Group 1 - Magnolia Oil & Gas (NYSE: MGY) is not considered a cheap entry in the oil and gas industry, indicating a premium valuation due to good management and execution [2] - The oil and gas industry is characterized as a boom-bust, cyclical sector, requiring patience and experience for successful investment [2] Group 2 - The analysis of oil and gas companies includes a breakdown of balance sheets, competitive positions, and development prospects to identify undervalued opportunities [1]

J.P. Morgan analyst Zach Parham shared his view on Magnolia Oil & Gas Corporation MGY ahead of the earnings release on May 1st.The analyst maintained a Neutral rating on the stock with a price forecast of $24 after updating for first-quarter commodity prices.Parham writes that Magnolia Oil & Gas remains on track with its 2-rig/1-frac crew program and is committed to keeping capex below 55% of EBITDA.Despite commodity price volatility, the analyst expects capital expenditure to stay under 50% of EBITDA due t ...

Magnolia Oil & Gas Corp (MGY) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices. The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system. ...

A month has gone by since the last earnings report for Magnolia Oil & Gas Corp (MGY) . Shares have added about 3.1% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Magnolia Oil & Gas Corp due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.How Have Estimates Been Moving ...

Group 1 - The article promotes a free two-week trial for the investment group Distressed Value Investing, which offers exclusive research on various companies and investment opportunities [1] - The author, Aaron Chow, has over 15 years of analytical experience and co-founded a mobile gaming company that was acquired by PENN Entertainment, indicating a strong background in both analysis and industry experience [2] - Distressed Value Investing focuses on value opportunities and distressed plays, particularly in the energy sector, highlighting a niche investment strategy [2] Group 2 - The article emphasizes that past performance is not indicative of future results, which is a common disclaimer in investment discussions [3] - It clarifies that no specific investment recommendations are being made, and the views expressed may not represent the entire platform's opinions [3] - The article notes that the analysts contributing to the platform may not be licensed or certified, which is important for understanding the credibility of the analysis provided [3]

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - Zacks Style Scores rate stocks based on value, growth, and momentum, serving as complementary indicators to the Zacks Rank, helping investors identify securities likely to outperform the market in the short term [2][3] Value Score - The Value Style Score identifies attractive and discounted stocks using various financial ratios such as P/E, PEG, and Price/Sales, appealing to value investors [3] Growth Score - The Growth Style Score focuses on a company's future prospects and financial health, analyzing projected and historical earnings, sales, and cash flow to find stocks with sustainable growth [4] Momentum Score - The Momentum Style Score helps investors capitalize on price trends by analyzing short-term price changes and earnings estimate revisions, indicating favorable buying opportunities [5] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who utilize multiple investing strategies, highlighting stocks with strong value, growth, and momentum [6] Zacks Rank - The Zacks Rank is a proprietary model based on earnings estimate revisions, with a historical average annual return of +25.41% for 1 (Strong Buy) stocks since 1988, significantly outperforming the S&P 500 [7][8] Stock to Watch: Magnolia Oil & Gas Corp - Magnolia Oil & Gas is an independent operator focused on natural gas and crude oil production, primarily in the Eagle Ford Shale and Austin Chalk formations in South Texas [12] - The company holds a 3 (Hold) Zacks Rank with a VGM Score of B and a Value Style Score of B, supported by a forward P/E ratio of 10.39, making it attractive to value investors [12][13] - Recent upward revisions in earnings estimates by analysts and a Zacks Consensus Estimate increase to $2.18 per share, along with an average earnings surprise of 9%, position MGY favorably for investors [13]

Core Insights - Magnolia Oil & Gas Corporation (MGY) reported a fourth-quarter 2024 net profit of 49 cents per share, exceeding the Zacks Consensus Estimate of 46 cents, driven by increased production volumes despite a decrease from the previous year's profit of 50 cents due to rising operating expenses [1][2] Financial Performance - Total revenues for the quarter were $326.6 million, slightly above the Zacks Consensus Estimate of $326 million, marking a 1.2% increase from $322.6 million in the same quarter last year, attributed to higher revenues from natural gas liquids [2] - The company generated $222.6 million in net cash from operating activities and achieved a free cash flow of $90.3 million [3] - Operating expenses rose to $202.5 million from $184.5 million year over year [11] Dividend and Share Repurchase - Magnolia declared a cash dividend of 15 cents per share for Class A Common stock and Class B units, reflecting a 15.4% increase, resulting in an annualized dividend rate of 60 cents per share, marking the fourth consecutive year of dividend increases since 2021 [4] - In the fourth quarter, the company repurchased 2.2 million Class A Common shares for $55.8 million, totaling 11 million shares repurchased for the full year, leading to a 5% reduction in diluted weighted average share count [5][6] Production and Prices - Average daily total output was 93,096 barrels of oil equivalent per day (boe/d), up from 85,414 boe/d in the year-ago quarter, with oil and gas production increasing by 9% year over year [7] - Oil volumes reached 38,821 barrels per day (bpd), a 9.5% increase from the previous year, while natural gas volumes were 167,079 thousand cubic feet per day (Mcf/d), up 7.9% but below expectations [8] - The average realized crude oil price was $69.01 per barrel, down 12.1% from $77.39 a year ago, and the average sales price of $38.13 per boe compared to $41.06 a year prior [9] Balance Sheet and Capital Expenditure - As of December 31, Magnolia had cash and cash equivalents of $260 million and long-term debt of $392.5 million, with a total debt-to-total capital ratio of 16.6% [10] - The company spent $131.6 million on its capital program in the reported quarter [11] Guidance - For 2025, Magnolia expects drilling and completion capital spending to be between $460 million and $490 million, with production growth anticipated at 5-7% [12][13] - The first quarter of 2025 is projected to have D&C capital spending of around $135 million and total production of approximately 94 thousand boe/d [13]

