Northern Oil and Gas, Inc. Announces 2011 First Quarter Results, Provides Operations Update and Announces Approval of Stock Repurchase Program

WAYZATA, Minn., May 10, 2011 /PRNewswire/ -- Northern Oil and Gas, Inc. (NYSE/AMEX: NOG) ("Northern Oil") today announced record first quarter oil and gas sales of approximately $27.0 million.  Excluding the effect of unrealized, mark-to-market of oil hedges, Northern Oil had net income of $5.9 million, representing $0.09 per fully diluted share.  Including the effect of unrealized mark-to-market of oil hedges, Northern Oil had a first quarter net loss of $7.1 million, representing a $0.11 loss per share.

2011 QUARTERLY RESULTS

Oil and gas sales for the first quarter of 2011 were $27.0 million compared to $8.4 million for the first quarter of 2010, representing a 223% increase.  These results represent a 13% increase in oil and gas sales during the first quarter of 2011 compared to the fourth quarter of 2010.

Production volumes for the first quarter of 2011 were a quarterly record of 356,622 barrels of oil equivalent ("BOE"), representing a 185% increase compared to the first quarter of 2010 and a 5% increase compared to the fourth quarter of 2010.  The first quarter production volumes represent Northern Oil's thirteenth consecutive quarterly increase in production.  

First quarter 2011 production consisted of approximately 94% crude oil and 6% associated natural gas and other liquids.  Northern Oil exited the first quarter of 2011 with production volumes of approximately 5,413 BOE per day ("BOEPD").  Northern Oil does not include flared and unsold gas volumes in its production figures.  During the first quarter of 2011, Northern Oil spud approximately 9.8 net wells and added production from 55 gross (4.98 net) wells.  Northern Oil has maintained a 100% drilling success rate in the Williston Basin Bakken and Three Forks trends since the company's inception.

Northern Oil's average realized crude oil sale price for first quarter 2011 was $74.10 per barrel, after taking into account a $9.73 per barrel loss due to the settlement of crude oil derivative contracts.  This compares to an average $70.49 per barrel realized price in the fourth quarter of 2010, which took into account a $4.25 per barrel loss due to the settlement of crude oil derivative contracts.

Production expenses for first quarter 2011 were $5.24 per BOE on an accrued basis, compared to $3.15 per BOE on an accrued basis for the first quarter of 2010 and $3.69 per BOE on an accrued basis for the fourth quarter of 2010. The increase in production expense is primarily due to the continued addition of producing oil and gas properties, exposure to new operators and new development areas, an increase in working interests, mature wells utilizing artificial lift and the general aging of our production.  

Depletion expense for first quarter 2011 was $6.9 million, or $19.25 per BOE.  As such, Northern Oil's first quarter 2011 depletion expense was consistent with its peer group in the Bakken and Three Forks play.  

General and Administrative (G&A) expense, net of share based compensation, for first quarter 2011 was $1.4 million, compared to $1.1 million in the fourth quarter of 2010.  Share based compensation for the first quarter 2011 was $1.9 million, compared to $835,363 in the fourth quarter of 2010.  The increase in share based compensation was primarily due to share issuances related to amended and restated employment agreements which included the extension of non-compete terms from one to three years along with various other modifications.

ADJUSTED EBITDA

Adjusted EBITDA for the first quarter 2011 was $18.6 million, or $0.29 per diluted share, which represents a 190% increase over Adjusted EBITDA of $6.4 million, or $0.14 per diluted share for the first quarter 2010 and a 2% increase compared to the fourth quarter of 2010.  

Northern Oil defines Adjusted EBITDA as net income before (i) interest expense, (ii) income taxes, (iii) depreciation, depletion and amortization, (iv) accretion of abandonment liability, (v) pre-tax unrealized gain and losses on commodity risk and (vii) non-cash expenses relating to share-based payments recognized under Accounting Standards Codification (ASC) Topic 718.  Net income excluding unrealized mark-to-market hedging gains or losses and Adjusted EBITDA are non-GAAP measures.  A reconciliation of these measures to GAAP is included in our accompanying financial tables found later in this release.  Northern Oil's management believes the use of non-GAAP financial measures provides useful information to investors to gain an overall understanding of current financial performance.  Specifically, management believes the non-GAAP results included herein provide useful information to both management and investors by excluding certain expenses, unrealized commodity gains and losses, and a depletion adjustment that management believes are not indicative of Northern Oil's core operating results.  In addition, these non-GAAP financial measures are used by Northern Oil's management for budgeting and forecasting as well as subsequently measuring Northern Oil's performance, and management believes that Northern Oil is providing investors with financial measures that most closely align to its internal measurement processes.  

