Financial Performance - Magnolia Oil & Gas Corporation (MGY) reported a second-quarter 2024 net profit of 51 cents per share, an increase from 48 cents in the prior-year quarter, driven by higher production volumes and oil prices [1] - Total revenues for the quarter were $336.7 million, missing the Zacks Consensus Estimate of $341 million, primarily due to lower-than-expected natural gas revenues, which totaled $18.6 million against a consensus of $24.3 million; however, this figure represented a 4.4% increase from $280.3 million in the year-ago period [2] - The company recorded $269.4 million in net cash from operating activities and achieved a free cash flow of $96.7 million, with operating income constituting 40% of revenues [3] Shareholder Returns - Magnolia declared a cash dividend of 13 cents per share for Class A common stock and Class B units, payable on September 3, to shareholders of record as of August 9 [3] - The company distributed approximately $130 million to shareholders in the second quarter through dividends and share repurchases, having repurchased 4 million shares for $102.7 million [4][5] Production and Pricing - The average daily total output was 90,207 barrels of oil equivalent per day (boe/d), up from 81,881 boe/d in the year-ago quarter, exceeding estimates of 89,000 boe/d; oil production increased by 11.4% to 37,943 barrels per day (bpd) [6] - The average realized crude oil price was $79.74 per barrel, a 10.8% increase from $71.98 a year ago, while natural gas prices decreased by 17.9% to $1.24 per thousand cubic feet [7] Balance Sheet and Capital Expenditure - As of June 30, Magnolia had cash and cash equivalents of $275.7 million and long-term debt of $394.1 million, with a total debt-to-total capital ratio of 17% [8] - The company spent $123.4 million on its capital program in the reported quarter, with operating expenses rising to $202.4 million from $159 million in the previous year [8] Future Guidance - Magnolia plans to maintain its current operating tempo of two drilling rigs and one completion crew throughout 2024, expecting significant cost reductions and operational enhancements to drive high-margin growth [9] - The company anticipates full-year 2024 capital spending to range from $450 to $480 million, projecting high single-digit growth in total production compared to 2023 [11] - Third-quarter D&C capital expenditures are estimated at $120 million, with total production expected to reach 91 thousand boe/d [12]

Financial Data and Key Metrics Changes - Magnolia Oil & Gas reported total GAAP net income attributable to Class A common stock of $96 million and total adjusted net income of $104 million, equating to $0.52 per diluted share [14] - Adjusted EBITDAX for the quarter was $246 million, with total capital expenditures (CapEx) of $123 million, representing 50% of adjusted EBITDAX [14] - Free cash flow for the second quarter was $97 million, with approximately $130 million returned to shareholders, including $103 million for share repurchases [8][14] Business Line Data and Key Metrics Changes - Total company production reached approximately 90,000 barrels of oil equivalent per day, a record for the company, reflecting a 10% increase year-over-year and a 6% increase sequentially [6][15] - Oil production was nearly 38,000 barrels per day, an 11% increase from the previous year, with Giddings production accounting for approximately 77% of total volumes [7][15] - Giddings production grew 21% year-over-year, with oil production in Giddings increasing by 28% [7] Market Data and Key Metrics Changes - The company ended the quarter with $276 million in cash and $400 million in senior notes maturing in 2026, providing total liquidity of approximately $726 million [17] - Total adjusted cash operating costs were $11.10 per BOE, a 7% increase compared to the previous year, primarily due to higher lease operating expenses (LOE) from acquisitions [18] Company Strategy and Development Direction - Magnolia aims to be the most efficient operator of oil and gas assets, focusing on generating high returns while minimizing capital employed for drilling and completing wells [5] - The company plans to continue returning a substantial portion of free cash flow to shareholders through share repurchases and dividends, with a growing base dividend announced at $0.13 per share [17] - The recent bolt-on acquisition for $125 million added 27,000 net acres adjacent to Giddings, enhancing development opportunities [8][9] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of oil production for the remainder of the year, with expectations for continued strong performance from Giddings [7][28] - The company anticipates maintaining low field-level costs through the second half of the year, supporting operating margins and free cash flow [12] - Management reiterated guidance for 2024 D&C capital spending in the range of $450 million to $480 million, with production growth expected in the high single digits [19] Other Important Information - The company has successfully reduced LOE to $5.40 per BOE, a 10% sequential decline, through field-level optimization and cost reduction initiatives [12] - Magnolia's average return on capital employed was reported at 18% over five years, with an annualized ROCE of 23% for the first half of 2024 [13] Q&A Session Summary Question: Variability in Giddings Development Acreage - Management acknowledged variability in Giddings acreage but noted that within the core development area, variability is less pronounced [21] Question: Reinvestment Rate and Capital Return - The company expects to maintain a reinvestment rate of around 47%, with no significant changes anticipated in capital return methodology [25] Question: Oil Mix Trends - Management indicated that oil production should remain steady, with no significant changes expected in the oil mix for the upcoming quarters [28] Question: Cash Return Methodology Post-Sale of Stock - Management stated that ongoing share repurchase programs are important, and they will consider market conditions when making decisions [31][33] Question: Non-Operated Activity and Production - Management indicated that while there may be an uptick in non-operated activity, it is too early to provide specific guidance for 2025 [40]

