DJ Northern Oil & Gas Shares Up After Stock Offering Prices
Northern Oil & Gas Inc. shares advanced Friday after the company priced an equity raising to help fund its pending acquisition of natural-gas assets in the Appalachian Basin.
In afternoon trading, the stock was 12% higher at $11.70. It has risen 34% in the new year, though is down 32% over the last 12 months.
A public offering of 12.5 million shares was priced at $9.75 each, Northern said late Thursday. Underwriters have a 30-day option to buy up to almost 1.9 million additional shares.
In the wake of the pricing and Northern's plans to refinance debt, S&P Global Ratings lifted its credit rating on the company to B- from CCC+, with a stable outlook. On Wednesday, Fitch Ratings assigned a first-time long-term issuer default rating of B on Northern, with a stable outlook.
Alongside the sale of shares, Northern earlier this week said it also would sell $500 million in new senior notes due 2028 in a price placement to raise funds to for its planned purchase of certain non-operated gas assets from Reliance Marcellus LLC, repay some outstanding borrowings on a revolving credit facility and repurchase or redeem notes due 2022 and 2023.
The assets in the Appalachian Basin, which Northern said it was buying for $175 million in cash and about 3.25 million warrants to buy shares at a $14 exercise price, cover about 64,000 net acre, with more than 100 producing wells. Northern's strategy is to invest in oil and gas properties in basins in the U.S.
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(END) Dow Jones Newswires
February 05, 2021 12:39 ET (17:39 GMT)
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