically limited to 2-3 zones across Delaware positions
• Core Uinta areas offer up to 40 wells per mile development across the Upper, Lower and Deep interval
• Uinta basin has one of the thickest productive oil-weighted hydrocarbon columns in the Lower 48

XCL Joint Acquisition June 2024 | 5

High Value Crude with Access to Premium Markets

Ample offtake with well-established oil and gas takeaway logistics

XCL Takeaway Locator Map

XCL Production Commodity Flows

	WYOMING	Production
	Facilities
1	SLC Refineries
COLORADO	Kinder Morgan
		Green River
		(2026)
	Kinder Morgan
	Altamont / Bluebell			Kinder
	1	Western
	Chipeta /	1	Morgan
		MPLX	Altamont /

Wellhead

Contracted

Trucking

Ironhorse	Bluebell
	Mountain
2	West

2

Price River

Terminal

1

2	Pipeline
Williams Mountain	Demand
West Pipeline
Markets
2
3
Price River Terminal	Locator Map Legend
(Transload to Rail)	Gas Pipelines
	Gas Processing
	Oil Takeaway
	Oil
	Gas
	4

3

4

SLC Refineries

Rail

(UP / BNSF)

L48 Refineries

(Gulf Coast, Cushing

& Rockies)

Source: East Daley, RBN.

XCL Joint Acquisition June 2024 | 6

SM Partnership Is Consistent with NOG's Playbook Bolt-On

NOG repeats successful strategy of basin expansion through a scaled entry with a proven operator

Proven Operating

Partner

• SM and NOG have a longstanding working relationship historically in the Williston and more recently in the Permian
• SM is one of NOG's most efficient operating partners
• SM has an established track record of meeting or exceeding guidance

Scaled Entry with

Additional Growth

• Adds 9,300 net contiguous acres in the Uinta
• ~97.6 (net to NOG) oil-weighted locations that rival the quality of NOG's existing Permian Inventory
• Additional unquantified inventory within the JV provides future organic development opportunities
• Provides opportunity for NOG to "land and expand" with other operators

Governance &

Alignment

• Deal structure follows precedents set with MPDC, Forge and Novo
• JDA and AMI agreements ensure that SM's and NOG's interests are aligned
• Uinta Basin represents significant growth opportunity for both SM and NOG garnering ~25% of SM's 2025E capital budget

XCL Joint Acquisition June 2024 | 7

XCL Further Enhances & De-Risks NOG's Business Model

As NOG adds another substantial JV and fourth major region, its operator, basin and commodity concentration have declined markedly and substantially lowered business and cyclical risk for its investors

Basins(1)

Q2 2020	Williston
Pure-Play
	100%

Operators

Commodity

23%

41

Operators

77%

9%

13%

37%

Current Diversified

91

Oil Gas & NGL

39%

41%

		Williston		Permian		Appalachia		Uinta

Source: Public disclosures.

1. Percentages based on 2025E production (boe).

Operators

61%

Oil Gas & NGL

XCL Joint Acquisition June 2024 | 8

Transaction Enhances NOG's Growth

Adds diversity and scale with a fourth joint venture and fourth basin in NOG's portfolio

Compelling long-term value - sets up for over 10 years of self-funding cash flow

High quality assets - adds significant <$50/bbl breakeven properties to enhance platform resiliency

Potential for incremental value creation from undeveloped locations and non-underwritten locations

Establishes NOG as Uinta player, attracting additional potential Uinta Basin opportunities

XCL Joint Acquisition June 2024 | 9

Appendix