Northern Oil and Gas grew with the North Dakota oil boom, buying interests in oil-producing properties and contracting with other companies to operate them.

Now, as North Dakota's output has slowed, the Minnetonka-based company over the past five years has successfully diversified its holdings by making 14 deals worth $5.3 billion from Texas and New Mexico to Ohio and Utah.

As a result, Northern Oil and Gas (NOG) is now the largest publicly traded nonoperating oil and gas company in the continental U.S. It's also a unicorn — an oil and gas company amid corporate neighbors that are industry giants in health care, retail, financial services and manufacturing.

"Right now, I'm super happy, because financially, the company is now at the point where we can pay for all of our growth with internally generated cash flow," said Bahram Akradi, NOG's board chair since 2018.

Akradi deserves some credit for NOG's growth, but he's also quick to credit the management team led since 2020 by Chief Executive Nick O'Grady.

Under O'Grady, a New Jersey native and former energy industry analyst, Northern Oil has outperformed the S&P Oil and Gas Exploration and Production ETF fund. The total return during that time was 78%, compared with the fund's 59%.

That wasn't always the case.

The current history of NOG started in March 2007, when the company starting taking advantage of previously inaccessible oil and gas reserves in Montana and the Dakotas. The company concentrated in buying properties — or interests in properties — in the Bakken and Three Forks portions of the Williston Basin.

From 2009 to 2012, it was a high-flying stock as production in the region boomed. The stock peaked at over $300 a share, but by late 2017 it was under $10 a share and the finances were a mess. Bondholders were ready to take over the company.

The company was also enmeshed with a securities fraud scandal, involving its then-CEO and president, that was largely centered around a different public company, Dakota Plains.

It was clear the company needed a new plan.

Akradi, who also is the CEO and founder of Lifetime Group Holdings, was an investor in NOG at the time and eventually became one of its largest shareholders.

By January 2018, Akradi basically forced his way onto the board. Akradi then used his connections and relationships to assure bondholders, raise additional capital and straighten out the finances.

"It was pretty much dead," Akradi said. "There really was nothing left of it."

NOG is a nonoperating oil and gas company, meaning its workers don't do the actual drilling. Instead, it buys fractional interests in various oil- and gas-producing properties and helps provide financing for the exploration and drilling done by the more than 100 operators they partner with.

It is because of the nonoperational model that NOG had the second highest median employee compensation among Minnesota public companies, at $239,308. NOG has 47 employees from data scientists, geologists and real estate professionals to petroleum engineers.

All of them rely on the company's secret sauce, a proprietary database named Drakkar after Viking long ships, that has information on over 10,000 wells.

That rich database helps to fuel the acquisition strategy for deals that involve complex ownership structures. The company's financial and investment experts also mine the database to create hedging strategies the NOG has used when the price for a barrel of oil has dropped.

"The best thing we have got, the best thing we always had going for us, even at our darkest days, was that we had the data," said O'Grady.

O'Grady and his team have used a portfolio approach to building NOG's interests. But instead of acquiring shares of various companies like a mutual fund manager might do, NOG partners with the best operators in a variety of oil and gas regions.

Size is important to a nonoperator. With scale and geographic diversity comes the ability to control how capital is deployed among its operating partners.

With production in the Bakken region at its peak, in order to grow it became essential that Northern Oil and Gas expand into other areas.

"When you are a small company in the Bakken that is a nonoperator, having no scale — no diversity becomes a challenging business model," said Scott Hanold, an energy analyst with RBC Capital Markets who has been covering the industry for 25 years.

Since 2020, NOG has used its data to execute the 14 acquisitions, with each deal is seemingly bigger than the last. The largest, which was a $2.55 billion deal announced in June, expanded NOG into energy-producing regions in Utah. That deal is expected to close by the end of the year.

Other recent deals have added more geographic diversity including a major push into the Permian Basin. The company now has ownership interests in all the major oil and gas production regions of the contiguous U.S.

As of March 31, 41% of NOG's oil production came from the Williston Basin and 45% came from the Permian Basin in Texas and New Mexico. Another 14% of their production came from the Appalachia region in Ohio and Pennsylvania.

The acquisition and diversification strategy has worked. Analysts covering NOG expect it to report annual revenue for 2024 of $2.2 billion and adjusted net income of $594 million. Since 2018 that's a compound annual growth of 22% and 27% respectively. With the growth NOG now produces enough free cash flows to reward shareholders with one of the higher dividend rates in the sector. They recently raised their quarterly dividend to 42 cents a share, up 11% from a year ago.

Another good thing about the nonoperator model is it could conceivably work with other energy markets. The greening of the U.S. energy system is still a long ways a way and natural gas may prove to be a bridge of sorts, but new markets are also developing.

"We really are getting to this point in U.S. energy, which is that inventory is becoming a problem. So the Permian Basin is 60 to 70 percent drilled at this point," O'Grady said.

O'Grady says that operators are doing amazing things in the Williston to keep production going, "but it is in the eighth inning of its life."

O'Grady says a lot of those emerging technologies from an investment perspective are still in the early stages and NOG has been more of a late-stage entrant. Still, it is studying those markets.

"We've looked at almost everything under the sun," O'Grady said. "We could own a nonoperated interest in everything. ... I would say this, that as a company, you know, over time, I think we'll invest in whatever the future is."