Financial Performance - For the three months ended June 30, 2024, Magnolia reported net income attributable to Class A Common Stock of $95.6 million, or $0.51 per diluted share, compared to $180.6 million, or $0.97 per diluted share for the six months ended June 30, 2024 [81]. - Oil revenues for the three months ended June 30, 2024, were $275.3 million, an increase of $52.2 million compared to the same period in 2023, driven by an 11% increase in average prices and an 11% increase in oil production [88]. - Natural gas revenues for the three months ended June 30, 2024, were $18.6 million, a decrease of $2.3 million from the same period in 2023, primarily due to an 18% decrease in average prices [89]. - NGL revenues for the three months ended June 30, 2024, were $42.8 million, an increase of $6.5 million compared to the same period in 2023, attributed to a 7% increase in average prices and a 10% increase in NGL production [90]. - Net cash provided by operating activities was $480.3 million for the six months ended June 30, 2024, compared to $421.6 million for the same period in 2023, an increase of 13.9% [105]. - The company reported a net change in cash and cash equivalents of $(125.4) million for the six months ended June 30, 2024, compared to a positive change of $1.1 million for the same period in 2023 [103]. Production and Operations - Total production for the three months ended June 30, 2024, was 90.2 thousand barrels of oil equivalent per day, an increase from 81.9 thousand boe/d for the same period in 2023, representing an increase of approximately 10% [86]. - Total operating expenses for the three months ended June 30, 2024, were $202.4 million, an increase of 27.3% compared to $159.0 million for the same period in 2023 [91]. - Lease operating expenses for the three months ended June 30, 2024, were $44.4 million, up from $36.8 million in the same period of 2023, reflecting a $7.6 million increase [91]. - Gathering, transportation, and processing costs decreased to $8.5 million for the three months ended June 30, 2024, from $10.4 million in the same period of 2023, a reduction of 18.5% [93]. - Depreciation, depletion, and amortization (DD&A) for the three months ended June 30, 2024, was $104.7 million, compared to $77.0 million in the same period of 2023, representing a 36.0% increase [91]. Capital Management - The company declared cash dividends totaling $47.8 million to holders of its Class A Common Stock during the six months ended June 30, 2024 [82]. - Magnolia's board of directors authorized a share repurchase program of up to 40 million shares, with 34.1 million shares repurchased at a cost of $603.3 million as of June 30, 2024 [82]. - The Company repurchased 3.4 million shares of Class A Common Stock for approximately $78.3 million during the six months ended June 30, 2024 [107]. - Cash dividends declared and paid to holders of Class A Common Stock totaled $47.8 million during the six months ended June 30, 2024, compared to $44.5 million in the same period of 2023 [108]. - The Company distributed $5.7 million to Magnolia LLC Unit Holders during the six months ended June 30, 2024 [108]. Debt and Financial Position - The company had $400.0 million of principal debt related to the 2026 Senior Notes outstanding as of June 30, 2024, with no outstanding borrowings related to the RBL Facility [102]. - The Company had no borrowings outstanding under the RBL Facility as of June 30, 2024, indicating a low financial leverage position [109]. - Interest expense, net, increased to $3.5 million for the three months ended June 30, 2024, compared to $1.1 million in the same period of 2023, a rise of 206.2% [96]. - Current income tax expense for the three months ended June 30, 2024, was $10.5 million, an increase of 164.5% compared to $4.0 million for the same period in 2023 [98]. Strategic Initiatives - The company completed an acquisition in November 2023 for approximately $264.1 million, which may include contingent cash consideration of up to $40 million based on future commodity prices [84]. - The Company paid $150.2 million for acquisitions during the six months ended June 30, 2024, primarily for a $125.0 million acquisition in the Giddings area [106]. - The Company plans to continue spending within cash flow on drilling and completing wells while maintaining low financial leverage [106]. - Magnolia's business model emphasizes disciplined capital allocation and aims for moderate and predictable annual volume growth while returning capital to shareholders [79]. Market Risks - The Company is subject to market risk exposure related to changes in commodity prices, which are expected to remain volatile [110]. - A $1.00 per barrel increase in the weighted average oil price would have increased the Company's revenues by approximately $13.7 million on an annualized basis for the six months ended June 30, 2024 [110]. Asset Overview - As of June 30, 2024, Magnolia's assets included 77,278 gross acres in the Karnes area and 743,069 gross acres in the Giddings area, with a total of 2,615 gross wells [81]. - Magnolia owned approximately 94.5% of the interest in Magnolia LLC as of June 30, 2024 [107].

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both. Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor. Zacks Premium also includes the Zacks Style Scores. What are the Zacks Style Scores? The Zacks Styl ...

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both. It also includes access to the Zacks Style Scores. Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days. The Style Scores are broken down into four categories: Growth Score Momentum trading is al ...

