Okay, we're going to get started with our next presenting company. We've got Northern Oil and Gas, largest non-op company in the country, been one of our favorite small caps for a while. Presenting on behalf of Northern Oil and Gas is the CEO, Nick O'Grady. Nick?
Thanks, John. Good morning, everyone. As you mentioned, I'm Nick O'Grady. It's a pleasure to be with everyone. So I'm going to skip over a bunch of these slides and just focus on what's important. So bear with me, I'm firing through two computers here. So I just want to go through the five key points here. I know it's been quite a challenging volatile period in the capital markets of late, but ultimately, I think it'll prove to be a great opportunity for our business over the next couple of years. But let's go through these five points really quickly. One, we are the largest of our kind, as John mentioned, a non-operator. Truly, no one comes close. We might not be the biggest public company, but we are a giant of our niche, and it proves to be a huge competitive advantage for what we do.
Number two, our business generates copious amounts of cash flow, which has, for number three, allowed us to generate a lot of cash and return it to shareholders over the last couple of years, even as we've grown tremendously over the past several years. Four, we borrowed some money recently to acquire some assets, but as we've done before, we'll head right back down to our target leverage in the near to medium term, and on number five, I'll get into this further as we go along, but we have invested and we continue to invest millions in technology to press our advantage to grow our company. Okay, so this is a quick synopsis of who we are. We're about 300,000 acres covering 11,000 gross wells in six regions. I wouldn't define us truly as an E&P company. We are an energy company. We're very diversified by region.
We're in about six plays across four regions. And our return on capital, because we're not a true E&P, is among the highest in energy. We have about almost 100 operators. And remember, as I mentioned, we're a non-operator. We don't drill any wells. We own the real property under the ground, just like an operator. We do all the same technical evaluation. We have the same engineers, but ultimately, our operators do all the heavy lifting on our behalf. That means we're very people-light, which allows us to keep our capital returns a bit higher. So skipping forward a bit here. So I'll review our business really quickly. As I mentioned, we purchase leasehold like an E&P, but we don't drill the wells. We acquire the minority interests on purpose. And when we acquire these drilling units, the majority of owners, the operators, develop them.
We do have special rights as owners. This is very distinct. Some people will hear about royalties. When you own a royalty in something, ultimately, it's great because you can earn a revenue interest from it, but you don't have any rights. Because we are a capital provider, we have a right. That means we can consent or non-consent to that capital call. Our technical team, which makes up the bulk of our company, is focused on both where to acquire the lands and evaluating all the proposals that ultimately happen on the lands that we already own. I'm going to skip ahead here. If you look at the four major regions where we now own assets, one of the hallmarks of this strategy is we don't require contiguous acres. This is really important.
For those of you who have followed the energy space in the last couple of years, drilling locations' inventory is becoming ever more precious. It hasn't manifested itself in the sense that U.S. oil production is at pretty much all-time highs, but you've seen a lot of consolidation, and that consolidation has been happening because overall, shale is maturing and drilling locations are becoming harder to find, and most of the land has already been leased, and so for an operator to find a two-mile by two-mile section, which is what they need to drill lands, it's hard when everybody already owns it. It's already been leased, but we don't require contiguous lands, which means small pieces of all of those units are up for sale every day.
And so our ability to replace our inventory and to find new inventory within the cores of the play is significantly easier than it is for an operator. And that's one of the reasons, and it is much more fragmented, which is why we have been able to grow as fast as we have and why we continue to be able to be. But more importantly, when you own the amount of data we have, it gives us a huge advantage in terms of finding and seeking and as well as evaluating those properties. And so that's one of the reasons that we've continued to grow and why I think we continue to have a path that is superior to most of the people in our space. So I'm going to skip forward a little bit, and this is a little bit of a, I mentioned growth.
We've been growing at pretty much a geometric pace over the last seven years. And as we've been doing this, our cost structure, our G&A has been grinding lower along the way. And this is despite the fact that we've been, you've had an inflationary environment. The cost of being public has been growing. I could tell you our insurance rates alone are astronomical. But the reality is that we think we can do this even further. And we've been making significant investments, internal investments, to improve our technology platform as we look towards the future. But ultimately, we think we can probably have this over the next decade, even as we continue to grow. So when I started in the business, we were about 25 employees, and we were producing, call it 15,000 to 17,000 barrels a day. Today, we're about 50, and we're producing closer to 130.
That scalability, and it will continue. I think even as we reach terminal velocity in terms of the number of employees, technology is really taking the place of that as we continue. I'll get to that in a little bit further. Let me just skip ahead here. This, I mentioned growth. We have mostly grown through acquisition. We've certainly grown organically, very modestly over the last several years. But we've done about $5 billion worth of acquisitions as we've become the largest of our kind. Over the last several years, it's been almost $1 billion in deals per annum. When I started at the company, NOG was known as a Bakken-only player. The Bakken was one of the early shale play booms. Ultimately, we were good at one thing.