Reserves and Production - As of December 31, 2024, Magnolia's total proved reserves amounted to 191.7 million barrels of oil equivalent (MMboe), consisting of 77.2 million barrels of oil, 336.8 billion cubic feet (Bcf) of natural gas, and 58.3 million barrels (MMBbls) of natural gas liquids (NGLs) [77] - Magnolia's proved undeveloped reserves increased by 7.8 MMboe during the year ended December 31, 2024, totaling 42.4 MMboe, which includes 14.2 MMBbls of oil, 78.4 Bcf of natural gas, and 15.1 MMBbls of NGLs [79] - The company converted 28.8 MMboe of proved undeveloped reserves to proved developed reserves as a result of drilling activities completed during 2024 [79] - Magnolia operated two rigs during 2024, achieving total production of 89.7 thousand barrels of oil equivalent per day (Mboe/d) [64] - Approximately 43% of Magnolia's production was attributable to oil, 30% to natural gas, and 27% to NGLs for the year ended December 31, 2024 [64] - The company reported crude oil production of 14.0 million barrels in 2024, up from 12.6 million barrels in 2023, and natural gas production of 58.7 billion cubic feet, an increase from 55.1 billion cubic feet in 2023 [86] - Magnolia's total production for the year ended December 31, 2024, was 89.7 Mboe/d, with approximately 43% from oil, 30% from natural gas, and 27% from NGLs [64] - Crude oil production increased to 14.0 MMBbls in 2024, up from 12.6 MMBbls in 2023, representing an 11.1% growth [86] - Natural gas production rose to 58.7 Bcf in 2024, compared to 55.1 Bcf in 2023, marking a 6.5% increase [86] Financial Performance and Strategy - The company incurred costs of approximately $271.6 million to convert reserves associated with 38 net proved undeveloped locations to 28.8 MMboe of proved developed reserves [80] - Magnolia's business model emphasizes prudent capital allocation, aiming to spend within cash flow while maintaining low financial leverage [60] - The company targets moderate annual organic production growth and aims to generate significant free cash flow after capital expenditures [62] - Magnolia's long-term strategy focuses on generating moderate annual organic production growth and maintaining a conservative financial leverage profile [62] - The company plans to effectively reinvest free cash flow to maximize shareholder returns while maintaining an efficient capital program [62] Operational Activities - In 2024, Magnolia operated two rigs and drilled a total of 53 net productive development wells, an increase from 45 in 2023 and 50 in 2022, representing a 17.8% increase year-over-year [83] - As of December 31, 2024, Magnolia had 63 gross (23 net) development wells in the process of being drilled, completed, or awaiting completion operations [81] - Magnolia's assets cover a total leasehold position of 817,907 gross acres, with significant holdings in the Karnes and Giddings areas of South Texas [64] - The company has demonstrated strong economic viability in its drilling activities, particularly in the Giddings area, due to recent improvements in drilling and completion technologies [65] Regulatory and Environmental Compliance - Magnolia is subject to new federal regulations aimed at reducing methane emissions, which may impact operational costs and compliance requirements [100] - The company plans to invest in additional direct measurement technologies to improve the accuracy of methane emissions reporting, aligning with new EPA guidelines [100] - The company faces increased regulatory scrutiny regarding methane emissions and may incur costs to comply with new federal regulations [100] Employee and Community Engagement - In 2024, Magnolia contributed $252,000 towards employee-directed donations to local and national non-profits, supporting various causes [124] - Magnolia's field teams set a program record by contributing more than $43,500 to over 30 local non-profit organizations in 2024 [125] - As of December 31, 2024, 23% of Magnolia's total employee population was female, and 29% identified as members of a minority group [119] - Magnolia's employees received an average of approximately 60 hours of safety training in 2024, focusing on enhancing their skills [122] - The Company was recognized as a top workplace in the annual Houston Chronicle Top Workplaces survey, placing tenth among mid-sized companies in the greater Houston area [116] - Magnolia's commitment to safety includes tracking key safety metrics and implementing proactive measures to minimize health and safety risks [120] - The Company continues to offer a workplace flexibility program, allowing eligible employees to telecommute for up to two days a week [115] - Magnolia's Human Capital Philosophy emphasizes attracting and retaining qualified individuals to enhance its position as an employer of choice [113] Safety and Governance - Magnolia's Environmental, Social, and Governance (ESG) policies are overseen by the Nominating and Corporate Governance Committee, focusing on safety, social responsibility, and human capital issues [113] - The company tracks key safety metrics, including total recordable incident rate and contractor recordables, to ensure employee safety [120] - The company maintains comprehensive emergency response and crisis communication plans at both field and corporate levels [123] - Magnolia's Think Like a Magnolia Owner CEO Award program continued in 2024 to recognize projects that generated shareholder value [115]

