Northern Oil and Gas has signed a definitive agreement to acquire a non-operated 49% interest in natural gas assets located in the Utica region of eastern Ohio, for $588mn. The transaction is carried out in partnership with Infinity Natural Resources, for a total of $1.2bn, divided between upstream production and midstream transport and processing infrastructure.
Increasing volumes with over 100 identified drilling sites
The upstream assets cover approximately 35,000 net acres and include more than 100 identified undeveloped drilling locations. NOG expects net production of around 65 million cubic feet equivalent per day (MMcfe/d) by 2026, with a compound annual growth rate above 30% through the end of the decade. The projected decline rate for produced volumes is under 15% over the next twelve months.
Integrated infrastructure to optimise flow
The portfolio includes 140 miles of low- and high-pressure gathering pipelines, along with 90 miles of water management pipelines. These systems are built for historically high throughput of up to 600 MMcfe/d. Direct connections to out-of-basin premium markets via the Tallgrass Rex pipeline provide additional pricing leverage.
Expected yield and structured financing
The assets are expected to generate approximately $100mn in net cash flow for NOG in 2026, with 19% stemming from midstream operations. The average capital investment programme for these assets is estimated at $100mn per year through the end of the decade. The acquisition will be financed through internal cash flow, available liquidity, and borrowings under NOG’s reserves-based lending facility.
Structured partnership with shared governance
Infinity will operate most of the assets under multi-year joint development agreements. The effective date of the transaction is set for July 1, 2025, with closing expected in the first quarter of 2026. A $58.8mn deposit has been placed in escrow. A downward purchase price adjustment is expected to reflect interim cash flow generation.
