The top executives of a Wayzata-based oil-and-gas company will take their 2009-2010 salaries in company stock in a vote of confidence in their company's drilling prospects in the resurgent fields of western North Dakota and Montana.

"We're bullish on the future of the company," Northern Oil and Gas Inc. Chief Financial Officer Ryan Gilbertson said Friday afternoon.

Gilbertson and Chief Executive Michael Reger will take their $185,000 salaries in company stock under an executive compensation plan approved this week by the company's board.

Two other executives also will take stock in lieu of cash.

The executives were inspired by Bahram Akradi, the CEO of Life Time Fitness Inc., who is taking his 2008 cash compensation in restricted stock to show his confidence in the value of the company.

The move also is intended to send a signal to short-sellers, detractors who profit when a stock drops in price. They moved in after Reger and other big shareholders sold hundreds of thousands of shares last spring and summer. The stock had dropped to $4.40 per share earlier this month before climbing back to an $8.50 close Friday.

During the past six months, insiders and major shareholders sold 2.1 million shares of Northern (ticker: NOG), and purchased less than 100,000, according to Thomson Financial.

Gilbertson said executives have been "net buyers" of the company since it went public, selling only about enough shares to pay the option prices and taxes owed on their stock-option purchases.

"We've sold a very small amount of what we own," Gilbertson said.

Reger said the current stock price "does not properly reflect the value of our developing leasehold position."

Last month, the company, which started in 2006, announced an initial quarterly profit of $283,465, or 1 cent per share, on revenue of $764,528.

Northern Oil went public last year through a reverse merger with a dormant Nevada company.

It had more than $12 million in cash on hand June 30, most of which will be invested in leasing and drilling partnerships in North Dakota's Williston Basin.

The stakes are lucrative.

Market value of $275 million

Northern Oil's stock price soared from $5 per share a year ago to $16.40 in July, as spot oil prices peaked. Friday's closing price represents a market value of more than $275 million.

Reger, 32, who owns 15 percent of Northern, is a University of St. Thomas graduate who hails from a Great Plains family that has been involved in leasing and exploration of the Williston Basin for more than half a century.

Gilbertson, 32, a Gustavus Adolphus graduate, worked for Piper Jaffray and Telluride Asset Management. He owns nearly 8 percent of the stock.

The board of directors, in addition to Gilbertson and Reger, is well represented by oil-drilling veterans from the Williston Basin area and a Texas energy company executive.

Directors and officers own 25 percent of the stock.

Area businessmen Joseph Geraci II and Douglas Polinski and affiliated investors own about 20 percent of the company, according to information filed with the Securities and Exchange Commission.

In August, Northern Oil said it had an interest in 26 wells and that it had achieved a 100 percent success rate in wells drilled during 2008.

Northern Oil expects to develop its full 60,000-net-acre North Dakota position through 2011, consisting of about 90 wells, with access to potential reserves of 45 million-plus barrels of oil.

Neal St. Anthony • 612-673-7144 • nstanthony@startribune.com