2011 DRILLING AND PRODUCTION GUIDANCE

As of May 9, 2011, Northern Oil held working interests in a total of 395 gross (34.08 net) producing wells.  As of May 9, 2011, Northern Oil was also participating in 138 gross (12.94 net) Bakken or Three Forks wells drilling, awaiting completion or completing, meaning Northern Oil has participated in a total of 533 gross wells since its inception.

Northern Oil affirms that it expects to spud approximately 40 net wells throughout 2011 and reaffirms its guidance to produce an average of 6,500 to 7,100 BOEPD in 2011.

Northern Oil continues to develop its core Bakken and Three Forks acreage position at an accelerating pace.  According to the North Dakota Industrial Commission, 178 rigs are currently drilling in North Dakota.  The significant rig increase in the play continues to accelerate the development of Northern Oil's core acreage position.  

2011 CAPITAL EXPENDITURES

Northern Oil expects to drill approximately 40 net wells in 2011 with drilling capital expenditures approximating $252 million. Based on current, yet evolving, conditions in the field, Northern Oil expects to continue to deploy additional funds toward further strategic acreage acquisitions during 2011.  Northern Oil currently expects to fund all 2011 drilling commitments using cash-on-hand, cash flow and its undrawn credit facility.

ACREAGE UPDATE

During first quarter 2011, Northern Oil acquired leasehold interests covering an aggregate of 11,514 net mineral acres for an average of $1,601 per net acre and an aggregate of $18.4 million.  Of the acquired 11,514 net acres, 3,417 net acres were permitted, under the bit or began producing as of March 31, 2011.

As of March 31, 2011, Northern Oil had 37,226 net acres either held by production or under the bit, which represents approximately 25% of Northern Oil's total Bakken and Three Forks position.  Northern Oil expects that approximately 50% of its current acreage will be held by production or under the bit by the end of 2011.

CONTINUING THREE FORKS DELINEATION

Northern Oil recently participated in the Water Moccasin #1-34H, a successful Three Forks test well operated by Slawson Exploration in the southern Mountrail County Windsor project area.  Northern Oil controls a 44.14% working interest in the well, which had an initial production rate of 1,490 BOEPD.  The well had an initial tubing pressure of 2,800 psi on a 12/64th choke.

On the same drilling pad as the Water Moccasin #1-34H, yet different spacing unit, Slawson Exploration recently completed the Vagabond #1-27H well.  The well is a Bakken producer in which Northern Oil controls a 49.04% working interest.  The well had an initial production rate of 1,229 BOEPD and an initial tubing pressure of 3,100 psi on an 11/64th choke.

Michael Reger, Chief Executive Officer, commented: "The Water Moccasin and Vagabond results confirm the expanding productivity of the Three Forks formation and the efficiencies gained from pad drilling.  Slawson Exploration has received approval from the North Dakota Industrial Commission to drill six wells per spacing unit in the Windsor project area."

STOCK REPURCHASE PROGRAM

Northern Oil also today announced that its board of directors approved a stock repurchase program to acquire up to $150 million of Northern Oil's outstanding common stock.  The stock repurchase program will allow Northern Oil to repurchase its shares from time to time in the open market and in negotiated transactions.

MANAGEMENT COMMENT

Michael Reger, Chief Executive Officer, commented, "With over 25% of our Bakken and Three Forks position developed or under the bit, we believe we are moving ahead at an excellent pace.  Importantly, we continue to acquire acreage at prices significantly below levels indicated in recent publicly-announced transactions conducted by other industry participants.  We believe our expertise and specialty in non-operated interests continues to yield excellent results and look forward to continuing to add to our acreage inventory throughout 2011.  With no debt, cash, receivables and short-term investments of approximately $150 million, we are well positioned to fund the development of our core acreage position in the Bakken and Three Forks play."

RECENT WELL COMPLETIONS

The following table illustrates certain producing wells in which Northern Oil has participated with a working interest ("WI") during 2011.




