Northern Oil Raises 2026 Production Target to 150,000 Boe per Day
Key Facts
Northern Oil & Gas raised its 2026 production guidance to 147,000–150,000 barrels of oil equivalent per day, from 143,000–148,000 previously, according to the transcript of its third-quarter earnings call published on November 6. The change raises both the low and high ends of the range by 4,000 barrels per day. Management attributed the higher guidance to record production volumes and strong well performance, not to an operational change the company had not announced. It said on the call that total production reached a record level during the quarter. That puts the performance in the quarter ended in the context of the decision on the full-year outlook, while keeping the capital spending budget within its previous range.
Third-quarter production was 156,239 barrels of oil equivalent per day, up 19% year over year and 7% from the previous quarter, according to company data cited on the call. That level exceeded the midpoint of the new annual production range, although comparing one quarter's production with annual guidance does not mean the same rate will continue throughout the year. Oil volumes also rose 10% from the second quarter, while natural gas production set a new record and increased 39% year over year. Management said strong well performance and higher volumes contributed to the higher outlook. The oil and gas figures show that production growth came from both components, with gas posting faster annual growth during the quarter.
Natural gas price realizations improved to 98% of the Henry Hub benchmark in the third quarter, compared with 90% in the second quarter, the company said. The improvement was more pronounced in the Permian Basin, where realizations rose to 85% of Henry Hub from 39% in the previous quarter. Management linked the recovery to easing gas transportation constraints in the Delaware Basin, which had weighed on realized prices in the second quarter. It said realizations had "improved significantly to 98% of Henry Hub," noting that the Permian led the improvement. These developments coincided with record gas production, adding to the performance factors the company cited when raising its production guidance.
Northern Oil kept its 2026 capital spending budget range at $850 million to $900 million, but expects spending to come in near the high end. The company attributed that to higher activity and the continued success of "Ground Game" deals, according to the call transcript. It therefore raised production guidance without widening its stated capital spending range. Free cash flow was $148.6 million in the third quarter, up 25% from the same quarter of 2025 despite higher capital spending. That cash flow offers a parallel indicator of production growth at a time when management expects spending to be higher within the existing range.
By contrast, the company raised its well operating expense outlook to $9.75–$9.85 per barrel of oil equivalent, from $9.70–$9.80 previously. It said the change reflects higher processing costs, particularly in the Williston Basin amid strong natural gas liquids prices. It also revised its cash general and administrative expense guidance to $0.85–$0.90 per barrel of oil equivalent to include costs incurred year to date. These adjustments put some of the production and cash flow growth alongside pressures from operating and processing costs. The company did not change its stated capital spending range alongside the expense outlook updates.
Northern Oil reduced its total debt by slightly more than $100 million and reported that adjusted net debt to last-twelve-month adjusted EBITDA was below 1.5 times. Management said this put the company within its stated leverage range, one quarter ahead of its year-end target. The debt reduction adds a balance sheet management element to the quarter's picture, which included higher production and cash flow, alongside expected capital spending near the high end and adjusted operating costs. The company's shares closed at $22.14 in the November 5 session, according to EL7 market data. The close came the day before the earnings call transcript containing the production guidance update was published.