[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations, changes in equity, and cash flows, with accompanying notes detailing accounting policies and financial matters [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased slightly to **$2.86 billion** from **$2.82 billion** at year-end 2024, primarily driven by an increase in net oil and natural gas properties, while total equity grew to nearly **$2.0 billion** from **$1.97 billion** Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | **Total Current Assets** | $416,737 | $410,824 | | **Total Property, Plant and Equipment, net** | $2,355,555 | $2,306,034 | | **Total Assets** | **$2,860,648** | **$2,820,835** | | **Total Current Liabilities** | $288,620 | $290,261 | | **Total Long-Term Liabilities** | $573,682 | $563,248 | | **Total Liabilities** | **$862,302** | **$853,509** | | **Total Equity** | **$1,998,346** | **$1,967,326** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20(unaudited)) For the second quarter of 2025, total revenues decreased to **$319.0 million** from **$336.7 million** year-over-year, mainly due to lower oil prices, leading to a reduction in net income attributable to Class A common stock to **$78.1 million** ($0.41 per diluted share) Operating Results (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $318,981 | $336,725 | $669,282 | $656,142 | | **Operating Income** | $107,814 | $134,351 | $243,636 | $258,909 | | **Net Income Attributable to Class A Common Stock** | $78,117 | $95,559 | $181,044 | $180,645 | | **Diluted EPS** | $0.41 | $0.51 | $0.95 | $0.97 | [Consolidated Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity%20(unaudited)) Total equity increased from **$1.97 billion** at the end of 2024 to **$2.00 billion** as of June 30, 2025, driven by net income of **$187.7 million**, partially offset by **$100.7 million** in Class A common stock repurchases and **$57.3 million** in dividends Key Equity Changes - H1 2025 (in thousands) | Item | Amount | | :--- | :--- | | **Balance, December 31, 2024** | $1,967,326 | | Net Income | $187,676 | | Class A Common Stock Repurchases | $(100,661) | | Dividends Declared | $(57,261) | | **Balance, June 30, 2025** | **$1,998,346** | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) For the first six months of 2025, net cash from operating activities was **$423.2 million**, a decrease from **$480.3 million** in the prior-year period, resulting in a net cash decrease of **$8.3 million** after investing **$262.6 million** and financing **$168.9 million** Cash Flow Summary - Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $423,188 | $480,329 | | **Net Cash Used in Investing Activities** | $(262,567) | $(387,446) | | **Net Cash Used in Financing Activities** | $(168,909) | $(218,321) | | **Net Change in Cash** | $(8,288) | $(125,438) | | **Cash at End of Period** | $251,761 | $275,683 | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(unaudited)) The notes detail key financial activities and policies, including **$39.7 million** in bolt-on acquisitions, **$400 million** in Senior Notes due 2032, **7.4 million** shares remaining for repurchase, and **$0.15 per share** quarterly dividends - During the first six months of 2025, the Company completed various bolt-on property acquisitions of certain oil and natural gas assets totaling **$39.7 million**[47](index=47&type=chunk) - As of June 30, 2025, long-term debt consisted of **$400.0 million** in 6.875% Senior Notes due 2032, with no outstanding borrowings under the RBL Facility[61](index=61&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - As of June 30, 2025, **7.4 million shares** of Class A Common Stock remained available for repurchase under the authorized 50.0 million share program[86](index=86&type=chunk) - On July 29, 2025, the board declared a quarterly cash dividend of **$0.15 per share** of Class A Common Stock, payable on September 2, 2025[111](index=111&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a strategy focused on disciplined capital allocation, moderate production growth, and shareholder returns, maintaining a strong liquidity position of **$701.8 million** despite lower realized oil prices [Business Overview](index=28&type=section&id=Business%20Overview) Magnolia operates primarily in the Karnes and Giddings areas of South Texas, targeting the Eagle Ford Shale and Austin Chalk formations, with an objective to generate long-term value through steady organic production growth and high margins, achieving **98.2 Mboe/d** total production for Q2 2025 - The company's objective is to generate stock market value through steady organic production growth, high full cycle operating