After acquiring the best and remaining non-operated assets within the Williston, we expanded outward, both in the Marcellus and the Permian. We now own in the Uinta and in the Utica as well, and within the Permian, both the Delaware and the Midland, which truly are distinct basins, but that diversity really is key. Unlike with an operator where it is very challenging to operate in multiple places, that means you need multiple teams, and allocating capital can be very challenging when those teams are competing for capital. Ultimately, for us, it really is one funnel of capital allocation. It's just dollars, and so you have the engineers doing all those same evaluations, and you don't really have the same amount of infrastructure that has to be those synergies that you have from those operations.
And instead, that diversity becomes your friend, both from a fuel mix and from a regional mix, so that when you have problems that you inevitably have in these fields, it becomes a much more balanced portfolio. You add in the fact that our average working interest, meaning our average ownership interest is, call it 10%-15% on average. It means that no single development ever is going to be that concentrated to create a huge problem, which means if you think about it, it would be the difference between we are a portfolio management company to some degree, and many of you in the room can probably relate to that. It's the difference between a five-stock portfolio and a 500-stock portfolio. It means when one goes down, ultimately, it doesn't have the same impact when you have a 500-stock portfolio. So I mentioned returns.
The proof is in the pudding. This is last year's. We'll update this as the 10-Ks come in. Not all of our peers have reported, but when I started the company, the company, and I don't need to get into it, but the historic company had had some issues. A new management team came in at the time, and we reformulated the business, but it didn't take us long as we really built an engineering-focused and financial business, and it was a pretty simple mantra: make money, right? This business is an extractive business. It's not that complicated. We invest based on the engineering, and we hedge our returns where we can, and the results manifested themselves very quickly, and as a result, today, we enjoy one of the highest returns in the space, and I think that when we update these results, it'll be very consistent.
Returns will be down overall for the space as commodity prices have come down. But our relative spread to the space will stay consistent, which is that we have focused on making money. So even as we've acquired, and that's hard because when you acquire, you have to capitalize upfront the cost of those acquisitions, which tends to dilute your returns upfront. But even as we've done that, we've enjoyed one of the highest returns on capital employed in the space. And this is partly how I'm personally paid. So our board measures this every single year as a benchmark, and that is one of the standards that we're held to beyond overall equity performance over time. Okay. Sorry, I'm skipping ahead here. Dividends. Dividends are important. For anyone who's a true corporate finance junkie, I'm a former buy-sider, so I am.
You'd actually say from a capital efficiency perspective, dividends aren't the best form of return. But there's another factor that goes into that, which is that in the real world, they're a testament to discipline. They're a commitment from a company to deliver. And if you look at the history of the oil and gas space, which has been very volatile, you've seen a shift over the last five or six years, which is that ultimately, as we grow, investors want a measured return, and they want cash in their hands as proof in the pudding. We can buy back all the stock we want, but ultimately, a stock buyback can be turned on and off, and companies have a history of buying back stock at the wrong times. It doesn't mean we won't ever buy back stock. That's far from the truth.
It just means that a dividend is a commitment and a form of consistency. And we have had a consistent track record of growing that dividend over time, and we're committed to doing so as we grow our business over time. And I think the track record speaks for itself. So I'm going to conclude with one of my favorite slides. This picture was created by AI, which I love. But AI is obviously the big buzzword. But as I mentioned before, we're in 11,000 wells. That's probably double or triple or quadruple for an operated company of our size. To give you a frame of reference, we're in half of every well ever drilled in the Bakken. So the amount of data we have is just massive. I think we're approaching something like 20% within the Delaware Basin today.
What that means is that you have a lot of proprietary information. A lot of people can pull up drilling info and get the overall raw data from a well performance, but it doesn't give you the operating costs. It doesn't give you the well costs. It doesn't give you the midstream costs. It doesn't give you all of that data. Basically, think of it like the income statement and the cash flow statement of those wells to really understand the true economics. That is proprietary. Ultimately, the engineers and the long-term performance of those wells are only as good as that state data is, which is often quite poor. We built a system a few years ago called Drakkar. It's not named after the cologne. It was a popularity contest internally that I lost, sorry.
But with the help of Palantir Foundry and millions and millions of dollars, and we continue to spend heavily on these internal systems, we built a giant data lake, which basically combined every internal system: our land, our engineering, and our finance systems all into one source of truth. And this trove of data basically allowed us to access everything from every evaluation we've ever done to every well we've ever owned so that as we look to acquire, as we look to evaluate anything, we can instantaneously access all of that information and use it as a tool. Oftentimes, it helps us lose because you know too much, but that prevents you from making mistakes. And again, this gives you a mosaic of operators, which operators have a propensity to overspend. For example, you receive an AFE, which is an allowance for expenditure, when an operator proposes a well.
Well, you might get 10 that say the well is going to be $10 million. But when you have the data that can show you that the last 50 wells from that operator have come in 30% over or under budget, you can use that data to your advantage when you're evaluating a new property. But again, we try to use this to our advantage every day, and it has been a huge tool to our future, and I think it will continue to do so. But again, that concludes my prepared remarks. Thanks for your time, and take any questions now.