WELL NAME                     OPERATOR     COUNTY/STATE   WI      IP/BOEPD

JEANIE 25-36 #2H              URSA         MCKENZIE, ND   54.58%  1,185

VAGABOND #1-27H               SLAWSON      MOUNTRAIL, ND  49.04%  1,229

HOVDEN FEDERAL #1-20H         SINCLAIR     DUNN, ND       45.72%  1,325

WATER MOCCASIN #1-34H         SLAWSON      MOUNTRAIL, ND  44.14%  1,490

BORSETH #15-22 1H             URSA         MCKENZIE, ND   39.55%  2,015

TVEIT 25-36 #1H               URSA         RICHLAND, MT   39.54%  735

NOVA #4-9-163-98H             SAMSON       DIVIDE, ND     37.50%  601

BANDIT #2-29H                 SLAWSON      MOUNTRAIL, ND  26.25%  959

NIELSEN #1-12H                CONTINENTAL  DIVIDE, ND     24.25%  857

SHELL #1-3-34H                HUNT OIL     MOUNTRAIL, ND  23.44%  511

VONA #1-13H                   CONTINENTAL  DIVIDE, ND     20.31%  921

ERNEST SCHARCHENKO #34-33H    MARATHON     DUNN, ND       17.57%  400

BONANZA #1-21-16H             SLAWSON      MCKENZIE, ND   14.84%  1,549

MUSKRAT FEDERAL #1-28-33H     SLAWSON      MOUNTRAIL, ND  12.83%  1,453

ZI PAYETTE #10-15H            ZENERGY      MCKENZIE, ND   12.50%  1,323

HOLTE #1-32H                  CONTINENTAL  WILLIAMS, ND   12.50%  933

GEORGE TANK #151-96-10C-3-3H  PETRO HUNT   MCKENZIE, ND   12.35%  902

ALMER 31X-6                   XTO          WILLIAMS, ND   11.14%  388

BROWN 30-19 #1H               BRIGHAM      MOUNTRAIL, ND  9.25%   2,240

CROWFOOT #35-3031H            EOG          MOUNTRAIL, ND  8.38%   330

TATTU #19-1H                  HESS         MCKENZIE, ND   8.21%   1,479

COWDEN #5404 13-35H           OASIS        WILLIAMS, ND   7.65%   1,594

EN-HEINLE #156-94-2536H-3     HESS         MOUNTRAIL, ND  7.29%   600

VIXEN FEDERAL #1-19-30H       SLAWSON      MOUNTRAIL, ND  6.70%   2,218

HELEN 11X-05                  XTO          WILLIAMS, ND   6.64%   917

BENNY #1-13H                  CONTINENTAL  RICHLAND, MT   6.25%   232

NORWAY #1-5H                  CONTINENTAL  MCKENZIE, ND   5.14%   1,429







* The "IP BOEPD" means the initial production ("IP") rate expressed in barrels of oil equivalent per day.  The IP rate is the 24-hour "Peak Production Rate." Peak Production Rates may be established following the initial day of production, depending on operator design or well flowback profiles.  The IP rate may be estimated based on other third party estimates or limited data available at this time.  The IP BOEPD may be computed using crude oil production only, without taking into consideration any associated natural gas production. 

The following table illustrates all Bakken and Three Forks wells drilling, awaiting completion or completing in which Northern Oil is participating with a working interest as of May 9, 2011.