Company Overview - Magnolia Oil & Gas Corp (MGY) is an independent upstream operator engaged in the exploration, development, and production of natural gas, crude oil, and natural gas liquids, primarily focused on the Eagle Ford Shale and Austin Chalk formations in South Texas [10]. Zacks Rank and Style Scores - MGY holds a Zacks Rank of 3 (Hold) and has a VGM Score of B, indicating a solid position in the market [10]. - The company has a Value Style Score of B, supported by attractive valuation metrics such as a forward P/E ratio of 10.79, which may appeal to value investors [11]. Earnings Estimates - For fiscal 2024, five analysts have revised their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $0.18 to $2.25 per share [11]. - MGY has demonstrated an average earnings surprise of 2%, suggesting a consistent performance relative to expectations [11]. Investment Consideration - With a solid Zacks Rank and top-tier Value and VGM Style Scores, MGY is recommended for investors looking for potential opportunities in the energy sector [11].

Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor. It also includes access to the Zacks Style Scores. What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 3 ...

Magnolia Oil & Gas Corporation (MGY) reported first-quarter 2024 adjusted net income of 49 cents per share, which beat the Zacks Consensus Estimate of 44 cents. The outperformance can be primarily attributed to a healthy increase in production volumes and higher oil prices year over year. However, the bottom line deteriorated from the year-ago quarter’s level of 56 cents due to higher year-over-year operating expenses.Total revenues came in at $319.4 million, which beat the Zacks Consensus Estimate of $308 ...

Financial Performance - For the three months ended March 31, 2024, Magnolia reported net income of $97.6 million, or $0.46 per diluted common share, compared to $85.1 million for the same period in 2023 [106]. - Oil revenues increased to $259.2 million for the three months ended March 31, 2024, up from $239.1 million in the same period of 2023, reflecting a 8.4% increase [112]. - Natural gas revenues decreased to $21.1 million for the three months ended March 31, 2024, down from $27.8 million in the same period of 2023, a decline of 24.5% [114]. - NGL revenues were $39.1 million for the three months ended March 31, 2024, compared to $41.5 million in the same period of 2023, a decrease of 5.8% [115]. - Total operating expenses for the three months ended March 31, 2024 were $194.9 million, an increase from $181.4 million in the same period of 2023, representing a 7.4% rise [117]. - For the three months ended March 31, 2024, income tax expense was $20.3 million, a $0.7 million increase compared to $19.6 million for the same period in 2023, driven by a $7.4 million increase in current income tax expense [126]. - Net cash provided by operating activities was $210.9 million for the three months ended March 31, 2024, compared to $219.8 million for the same period in 2023, impacted by timing of collections and a decrease in realized natural gas and NGL prices [133]. - The company had $3.2 million higher other expenses for the three months ended March 31, 2024, primarily due to the loss on revaluation of contingent consideration liability from an acquisition [124]. Production and Capital Expenditures - Total production for the three months ended March 31, 2024 was 84.8 thousand barrels of oil equivalent per day, an increase from 79.3 thousand boe/d in the same period of 2023, representing a 6.2% growth [105]. - The average price of oil per barrel increased to $75.89 for the three months ended March 31, 2024, compared to $74.24 in the same period of 2023, a 2.2% increase [112]. - Total capital expenditures for the three months ended March 31, 2024, were $120.986 million, down from $138.645 million in the same period of 2023 [135]. Shareholder Returns and Debt - Magnolia's board of directors authorized a share repurchase program of up to 40.0 million shares, with 33.1 million shares repurchased at a cost of $577.3 million as of March 31, 2024 [107]. - The company repurchased 2.4 million shares of Class A Common Stock at a total cost of approximately $52.4 million during the three months ended March 31, 2024 [136]. - Cash dividends declared for the three months ended March 31, 2024, totaled $24.0 million, compared to $22.4 million for the same period in 2023 [138]. - As of March 31, 2024, the company had $400.0 million of principal debt related to the 2026 Senior Notes and $849.3 million of liquidity, which includes $450.0 million of borrowing base capacity and $399.3 million of cash and cash equivalents [129]. Strategic Initiatives - The company acquired oil and gas properties in the Giddings area for approximately $264.1 million in November 2023, with additional contingent cash consideration of up to $40.0 million based on future commodity prices [109]. - Magnolia's capital allocation strategy focuses on reinvesting in its business for moderate and predictable annual volume growth while returning capital to shareholders through dividends and share repurchases [102]. - A $1.00 per barrel increase in the weighted average oil price would have increased the company's revenues by approximately $13.7 million on an annualized basis for the three months ended March 31, 2024 [140]. - The company anticipates its current cash balance and cash flows from operations will be sufficient to meet its cash requirements [128]. - Magnolia's ongoing plan is to continue spending within cash flow on drilling and completing wells while maintaining low financial leverage [135].

Magnolia Oil & Gas Corp (MGY) came out with quarterly earnings of $0.49 per share, beating the Zacks Consensus Estimate of $0.44 per share. This compares to earnings of $0.56 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 11.36%. A quarter ago, it was expected that this company would post earnings of $0.54 per share when it actually produced earnings of $0.50, delivering a surprise of -7.41%.Over the last four quarters, the c ...