Here's Why You Should Invest In Northern Oil And Gas Now

On Mar 22, Northern Oil and Gas, Inc. (NYSE:NOG) was upgraded to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

For first-quarter 2018, the Zacks Consensus Estimate for earnings per share (EPS) has been revised higher from a loss of 2 cents to EPS of 10 cents over the last 60 days. The consensus estimate for 2018 earnings was revised to 42 cents from 10 cents over the same period.

Moreover, the exploration and production company has an impressive earnings surprise history, the average being 175% for the last four quarters.

Along with the announcement of fourth-quarter 2017 results, Northern Oil and Gas reported an increase in total net proved reserves. Through 2017, the company witnessed an increase of 40% in net proved reserves to 54.1 million barrels of oil equivalent (MMBoe), which entails higher future oil and gas production.

The company has raised first-quarter and full-year 2018 guidance for production. For first-quarter 2018, Northern Oil and Gas expects average daily production to increase 5-6% over the prior-year quarter, up sequentially about 1,000 barrels of oil equivalent per day. It has also raised full-year 2018 production guidance, projecting an increase of 18-22% from 2017 and up from the previous guidance of 16-20%.

We appreciate the company’s decision to complete higher wells during 2018. This year, Northern Oil and Gas plans to bring online 20-22 net oil and gas wells compared with 16.9 last year.

Northern Oil and Gas has set a capital budget of $165-$180 million for 2018. Majority of the budget is expected to be spent for drilling and completion activity. The decision seems impressive considering that the company has a trailing 12-month return on capital investment of 2.4%, higher than 2% of the Zacks Oil & Gas-U.S. Exploration & Production industry.

Also, the upstream energy firm gained 2.4% over the last three months against the industry’s 1.9% decline.

Other Stocks to Consider

A few other top-ranked players in the same sector are Continental Resources, Inc (NYSE:CLR) , Pioneer Natural Resources Company (NYSE:PXD) and Concho Resources Inc (NYSE:CXO) . All three stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Continental Resources is an independent oil and natural gas exploration and production company. It delivered an average positive earnings surprise of 64.9% over the last four quarters.

Headquartered at Irving, TX, Pioneer Natural Resources Company is an independent oil and gas exploration and production entity. It pulled off an average beat of 66.92% in the trailing four quarters.

Concho Resources is an independent oil and natural gas company. It delivered a positive surprise of 48.9% during the same time frame.

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