WELL NAME                       OPERATOR      COUNTY/STATE   WI

BIGHORN #1-6H                   SINCLAIR      DUNN, ND       48.79%

MUSTANG #1-22H                  SLAWSON       MOUNTRAIL, ND  39.56%

GUNNISON #44-25H                PRIMA         BURKE, ND      39.35%

KANDIYOHI #1-19H                EOG           BURKE, ND      37.47%

STATE JAEGER 1-16-21H-142-94    OXY           DUNN, ND       34.38%

CHARLIE SORENSON 17-8 #1-H      BRIGHAM       MOUNTRAIL, ND  33.58%

OLSON RANCH #1-21-16H           G3 OPERATING  ROOSEVELT, MT  33.00%

YUKON #12-1-163-98H             SAMSON        DIVIDE, ND     32.81%

MOORE #5304 13-1H               OASIS         WILLIAMS, ND   32.70%

HOLLAND #9-19H                  NORTH PLAINS  WILLIAMS, ND   32.68%

DENALI #13-24-163-98H           SAMSON        DIVIDE, ND     32.45%

AV-SCHWARTZ-163-93-1102H-1      HESS          BURKE, ND      30.61%

ALAMO #2-19-18H                 SLAWSON       MOUNTRAIL, ND  29.98%

CROSBY CREEK #1-5H              SINCLAIR      DUNN, ND       29.63%

BLUE JAY #32-29-163-95H         SAMSON        DIVIDE, ND     29.13%

PORCUPINE #1-19H                SINCLAIR      DUNN, ND       29.02%

DIAMONDBACK #2-21H              SLAWSON       MOUNTRAIL, ND  25.23%

CYCLONE #1-21-16H               SLAWSON       MCKENZIE, ND   25.00%

FREDDY #1-8H                    CONTINENTAL   DIVIDE, ND     24.97%

RASCAL #1-18H                   SLAWSON       RICHLAND, MT   20.00%

PARADISE #5892 11-30H           OASIS         MOUNTRAIL, ND  18.78%

GOODSON #1-28H                  CONTINENTAL   DIVIDE, ND     18.75%

OBENOUR #150-99-21-16-1H        NEWFIELD      MCKENZIE, ND   18.75%

HARLAN REBSOM #1-2-11H-143-95   OXY           DUNN, ND       17.81%

CRUISER #2-16-9H                SLAWSON       MOUNTRAIL, ND  16.44%

LYNN #5502 11-10H               OASIS         WILLIAMS, ND   15.68%

CLEO 31X-5                      XTO           WILLIAMS, ND   14.33%

SHORT PRAIRIE #7-1201H          EOG           WILLIAMS, ND   13.26%

LOSTWOOD #1-1201H               EOG           MOUNTRAIL, ND  12.52%

LOSTWOOD #18-1224H              EOG           MOUNTRAIL, ND  12.52%

LOSTWOOD #19-1324H              EOG           MOUNTRAIL, ND  12.52%

MATTER STATE #3-17H             CORNERSTONE   BURKE, ND      12.50%

ALLEN 21X-17                    XTO           WILLIAMS, ND   11.90%

FERTILE #28-26H                 EOG           MOUNTRAIL, ND  11.88%

HUNTER #1-8-17                  SLAWSON       MOUNTRAIL, ND  11.74%

HUNTER #2-8-17H                 SLAWSON       MOUNTRAIL, ND  11.74%

MUSTANG #7-6-163-98H            SAMSON        DIVIDE, ND     11.72%

ALBERTINE 21X-2                 XTO           WILLIAMS, ND   11.52%

LOSTWOOD #20-1123H              EOG           MOUNTRAIL, ND  11.51%

LOSTWOOD #21-1402H              EOG           MOUNTRAIL, ND  11.51%

LOSTWOOD #22-1423H              EOG           MOUNTRAIL, ND  11.51%

LOSTWOOD #6-1102H               EOG           MOUNTRAIL, ND  11.51%

SUBMARINER FEDERAL #1-23-24H    SLAWSON       MOUNTRAIL, ND  10.89%

BATTALION #1-3H                 SLAWSON       ROOSEVELT, MT  10.15%

KOSTELNAK #28-1H                HESS          DUNN, ND       10.00%

HOLM #9-4 1-H                   BRIGHAM       MOUNTRAIL, ND  9.75%

EN-WEFALD 156-94-1324H-2        HESS          MOUNTRAIL, ND  9.38%

EN-WEFALD 156-94-1324H-3        HESS          MOUNTRAIL, ND  9.38%

FRANCHUK 44-20SWH               ENCORE        DUNN, ND       9.38%

UXBRIDGE #2-9H                  CONTINENTAL   DIVIDE, ND     9.04%

ORCA FEDERAL #1-23-26H          SLAWSON       MOUNTRAIL, ND  8.44%

FORT BERHOLD 152-94-14C-11-1H   PETRO HUNT    MCKENZIE, ND   8.10%

HARDSCRABBLE #13-3526H          EOG           WILLIAMS, ND   7.81%

RELLA #18-19H                   ZENERGY       WILLIAMS, ND   7.26%

ROSENVOLD #1-30H                CONTINENTAL   DIVIDE, ND     6.44%

VARDON #1-14H                   CONTINENTAL   MCKENZIE, ND   6.37%

KANDIYOHI #5-3031H              EOG           BURKE, ND      6.36%

BUCKLEY #1-9H                   CONTINENTAL   RICHLAND, MT   6.25%

JACOBSON #8-33H                 CORNERSTONE   BURKE, ND      5.86%

JACOB MADISON #11-27H           MARATHON      MOUNTRAIL, ND  5.78%

KOESER 41-15 SWH                ENCORE        MCKENZIE, ND   5.59%

ELK USA #11-17H                 MARATHON      MOUNTRAIL, ND  5.57%

DAGGER #1-10H                   SLAWSON       DUNN, ND       5.30%

RUTLEDGE #1-32H                 CONTINENTAL   DUNN, ND       4.97%

LAMEY #1-30-31H-143-96          OXY           DUNN, ND       4.95%

BUFFALO #34-12H                 MARATHON      DUNN, ND       4.91%

SCHA 33-34 #1-H                 BRIGHAM       MOUNTRAIL, ND  4.88%

STENEHJEM 27-34 #1H             ABRAXAS       WILLIAMS, ND   4.87%

BRUCE 5-8 #1H                   ZAVANNA       WILLIAMS, ND   4.69%

SHELL #1-35-26H                 HUNT OIL      MOUNTRAIL, ND  4.66%

EN-CHARLES WOOD 157-94-1720H-1  HESS          MOUNTRAIL, ND  4.61%

POMERAL STATE #7-36H            CORNERSTONE   BURKE, ND      4.50%

