By Robb M. Stewart

Northern Oil & Gas is pushing into Canada for the first time with the roughly $259 million acquisition of a stake in producing light-oil assets in central Alberta.

The deal will see Northern Oil & Gas pick up a 25% interest in assets in the Duvernay Shale Basin owned and operated by closely held Parallax Energy Operating.

NOG said it will fund the purchase through about $83.5 million worth of its shares plus cash, which will be sourced from cash on hand, operating free cash flow and borrowings. It also has agreed to pay the equivalent of $18.5 million in cash or shares in the first quarter of 2028 if certain average oil prices are hit through the end of 2027.

The assets are made up of an undivided non-operated interest that will net NOG 4,000 barrels of oil equivalent a day of production and 75,000 acres with 20 years of inventory in the Duvernay. Northern said it expects operating costs to be less than $7.50 a barrel a day, which is below its corporate average.

With the proposed purchase, NOG revised its annual guidance to now anticipate annual production of between 143,000 and 148,000 oil-equivalent barrels a day, from a prior target of 139,000 to 143,000.

NOG is the largest publicly traded non-operator of oil and gas assets in the U.S., having built up a portfolio of minority working interests and mineral rights in basins in North America. The company said quality oil inventory is becoming increasingly scarce, but its non-operated model positions it to access opportunities that most companies in the industry can't. It said it has now formed a wholly owned Canadian subsidiary, NOG Energy Canada.

With the deal, NOG said it plans intends to enter into derivatives transactions to hedge currency fluctuations related to operating costs on a multi-year basis. Depending on market conditions, NOG said it also may repurchase a portion of the stock consideration in the open market.

The transaction is expected to close in the second quarter.

NOG's shares were down 1.6% in premarket trading at $23.37.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 26, 2026 07:24 ET (11:24 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.