Northern Oil and Gas plans a reverse stock split, essentially turning six to 10 shares held by its investors into one.
The Minnetonka company announced the proposed stock split earlier this week and plans to conduct a special shareholders meeting in the third quarter to approve the move.
Northern Oil's board of directors will determine a share split between six shares to one, to 10 shares to one. Reverse splits decrease the number of outstanding shares and are usually undertaken to increase share price.
Northern Oil said in a news release that an increase in its per-share price through a reverse split "may improve marketability and facilitate its trading."
Northern Oil invests in leases and drilling projects in North Dakota.
Like many oil and gas stocks, Northern shares have been hammered in recent months by the drop in petroleum demand during COVID-19 stay-at-home orders.
The stock was near a one-year high of $2.35 in late December, before drifting down with other energy stocks to about $1.35 in early March when the COVID crisis started.
Since then, it has traded below $1 except for a couple of spikes above that threshold earlier this month. Northern's stock closed at 85 cents on Friday.
Northern said that the reverse stock split and share reduction will not change the proportionate equity interests or voting rights of common stock holders, subject to the treatment of fractional shares.