Any questions? I can start. So the last several sizable transactions that you all have done in the past couple of years have been structured where you're kind of getting a seat at the table.
You're able to dictate some of the development terms, which has always been the one knock on non-operators. You don't necessarily have control. It just seems like you all have been leaning towards these bigger deals with more say over when wells get drilled, so maybe just speak to that.
Yeah, so as we become larger, think of it like the. I like analogy. So if you're a local thrift bank, you might do a couple of personal loans and maybe a mortgage or two. But when you're Bank of America, you might be doing credit default swaps and all kinds of exotic loans, so as we become larger, our capabilities have become more complex.
A few years ago, as we had scaled the business, we found that our operating partners had been reaching out directly to us, asking for us to heads-up partner with them as they were acquiring to help them supersize their transactions. So for us, we said, "That's fine. But if we're going to do that, if we're going to buy 20% or 30% of an asset alongside you, we would like some enhanced benefits." Those enhanced benefits were both informational, but also if we're going to underwrite, if the operator lays out a five- to ten-year development plan and they're underwriting that in the acquisition of that asset, well, we're paying for that, and then we want some guarantees, and that's actually going to transpire.
And what's important too is if you put yourself in our shoes, we are the non-operator, and we have a real-time example of this. If that operator buys that asset and then they are sold a year later, what happens if the new owner doesn't like that asset as much? And they just say, "Yeah, that's great, but new shiny thing, and it's not that important to us," and they lay down those rigs, suddenly all that value we paid for is down the tubes. So we've really designed structures with a lot of governance where it's written within our joint operating agreement, which means it runs with the land, so it survives any future operator. And we've really laid out those commitments on paper with those operators, and it doesn't really cause them any consternation because they're dedicated to those assets.
But it also means that in the case of we bought an asset with a company called Earthstone, which was subsequently purchased within about a month of us closing the transaction. And so it means the successor, Permian Resources, also will continue on with the same program that we had underwritten to begin with.
Great. Yeah, go ahead. Do you ever use we talked a little bit about your rights in the joint operating agreement, but to participate in certain types of structures? In other words, you get a guaranteed rate of return. You still get the underlying asset, but you're protected. Your for example, a guy wants to underwrite such and such. You say, "Give me enough structure. I can underwrite it that value or other."
Yeah. So we look at securitizing your return. There certainly are in our drilling partnerships, we have done pretty much every structure under the sun.
What I would tell you is generally, it's like anything else. It's like a mortgage. You trade rate for risk, right? So you can take a preferred return or with a reversionary return, and you're going to get a lower return. And I think it just depends on the project specifically. So there are some in which we have done MOIC-style transactions, which is meaning that we get our return first, and then on the back end, the operator may then basically be able to back into it. We've done that where there's been risk in our view. And there are other ones where it's truly just heads-up along the way. There are sometimes where it's the other way where we pay for the asset through the drill bit over time, right? And that way, we don't take that risk until it's actually developed.
You made a comment earlier about getting a capital call. Even though you're a minority player, it's safe to consent to the capital call. Correct. How does that apply? How does that get resolved?
It's very simple. So the way a typical consent right works, so if you own acreage in any given unit and let's just say you own 20% in a given unit and the operator proposes a well, you have a right to elect, and there's a typical statutory period by state. So it varies. It could be 30 days, 60 days, and you literally elect yes or no. If you elect no, what tends to happen is you have a back end.
So what it means is that even if you say no, if the well was a barn burner and did really well, you would get an after-payout back end, meaning if the well did really well, and that's designed to protect the farmer that may not be able to afford the capital call, right? So if the well pays out after a certain period of time, usually 200%, then you would get your interest back. But the reality is that, and people ask us our consent rate all the time, it should be very high, and because the idea is acreage sells for tens of thousands of dollars per acre in most cases. If you're buying hundreds of thousands of acres and you're paying tens of thousands of dollars per acre and then you're non-consenting all the time, you did a really bad job of acquiring it to begin with.
And so you should be aligned with your operators in acquiring to begin with. Most of our non-consent today on a net basis is generally pretty small, and it's on legacy acreage that was purchased 15 years ago at the beginnings of the Bakken Shale boom that we still own, and it's held by production, but it was in the early days. But it does happen. Where our non-consent rate tends to go up is during periods of volatility in the commodity. So if oil prices were to drop to 50 tomorrow, you'd probably see our non-consent rate spike. We saw that in 2020. I think our non-consent rate went above 40%. The interesting factor there was that most of those wells were actually those AFEs were. We were just faster than the operators. Those AFEs were withdrawn. So they were never drilled. They were reproposed later on.
The operators simply sent the proposals. We said no, and then the wells were actually, after the AFE goes stale after six months, the wells were never drilled .
Please join me in thanking Nick. He'll be available in the breakout room for any other questions.