Financial Performance - For the three months ended September 30, 2025, Magnolia reported net income of $75.5 million, or $0.40 per diluted common share, compared to $256.5 million, or $1.36 per diluted common share for the same period in 2024[115]. - Magnolia's total revenues for the three months ended September 30, 2025, were $324.9 million, compared to $333.1 million for the same period in 2024[123]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $670.2 million, a decrease from $698.2 million for the same period in 2024[143]. - Total capital expenditures for the nine months ended September 30, 2025, were $350.5 million, slightly lower than $351.9 million for the same period in 2024[145]. Revenue Breakdown - Oil revenues for the three months ended September 30, 2025, were $230.5 million, a decrease of $35.2 million from $265.7 million in the same period of 2024, primarily due to a 14% decrease in average prices[123]. - Natural gas revenues increased by $21.0 million to $43.2 million for the three months ended September 30, 2025, driven by a 63% increase in average prices and a 20% increase in production[124]. - NGL revenues for the three months ended September 30, 2025, were $51.2 million, up $6.0 million from the previous year, supported by a 16% increase in production[125]. Production and Operations - Total production for the three months ended September 30, 2025, was 100.5 thousand barrels of oil equivalent per day, an increase from 90.7 thousand boe/d in the same period of 2024[114]. - The company aims for steady organic production growth and significant free cash flow after capital expenditures, prioritizing reinvestment in its business and returning capital to shareholders[111]. Expenses - Total operating expenses for the three months ended September 30, 2025, were $223.5 million, an increase of 9.3% compared to $204.1 million for the same period in 2024[127]. - Gathering, transportation, and processing (GTP) costs for the three months ended September 30, 2025, were $17.7 million, or $0.64 per boe, higher than the same period in 2024[129]. - Taxes other than income for the three months ended September 30, 2025, increased by $2.1 million to $20.4 million compared to the same period in 2024[130]. - Depreciation, depletion, and amortization (DD&A) for the three months ended September 30, 2025, was $110.6 million, an increase of $3.3 million compared to the same period in 2024[131]. - General and administrative expenses for the three months ended September 30, 2025, were $24.2 million, an increase of $3.0 million compared to the same period in 2024[132]. - Interest expense, net, for the three months ended September 30, 2025, was $5.4 million, an increase of $1.5 million compared to the same period in 2024[133]. Shareholder Returns - The company declared cash dividends totaling $85.3 million to holders of its Class A Common Stock during the nine months ended September 30, 2025[117]. - The Company declared and paid cash dividends totaling $85.3 million to holders of its Class A Common Stock during the nine months ended September 30, 2025, an increase from $72.5 million in 2024[148]. - As of September 30, 2025, Magnolia had repurchased 44.8 million shares of Class A Common Stock at a cost of $859.9 million, with 5.2 million shares remaining under its repurchase authorization[118]. - During the nine months ended September 30, 2025, the Company repurchased 6.5 million shares for a total cost of approximately $152.1 million, compared to 5.3 million shares for $127.0 million in the same period of 2024[146]. Liquidity and Financial Position - As of September 30, 2025, the company had $730.5 million of liquidity, comprised of $450.0 million of borrowing capacity under the RBL Facility and $280.5 million of cash and cash equivalents[139]. - The Company had no borrowings outstanding under the RBL Facility as of September 30, 2025[149]. Market Risks - The Company is subject to market risk exposure related to changes in interest rates and commodity prices, which are expected to remain volatile[150]. - A $1.00 per barrel increase in the weighted average oil price would increase the Company's revenues by approximately $14.4 million on an annualized basis[150]. - A $0.10 per Mcf increase in the weighted average natural gas price would increase the Company's revenues by approximately $6.8 million on an annualized basis[150]. Taxation - Current income tax expense for the three months ended September 30, 2025, was $(32.3) million, a decrease of $31.8 million compared to the same period in 2024[136].

