Northern Oil and Gas enters Canada with CA$350 million Duvernay deal
Northern Oil and Gas (NYSE:NOG) agreed to acquire an undivided 25% non-operated interest in light oil assets within Alberta’s Duvernay Shale for an initial unadjusted purchase price of CA$350 million (approximately US$259 million), marking the company’s first expansion outside of the United States.
The Minneapolis-based shale producer announced Tuesday that it has partnered with operator Parallax Energy Operating, a portfolio company of investment funds managed by Carnelian Energy Capital Management.
The transaction includes an effective date of April 1, 2026, with closing anticipated in the late second quarter of 2026.
The transaction utilizes a structured financial framework.
NOG will issue approximately CA$113 million (US$83.5 million) of its common stock directly to the sellers at closing.
The remaining balance will be funded through cash on hand, operating free cash flow, and borrowings under the company's revolving credit facility.
An additional contingent payment of up to CA$25 million may be triggered in early 2028 if certain West Texas Intermediate (WTI) pricing thresholds are met through 2027.
The transaction targets an asset footprint across the Duvernay East Shale Basin encompassing roughly 75,000 net acres.
The position holds an estimated 500 gross drilling locations with average breakeven metrics calculated below $50 per barrel WTI.
NOG expects its share of production from the acreage to reach approximately 4,000 barrels of oil equivalent per day by full-year 2027, with light oil making up roughly 80% of the product stream.
The agreement establishes a long-term Joint Development Agreement between NOG and Parallax, incorporating multi-year drilling commitments and a defined Area-of-Mutual-Interest framework to guide future expansion.
NOG plans to allocate between US$40 million and US$45 million in organic capital expenditures to the properties during the remainder of 2026, followed by a US$45 million to US$50 million capital budget in 2027.