Northern Oil and Gas, Inc.

Greetings and welcome to the NOG fourth quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. As a reminder, this conference is being recorded. It's now my pleasure to introduce to you our host, Evelyn Inferna, Vice President, Investor Relations. Thank you. You may begin.

Good morning. Welcome to NOG's fourth quarter and year-end 2025 earnings conference call. Yesterday after the close, we released our financial results. You can access our earnings release and presentation in the Investor Relations section of the website at NOGinc.com. We will be filing our 2025 10-K with the SEC within the next few days. I'm joined this morning by our Chief Executive Officer, Nick O'Grady, our President, Adam Derlam, our Chief Financial Officer, Chad Allen, and our Chief Technical Officer, Jen Evans. Our agenda for today's call is as follows. Nick will provide introductory remarks, followed by Adam, who will share an overview of NOG's operations and business development activities, and Chad will review our financial results. After our prepared remarks, the team, including Jen, will be available to answer any questions. Before we begin, let me remind you of our safe harbor language. Please be advised that our remarks today, including the answers to your questions, may include forward looking statements within the meaning of the Private Securities Litigation Reform Act. These forward looking statements are subject to risks and uncertainties that could cause actual results to be materially different from expectations contemplated by our forward looking statements. Those risks include, among others, Matters that we have described in our earnings release, as well as in our filings with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. We disclaim any obligation to update these forward-looking statements. During today's call, we may discuss certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income, and free cash flow. Reconciliations of these measures to the closest gap measures can be found in our earnings release. With that, I'll turn the call over to Nick.