Core Insights - Magnolia Oil & Gas Corporation reported third-quarter 2025 net earnings of $0.41 per share, matching analyst estimates but down from $0.52 last year due to higher operating expenses offsetting gains from increased output [1] - Total revenue reached $324.9 million, slightly above expectations, supported by stronger natural gas and NGL sales, although overall revenue declined 2.5% year over year due to weaker oil prices [1] Revenue Breakdown - Oil revenue decreased by 13% to $230.5 million, while natural gas revenue nearly doubled to $43.2 million, and NGL revenue rose to $51.2 million [2] - Production averaged 100,507 barrels of oil equivalent per day (boe/d), up 10.8% from the prior year, exceeding consensus forecasts [2] Pricing and Sales - The average oil price realized was $63.55 per barrel, down 14% year over year but ahead of forecasts [3] - Gas prices averaged $2.46 per Mcf, while NGLs fetched $18.98 per barrel, with average sales prices across all products at $35.14 per boe, slightly below last year's level [3] Cash Flow and Shareholder Returns - Magnolia generated $247 million in operating cash flow and $134 million in free cash flow, returning $80.3 million—or 60% of free cash flow—to shareholders via dividends and share repurchases [4] - The company bought back 2.15 million shares for $51.4 million and declared a $0.15 dividend per share, payable December 1 [4] Financial Position - With a cash balance of $280 million and long-term debt of $393 million (16% debt-to-capital ratio), Magnolia remains financially strong [5] - The company spent $118 million in capex during the quarter and expects full-year spending near the midpoint of its $430–470 million range [5] Future Outlook - For Q4, Magnolia anticipates record production near 101,000 boe/d and continued cost reductions, targeting lease operating expenses around $5.20 per boe [6] - The company remains unhedged, operating two drilling rigs and one completion crew, with 75–80% of 2025 activity centered on Giddings Field, its 240,000-acre core [6]

Core Insights - Magnolia achieved a record quarterly total production rate of 100,500 barrels of oil equivalent per day in Q3 2025, reflecting an 11% year-over-year growth [1][14][19] - The company emphasizes a disciplined capital allocation strategy aimed at generating consistent and sustainable free cash flow, despite recent declines in product prices [2][3] - Magnolia plans to maintain a capital spending limit of 55% of adjusted EBITDAX, ensuring financial flexibility and operational efficiency [10][12][77] Production and Financial Performance - Total production growth for 2025 is expected to be approximately 10%, exceeding initial guidance of 5% to 7% [5][18] - Adjusted EBITDAX for Q3 was $219 million, with operating income margins at 31% [6][13] - Free cash flow generated in Q3 was $134 million, with 60% returned to shareholders through share repurchases and dividends [7][14] Capital Management and Shareholder Returns - The company ended Q3 with a cash balance of $280 million, the highest level of the year, and plans to allocate approximately $110 million in capital spending for Q4 [8][17] - Magnolia has a consistent share repurchase program, having repurchased over 79.4 million shares since its inception, leading to a 26% reduction in weighted average diluted shares outstanding [15][16] - The quarterly dividend has increased by 15% to $0.15 per share, reflecting the company's commitment to returning value to shareholders [16][17] Operational Efficiency and Future Outlook - Magnolia's operational efficiencies have led to reduced lease operating expenses and improved production efficiencies, particularly in water handling and fluid management [8][9][62] - The company plans to operate two drilling rigs and one completion crew in 2026, with a focus on appraisal activities in Giddings and Karnes areas [11][12] - Future production growth is anticipated to be mid-single-digit, with capital spending levels similar to 2025, allowing for significant free cash flow generation [11][19] Market Position and Strategic Initiatives - Magnolia continues to explore bolt-on acquisitions to enhance its asset base, leveraging its subsurface knowledge and operational expertise [3][26] - The company remains unhedged on all oil and natural gas production, with price differentials expected to be approximately $3 per barrel discount to Magellan East Houston [19][20] - Magnolia's strong balance sheet, with $730 million in total liquidity, positions it well to navigate a volatile pricing environment [17][18]