margins, an efficient capital program, and significant free cash flow[116](index=116&type=chunk) - As of June 30, 2025, total production was **98.2 thousand barrels of oil equivalent per day** for the second quarter[119](index=119&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Total production for Q2 2025 increased by **9%** year-over-year to **98.2 Mboe/d**, but a **22%** decrease in average realized oil prices to **$62.20/bbl** led to a **5%** drop in total revenue to **$319.0 million**, partially offset by a **106%** increase in natural gas prices Production and Pricing Comparison (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Production (Mboe/d)** | 98.2 | 90.2 | +9% | | **Average Oil Price ($/Bbl)** | $62.20 | $79.74 | -22% | | **Average Natural Gas Price ($/Mcf)** | $2.55 | $1.24 | +106% | | **Total Revenues ($M)** | $319.0 | $336.7 | -5% | - Lease operating expenses per boe decreased by **10%** to **$4.88** in Q2 2025 from **$5.40** in Q2 2024, driven by higher production and cost reduction initiatives[133](index=133&type=chunk) - Gathering, transportation, and processing (GTP) costs increased to **$1.84/boe** in Q2 2025 from **$1.03/boe** in Q2 2024, driven by higher natural gas and NGL prices and changes to gathering contracts[134](index=134&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity source is cash from operations, totaling **$423.2 million** in H1 2025, with total liquidity at **$701.8 million** as of June 30, 2025, primarily used for capital expenditures of **$225.7 million**, share repurchases of **$100.9 million**, and dividends of **$57.3 million** - As of June 30, 2025, the Company had total liquidity of **$701.8 million**, consisting of **$251.8 million** in cash and cash equivalents and **$450.0 million** of borrowing capacity under the RBL Facility[144](index=144&type=chunk) Sources and Uses of Cash - H1 2025 (in thousands) | Category | Amount | | :--- | :--- | | **Net Cash from Operations** | $423,188 | | **Uses of Cash:** | | | Additions to oil & gas properties | $(231,455) | | Acquisitions | $(39,653) | | Class A Stock Repurchases | $(100,932) | | Dividends Paid | $(57,261) | - Drilling and completion capital expenditures for H1 2025 were **$225.7 million**, down from **$242.3 million** in H1 2024[150](index=150&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is commodity price volatility, where a **$1.00 per barrel** change in oil prices would impact annualized revenues by approximately **$14.3 million**, and a **$0.10 per Mcf** change in natural gas prices would impact revenues by **$6.7 million** - A **$1.00 per barrel** change in the weighted average oil price would have impacted the Company's annualized revenues by approximately **$14.3 million**[155](index=155&type=chunk) - A **$0.10 per Mcf** change in the weighted average natural gas price would have impacted the Company's annualized revenues by approximately **$6.7 million**[155](index=155&type=chunk) - The company is subject to interest rate risk on its RBL Facility, but had no borrowings outstanding as of June 30, 2025, mitigating this risk[154](index=154&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation conducted by management, including the CEO and CFO, the company's disclosure controls and procedures were deemed effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Management, including the principal executive officer and principal financial officer, concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[156](index=156&type=chunk) - There were no changes in the system of internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company's internal control[157](index=157&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation incidental to its business, including a specific lawsuit concerning working interests in certain Karnes County Assets, but management does not anticipate a material adverse effect on financial condition - The Company is party to certain legal actions and claims arising in the ordinary course of business, which are not expected to have a materially adverse effect on its financial position[159](index=159&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, stating that there have been no material changes to these risk factors since that filing - There have been no material changes to the Company's risk factors since its 2024 Form 10-K[160](index=160&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the second quarter of 2025, the company repurchased **2.21 million shares** for approximately **$48.7 million**, totaling **4.36 million shares** for the first six months, with approximately **7.4 million shares** remaining available under the existing