Northern Oil & Gas Inc (NOG)

Interest coverage

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	1,136,410	856,669	65,614	-847,704	2,911
Interest expense	US$ in thousands	135,664	80,331	59,020	58,503	79,229
Interest coverage		8.38	10.66	1.11	-14.49	0.04

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,136,410K ÷ $135,664K
= 8.38

Northern Oil and Gas Inc.'s interest coverage has fluctuated over the past five years. The interest coverage ratio measures the company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates that the company is more easily able to cover its interest expenses.

In 2023, the interest coverage ratio stands at 8.27, reflecting a decline from the previous year's ratio of 10.62. This may indicate a decrease in the company's ability to cover its interest expenses using its operating income.

The significant improvement in 2022, with an interest coverage ratio of 10.62, suggests that Northern Oil and Gas Inc. had a strong ability to meet its interest obligations that year.

In 2021 and 2020, the interest coverage ratios were 1.32 and 3.85, respectively. These ratios indicate that the company's ability to cover interest expenses was relatively weak in those years.

The lowest interest coverage ratio was observed in 2019 at 0.78, highlighting a period of financial strain where the company had limited capacity to cover its interest costs.

Overall, while Northern Oil and Gas Inc. has shown varying levels of interest coverage over the past five years, the company should aim to maintain a higher interest coverage ratio to ensure it can comfortably meet its interest obligations and remain financially stable.