Financial Data and Key Metrics Changes - Magnolia achieved adjusted net income of $78 million or $0.41 per diluted share for the third quarter of 2025, with adjusted EBITDAX of $219 million and operating income margins of 31% [14][19] - Free cash flow for the quarter was $134 million, with a capital reinvestment rate limited to 54% of adjusted EBITDAX [9][14] - The company ended the quarter with a cash balance of $280 million, the highest level of the year, and total liquidity of approximately $730 million [10][19] Business Line Data and Key Metrics Changes - Total production reached a record of 100.5 thousand barrels of oil equivalent per day, representing year-over-year growth of 11% [6][14] - Oil production at Giddings grew by nearly 5% compared to the prior year, contributing to an expected full-year production growth of approximately 10% [6][7] Market Data and Key Metrics Changes - Total revenue per BOE declined approximately 12% year over year due to lower oil prices, partially offset by an increase in natural gas prices [19] - Price differentials are anticipated to be approximately a $3 per barrel discount to Magellan East Houston, with Magnolia remaining unhedged on all oil and natural gas production [20] Company Strategy and Development Direction - Magnolia's strategy focuses on generating consistent and sustainable free cash flow through disciplined capital allocation and profitability, with no plans to increase activity at current product prices [5][12] - The company aims to enhance its asset base through bolt-on acquisitions and continues to operate with a disciplined capital spending philosophy [5][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to a volatile product price environment, emphasizing a commitment to its business model and operational flexibility [12][20] - The company plans to maintain capital spending at approximately 55% of adjusted EBITDAX for 2026, with expectations for mid-single-digit total production growth [11][20] Other Important Information - Magnolia returned 60% of its free cash flow to shareholders through share repurchases and dividends, with a quarterly dividend of $0.15 per share announced earlier this year [9][17] - The company has repurchased 79.4 million shares since the program began, reducing the weighted average diluted share count by approximately 26% [16] Q&A Session Summary Question: Can operational efficiencies lead to accelerated production? - Management indicated that while they could increase production, they prefer to stay true to their business model, focusing on maximizing free cash flow rather than rushing production [25][26] Question: Is there still potential for strategic bolt-on acquisitions? - Management confirmed there is still a fair amount of white space for acquisitions, but any potential deals must align with Magnolia's business model and improve the company [29][30] Question: What is the outlook for Karnes and appraisal activities? - Management remains optimistic about Karnes, stating that good rock has a long life and they will continue to explore appraisal opportunities [40][41] Question: How will the appraisal program be managed in a weak oil price environment? - Management expressed reluctance to cut the appraisal program significantly, emphasizing its importance for resource expansion and flexibility in response to market conditions [46][49] Question: How does Magnolia view service pricing and its alignment with oil prices? - Management noted that service pricing has softened but remains stable, with some upward pressure from steel tariffs offset by overall market conditions [99][100] Question: What is the plan for deferred completions and DUCs in 2026? - Management clarified that they do not typically carry planned DUCs, and the focus will be on timing rather than maintaining a specific number of DUCs [102][103]

Core Insights - Magnolia Oil & Gas Corporation (MGY) reported a third-quarter 2025 net profit of 41 cents per share, matching the Zacks Consensus Estimate, attributed to increased production volumes despite a decrease from 52 cents in the previous year due to a 9.5% rise in operating expenses [1][9] - Total revenues reached $324.9 million, surpassing the Zacks Consensus Estimate of $322 million, driven by higher revenues from natural gas and natural gas liquids, although down 2.5% from $333.1 million in the prior-year period due to lower oil revenues [2][9] Revenue Breakdown - Oil revenues were $230.5 million, a 13.2% decrease from $265.7 million in the year-ago quarter, but exceeded the estimate of $224.6 million [3] - Natural gas revenues nearly doubled to $43.2 million from $22.2 million year-over-year, beating the estimate of $41.7 million [3] - Natural gas liquids revenues increased to $51.2 million from $45.2 million in the previous year, surpassing the estimate of $50.5 million [3] Cash Flow and Shareholder Returns - The company generated $247.1 million in net cash from operating activities and achieved a free cash flow of $133.9 million [4] - Magnolia declared a cash dividend of 15 cents per share and returned a total of $80.3 million to shareholders, representing 60% of its free cash flow for the quarter through dividends and share repurchases [5][9] Production and Prices - Average daily total output was 100,507 barrels of oil equivalent per day (boe/d), a 10.8% increase from 90,702 boe/d in the year-ago quarter, exceeding the estimate of 90,000 boe/d [6] - Oil volumes were 39,430 barrels per day (bpd), slightly up 1.4% from the previous year but below the estimate of 40,500 bpd [6] - Natural gas volumes reached 190,384 thousand cubic feet per day (Mcf/d), up 19.6% year-over-year, surpassing the expectation of 183,900 Mcf/d [7] - Average realized crude oil price was $63.55 per barrel, a 14.4% decrease from $74.23 a year ago, but above the estimate of $60.23 [8] Balance Sheet and Capital Expenditure - As of September 30, 2025, Magnolia had cash and cash equivalents of $280.5 million and long-term debt of $393.1 million, with a debt-to-capitalization ratio of 16.1% [11] - The company spent $118.4 million on its capital program during the quarter, with operating expenses rising to $223.5 million from $204.1 million in the previous year [11] Future Guidance - For Q4 2025, Magnolia expects drilling and completion capital spending of approximately $110 million, with full-year capital expenditures projected near the midpoint of $430-$470 million [12] - The company anticipates a production growth outlook of approximately 10% for the full year, up from the initial guidance of 5-7% [12] - Operating costs per boe are expected to ease modestly in Q4, with estimates around $5.20, and full-year 2025 Lease Operating Expense expected to be at least 5% lower than 2024 levels [13]