program Share Repurchase Activity - 2025 | Period | Shares Purchased | Average Price Paid | | :--- | :--- | :--- | | Q1 2025 | 2,150,000 | $24.18 | | Q2 2025 (Apr-Jun) | 2,210,000 | $22.04 (calculated) | | **Total H1 2025** | **4,360,000** | **$23.09** | - As of the end of June 2025, **7,383,105 shares** remained available for purchase under the publicly announced repurchase program[161](index=161&type=chunk) [Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None reported - None[162](index=162&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[163](index=163&type=chunk) [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) During the second quarter of 2025, no director or officer of the company adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - During the three months ended June 30, 2025, no director or officer of Magnolia adopted, modified, or terminated any Rule 10b5–1 trading arrangement or any non-Rule 10b5-1 trading arrangement[164](index=164&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including the CEO and CFO certifications required under the Sarbanes-Oxley Act and the XBRL interactive data files

Financial Data and Key Metrics Changes - Magnolia reported total adjusted net income of $81 million for Q2 2025, with adjusted EBITDAX of $223 million and D&C capital expenditures of $95 million, resulting in a reinvestment rate of 43% [6][15] - The company generated free cash flow of $107 million and returned 72% of that to shareholders through dividends and share repurchases, totaling approximately $78 million [7][15] - Annualized return on capital employed was 18%, with pretax operating margins at 34% [6][19] Business Line Data and Key Metrics Changes - Total production volumes reached 98,200 barrels of oil equivalent per day, reflecting a 9% year-over-year growth, with oil production at a record 40,000 barrels per day, also a 5% year-over-year increase [7][8] - The company raised its full-year 2025 production growth guidance to approximately 10%, up from a prior range of 7% to 9% [8][19] Market Data and Key Metrics Changes - Total revenue per BOE declined approximately 13% year-over-year due to price fluctuations, partially offset by increases in natural gas and NGL prices [18] - Total adjusted cash operating costs decreased by 4% to $10.7 per BOE, with LOE at a low of $4.88 per BOE during the quarter [18] Company Strategy and Development Direction - Magnolia continues to pursue a strategy of appraising, acquiring, growing, and exploiting its assets, particularly in the Giddings area, which has seen a 20% increase in development acreage [9][10] - The company aims to maintain balance sheet strength and capital discipline while generating high pretax operating margins and returning significant free cash flow to shareholders [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Giddings field's potential for further capital efficiencies and production growth, emphasizing the importance of achieving the best wells with minimal capital [26][28] - The company anticipates minimal cash taxes for 2025 and 2026 due to recent legislative changes, which should benefit future cash flows [36][20] Other Important Information - Magnolia completed multiple bolt-on acquisitions totaling about $40 million, adding approximately 18,000 net acres in Giddings and increasing production by roughly 500 BOE per day [9][10] - The company maintains a strong liquidity position with $252 million in cash and an undrawn $450 million revolving credit facility, totaling approximately $700 million in liquidity [17] Q&A Session Summary Question: Free cash flow trends and capital efficiency - Management acknowledged the importance of balancing growth and capital efficiency, noting that they are focused on generating the highest free cash flow with the least capital [24][25] Question: Product mix and capital allocation - Management clarified that while there are variations in the Giddings area, the focus remains on drilling good wells across the field to optimize returns [30][31] Question: Minimal cash taxes due to new budget bill - Management confirmed that cash taxes for 2025 are expected to be negligible, with similar expectations for 2026 under current pricing conditions [35][36] Question: Oil production trajectory and growth expectations - Management indicated that oil production is expected to continue growing in the second half of the year, with a slight increase anticipated for 2026 [43][44] Question: M&A outlook and future acquisitions - Management expressed optimism about ongoing smaller acquisition opportunities in core areas, while larger acquisitions may present complexities [46][47] Question: Appraisal wells and expansion criteria - Management stated that appraisal wells typically account for about 10% of overall activity, with ongoing efforts to identify new opportunities [73][74] Question: Deferred completions and spare capacity - Management confirmed that about six completions are deferred into 2026, with plans to utilize spare capacity depending on market conditions [78][80]