WIZARD #2-35H                   SLAWSON       MOUNTRAIL, ND  4.50%

FIELD TRUST 7-6 #1-H            BRIGHAM       WILLIAMS, ND   4.28%

JAGUAR #2-32H                   SLAWSON       MOUNTRAIL, ND  4.22%

NIGHTCRAWLER #2-17H             SLAWSON       MOUNTRAIL, ND  4.20%

OXY OLSON #160-90-10-P-1H       OXY           BURKE, ND      4.17%

AMBUSH #1-31-30H                SLAWSON       WILLIAMS, ND   3.96%

MONTAGUE #5501 13-3H            OASIS         WILLIAMS, ND   3.95%

JOHNSON #44-32H                 MARATHON      MOUNTRAIL, ND  3.87%

ROSS #27-2728H                  EOG           MOUNTRAIL, ND  3.75%

SOVIG #150-100-22C-15-1H        PETRO HUNT    MCKENZIE, ND   3.59%

GENESIS #2-13H                  SLAWSON       MOUNTRAIL, ND  3.44%

FERTILE #19-29H                 EOG           MOUNTRAIL, ND  3.38%

WALLACE #7-1H                   HESS          DUNN, ND       3.27%

L. TUFTO 7-6#1-H                BRIGHAM       WILLIAMS, ND   3.24%

BAGLEY #4-30H                   SM ENERGY     DIVIDE, ND     3.20%

MEIERS #5692 11-19H             OASIS         MOUNTRAIL, ND  3.17%

LEE #34-31 NWH                  DENBURY       MCKENZIE, ND   3.16%

GO-ALASKON-156-97-3427H-1       HESS          WILLIAMS, ND   3.13%

GO-SOINE A-156-97-3229H-1       HESS          WILLIAMS, ND   3.13%

KOUFAX #3-10 1H                 ZAVANNA       MCKENZIE, ND   3.13%

WANNEMACHER 1-4-9H-142-95       OXY           DUNN, ND       3.13%

WOODROW 24X-32                  XTO           WILLIAMS, ND   3.12%

NELSON #2-26H                   SINCLAIR      MOUNTRAIL, ND  3.11%

WARDNER #24-35H                 MARATHON      DUNN, ND       3.09%

GLENDON #1-17H                  CONTINENTAL   WILLIAMS, ND   3.05%

JUGHEAD FEDERAL #2-26H          SLAWSON       MOUNTRAIL, ND  2.81%

VERLYN STROMMEN #34-8H          MARATHON      DUNN, ND       2.50%

STORVIK 7-6 #1H                 URSA          RICHLAND, MT   2.35%

DORIS 21X-5                     XTO           WILLIAMS, ND   2.28%

EN-TRINITY 154-93-2833H-2       HESS          MOUNTRAIL, ND  2.28%

EN-TRINITY 154-93-2833H-3       HESS          MOUNTRAIL, ND  2.28%

BARMAN #15-7H                   HESS          WILLIAMS, ND   2.25%

DAKOTA-3 ELK #16-21H            ZENERGY       MOUNTRAIL, ND  2.15%

CLEAR WATER #1-24-25H           HUNT          MOUNTRAIL, ND  2.08%

HOVDE 33-4 #1H                  BRIGHAM       MCKENZIE, ND   2.08%

SIDONIA #44-2821H               EOG           MOUNTRAIL, ND  1.79%

CHARLOTTE #1-22H                CONTINENTAL   MCKENZIE, ND   1.68%

MONT #3-3403H                   EOG           WILLIAMS, ND   1.67%

JOHNSRUD #1-1H                  SM ENERGY     MCKENZIE, ND   1.67%

DRONE #1-34-27H                 SLAWSON       DUNN, ND       1.59%

LIBERTY LR #17-11H              EOG           MOUNTRAIL, ND  1.59%

HARTMAN #14-32H                 MARATHON      DUNN, ND       1.57%

TILTON #34-7H                   CONOCO        DUNN, ND       1.53%

JORGENSON #158-94-11D-2-1H      PETRO HUNT    MOUNTRAIL, ND  1.49%

THIEL 2 11X-12                  XTO           RICHLAND, MT   1.47%

EN-CVANCARA A-155-93-3231H-1    HESS          MOUNTRAIL, ND  1.39%

KLOSE #24-1H                    HESS          MCKENZIE, ND   1.35%

FERTILE #45-29H                 EOG           MOUNTRAIL, ND  1.25%

HELLAND #15-19H                 AMERICAN      WILLIAMS, ND   1.25%

JAMES HILL #9-0112H             EOG           MOUNTRAIL, ND  1.25%

EN-CHAMLEY 156-93-0508H-1       HESS          MOUNTRAIL, ND  1.23%

RANSOM #44-31H                  CONOCO        MCKENZIE, ND   1.19%

AMY ELIZABETH #11-2H            ARSENAL       MOUNTRAIL, ND  1.13%

HAGEN #23-13H                   TRUE OIL      MCKENZIE, ND   1.11%

CLEARWATER #24-3025H            EOG           MOUNTRAIL, ND  1.02%

DEBBIE BAKLENKO USA #12-26H     MARATHON      MCKENZIE, ND   1.00%

HAUSTVEIT 42X-10                XTO           WILLIAMS, ND   0.94%

RMJK #31-26H                    MARATHON      MOUNTRAIL, ND  0.94%

LUCY FLECKENSTEIN #34-20H       MARATHON      DUNN, ND       0.78%

SOLBERG #15-8H                  HESS          WILLIAMS, ND   0.78%

KALIL FARM 14-23 #1H            BRIGHAM       WILLIAMS, ND   0.68%

EN-FRANDSON 154-93-2116H-2      HESS          MOUNTRAIL, ND  0.61%

EN-FRANDSON 154-93-2116H-3      HESS          MOUNTRAIL, ND  0.61%

DEVON #5601 12-17H              OASIS         WILLIAMS, ND   0.56%

MARTENS #2-5H                   SINCLAIR      MOUNTRAIL, ND  0.56%

CANNONBALL FEDERAL #2-27-34H    SLAWSON       MOUNTRAIL, ND  0.55%







FIRST QUARTER EARNINGS RELEASE TELECONFERENCE CALL

In conjunction with Northern Oil's release of its financial and operating results, investors, analysts and other interested parties are invited to listen to a conference call with management on Tuesday, May 10, 2011 at 10:00 a.m. Central Daylight Time.  Details for the conference call are as follows:

Dial-In Number:  (866) 847-7864 (US/Canada) and (703) 639-1430 (International)

Conference ID:   1528973 - Northern Oil and Gas First Quarter Earnings Release

Replay Dial-In Number: (866) 837-8032 (US/Canada)

