Magnolia Oil & Gas(US:MGY)2024-08-01 20:01Financial 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].