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].

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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].

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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 ...

First Quarter 2024 Results Overview [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) The company reported a 7% production increase and 5% Adjusted EBITDAX growth, generating $117.1 million in free cash flow despite lower net income Key Financial and Operational Metrics | (In millions, except per share data) | March 31, 2024 | March 31, 2023 | Percentage increase (decrease) | | :--- | :--- | :--- | :--- | | Net income | $97.6 | $106.7 | (9)% | | Adjusted net income | $101.0 | $119.3 | (15)% | | Earnings per share - diluted | $0.46 | $0.50 | (8)% | | Adjusted EBITDAX | $227.8 | $216.9 | 5 % | | Capital expenditures - D&C | $119.0 | $139.7 | (15)% | | Average daily production (Mboe/d) | 84.8 | 79.3 | 7 % | | Cash balance as of period end | $399.3 | $667.3 | (40)% | | Diluted weighted average total shares outstanding | 204.3 | 213.9 | (5)% | - Total production grew **7%** year-over-year to **84.8 Mboe/d**, with production from the Giddings and Other area growing **17%**[5](index=5&type=chunk) - The company generated **$117.1 million in free cash flow** and maintained capital discipline with D&C capital at **$119.0 million**, a **15% decrease** from Q1 2023[5](index=5&type=chunk) - Returned **$79.2 million (68% of free cash flow)** to shareholders through **$52.4 million in share repurchases** and a declared dividend of **$0.13 per share**[5](index=5&type=chunk)[6](index=6&type=chunk) [Management Commentary and Strategy](index=2&type=section&id=Management%20Commentary%20and%20Strategy) Management emphasized disciplined capital spending, bolt-on acquisitions, and a new cost reduction program to enhance returns - A key strategic objective is to use excess cash for **attractive bolt-on oil and gas property acquisitions** to enhance returns[7](index=7&type=chunk) - The company initiated a cost reduction program aiming for a **5% to 10% reduction in cash operating costs per boe** in the second half of 2024[5](index=5&type=chunk)[8](index=8&type=chunk) [Operational Update and Acquisitions](index=2&type=section&id=Operational%20Update%20and%20Acquisitions) Production growth was driven by the Giddings area, supported by a two-rig program and a recent $125 million acquisition - Q1 2024 total production averaged **84.8 Mboe/d**, with production from Giddings and Other increasing by **17% YoY** to **61.4 Mboe/d**[9](index=9&type=chunk) - Magnolia continues to operate **two drilling rigs** and one completion crew, focusing on multi-well pads with longer laterals in the Giddings area[10](index=10&type=chunk) - The company acquired approximately **27,000 net acres** in Giddings for about **$125 million**, adding **1,000 Mboe/d** of production[5](index=5&type=chunk)[11](index=11&type=chunk) [2024 Outlook and Guidance](index=3&type=section&id=2024%20Outlook%20and%20Guidance) The company reaffirmed its full-year capital and production growth guidance while providing specific targets for Q2 2024 2024 Guidance | Guidance Metric | Full Year 2024 | Second Quarter 2024 | | :--- | :--- | :--- | | D&C Capital | $450 - $480 million | $120 - $125 million | | Total Production Growth | High single-digit % (YoY) | ~89 Mboe/d | | Oil Production Growth | High single-digit % (YoY) | N/A | - The company remains **completely unhedged** for all its oil and natural gas production[14](index=14&type=chunk) - The fully diluted share count for Q2 2024 is expected to be approximately **203 million shares**, about **4% lower** than Q2 2023 levels[14](index=14&type=chunk) Financial Statements [Operating Highlights](index=5&type=section&id=Operating%20Highlights) Total production and revenues increased year-over-year, though profitability was impacted by lower natural gas prices Key Operating Metrics | | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | **Production:** | | | | Total (Mboe) | 7,715 | 7,141 | | Total (boe/d) | 84,784 | 79,342 | | **Revenues (in thousands):** | | | | Total Revenues | $319,417 | $308,382 | | **Average sales price:** | | | | Oil (per Bbl) | $75.89 | $74.24 | | Natural gas (per Mcf) | $1.53 | $2.20 | | Total (per boe) | $41.40 | $43.18 | | **Operating costs per boe:** | | | | Lease operating expenses | $5.98 | $5.93 | | Depreciation, depletion and amortization | $12.58 | $9.90 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Revenues grew