Replay Access Code:     1528973 - Replay will be available through May 24th, 2011

ABOUT NORTHERN OIL AND GAS

Northern Oil and Gas, Inc. is an exploration and production company based in Wayzata, Minnesota.  Northern Oil's core area of focus is the Williston Basin Bakken and Three Forks play in North Dakota and Montana.  

More information about Northern Oil and Gas, Inc. can be found at www.NorthernOil.com.

SAFE HARBOR

This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").  All statements other than statements of historical facts included in this report regarding our financial position, business strategy, plans and objectives of management for future operations, industry conditions, and indebtedness covenant compliance are forward-looking statements.  When used in this report, forward-looking statements are generally accompanied by terms or phrases such as "estimate," "project," "predict," "believe," "expect," "anticipate," "target," "plan," "intend," "seek," "goal," "will," "should," "may" or other words and similar expressions that convey the uncertainty of future events or outcomes.  Items contemplating or making assumptions about, actual or potential future sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our Company's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which our Company conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our Company's operations, products, services and prices.  

We have based these forward-looking statements on our current expectations and assumptions about future events.  While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control.  

CONTACT:

Investor Relations
Erik Nerhus
952-476-9800


NORTHERN OIL AND GAS, INC.

CONDENSED BALANCE SHEETS

MARCH 31, 2011 AND DECEMBER 31, 2010



ASSETS



                                                   March 31,      December 31,

                                                   2011           2010

                                                   (UNAUDITED)

CURRENT ASSETS

 Cash and Cash Equivalents                         $ 99,705,160   $ 152,110,701

 Trade Receivables                                 27,027,334     22,033,647

 Prepaid Drilling Costs                            15,350,719     13,225,650

 Prepaid Expenses                                  396,474        345,695

 Other Current Assets                              753,661        475,967

 Short - Term Investments                          24,866,660     39,726,700

 Deferred Tax Asset                                11,884,000     5,100,000

       Total Current Assets                        179,984,008    233,018,360



PROPERTY AND EQUIPMENT

 Oil and Natural Gas Properties, Full Cost Method
 of Accounting

     Proved                                        202,071,631    158,846,475

     Unproved                                      157,678,911    136,135,163

 Other Property and Equipment                      2,499,699      2,479,199

       Total Property and Equipment                362,250,241    297,460,837

 Less - Accumulated Depreciation and Depletion     29,084,148     22,152,356

       Total Property and Equipment, Net           333,166,093    275,308,481



DEBT ISSUANCE COSTS                                1,277,732      1,367,124



       Total Assets                                $ 514,427,833  $ 509,693,965



LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

 Accounts Payable                                  $ 28,531,576   $ 48,500,204

 Accrued Expenses                                  439,790        2,829

 Derivative Liability                              27,954,596     11,145,319

 Other Liabilities                                 18,574         18,574

       Total Current Liabilities                   56,944,536     59,666,926



LONG-TERM LIABILITIES

 Revolving Line of Credit                          -              -

 Derivative Liability                              9,221,859      5,022,657

 Other Noncurrent Liabilities                      563,127        477,900

       Total Long-Term Liabilities                 9,784,986      5,500,557



DEFERRED TAX LIABILITY                             11,247,000     9,167,000



        Total Liabilities                          77,976,522     74,334,483



STOCKHOLDERS' EQUITY

  Preferred Stock, Par Value $.001; 5,000,000
  Authorized, No Shares Outstanding                -              -

  Common Stock, Par Value $.001; 95,000,000
  Authorized, 63,135,424

    Outstanding (12/31/2010 – 62,129,424 Shares
    Outstanding)                                   63,135         62,129

  Additional Paid-In Capital                       436,920,522    428,484,092

  Retained Earnings                                701,350        7,759,192

  Accumulated Other Comprehensive Income (Loss)    (1,233,696)    (945,931)

        Total Stockholders' Equity                 436,451,311    435,359,482



        Total Liabilities and Stockholders' Equity $ 514,427,833  $ 509,693,965












NORTHERN OIL AND GAS, INC.

