Northern Oil and Gas (NOG) has agreed to acquire a 25% undivided stake in light oil properties in the Duvernay East Shale Basin, Alberta, Canada.
The transaction, currently valued at C$350m ($253.4m) before customary closing adjustments, marks the company’s entry into the Canadian market.
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The assets are currently operated by Parallax Energy Operating, a portfolio company of investment funds overseen by Carnelian Energy Capital Management.
Under the agreement, NOG will purchase its interest through a combination of cash and stock.
Parallax will receive approximately C$113m in NOG common stock at closing. The remainder of the payment will be funded through cash on hand, operating free cash flow, and borrowings from NOG’s revolving credit facility.
The effective date for the transaction is set for 1 April 2026, with closing anticipated late in the second quarter of 2026.
In connection with this acquisition, NOG is forming a new Canadian subsidiary, NOG Energy Canada.
The portfolio to be acquired comprises approximately 75,000 net acres and around 500 gross drilling locations.
NOG estimates the assets hold roughly 20 years of inventory, with average breakeven costs below $50 WTI and a projected capital cost of about $0.6m per net location.
Production from the acquired stake is expected to reach around 4,000 barrels of oil equivalent per day (boepd) by 2027, with roughly 80% categorised as light oil.
NOG has also entered into a long-term Joint Development Agreement (JDA) with Parallax, covering an area of mutual interest and including multi-year drilling commitments.
As a non-operating partner, NOG will participate in the ongoing development of the assets led by Parallax.
Additional contingent consideration of C$25m may be paid in cash or equity in early 2028 if certain average oil price conditions are met.
NOG expects operating costs on the assets to be less than $7.50 per boepd and anticipates capital expenditures of $40m to $45m in 2026, and $45m to $50m in 2027.
According to company, the deal is projected to be leverage-neutral initially and leverage-accretive in the long term.
Citigroup Global Markets served as exclusive adviser to NOG, with Kirkland & Ellis and Blakes, Cassels & Graydon engaged as legal counsel.
Parallax was advised by National Bank Capital Markets and RBC Capital Markets, with Stikeman Elliot as legal adviser.
In connection with the acquisition, NOG has released updated guidance for its 2026 fiscal year.
The company now expects annual production to range between 143,000 and 148,000boepd, and oil production between 71,500 and 73,500 barrels per day.
The number of net wells brought online (TILs) is projected to increase from the previous 68.0–72.0 range to 74.0–76.0.
Total capital expenditures are forecast to remain between $850m and $900m.
In February this year, NOG closed its acquisition of non-operated Utica Shale interests in Ohio from Antero Resources and Antero Midstream. The deal was completed for $464.5m, including a $58.8m deposit paid at signing.
