primarily sells its oil and natural gas production to end users, marketers, and other purchasers. The ongoing oil price rally has vindicated the company’s decision.Īs of December 31, 2020, the company proved reserves consisted of approximately 76.5 million barrels of oil equivalent(BOE) as well as interests in 45,000 net developed acres and another 31,700 net undeveloped acres. Further, NOG upped its production guidance. The fact that a financial distressed company with more than a billion dollars in long-term debt and a high debt-to-equity ratio made such a bold move still deep in the throes of the crisis means that NOG really believed that an oil price rebound remained firmly in the cards, in which case its latest purchase could end up being a massive bargain. That piece of news would have hardly turned heads if the buyer was an Exxon or a Chevron. NOG stock ever since the company announced that it had agreed in 2020 to acquire its first non-operating interest in the Delaware Basin in a $12M deal.
The company has more than 6,000 gross producing wells primarily in the Bakken. NOG has a rather unique modus operandi in that it invests in oil producing properties, acting as a financial partner to exploration and production names. (NYSE:NOG) is an independent energy company that engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties in the United States. Minnetonka, Minnesota based Northern Oil and Gas Inc. Kostin is less sanguine about small-cap prospects, saying tightening financial conditions, slowing growth, and a flattening yield curve will continue to pressure Russell 2000 returns relative to the S&P 500. JPM strategist Marko Kolanovic has recommended buying the dip, saying small-caps (NYSEARCA:IWM) and cyclicals (NYSEARCA:XLI) (NYSEARCA:XLE) (NYSEARCA:XLF) (NYSEARCA:XLB) (NYSEARCA:XLY)-offer buying opportunities. “ Client conversations have recently focused on the dramatic underperformance of the Russell 2000 small-cap index.Small-cap firms generally have weaker balance sheets, lower profit margins, and less market power, all of which make them highly sensitive to economic growth environments,” writes Goldman Sachs’ chief U.S. The small-fry stock trade fizzled by Q2 of 2021 as inflation began to bite into corporate margins and the Federal Reserve Bank became more hawkish. Morgan warning that this isn't just a stock market correction but a full-bodied bear market. The sector’s popular benchmark, the Russell 2000 Index, has tanked 9.7% in the year-to-date compared with a milder 3.8% decline by the S&P 500 with a cross-section of analysts such as J.P.
After a stellar run during the so-called reopening trade from late 2020, the small-cap sector has turned into a major laggard in 2022.
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