Magnolia Oil & Gas(MGY)2024-10-31 20:02Financial Performance - For the three months ended September 30, 2024, Magnolia reported net income attributable to Class A Common Stock of $99.8 million, or $0.52 per diluted share, compared to $280.4 million, or $1.50 per diluted share for the nine months ended September 30, 2024[95]. - Oil revenues for the three months ended September 30, 2024 were $265.7 million, an increase of $22.1 million compared to the same period in 2023, driven by an 18% increase in oil production[104]. - Natural gas revenues for the three months ended September 30, 2024 decreased by $4.9 million to $22.2 million, primarily due to a 19% decrease in average prices[106]. - NGL revenues for the three months ended September 30, 2024 were $45.2 million, a slight increase of $0.2 million compared to the same period in 2023, supported by a 7% increase in NGL production[107]. - Total operating expenses for the three months ended September 30, 2024, were $204.1 million, an increase of 21.8% compared to $167.5 million for the same period in 2023[108]. - Income tax expense for the three months ended September 30, 2024, was $26.5 million, a decrease of 15.4% from $31.2 million in 2023[117]. - The net change in cash and cash equivalents for the nine months ended September 30, 2024, was a decrease of $125.0 million, compared to a decrease of $57.0 million in 2023[122]. Production and Operations - Total production for the three months ended September 30, 2024 was 90.7 thousand barrels of oil equivalent per day, an increase from 82.7 thousand boe/d for the same period in 2023, representing a 9.9% increase[94]. - Lease operating expenses for the three months ended September 30, 2024, were $44.4 million, up from $35.9 million in 2023, reflecting a 23.5% increase[108]. - Gathering, transportation, and processing costs for the three months ended September 30, 2024, were $10.7 million, slightly higher than $10.3 million in 2023, but $0.07 per boe lower[110]. - Depreciation, depletion, and amortization for the three months ended September 30, 2024, was $107.3 million, compared to $81.2 million in 2023, marking a 32.2% increase[112]. - The Company is running a two-rig program, with drilling rig numbers dependent on commodity prices and business strategy[125]. Capital Expenditures and Acquisitions - The company acquired oil and gas producing 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[100]. - Acquisitions for the nine months ended September 30, 2024, amounted to $165.0 million, significantly higher than $53.8 million in 2023[122]. - Total capital expenditures for the three months ended September 30, 2024, were $104.9 million, compared to $106.7 million for the same period in 2023[125]. Shareholder Returns - The company declared cash dividends totaling $72.5 million to holders of its Class A Common Stock during the nine months ended September 30, 2024[96]. - Cash dividends declared and paid to holders of Class A Common Stock totaled $72.5 million during the nine months ended September 30, 2024, up from $66.3 million in the same period of 2023[128]. - Magnolia's board of directors authorized a share repurchase program of up to 40.0 million shares, with 36.1 million shares repurchased at a cost of $652.0 million as of September 30, 2024[97]. - The Company repurchased 5.3 million shares for approximately $127.0 million during the nine months ended September 30, 2024, compared to 7.1 million shares for $152.9 million in the same period of 2023[126]. - Magnolia LLC repurchased and canceled 3.5 million units for $89.7 million during the nine months ended September 30, 2024[127]. - The future amount and frequency of dividends are subject to the discretion of the Company's board of directors, influenced by earnings and capital expenditures[128]. Financial Position - The company had $726.1 million in liquidity as of September 30, 2024, consisting of $450.0 million in borrowing capacity and $276.1 million in cash[120]. - As of September 30, 2024, the Company had no borrowings outstanding under the RBL Facility, indicating a low financial leverage position[129]. Price Sensitivity - A $1.00 per barrel increase in the weighted average oil price would increase the Company's revenues by approximately $13.9 million on an annualized basis[130]. - A $0.10 per Mcf increase in the weighted average natural gas price would increase the Company's revenues by approximately $5.8 million on an annualized basis[130]. Business Strategy - Magnolia's business model emphasizes disciplined capital allocation and aims for moderate and predictable annual volume growth while returning capital to shareholders through dividends and share repurchases[92].