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]

Core Insights - Magnolia Oil & Gas Corp (MGY) reported quarterly earnings of $0.49 per share, exceeding the Zacks Consensus Estimate of $0.46 per share, but down from $0.50 per share a year ago, resulting in an earnings surprise of 6.52% [1][2] - The company generated revenues of $326.61 million for the quarter ended December 2024, slightly missing the Zacks Consensus Estimate by 0.01%, but up from $322.63 million year-over-year [2] - The stock has underperformed the S&P 500, gaining about 0.5% since the beginning of the year compared to the S&P 500's 4% increase [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.50 on revenues of $332.34 million, and for the current fiscal year, it is $2.08 on revenues of $1.37 billion [7] - The estimate revisions trend for Magnolia Oil & Gas Corp is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently ranked in the top 16% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Fourth quarter 2024 net income was $88.7 million, a decrease of 22% from $113.9 million in Q4 2023, with adjusted net income at $95.4 million, down 11% year-over-year [2][5]. - Full year 2024 net income totaled $397.3 million, a 10% decrease from $442.6 million in 2023, while adjusted net income was $400.9 million, down 9% [3][5]. - Net income for the quarter ended December 31, 2024, was $88.7 million, a decrease of 22.1% from $113.9 million in the same quarter of 2023 [28]. - Net income attributable to Class A common stock for the quarter was $85.6 million, down from $98.4 million in the same quarter of 2023, a decrease of 13.5% [26]. - The company reported an operating income of $124.1 million for the quarter, down from $138.1 million in the same quarter of 2023, a decrease of 10.1% [26]. - Adjusted EBITDAX for the year ended December 31, 2024, was $953.3 million, up 6.0% from $899.2 million in 2023 [36]. Production and Reserves - Average daily production for Q4 2024 was 93.1 Mboe/d, a 9% increase from 85.4 Mboe/d in Q4 2023, with full year production averaging 89.7 Mboe/d, also up 9% [2][9]. - Magnolia added 44.3 MMboe of proved developed reserves in 2024, achieving a replacement ratio of 135% of production, with organic proved developed finding and development costs at $10.77 per boe [10][13]. - Oil production for the quarter was 3,572 MBbls, representing a 9.4% increase compared to 3,263 MBbls in the same quarter of 2023 [23]. - Magnolia's average daily natural gas production increased to 167,079 Mcf/d, up from 154,848 Mcf/d, reflecting an 8% growth year-over-year [23]. - Proved developed reserves increased by 14.1 million barrels of oil equivalent (MMboe) to 149.3 MMboe for the year ended December 31, 2024, compared to 135.2 MMboe in 2023 [32]. Cash Flow and Expenditures - Free cash flow generated in Q4 2024 was $90.3 million, with total free cash flow for the year at $430.2 million, representing 88% of total free cash flow returned to shareholders [5][10]. - Capital expenditures for drilling and completions in Q4 2024 were $131.6 million, a 44% increase from $91.5 million in Q4 2023, with full year expenditures at $477.0 million, up 13% [2][10]. - Net cash provided by operating activities for the year ended December 31, 2024, was $920.9 million, an increase of 7.6% compared to $855.8 million in 2023 [28]. - The company reported a net cash used in investing activities of $655.1 million for the year ended December 31, 2024, down from $814.9 million in 2023 [28]. Shareholder Returns - A 15% increase in the quarterly dividend to $0.15 per share was approved, marking the fourth consecutive year of dividend growth [7][10]. - Magnolia repurchased 2.2 million shares for $55.8 million in Q4 2024, totaling 11.0 million shares repurchased for the year, leading to a 5% reduction in diluted weighted average shares outstanding [10][12]. - The company repurchased $55.2 million of Class A Common Stock during the quarter, compared to $53.6 million in the same quarter of 2023 [28]. Operational Efficiency - The company plans to maintain two drilling rigs and one completion crew in 2025, expecting total production growth of 5% to 7% for the year [12][14]. - The company anticipates continued growth in production and revenue, driven by ongoing operational efficiencies and market demand [23]. Revenue and Costs - For the quarter ended December 31, 2024, Magnolia Oil & Gas Corporation reported total revenues of $326.6 million, a slight increase from $322.6 million in the same quarter of 2023 [23]. - Total operating expenses for the quarter were $202.5 million, compared to $184.5 million in the same quarter of 2023, an increase of 9.8% [26]. - Lease operating expenses rose to $45.9 million from $40.4 million year-over-year, marking a 12.4% increase [26]. - Total revenues per barrel (boe) for Q4 2024 were $38.13, a decrease of 4.5% from $41.06 in Q4 2023 [43]. - Adjusted cash operating margin for Q4 2024 was $27.51 per boe, down 10.3% from $30.51 per boe in Q4 2023 [43]. - Total adjusted cash operating costs for Q4 2024 were $10.62 per boe, slightly up from $10.55 per boe in Q4 2023 [43]. - Operating income margin for Q4 2024 was $14.48 per boe, down from $17.56 per boe in Q4 2023 [43].