Financial Data and Key Metrics Changes - Magnolia reported total adjusted net income of $81 million for Q2 2025, with adjusted EBITDAX of $223 million and D&C capital expenditures of $95 million, resulting in a reinvestment rate of 43% [5][12] - The company generated free cash flow of $107 million and returned 72% of that, approximately $78 million, to shareholders through dividends and share repurchases [5][12] - Annualized return on capital employed was 18%, with pretax operating margins at 34% [5][12] Business Line Data and Key Metrics Changes - Total production volumes reached 98,200 barrels of oil equivalent per day, reflecting a year-over-year growth of 9%, with oil production at 40,000 barrels per day, marking a 5% increase year-over-year [6][12] - The company raised its full-year 2025 production growth guidance to approximately 10%, up from a prior range of 7% to 9% [6][18] Market Data and Key Metrics Changes - Total revenue per BOE declined approximately 13% year-over-year due to price fluctuations, although this was partially offset by increases in natural gas and NGL prices [17] - Total adjusted cash operating costs decreased by 4% to $10.7 per BOE, with LOE at a low of $4.88 per BOE during the quarter [17] Company Strategy and Development Direction - Magnolia continues to pursue a strategy of appraising, acquiring, growing, and exploiting its assets, particularly in the Giddings area, which has seen a 20% increase in development acreage [8][9] - The company aims to maintain balance sheet strength and capital discipline while generating high pretax operating margins and returning significant free cash flow to shareholders [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Giddings field's potential for continued production growth and capital efficiencies, emphasizing the importance of modern technology in unlocking previously undeveloped resources [24][26] - The company plans to defer several well completions into 2026, maintaining a capital spending estimate for 2025 in the range of $430 million to $470 million [6][18] Other Important Information - Magnolia completed small bolt-on acquisitions totaling about $40 million, adding approximately 18,000 net acres in Giddings and enhancing its production capabilities [8][9] - The company has maintained a strong balance sheet with total liquidity of approximately $700 million, including cash and an undrawn revolving credit facility [16] Q&A Session Summary Question: Free cash flow trends and capital efficiency - Management indicated that free cash flow is trending positively, with a focus on achieving the best wells with the least capital to maximize free cash flow [22][24] Question: Product mix and capital allocation - Management clarified that while there are variations in the Giddings area, the overall goal is to drill good wells across the field, with a focus on learning and optimizing capital allocation [27][28] Question: Minimal cash taxes due to new legislation - Management confirmed that cash taxes for 2025 are expected to be negligible, with similar expectations for 2026 under current product prices [32][33] Question: Oil production trajectory and growth expectations - Management expects continued growth in oil production in the second half of the year, with a projection of approximately 99,000 barrels per day for Q3 [39][40] Question: M&A outlook and future acquisitions - Management sees ongoing opportunities for smaller bolt-on acquisitions in the Giddings area, with a focus on maintaining a strategic approach to growth [42][43] Question: Appraisal wells and expansion criteria - Management stated that appraisal wells typically account for about 10% of overall activity, with ongoing efforts to fold in new opportunities to enhance results [70][71]