Thank you, Evelyn. Welcome and good morning, everyone, and thank you for your interest in our company. I'd like to take the time to reflect upon 2025, discuss our plans for 2026, and also share my views in regard to the macro oil and gas environment and how it may affect our company and strategy. While our equity total return was down in 2025, our adjusted EBITDA was actually up 1%, and this was with oil prices down some 14% on average. Our share count was 2% lower year over year. Our net debt was down modestly year over year, all of this despite closing over $340 million of acquisitions, including ground games. Our financial results are a testament to our consistent hedging and the decisions we made, regardless of market perceptions in the short term, which are manifested in multiple compression. We were judicious and strategic on how we deployed and allocated capital in 2025. Our natural gas spending increased dramatically and our oil spending declined. NOG is now seeing record natural gas volumes aligned with some of the highest seasonal prices seen in many years. and we and our operating partners have tried to deploy the bare minimum on the oil front to preserve our precious barrels for a better day. Our 2025 ground game focused more on long-term development versus drill bit projects given the fluxing pricing environment. It is our intent to capitalize on attractive land pricing while still maximizing our long-term return on capital as we anticipate incredible return development opportunities on these lands over time. As a result, we grew our footprint organically by over 12,000 acres last year, extremely cost-effectively, with advantageous and low-risk long-term leases. Our land assembly effort may have made us look less capital efficient in the short term, but it's the exact type of capital allocation tactics companies should take in times such as these, and we believe our decisions will pay dividends in the years to come as commodity pricing improves. In the first quarter of this year, we've already grown that land position substantially once again. And while the market likely treated our equity based on a deceleration of growth estimates in the short term and a continued decline of forward prices, we also took great pains in extending our maturity wall and increasing our liquidity to bridge to the next cycle. In fact, even after closing our joint UTIC acquisition with Infinity and using our revolver to finance that transaction in its entirety, we will still have more liquidity than we started with in 2025. These are all purposeful moves to allow us to navigate a cyclical business while also creating value during a downturn. As oil declined into the 50s later in the fourth quarter and into this year, we saw a notable change in operator behavior with a significant slowdown in new activity and a deferral of existing activity. While in the short term this can affect us, it helps solidify our belief that 2026 will mark the trough of the oil cycle. This also may lead to a slowdown in capital spending, offset in part or in whole from ground game opportunities as one would expect during weaker periods. In our view, there are two potential outcomes for oil. one of continued middling prices for the bulk of the year, which ultimately leads to an increase of pricing within a year or two, or conversely, a sharper short-term decrease in pricing, which leads, in the end, to the same outcome, higher prices. In either scenario, NOG will come out stronger. We are well hedged and our spending decisions over the last 12 months have proven wise as we have pushed and preserved high-value development for a higher-priced environment. Geopolitical noise in the short term has a lot of people guessing, but fundamentals are set to improve. We've heard investor rumors that somehow our dividend could be in question. I'd like to address that directly as we think this chatter is totally unfounded. While nothing in life is ever completely certain, our dividend is built for an even significantly weaker environment than we face today, where we would ultimately be at a cash flow break-even level during the trough of the cycle post-dividend. And we believe that our dividend can be sustained for many years, even though we don't believe that oil cycles work in a way that we will be in a break-even scenario for an extended period. We built our dividend to last and ultimately to grow through cycles. So while we, of course, must manage risk, we are dedicated to sustaining and growing our dividend over the long term. And we believe the attractive yield it provides today is a great opportunity, particularly at the trough of the energy cycle. Our macro view and the belief oil's trough is coming will pivot the execution of our ground game in 2026 from leasing, in some cases, to drill-ready projects. Organic activity, as always, will be dependent on short-term commodity prices, but our ground-game capital deployment will be targeted on investments that will create the coiled spring growth effect our investors saw in 2021. What we're seeing in real time is that drill-ready projects, something we saw as mostly unattractive in 2025, are slowly becoming a much better place to be. While leasing remains active as we focus on the long term, the ground game will definitively evolve in 2026. I'll let Chad and Adam cover this further, but our guidance is reflective of the marketplace. In our low activity scenario, we do see some reduction in oil volumes, but a much more dramatic reduction in spending. In that low activity scenario, we'll generate substantially larger amounts of free cash flow at today's strip, while deferring and pushing our high value development for a better environment. In the higher case scenario, we'll see some acceleration of activity, a reduction in the curtailment we've carried for some time, and a higher till count. While free cash flow would be lower at today's prices, it certainly would also drive higher future production, and of course, in this environment, it's quite possible that the overall pricing environment would wind up being much higher. Our ground game can play a major role in the in between of these scenarios, regardless of the environment where opportunities may arise for us to deploy ad hoc capital throughout the year and we expect and hope to do so, especially in a tougher environment. On the M&A front, we continue to evaluate assets as they come to market. With that said, however, we are satisfied with the portfolio's strategic positioning, and moreover, we believe that quality assets that meet our criteria, particularly on the oil front, possibly will only come to market if we see a healthier market price point. So we'll focus our discretionary capital on the ground. In the past several years, we've seen some aggressive new entrance to the smaller deal side of the market, and much of that capital has become sidelined as these parties' prior investments are proving to have been poor capital allocation decisions. This should now provide NOG with a clear competitive advantage in the current environment. On the development side, it's important to understand the inherent alignment built into our business model. Our operators are rational, and the activity we have seen curtailed and deferred will be activated into a healthier environment. Consequently, NOGE should see disproportional benefits as the market improves. But what that means is that as the cycle recovers, we create far more convexity to the upside exactly when you're supposed to have it, when prices are stronger. I recognize that our business model may make our journey a bit lumpier when comparing us to a typical operator, but it also has the potential to enhance long-term returns significantly versus a production targeting mindset. NOG has pioneered the large non-op at scale, moving to a broad-based, multi-basin, multi-commodity platform over the last eight years. We effectively created the large co-purchase partnership and reinvented to some degree the joint development agreements. We're not done innovating and evolving. We are reevaluating how we operate, how we allocate capital, and even how we source capital. Over time, the initiatives we are evaluating have the potential to enhance our value creation capabilities, our returns, and our business model, so stay tuned for these developments. It's going to be a great year. NOG has differentiated coil spring-like exposure to the cycle. It could take much of 2026 for the oil markets to fully recover, but as any good investor knows, the market will be well ahead of that. I can't say in my investment career I have seen a period where energy equities saw multiple compression at the same time that oil prices were declining. Cyclical stocks should never be valued at peaks or troughs, but at a mid-cycle marginal cost of production. This leads to multiple compression during high prices and expansion during low prices. We saw such a period during the trough of gas prices in 2024, but that has not happened for oil stocks, and certainly not specifically in our case. For our investors and prospective investors, this phenomenon presents a clear opportunity in NOG's shares, especially because NOG has true right-way risk. Our volumes and activity from operators will rise with pricing. I'm extremely excited about how we're positioned and for what lies ahead. Now I'll turn it over to Adam.