Core Viewpoint - Magnolia Oil & Gas Corporation (MGY) is expected to report fourth-quarter earnings on February 18, with earnings estimated at 46 cents per share and revenues at $330.02 million [1]. Group 1: Previous Performance - In the last reported quarter, MGY achieved a net profit of 52 cents per share, exceeding the Zacks Consensus Estimate by 4 cents, primarily due to increased production volumes [3]. - Total revenues for the last quarter were $333.1 million, surpassing the Zacks Consensus Estimate by $2.1 million [3]. - MGY has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 5.52% [3]. Group 2: Estimate Revisions - The Zacks Consensus Estimate for fourth-quarter 2024 earnings has remained unchanged over the past week, indicating an 8% year-over-year decrease [4]. - Conversely, the revenue estimate shows a 2.29% increase compared to the previous year [4]. Group 3: Revenue and Production Expectations - MGY's revenues are projected to increase to $327.9 million in the upcoming quarter, up from $322.6 million year-over-year, driven by strong contributions from oil and natural gas [6]. - Oil segment revenues are expected to rise by 1.3% year-over-year to $255.9 million, while natural gas segment revenues are predicted to increase by 17.1% to $30.9 million [6]. - Total production is anticipated to reach 8.6 million barrels of oil equivalent (MMboe), an 8.3% increase from 7.9 MMboe in the same quarter last year [7]. - Oil production is expected to rise by 8.5% to 3.5 thousand barrels of oil (MBbls), and natural gas production is predicted to grow by 13.6% to 16.2 million cubic feet [7]. Group 4: Cost Management - MGY's cost management efforts are likely to positively impact profitability, with gathering, transportation, and processing expenses expected to decrease by 20.7% to $8.7 million from $10.9 million year-over-year [8]. - The combination of increased production and effective cost management is expected to lead to higher revenues and improved profitability in the fourth quarter [8]. Group 5: Earnings Prediction - The model predicts an earnings beat for MGY, supported by a positive Earnings ESP of +1.73% and a Zacks Rank of 3 (Hold) [9][10].

Core Insights - Magnolia Oil & Gas Corp (MGY) is positioned to continue its earnings-beat streak, having a history of surpassing earnings estimates, particularly in the last two quarters with an average surprise of 9.07% [1][2] Earnings Performance - For the most recent quarter, Magnolia reported earnings of $0.52 per share against an expectation of $0.48, resulting in a surprise of 8.33%. In the previous quarter, the company reported $0.56 per share compared to a consensus estimate of $0.51, achieving a surprise of 9.80% [2] Earnings Estimates - Recent estimates for Magnolia have been increasing, with a positive Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat, especially when combined with its Zacks Rank [3][6] Predictive Metrics - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise, suggesting that out of 10 such stocks, approximately 7 may beat consensus estimates [4] Earnings ESP Definition - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions, which may be more accurate than earlier predictions [5] Current Earnings ESP - Magnolia Oil & Gas Corp currently has an Earnings ESP of +0.82%, indicating bullish sentiment among analysts regarding its near-term earnings potential. The next earnings report is anticipated on February 18, 2025 [6]

Core Viewpoint - Magnolia Oil & Gas Corp (MGY) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ending December 2024, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is expected to show earnings of $0.46 per share, reflecting an 8% decrease year-over-year, while revenues are projected to be $330.02 million, a 2.3% increase from the previous year [3]. - The consensus EPS estimate has been revised 3.23% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +0.82%, indicating a likelihood of beating the consensus EPS estimate [10][11]. - The stock currently holds a Zacks Rank of 3, which, combined with the positive Earnings ESP, suggests a favorable outlook for the upcoming earnings report [11]. Historical Performance - In the last reported quarter, Magnolia Oil & Gas Corp exceeded the expected earnings of $0.48 per share by delivering $0.52, resulting in a surprise of +8.33% [12]. - Over the past four quarters, the company has surpassed consensus EPS estimates three times [13]. Conclusion - While Magnolia Oil & Gas Corp is positioned as a strong candidate for an earnings beat, other factors should also be considered when evaluating the stock ahead of its earnings release [16].

