Quarterly report pursuant to Section 13 or 15(d)

RELATED PARTY TRANSACTIONS

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RELATED PARTY TRANSACTIONS
6 Months Ended
Jun. 30, 2014
RELATED PARTY TRANSACTIONS [Abstract]  
RELATED PARTY TRANSACTIONS
NOTE 7     RELATED PARTY TRANSACTIONS

The Company is a non-operating participant in a number of wells in North Dakota that are operated by Emerald Oil, Inc. (“Emerald”), by virtue of leased acreage held by the Company in drilling units operated by Emerald.  As of June 30, 2014, such wells included 26 gross (5.6 net) producing wells, and an additional 9 gross (1.1 net) wells that were drilling or awaiting completion.  Based on authorizations for expenditure (or AFEs) provided by Emerald with respect to each of the wells, the total drilling and completion costs for these 35 gross wells was estimated at approximately $358 million, approximately $67 million of which is attributable to Northern Oil’s working interest in the wells.  James Russell (J.R.) Reger is a director, executive officer and less than 5% shareholder of Emerald, which is a publicly-traded company.  J.R. Reger is also the brother of Northern Oil’s Chairman and Chief Executive Officer, Michael Reger.  At June 30, 2014, the Company’s accounts receivable and accounts payable balances with Emerald were $4.1 million and $16.6 million, respectively.  At December 31, 2013, the Company’s accounts receivable and accounts payable balances with Emerald were $4.6 million and $23.2 million, respectively.  The Company recorded total revenues of $12.75 million and $0 from Emerald for the six months ended June 30, 2014 and 2013, respectively.

All transactions involving related parties are approved or ratified by the Company’s Audit Committee.