NOG Upsizes Convertible Senior Notes Reopening to $175.0 Million

• The reopening of its 2029 convertible notes offers NOG increased strategic flexibility.

• A portion of the proceeds will be allocated to share repurchases and a hedge intended to offset dilution until the stock price reaches approximately $50.87.

MINNEAPOLIS — Northern Oil and Gas, Inc. (NOG), a name that’s been making waves in the energy sector, has just announced the pricing of an offering that’s sure to pique investors’ interest: an additional $175 million in aggregate principal amount of 3.625% convertible senior notes due in 2029. The notes, priced at 105.597% of their principal amount, will be sold in a private offering to qualified institutional buyers, signaling NOG’s strategic moves in the market. The initial offering size was upsized from the previously announced $150 million.

These new notes align with the existing $500 million of 3.625% convertible senior notes already in circulation, sharing an indenture and forming part of the same series. Initially trading under a Rule 144A CUSIP number, the company anticipates that these new notes will eventually trade under the same CUSIP number as the initial notes once de-legended. The settlement date of the new notes is set for June 17, 2025, pending the fulfillment of standard closing conditions. Notably, the initial purchasers have been granted an option to potentially purchase up to an additional $25 million in principal amount of notes within a 13-day window from the initial issuance.

The notes’ terms and conditions offer flexibility for NOG. They are redeemable, in part or in whole, for cash at the company’s discretion, starting April 15, 2026, and extending up until the 40th scheduled trading day before their maturity date. However, this is contingent on the last reported sale price of NOG’s common stock exceeding 130% of the conversion price for a predetermined period. The redemption price will equal the principal amount plus any accrued and unpaid interest. Furthermore, the company has assured that it won’t call any newly issued notes for redemption unless they’re “freely tradable” as per the governing indenture’s definition.

In the event of a “fundamental change” as defined in the notes’ indenture, noteholders may require NOG to repurchase their notes for cash. The repurchase price would consist of the principal amount, plus accrued and unpaid interest up to the repurchase date.

The offering is expected to bring in roughly $178.4 million for NOG (or approximately $204.0 million if the initial purchasers fully exercise their option), after deducting the initial purchasers’ discounts and estimated offering expenses. A significant portion, around $14.8 million, will be used to cover the cost of capped call transactions. In addition, the company plans to allocate up to $35 million to repurchase up to 1.1 million shares of its common stock via privately negotiated transactions. The remaining net proceeds are earmarked for general corporate purposes, starting with repaying a portion of the outstanding debt from the revolving credit facility. Additional capped call transactions are also anticipated if the initial purchasers exercise their option to acquire more notes.

The notes will be senior, unsecured obligations of NOG, accruing interest at 3.625% per annum, payable semi-annually on April 15 and October 15 of each year, starting October 15, 2025. The maturity date is set for April 15, 2029, subject to earlier repurchase, redemption or conversion. Prior to October 16, 2028, noteholders can convert their notes under certain conditions. Post that date, they can convert at any time until the second scheduled trading day before maturity. NOG has the prerogative to settle conversions in all cash or a combination of cash and shares. However, the conversion value will at least be the principal amount in cash, as determined over multiple trading days. The current conversion rate stands at 26.9811 shares per $1,000 of principal amount, representing a conversion price of approximately $37.06 per share – a 19% premium over the company’s closing price of $31.15 on June 12, 2025. The conversion rate and price are subject to potential adjustments depending on specific events.

Adding further nuance to the deal, NOG has entered into privately negotiated capped call transactions with initial purchasers or their affiliates and/or other financial institutions. These transactions will cover the number of shares underlying the new notes, with adjustments mirroring those of the notes themselves. Additional capped call transactions are expected should the initial purchasers exercise their option.

The “cap” price of the capped call transactions is set at $50.87 per share, representing a premium of approximately 63% over the June 12, 2025 closing price. This cap is subject to adjustments based on the terms of the transactions.

In essence, these capped call transactions are designed to mitigate potential dilution of NOG’s common stock upon conversion and potentially offset any cash payments exceeding the principal amount of the converted notes.

In tandem with the new notes, the option counterparties, or their affiliates, are likely to engage in various derivative transactions related to NOG’s common stock, potentially influencing the market price of the stock or notes. Furthermore, these counterparties may adjust their hedge positions through the secondary market, potentially impacting the market price and, thereby, the conversion ability of noteholders.

It’s important to note that the offer and sale of the new notes and any shares resulting from conversion haven’t been and won’t be registered. These securities can only be offered or sold within specific exemptions, limiting widespread distribution. Therefore, this announcement does not constitute an offer to sell, or a solicitation to buy, the new notes or any common stock.

ABOUT NOG

NOG is a real asset company focused on acquiring and investing in non-operated minority working and mineral interests in the top hydrocarbon-producing basins across the continental United States.

SAFE HARBOR

This press release includes forward-looking statements that are subject to the safe harbors under the Securities Act and the Securities Exchange Act of 1934. These statements, including plans for the offering’s closing and the anticipated use of net proceeds, are forward-looking elements. Within this release, terms like “estimate,” “project,” “predict,” “believe,” “expect,” “continue,” “anticipate,” “target,” “could,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” and “may” signal the uncertainty of future events.

These forward-looking statements inherently carry risks, including fluctuations in crude oil and natural gas prices, the pace of drilling and completion on NOG’s properties, industry and economic conditions, and the impact of various global events. Additional factors are detailed in NOG’s most recent SEC filings, specifically under “Item 1A. Risk Factors.” Such factors influence NOG’s results and could lead to outcomes that differ from those expressed in the forward-looking statements.

While management believes these forward-looking statements are based on reasonable assumptions, they are subject to substantial business, economic, and regulatory risks. The company cautions against over-reliance on these statements and does not commit to updating them after the date of publication, except as required by law.