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Financial Performance - The company reported an adjusted net income of $78 million with an operating income margin of 31%[11] - Adjusted EBITDAX was $219 million, with a capital reinvestment rate of 54%[11] - Free cash flow (FCF) reached $134 million, and the annualized Return on Capital Employed (ROCE) was 17%[11] - Total production reached a company record of 1005 Mboe/d, exceeding earlier guidance, with oil production at 394 Mbbls/d[11] - The company returned approximately $80 million to shareholders, including $51 million in share repurchases (215 million shares) and $29 million in dividends[11] Production and Growth - Giddings YoY total production growth was 15%, and oil production growth was 5% YoY[11] - Full-year 2025 production growth guidance is approximately 10%, above the original 5% - 7% guidance, with approximately 5% lower D&C capital[11] Balance Sheet and Capital Structure - The company maintained a strong balance sheet with $280 million in cash and only $120 million of net debt[11] - The company has liquidity of $730 million, including a fully undrawn credit facility[30] Sustainability - The company achieved a 21% reduction in gross Scope 1 greenhouse gas intensity rate since 2020, despite production growth[41] - The company achieved a 68% reduction in gas flared as a percent of total production since 2020[42]

Core Insights - Magnolia Oil & Gas Corp reported $324.94 million in revenue for Q3 2025, a year-over-year decline of 2.5%, with an EPS of $0.41 compared to $0.52 a year ago, aligning with the Zacks Consensus Estimate of $322.2 million, resulting in a surprise of +0.85% [1] Financial Performance - The company’s average daily production was 100,507 BOE/D, exceeding the analyst estimate of 99,182 BOE/D [4] - Natural gas production averaged 190,384 Mcf/D, surpassing the estimate of 187,160.70 Mcf/D [4] - Oil production averaged 39,430 BBL/D, slightly below the estimate of 40,162.36 BBL/D [4] - Natural gas liquids production averaged 29,347 BBL/D, exceeding the estimate of 27,789.82 BBL/D [4] Revenue Breakdown - Revenue from natural gas was $43.17 million, above the estimate of $42.88 million, reflecting a year-over-year increase of +94.4% [4] - Revenue from natural gas liquids was $51.24 million, compared to the estimate of $48.98 million, showing a year-over-year change of +13.2% [4] - Revenue from oil was $230.53 million, slightly above the estimate of $227.87 million, but representing a year-over-year decline of -13.2% [4] Stock Performance - Magnolia Oil & Gas Corp shares returned -4.7% over the past month, while the Zacks S&P 500 composite increased by +3.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Magnolia Oil & Gas Corp reported quarterly earnings of $0.41 per share, matching the Zacks Consensus Estimate, but down from $0.52 per share a year ago [1] - The company generated revenues of $324.94 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 0.85%, but lower than the $333.14 million reported in the same quarter last year [2] - The stock has underperformed the market, losing approximately 2.7% year-to-date compared to the S&P 500's gain of 17.2% [3] Earnings Performance - Over the last four quarters, Magnolia Oil & Gas has surpassed consensus EPS estimates three times [1] - The current consensus EPS estimate for the upcoming quarter is $0.41, with expected revenues of $323.9 million, and for the current fiscal year, the consensus EPS is $1.77 on revenues of $1.32 billion [7] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently ranked in the bottom 17% of over 250 Zacks industries, indicating potential challenges for stocks in this sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5]

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