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Northern Oil and Gas, Inc. provides fourth quarter 2012 production and operations update

Tuesday, Feb 12, 2013

WAYZATA, Minn., Feb. 11, 2013 /PRNewswire/ -- Northern Oil and Gas, Inc. ("Northern") (NYSE MKT: NOG) is providing a production and operations update for the quarter ended December 31, 2012.

PRODUCTION AND OPERATIONS UPDATE

Northern expects fourth quarter 2012 production to average approximately 10,800 barrels of oil equivalent per day, an increase of 55% over the fourth quarter of 2011 and a decline of approximately 4% compared to the third quarter of 2012.

Fourth quarter production was impacted by fewer net well additions in the month of November, primarily due to weather, and a lower average working interest in wells completed during the quarter. During the fourth quarter of 2012, Northern completed and placed into production approximately 123 gross (7.7 net) wells with an average 6% working interest.

Activity subsequently accelerated in December and as of December 31, 2012, Northern was participating in 157 gross (12.4 net) wells that were drilling, completing or awaiting completion, resulting in an average working interest of approximately 8%, which is more consistent with Northern's historical average working interest.  As of December 31, 2012, Northern was producing from a total of 1,227 gross (106.2 net) wells.

Production was also affected in the fourth quarter as Northern elected to high grade capital expenditures through the non-consent process.  During the second half of 2012, Northern elected to non-consent 29 gross (1.86 net) wells as part of this strategic capital efficiency effort. Based on internal analysis, these wells were likely to produce an internal rate of return below acceptable thresholds, due primarily to high estimated drilling and completion costs.  As drilling and completion costs decline, Northern expects to non-consent fewer wells.

LIQUIDITY UPDATE

An enhanced liquidity position is the result of Northern's strategic capital efficiency effort in the second half of 2012. Northern ended the year with $124 million drawn on its revolving credit facility which has a total borrowing capacity of $350 million.  Northern also ended the quarter with $13 million in cash, resulting in liquidity of approximately $240 million.

ABOUT NORTHERN OIL AND GAS

Northern Oil and Gas, Inc. is an exploration and production company with a core area of focus in the Williston Basin Bakken and Three Forks play in North Dakota and Montana.

SOURCE Northern Oil and Gas, Inc.

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