Financial Performance - The company reported an adjusted net income of $81 million and an operating income margin of 34%[10] - Adjusted EBITDAX reached $223 million, with a capital reinvestment rate of 43%[10] - Free cash flow (FCF) amounted to $107 million, with D&C (Drilling & Completion) capital spending at $95 million[10] - The annualized Return on Capital Employed (ROCE) for Q2 2025 was 18%[10] Production and Growth - Total production for Q2 2025 reached a company record of 982 Mboe/d, exceeding earlier guidance, with oil production at 400 Mbbls/d, representing a 5% year-over-year (YoY) growth[10] - Giddings area experienced YoY total production growth of 11% and oil production growth of 4%[10] - The company increased its full-year 2025 production growth guidance to approximately 10%, up from the previous range of 7% to 9%[11] Acquisitions and Acreage - The company closed multiple bolt-on acquisitions in late June/early July, adding over 18000 net acres and approximately 500 Boe/d (35% oil) for around $40 million[11, 14] - The Giddings development area increased by 40000 net acres, or 20%, to approximately 240000 net acres, with about 75% from organic appraisal and 25% from bolt-on acquisitions[11] Capital Allocation and Returns - The company aims for a long-term dividend per share compound annual growth rate of approximately 10% and share repurchases of at least 1% per quarter[16]

Core Viewpoint - Z4 Energy Research has established itself as a reputable source in the energy sector, ranking in the top 2% of financial bloggers and top 5% of overall experts as of January 2021 [1] Group 1: Company Overview - Z4 Energy Research has been active in the energy market since 2006, providing insights on oil, natural gas, wind, solar, fuel cells, and other renewable energy sources [1] - The company posts weekly slide shows on oil and natural gas inventory reports and daily analyses on individual companies and energy segments [1] Group 2: Services Offered - Z4 Energy Research offers a fully searchable database of their content, which includes trading history and insights on when they buy and sell [1] - The company encourages engagement by inviting inquiries about energy topics and providing timely updates on their analyses [1]

[Q2 2025 Earnings Release](index=1&type=section&id=Magnolia%20Oil%20%26%20Gas%20Corporation%20Announces%20Second%20Quarter%202025%20Results) Magnolia Oil & Gas Corporation reports strong Q2 2025 results, highlighting record production and increased full-year guidance [Financial & Operational Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Magnolia achieved record Q2 2025 production, generated significant free cash flow, and raised full-year production guidance | Financial Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net income | $81.0 million | $105.1 million | (23)% | | Adjusted net income | $80.9 million | $104.3 million | (22)% | | Earnings per share - diluted | $0.41 | $0.51 | (20)% | | Adjusted EBITDAX | $223.2 million | $246.1 million | (9)% | | Average daily production (thousand boe/d) | 98.2 | 90.2 | 9% | | D&C Capital expenditures | $95.2 million | $123.4 million | (23)% | - Total production volumes grew **9% YoY** to a record **98.2 thousand boe/d**, with oil production up **5%** to a record **40.0 thousand bbls/d**[4](index=4&type=chunk) - Generated **$107.5 million** of free cash flow, with D&C capital representing **43%** of adjusted EBITDAX[4](index=4&type=chunk) - Full-year 2025 production growth guidance was increased to approximately **10%** from a prior range of **7-9%**, with no change to the D&C capital budget[4](index=4&type=chunk) - The Giddings development area was increased by **20%** to approximately **240,000 net acres**, driven by successful appraisal and bolt-on acquisitions[4](index=4&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) CEO Chris Stavros emphasized record production, disciplined capital reinvestment, and the successful Giddings development strategy, leading to increased full-year production guidance - The company now expects full-year 2025 production growth of approximately **10%** due to improved well performance and capital efficiencies, while maintaining the capital spending range of **$430 million to $470 million**[5](index=5&type=chunk) - In Q2, the company generated **$107 million** of free cash flow and returned **72%** of it to shareholders through dividends and share repurchases[5](index=5&type=chunk) - The company's strategy of 'appraise, acquire, grow, and further exploit' in Giddings led to a **20%** increase in the development area to **240,000 net acres**, supported by recent bolt-on acquisitions totaling **~$40 million** for **~18,000 net acres**[6](index=6&type=chunk) [Operational Update & Capital Program](index=2&type=section&id=Operational%20Update) Record Q2 2025 production was driven by the Giddings area, with the company maintaining a consistent drilling and completion program for the remainder of the year | Metric | Q2 2025 Value | | :--- | :--- | | Total Production | 98.2 thousand boe/d (+9% YoY) | | Giddings Production | 77.4 thousand boe/d (+11% YoY) | | Giddings % of Total | 79% | | D&C Capital Spending | $95.2 million | - The company plans to continue operating two drilling rigs and one completion crew for the remainder of 2025[9](index=9&type=chunk) - Approximately **75% to 80%** of the 2025 activity is expected to consist of multi-well development pads in the Giddings area, combined with some appraisal wells[9](index=9&type=chunk) [Shareholder Returns](index=2&type=section&id=Shareholder%20Returns) Magnolia returned **72%** of its free cash flow to shareholders in Q2 2025 through share repurchases and dividends, maintaining a strong liquidity position | Shareholder Return Activity | Q2 2025 Value | | :--- | :--- | | Total Cash Returned | $77.9 million | | % of Free Cash Flow Returned | 72% | | Share Repurchases | 2.2 million shares for $48.7 million | | Dividend Declared | $0.15 per share | - The company has **7.4 million** Class A Common shares remaining under its current share repurchase authorization[10](index=10&type=chunk) - Magnolia ended the quarter with **$251.8 million** of cash on the balance sheet and an undrawn **$450 million** revolving credit facility[10](index=10&type=chunk) [Full-Year 2025 & Q3 2025 Guidance](index=3&type=section&id=Additional%20Guidance) The company increased its full-year 2025 production growth guidance to **10%** while providing specific production and capital expenditure forecasts for Q3 2025 | Guidance Metric | Full-Year 2025 | Q3 2025 (Estimate) | | :--- | :--- | :--- | | Total Production Growth | ~10% | ~99 thousand boe/d | | D&C Capital Spending | $430 million - $470 million | ~$115 million | | Lease Operating Expenses (LOE) | - | ~$5.25 per boe | | Diluted Share Count | - | ~191 million shares | - The company remains completely unhedged for all its oil and natural gas production[13](index=13&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents the company's consolidated financial performance and position for the reported periods [Operating Highlights](index=5&type=section&id=Operating%20Highlights) Q2 2025 saw increased total production but decreased revenues due to lower oil prices, alongside improved lease operating expenses per barrel of oil equivalent Production Volumes | Production | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total (thousand boe) | 8,939 | 8,209 | | Average Daily (boe/d) | 98,229 | 90,207 | Revenues and Average Sales Prices | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $319.0 million | $336.7 million | | Avg. Oil Price ($/Bbl) | $62.20 | $79.74 | | Avg. Gas Price ($/Mcf) | $2.55 | $1.24 | | Avg. Total Price ($/boe) | $35.68 | $41.02 | Operating Costs per boe | Cost per boe | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Lease operating expenses | $4.88 | $5.40 | | Gathering, transport & processing | $1.84 | $1.03 | | DD&A | $11.98 | $12.76 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 total revenues and operating income decreased year-over-year, resulting in a lower net income of **$81.0 million** and **$0.41** diluted earnings per share Income Statement Summary (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $318,981 | $336,725 | | Total Operating Expenses | $211,167 | $202,374 | | Operating Income | $107,814 | $134,351 | | Net Income | $81,028 | $105,113 | | Net Income Attributable to Class A | $78,117 | $95,559 | | Diluted EPS | $0.41 | $0.51 | [Summary Cash Flow Data](index=7&type=section&id=Summary%20Cash%20Flow%20Data) Net cash from operating activities decreased in Q2 2025, with significant cash used in investing and financing activities, ending the quarter with **$251.8 million** in cash Cash Flow Summary (in thousands) | Cash Flow Activity | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $198,701 | $269,398 | | Net cash used in investing activities | ($116,497) | ($260,139) | | Net cash used in financing activities | ($78,001) | ($132,893) | | Net change in cash | $4,203 | ($123,634) | | Cash and cash equivalents – End of period | $251,761 | $275,683 | [Summary Balance Sheet Data](index=8&type=section&id=Summary%20Balance%20Sheet%20Data) As of June 30, 2025, total assets increased slightly to **$2.86 billion**, with **$251.8 million** in cash and **$392.9 million** in long-term debt Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $251,761 | $260,049 | | Total assets | $2,860,648 | $2,820,835 | | Current liabilities | $288,620 | $290,261 | | Long-term debt, net | $392,880 | $392,513 | | Total liabilities and equity | $2,860,648 | $2,820,835 | [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures [Reconciliation of Net Income to Adjusted EBITDAX](index=9&type=section&id=Reconciliation%20of%20net%20income%20to%20adjusted%20EBITDAX) Adjusted EBITDAX for Q2 2025 decreased to **$223.2 million**, representing a key non-GAAP measure used to evaluate operating performance - Adjusted EBITDAX is defined as net income before interest expense, income taxes, DD&A, exploration expenses, and accretion of asset retirement obligations, with other adjustments. Management believes it is useful for evaluating operating performance[30](index=30&type=chunk)[31](index=31&type=chunk) Adjusted EBITDAX Reconciliation (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income | $81,028 | $105,113 | | Adjustments (Interest, Tax, DD&A, etc.) | $142,201 | $140,966 | | Adjusted EBITDAX | $223,229 | $246,079 | [Reconciliation of Net Income to Adjusted Net Income](index=10&type=section&id=Reconciliation%20of%20net%20income%20to%20adjusted%20net%20income) Adjusted net income for Q2 2025 was **$80.9 million**, a non-GAAP measure used to compare underlying business performance by excluding specific items Adjusted Net Income Reconciliation (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income | $81,028 | $105,113 | | Adjustments | ($104) | ($800) | | Adjusted Net Income | $80,924 | $104,313 | [Reconciliation of Revenue to Adjusted Cash Operating Margin](index=11&type=section&id=Reconciliation%20of%20revenue%20to%20adjusted%20cash%20operating%20margin) Adjusted cash operating margin was **$24.98 per boe** (70% of revenue) in Q2 2025, reflecting profitability after excluding non-cash costs Margin Analysis (in $/boe) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue per boe | $35.68 | $41.02 | | Total adjusted cash operating costs per boe | ($10.70) | ($11.10) | | Adjusted cash operating margin per boe | $24.98 | $29.92 | | Adjusted cash operating margin (%) | 70% | 73% | | Operating income margin (%) | 34% | 40% | [Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow](index=12&type=section&id=Reconciliation%20of%20net%20cash%20provided%20by%20operating%20activities%20to%20free%20cash%20flow) Free cash flow increased to **$107.5 million** in Q2 2025, a non-GAAP measure representing cash from operations less capital expenditures - Free cash flow is defined as cash flows from operations before net change in operating assets and liabilities, less additions to oil and natural gas properties and associated working capital changes[42](index=42&type=chunk) Free Cash Flow Reconciliation (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $198,701 | $269,398 | | Less: Capital Expenditures & Working Capital | ($106,727) | ($136,034) | | Add back: Net change in operating assets | $15,500 | ($36,665) | | Free cash flow | $107,474 | $96,699 |

Core Viewpoint - Magnolia Oil & Gas Corporation (MGY) is expected to report second-quarter 2025 earnings on July 30, with earnings estimated at 40 cents per share and revenues at $310.2 million [1]. Group 1: Recent Performance - In the last reported quarter, MGY achieved a net profit of 55 cents per share, exceeding the Zacks Consensus Estimate by 2 cents, driven by increased production volumes from the Giddings asset [2]. - Total revenues for the last quarter were $350.3 million, surpassing the Zacks Consensus Estimate by $7 million, with MGY beating earnings estimates in each of the last four quarters, averaging a surprise of 7.1% [2]. Group 2: Estimate Revisions - The Zacks Consensus Estimate for second-quarter 2025 earnings has increased by 2.6% in the past week, indicating a year-over-year decrease of 28.6% [3]. - Revenue estimates for the same quarter show a decline of 7.9% compared to the previous year [3]. Group 3: Production and Revenue Expectations - Total production is projected to reach 8.8 million barrels of oil equivalent (MMboe) in the second quarter, reflecting a 7.3% increase from 8.2 MMboe in the same quarter last year [5]. - Oil production is expected to rise by 11.4% year-over-year to 3.9 thousand barrels (MBbls), while natural gas liquids (NGL) production is forecasted to increase by 8.7% to 2.5 MBbls [5]. - Revenue from NGL is anticipated to grow by 8.4% year-over-year to $46.4 million, and revenues from natural gas are expected to more than double to $42.5 million compared to $18.6 million last year [6]. Group 4: Cost Management - General and administrative expenses are projected to decrease by 20.2% to $18.2 million in the second quarter, down from $22.8 million in the previous year, which may positively impact the bottom line [7]. Group 5: Earnings Prediction - The model predicts an earnings beat for MGY, supported by a positive Earnings ESP of +0.50% and a Zacks Rank of 3 (Hold) [8][10]. - The expected earnings of 40 cents per share represent a 28.6% decline from the prior-year quarter, while production is projected to rise by 7.3% [9].