Core Insights - Investors in Magnolia Oil & Gas Corporation (MGY) should monitor stock movements due to high implied volatility in the options market, particularly the March 21, 2025 $15 Call option [1] Company Overview - Magnolia Oil & Gas is currently rated as Zacks Rank 3 (Hold) in the Oil and Gas - Exploration and Production - United States industry, which ranks in the top 23% of Zacks Industry Rank [3] - Over the last 60 days, two analysts have raised their earnings estimates for the current quarter, while three have lowered theirs, resulting in a slight decrease in the Zacks Consensus Estimate from 47 cents per share to 46 cents [3] Market Sentiment - The high implied volatility suggests that options traders are anticipating significant price movement for Magnolia Oil & Gas shares, indicating potential upcoming events that could lead to a major rally or sell-off [2][4] - Options traders often seek high implied volatility options to sell premium, aiming to benefit from the decay of options value if the underlying stock does not move as much as expected [4]

Group 1 - Laura Starks is the founder and CEO of Starks Energy Economics, LLC, established in 2007, with expertise in energy investments [1] - Starks holds a degree in chemical engineering and an MBA focused on finance, which she applies in her investment strategies [1] - The coverage of Starks includes various sectors such as utilities, independent power producers, energy service companies, petrochemical companies, and all segments of oil and natural gas: upstream, midstream, and downstream [1]

Core Viewpoint - Magnolia Oil & Gas Corporation (MGY) reported a third-quarter 2024 net profit of 52 cents per share, exceeding the Zacks Consensus Estimate of 48 cents, driven by increased production volumes despite a year-over-year decline from 54 cents due to rising operating expenses [1][2]. Financial Performance - Total revenues for the quarter were $333.1 million, surpassing the Zacks Consensus Estimate of $331 million, and reflecting a 5.5% increase from $315.7 million in the same period last year, primarily due to higher oil revenues of $266 million [2][3]. - The company generated $217.9 million in net cash from operating activities and achieved a free cash flow of $126.1 million, with operating income constituting 39% of revenues [3]. Shareholder Returns - Magnolia declared a cash dividend of 13 cents per share for both Class A and Class B stock, payable on December 2, to shareholders of record as of November 8 [4]. - In the third quarter, the company repurchased 2.5 million shares for $61.7 million, returning approximately $87.8 million to shareholders, which represents 70% of its free cash flow [5]. Production and Prices - Average daily total output was 90,702 barrels of oil equivalent per day (boe/d), up from 82,651 boe/d year-over-year, although it fell short of the estimate of 91,000 boe/d [6]. - Oil production reached 38,902 barrels per day (bpd), an 18.4% increase from the previous year, exceeding the estimate of 37,200 bpd, while natural gas volumes were 159,170 thousand cubic feet per day (Mcf/d), up 1.7% but below the expected 173,600 Mcf/d [7]. - The average realized crude oil price was $74.23 per barrel, down 7.9% from $80.56 a year ago, and also below the expected $75.21 per barrel [7][8]. Balance Sheet and Capital Expenditure - As of September 30, Magnolia had cash and cash equivalents of $276.1 million and long-term debt of $394.8 million, with a total debt-to-total capital ratio of 16.8% [9]. - The company spent $103.1 million on its capital program during the quarter, with operating expenses rising to $204.1 million from $167.5 million year-over-year [9]. Guidance and Future Plans - Magnolia plans to maintain two drilling rigs and one completion crew, with an additional four well pads to be drilled in Giddings during the fourth quarter, enhancing operational flexibility for 2025 [10][11]. - The company expects fourth-quarter drilling and completion capital to be $125 million, bringing total capital spending for the year to approximately $470 million, aligning with its budget range [11]. - Projected total production volumes for the fourth quarter are about 93 thousand boe/d, indicating a high single-digit year-over-year increase, with oil production growth expected to exceed this rate [12].