Financial Data and Key Metrics Changes - Magnolia Oil & Gas Corporation ended 2024 with record quarterly production volume of 93.1 thousand barrels of oil equivalent per day, lifting full-year total production to 89.7 thousand BOE per day, representing a 9% annual growth for the second consecutive year [10][11] - Total adjusted net income for the year was approximately $401 million, with adjusted EBITDA at $953 million [11][29] - The company generated free cash flow of $430 million, returning 88% of this, or approximately $378 million, to shareholders through dividends and share repurchases [12][13] Business Line Data and Key Metrics Changes - Total production at Giddings grew 16%, with oil production increasing by 21%, supported by strong well productivity and expansion of the development area [11] - The company successfully lowered lease operating costs by 10% per BOE, contributing to a return on capital employed of 22% [12][21] Market Data and Key Metrics Changes - Magnolia's total revenue per BOE declined year-over-year due to lower oil prices, with total adjusted cash operating costs at $10.62 per BOE in Q4 2024 [35] - The company remains completely unhedged for all oil and natural gas production, allowing it to accrue significant excess cash flow during periods of higher product prices [18][38] Company Strategy and Development Direction - Magnolia's business model focuses on operating a highly efficient E&P business, generating absolute per share value over the long term, with a low reinvestment rate and significant free cash flow generation [14][15] - The company plans to operate two drilling rigs and one completion group in 2025, with total D&C capital spending anticipated between $460 million to $490 million, maintaining a similar level of activity as in 2024 [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong financial position and improved cost structure entering 2025, with expectations for moderate production growth of 5% to 7% [23][24] - The board approved a 15% increase in the quarterly dividend payment to 15 cents per share, reflecting confidence in the company's outlook [13][33] Other Important Information - Magnolia has returned nearly $1.6 billion to shareholders since inception, representing approximately 35% of its current market capitalization [22] - The company plans to allocate approximately 20% to 25% of its capital to Karnes area assets in 2025, alongside appraisal activities [26][37] Q&A Session Summary Question: On well costs and development programs - Management indicated that the focus has shifted more towards development in Giddings, with limited scientific testing as they have gained substantial knowledge over the years [41][42] Question: On shareholder returns and cash management - Management is comfortable holding cash for a short period, deploying it when attractive opportunities arise, rather than letting it sit idle for long [44][46] Question: On gas inventory and appraisal work - Management acknowledged improvements in cost structure and indicated ongoing evaluations of gas acreage, with potential for future development as economics improve [48][50] Question: On capital spending and rig activity - Management expressed confidence in the planned capital spending range for 2025, indicating no immediate plans to drop a rig unless oil prices fall significantly [62] Question: On production trajectory and growth expectations - Management expects production to grow ratably throughout the year, with potential for strong volumes in the second half of 2025 [66][68] Question: On M&A opportunities in Eagle Ford - Management noted several opportunities in the Eagle Ford, primarily focusing on quality assets that can enhance their resource set [75][77] Question: On Giddings appraisal work and potential impact - Management highlighted the significant potential of appraisal work in Giddings, which could lead to substantial increases in resource estimates over time [96][98]

Core Insights - Magnolia Oil & Gas Corp reported revenue of $326.61 million for Q4 2024, reflecting a year-over-year increase of 1.2% and an EPS of $0.49, slightly down from $0.50 a year ago [1] - The revenue was a slight miss compared to the Zacks Consensus Estimate of $326.62 million, while the EPS exceeded the consensus estimate of $0.46 by 6.52% [1] Financial Performance Metrics - Average daily production totaled 93,096 BOE/D, slightly above the analyst estimate of 92,864.74 BOE/D [4] - Average sales prices for natural gas were $1.85, below the estimate of $1.91, while oil prices averaged $69.01, also below the estimate of $70.10 [4] - Total production was reported at 8,565 Mboe, marginally above the average estimate of 8,534.15 Mboe [4] Revenue Breakdown - Natural gas revenues were $28.41 million, below the estimate of $30.53 million, but showed a year-over-year increase of 7.7% [4] - Revenues from natural gas liquids reached $51.72 million, exceeding the estimate of $45.50 million, representing an 18.3% year-over-year increase [4] - Oil revenues were reported at $246.48 million, falling short of the estimate of $257.52 million, indicating a 2.4% year-over-year decline [4] Stock Performance - Magnolia Oil & Gas Corp's shares have declined by 11.4% over the past month, contrasting with a 4.7% increase in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]