Core Viewpoint - Magnolia Oil & Gas Corp (MGY) is anticipated to report a year-over-year decline in earnings due to lower revenues for the quarter ended June 2025, with a consensus EPS estimate of $0.40, reflecting a -28.6% change from the previous year, and revenues expected to be $310.15 million, down 7.9% [1][3][19] Earnings Expectations - The earnings report is scheduled for release on July 30, and if the results exceed expectations, the stock may rise; conversely, a miss could lead to a decline [2] - The consensus EPS estimate has been revised 4.8% higher in the last 30 days, indicating a reassessment by analysts [4][19] Earnings Surprise Prediction - Magnolia Oil & Gas Corp has a positive Earnings ESP of +0.50%, suggesting analysts are optimistic about the company's earnings prospects [12][19] - The company holds a Zacks Rank of 3 (Hold), indicating a likelihood of beating the consensus EPS estimate [12][20] Historical Performance - In the last reported quarter, the company exceeded the expected EPS of $0.53 by delivering $0.55, resulting in a surprise of +3.77% [13] - Over the past four quarters, Magnolia Oil & Gas Corp has consistently beaten consensus EPS estimates [14] Industry Context - Within the Zacks Oil and Gas - Exploration and Production - United States industry, Magnolia Oil & Gas Corp is positioned to report earnings of $0.40 per share for the quarter ended June 2025, with a revenue expectation of $310.15 million [18][19]

Core Insights - Magnolia Oil & Gas (NYSE: MGY) reported Q1 2025 production results that exceeded guidance by approximately 3% [2] - Due to strong well performance and enhanced capital efficiency, Magnolia has increased its full-year total production guidance [2] Company Overview - Magnolia Oil & Gas operates in the energy sector, focusing on oil and gas production [2] - The company has demonstrated a strong analytical background through its leadership, with Aaron Chow having over 15 years of experience in analytics and a history of successful ventures [2] Analyst Background - Aaron Chow, known as Elephant Analytics, is a highly rated analyst on TipRanks and has co-founded a mobile gaming company that was acquired by PENN Entertainment [2] - The investing group Distressed Value Investing, led by Chow, emphasizes value opportunities and distressed plays, particularly in the energy sector [2]

Core Insights - Magnolia Oil & Gas Corporation (MGY) reported a first-quarter 2025 net profit of 55 cents per share, exceeding the Zacks Consensus Estimate of 53 cents and up from 49 cents in the same quarter last year [1] - The company's total revenues reached $350.3 million, surpassing the Zacks Consensus Estimate of $342 million and reflecting a 9.7% increase from $319.4 million in the prior year, driven by strong performance in natural gas and natural gas liquids [2] - Magnolia achieved $224.5 million in net cash from operating activities and a free cash flow of $110.5 million during the quarter [3] Financial Performance - The average daily total output was 96,549 barrels of oil equivalent per day (boe/d), a 13.9% increase from 84,784 boe/d in the year-ago quarter, exceeding the Zacks Consensus Estimate of 93,975 boe/d [5] - Oil volumes were reported at 39,078 barrels per day (bpd), up 4.1% from the previous year, slightly above the estimate of 39,045 bpd [5] - Natural gas volumes reached 183,248 thousand cubic feet per day (Mcf/d), a 21.3% increase from the first quarter of 2024, surpassing the expectation of 170,196 Mcf/d [6] Revenue Breakdown - Natural gas revenues were $51.4 million, more than doubling from $21.1 million in the year-ago quarter and exceeding the consensus estimate of $45.2 million [2] - Natural gas liquids revenues totaled $53.4 million, up from $39.1 million in the previous year, also surpassing the consensus estimate of $47.6 million [2] - The average realized crude oil price was $69.81 per barrel, an 8% decrease from $75.89 a year ago, while the average realized natural gas price increased significantly to $3.11 per Mcf from $1.53 [7] Shareholder Returns - Magnolia declared a cash dividend of 15 cents per share of Class A Common stock and a cash distribution of 15 cents of Class B unit, payable on June 2, 2025 [3] - The company repurchased 2.2 million Class A Common shares for $52 million, with 9.6 million shares remaining under its current repurchase authorization [4] - Magnolia returned 74% of its free cash flow to shareholders through share repurchases and dividends [4] Balance Sheet and Capital Expenditure - As of March 31, 2025, Magnolia had cash and cash equivalents of $247.6 million and long-term debt of $392.7 million, resulting in a debt-to-capitalization ratio of 16.5% [9] - The company spent $130.4 million on its capital program during the reported quarter, with operating expenses increasing to $214.5 million from $194.9 million in the previous year [9] Future Guidance - Magnolia raised its year-over-year production growth guidance for 2025 from 5%-7% to a range of 7%-9%, driven by improved well performance and capital efficiency [10] - The company decreased its drilling and completion (D&C) capital spending midpoint for 2025 to a range between $430 million and $470 million from an initial outlook of $460 million to $490 million [10] - For the second quarter of 2025, Magnolia anticipates D&C capital spending to be about $110 million, with production volume expected to remain flat at around 97 Mboe/d [11]