slightly, but net income and diluted EPS declined compared to the prior-year quarter Q1 2024 Statement of Operations | (In thousands, except per share data) | For the Quarter Ended March 31, 2024 | For the Quarter Ended March 31, 2023 | | :--- | :--- | :--- | | Total revenues | $319,417 | $308,382 | | Total operating expenses | $194,859 | $181,449 | | OPERATING INCOME | $124,558 | $126,933 | | NET INCOME | $97,597 | $106,677 | | NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK | $85,086 | $96,335 | | Diluted NET INCOME PER COMMON SHARE | $0.46 | $0.50 | [Summary Cash Flow Data](index=7&type=section&id=Summary%20Cash%20Flow%20Data) Operating cash flow slightly decreased while cash was primarily used for property investments and shareholder returns Q1 2024 Cash Flow Summary | (In thousands) | For the Quarter Ended March 31, 2024 | For the Quarter Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $210,932 | $219,823 | | Net cash used in investing activities | ($127,308) | ($150,215) | | Net cash used in financing activities | ($85,428) | ($77,765) | | NET CHANGE IN CASH AND CASH EQUIVALENTS | ($1,804) | ($8,157) | | Cash and cash equivalents – End of period | $399,317 | $667,284 | [Summary Balance Sheet Data](index=8&type=section&id=Summary%20Balance%20Sheet%20Data) The balance sheet shows total assets of $2.81 billion, a cash position of $399.3 million, and total equity of $1.90 billion Balance Sheet Summary | (In thousands) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $399,317 | $401,121 | | Total assets | $2,807,942 | $2,756,216 | | Current liabilities | $350,011 | $314,887 | | Long-term debt, net | $393,480 | $392,839 | | Total liabilities and equity | $2,807,942 | $2,756,216 | Non-GAAP Financial Measures [Reconciliation of Net Income to Adjusted EBITDAX](index=9&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDAX) Adjusted EBITDAX increased 5% year-over-year to $227.8 million after reconciling from GAAP net income Adjusted EBITDAX Reconciliation | (In thousands) | For the Quarter Ended March 31, 2024 | For the Quarter Ended March 31, 2023 | | :--- | :--- | :--- | | NET INCOME | $97,597 | $106,677 | | Adjustments (DD&A, Taxes, Interest, etc) | $125,572 | $94,443 | | EBITDAX | $218,964 | $197,348 | | Other Adjustments | $8,863 | $19,507 | | Adjusted EBITDAX | $227,827 | $216,855 | [Reconciliation of Net Income to Adjusted Net Income](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) Adjusted Net Income was $101.0 million after excluding non-recurring and non-cash items from GAAP net income Adjusted Net Income Reconciliation | (In thousands) | For the Quarter Ended March 31, 2024 | For the Quarter Ended March 31, 2023 | | :--- | :--- | :--- | | NET INCOME | $97,597 | $106,677 | | Adjustments | $3,410 | $12,646 | | ADJUSTED NET INCOME | $101,007 | $119,323 | [Reconciliation of Revenue to Adjusted Operating Income Margin](index=11&type=section&id=Reconciliation%20of%20Revenue%20to%20Adjusted%20Operating%20Income%20Margin) The adjusted cash operating margin remained stable at 71%, while the adjusted operating income margin declined to 39% Adjusted Margin Analysis | (in $/boe) | For the Quarter Ended March 31, 2024 | For the Quarter Ended March 31, 2023 | | :--- | :--- | :--- | | Revenue | $41.40 | $43.18 | | Total adjusted cash operating costs | ($11.86) | ($12.65) | | Adjusted cash operating margin | $29.54 | $30.53 | | Margin (%) | 71% | 71% | | Adjusted operating income margin | $16.15 | $19.98 | | Margin (%) | 39% | 46% | [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 significantly to $117.1 million from $60.6 million in the prior-year quarter Free Cash Flow Reconciliation | (In thousands) | For the Quarter Ended March 31, 2024 | For the Quarter Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $210,932 | $219,823 | | Cash flows from operations before net change in operating assets and liabilities | $217,873 | $214,176 | | Less: Additions to oil and natural gas properties (net of working capital changes) | ($100,742) | ($153,622) | | Free cash flow | $117,131 | $60,554 |

Magnolia Oil & Gas Corporation (NYSE:MGY) Q4 2023 Earnings Call Transcript February 15, 2024 11:00 AM ET Company Participants Tom Fitter - IR Chris Stavros - President and CEO Brian Corales - SVP and CFO Conference Call Participants Neal Dingmann - Truist Leo Mariani - MKM Partners Charles Meade - Johnson Rice Oliver Huang - TPH & Co. Ati Modak - Goldman Sachs Nicholas Pope - Seaport Research Geoff Jay - Daniel Energy Partners Zach Parham - JPMorgan Tim Rezvan - KeyBanc Capital Markets Paul Diamond - Citi O ...