CONDENSED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

(UNAUDITED)

                                               Three Months Ended

                                               March 31,

                                               2011           2010

REVENUES

 Oil and Gas Sales                             $ 27,041,621   $ 8,368,847

 Loss on Settled Derivatives                   (3,262,056)    (176,983)

 Mark-to-Market of Derivative Instruments      (21,278,629)   (990,816)

 Other Revenue                                 25,813         20,466

                                               2,526,749      7,221,514



OPERATING EXPENSES

 Production Expenses                           2,016,356      332,330

 Production Taxes                              2,615,864      645,866

 General and Administrative Expense            3,290,589      1,706,968

 Depletion of Oil and Gas Properties           6,863,479      1,883,605

 Depreciation and Amortization                 68,313         24,630

 Accretion of Discount on Asset Retirement
 Obligations                                   4,730          3,537

    Total Expenses                             14,859,331     4,596,936



(LOSS) INCOME FROM OPERATIONS                  (12,332,582)   2,624,578



OTHER INCOME (EXPENSE)                         767,040        (87,948)



(LOSS) INCOME BEFORE INCOME TAXES              (11,565,542)   2,536,630



INCOME TAX (BENEFIT) PROVISION                 (4,507,700)    977,000



NET (LOSS) INCOME                              $ (7,057,842)  $ 1,559,630





Net (Loss) Income Per Common Share - Basic     $ (0.11)       $ 0.04



Net (Loss) Income Per Common Share - Diluted   $ (0.11)       $ 0.04



Weighted Average Shares Outstanding – Basic  63,000,113     44,098,553



Weighted Average Shares Outstanding - Diluted  63,000,113     44,544,469










NORTHERN OIL AND GAS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

(UNAUDITED)

                                                   Three Months Ended

                                                   March 31,

                                                   2011           2010

CASH FLOWS FROM OPERATING ACTIVITIES

 Net (Loss) Income                                 $ (7,057,842)  $ 1,559,630

 Adjustments to Reconcile Net Income (Loss) to Net
 Cash Provided by

       (Used for) Operating Activities:

    Depletion of Oil and Gas Properties            6,863,479      1,883,605

    Depreciation and Amortization                  68,313         24,630

    Amortization of Debt Issuance Costs            89,392         150,398

    Accretion of Discount on Asset Retirement
    Obligations                                    4,730          3,537

    Income Tax (Benefit) Provision                 (4,510,000)    977,000

    Net (Gain) Loss on Sale of Available for Sale
    Securities                                     (459,998)      104,217

    Net Unrealized Loss on Derivative Instruments  21,278,629     990,816

    Amortization of Deferred Rent                  (4,644)        (4,643)

    Share - Based Compensation Expense             1,858,171      813,297

    Changes in Working Capital and Other Items:

         Increase in Trade Receivables             (4,993,687)    (968,924)

         Increase in Other Receivables             -              (237,877)

         Increase in Prepaid Expenses              (50,779)       (65,741)

         Increase in Other Current Assets          (277,694)      (111,971)

         (Decrease) Increase in Accounts Payable   (19,968,628)   7,076,193

         Decrease in Accrued Expenses              (263)          (45,601)

         Net Cash (Used For) Provided By Operating
         Activities                                (7,160,821)    12,148,566



CASH FLOWS FROM INVESTING ACTIVITIES

 Purchases of Other Equipment and Furniture        (20,500)       (30,360)

 Increase in Prepaid Drilling Costs                (2,125,069)    (4,495,200)

 Proceeds from Sale of Oil and Gas Properties      -              237,877

 Purchase of Available for Sale Securities         (18,381,690)   -

 Proceeds from Sale of Available for Sale
 Securities                                        32,949,813     7,639,783

 Purchase of Oil and Gas Properties                (59,167,274)   (22,077,340)

         Net Cash Used For Investing Activities    (46,744,720)   (18,725,240)



CASH FLOWS FROM FINANCING ACTIVITIES

 Payments on Line of Credit                        -              (803,115)

 Advances on Revolving Credit Facility             -              2,300,000

 Proceeds from Exercise of Warrants                1,500,000      -

         Net Cash Provided by Financing Activities 1,500,000      1,496,885



NET DECREASE IN CASH AND CASH EQUIVALENTS          (52,405,541)   (5,079,789)



CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD  152,110,701    6,233,372



CASH AND CASH EQUIVALENTS – END OF PERIOD        $ 99,705,160   $ 1,153,583





Supplemental Disclosure of Cash Flow Information

  Cash Paid During the Period for Interest         $ -            $ 26,515

  Cash Paid During the Period for Income Taxes     $ 2,300        $ -



  Non-Cash Financing and Investing Activities:

   Purchase of Oil and Gas Properties through
   Issuance of Common Stock                        $ -            $ 99,475

   Payment of Compensation through Issuance of
   Common Stock                                    $ 7,374,660    $ 1,655,747

   Capitalized Asset Retirement Obligations        $ 85,141       $ 16,158














USE OF NON GAAP FINANCIAL MEASURES



Northern Oil and Gas, Inc.

Reconciliation of Adjusted EBITDA





                                               Three Months Ended

                                               March 31, 2011  March 31, 2010



Net Income (Loss)                              $ (7,057,842)   $ 1,559,630



Add Back:



 Income Tax Provision (Benefit)                (4,507,700)     977,000



 Depreciation, Depletion, Amortization,

 and Accretion                                 6,936,522       1,911,772



 Share Based Compensation                      1,858,171       813,297



 Mark-to-Market Derivative Instruments         21,278,629      990,816



 Interest Expense                              120,642         165,193



          Adjusted EBITDA                      $ 18,628,422    $ 6,417,708



Adjusted EBITDA Per Common Share - Basic       $ 0.30          $ 0.15



Adjusted EBITDA Per Common Share - Diluted     $ 0.29          $ 0.14



Weighted Average Shares Outstanding – Basic  63,000,133      44,098,553



Weighted Average Shares Outstanding - Diluted  63,246,984      44,544,469












Northern Oil and Gas, Inc.

Reconciliation of Adjusted EBITDA Per Common Share – Basic



                                            Three Months Ended

                                            March 31, 2011  March 31, 2010

Net (Loss) Income Per Common Share - Basic  $ (0.11)        $ 0.04

 (As Reported)



Add Back:



 Income Tax (Benefit)Provision              (0.07)          0.02



 Depreciation, Depletion, Amortization,

 and Accretion                              0.11            0.04



 Share Based Compensation                   0.03            0.02



 Mark-to-Market Derivative Instruments      0.34            0.02



 Interest Expense                           0.00            0.01



Adjusted EBITDA Per Common Share - Basic    $ 0.30          $ 0.15

 (Adjusted for Non-GAAP Measurements)












Northern Oil and Gas, Inc.

Reconciliation of Adjusted EBITDA Per Common Share - Diluted



                                              Three Months Ended

                                              March 31, 2011  March 31, 2010

Net (Loss) Income Per Common Share - Diluted  $ (0.11)        $ 0.04

 (As Reported)



Add Back:



 Income Tax (Benefit) Provision               (0.07)          0.02



 Depreciation, Depletion, Amortization,

 and Accretion                                0.11            0.04



 Share Based Compensation                     0.03            0.02



 Mark-to-Market Derivative Instruments        0.33            0.02



 Interest Expense                             0.00            0.00



Adjusted EBITDA Per Common Share - Diluted    $ 0.29          $ 0.14

 (Adjusted for Non-GAAP Measurements)








Northern Oil and Gas, Inc.

Reconciliation of GAAP Net Income to Net Income Excluding

Unrealized Mark-to-Market Hedging Losses



                                                Three Months Ended

                                                March 31, 2011  March 31, 2010



Net (Loss) Income                               $ (7,057,842)   $ 1,559,630



Mark-to-Market of Derivative Instruments        21,278,629      990,816



Tax Impact                                      (8,299,000)     (378,000)



Net Income without Effect of Certain Items      $ 5,921,787     $ 2,172,446



Net Income Per Common Share - Basic             $ 0.09          $ 0.05



Net Income Per Common Share - Diluted           $ 0.09          $ 0.05



Weighted Average Shares Outstanding – Basic   63,000,113      44,098,553



Weighted Average Shares Outstanding - Diluted   63,246,984      44,544,469



Net (Loss) Income Per Common Share - Basic      $ (0.11)        $ 0.04



Change due to Mark-to-Market of Derivative
Investments                                     0.34            0.02



Change due to Tax Impact                        (0.14)          (0.01)



Net Income without Effect of Certain Items Per
Common Share - Basic                            $ 0.09          $ 0.05



Net Income Per Common Share - Diluted           $ (0.11)        $ 0.04

  (As Reported)



Change due to Mark-to-Market of Derivative
Investments                                     0.34            0.02



Change due to Tax Impact                        (0.14)          (0.01)



Net Income without Effect of Certain Items Per
Common Share - Diluted                          $ 0.09          $ 0.05







SOURCE Northern Oil and Gas, Inc.