Magnolia Oil & Gas(MGY) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter 2025 net income was $71.4 million, a decrease of 20% compared to $88.7 million in Q4 2024, while full year net income totaled $337.3 million, down 15% from $397.3 million in 2024[2][3][4] - Adjusted EBITDAX for Q4 2025 was $215.7 million, down 9% from $235.8 million in Q4 2024, while full year adjusted EBITDAX was $906.1 million, a 5% decrease from $953.3 million in 2024[2][3][4] - For the quarter ended December 31, 2025, Magnolia reported total revenues of $317.6 million, a slight decrease from $326.6 million in the same quarter of 2024[27] - Net income for the year ended December 31, 2025, was $337,279, a decrease of 15.1% from $397,330 in 2024[29] - Adjusted net income for the year ended December 31, 2025, was $335,672,000, down from $400,944,000 in 2024, reflecting a decline of about 16.3%[41] Production and Operations - Average daily production for Q4 2025 reached 103.8 Mboe/d, an 11% increase from 93.1 Mboe/d in Q4 2024, and full year production averaged 99.8 Mboe/d, also reflecting an 11% year-over-year growth[2][3][4] - Oil production for the quarter was 3,747 MBbls, up from 3,572 MBbls in the same quarter of 2024, representing a growth of 4.9%[25] - Average daily oil production increased to 40,730 Bbls/d from 38,821 Bbls/d, reflecting a year-over-year increase of 4.7%[25] - Natural gas production rose to 18,089 MMcf for the quarter, compared to 15,371 MMcf in the same quarter of 2024, marking a 17.7% increase[25] - Magnolia's average daily production for the year ended December 31, 2025, was 99,793 boe/d, an increase from 89,709 boe/d in 2024, representing a growth of 11.7%[25] Costs and Expenditures - Capital expenditures for drilling and completions in Q4 2025 were $116.5 million, an 11% decrease from $131.6 million in Q4 2024, and full year capital expenditures totaled $460.7 million, down 3% from $477.0 million in 2024[2][3][4] - Total operating costs and expenses for the quarter were $223.5 million, up from $202.5 million in the same quarter of 2024, an increase of 10.3%[27] - Total costs incurred for exploration and development activities in 2025 were $556,759, a decrease from $661,116 in 2024[34] - Total adjusted cash operating costs per boe for the year ended December 31, 2025, were $11.10, compared to $11.08 in 2024, indicating a slight increase of about 1.8%[46] Cash Flow and Shareholder Returns - Magnolia returned 75% of free cash flow generated in 2025 to shareholders through dividends and share repurchases, totaling $205.5 million in share repurchases and $113.1 million in dividends[7][10][19] - Free cash flow for the year ended December 31, 2025, was $426,599,000, slightly down from $430,232,000 in 2024, showing a decrease of approximately 0.6%[49] - A cash dividend of $0.165 per share was declared, representing a 10% increase from the previous rate, marking the fifth consecutive annual increase in dividends[10][19] Reserves and Efficiency - The company achieved a reserve replacement ratio of 137% for 2025, adding 49.8 MMboe of proved developed reserves, with organic proved developed finding and development costs at $9.25 per boe[10][15] - Proved developed reserves increased by 17.3 MMboe to 166.6 MMboe at the end of 2025, compared to 149.3 MMboe at the end of 2024[34] - Organic proved developed F&D cost per boe decreased to $9.25 in 2025 from $10.77 in 2024, indicating improved cost efficiency[34] - Magnolia's return on capital employed was 18% in 2025, reflecting strong operational efficiency and capital discipline[8][9] - The return on average capital employed (ROCE) for the year ended December 31, 2025, was 18.5%, down from 22.1% in 2024, indicating a decrease of about 16.3%[52] Balance Sheet and Assets - Magnolia's cash balance increased to $266.8 million at year-end 2025, up from $260.0 million at the end of 2024, while maintaining an undrawn $450 million revolving credit facility[4][10] - Total assets increased to $2,903,092 as of December 31, 2025, compared to $2,820,835 in 2024, representing a growth of 2.9%[32] - Cash and cash equivalents at the end of the period were $266,785, slightly up from $260,049 at the end of 2024[32] Market Realization - The average sales price for oil decreased to $57.54 per Bbl from $69.01 per Bbl in the same quarter of 2024, a decline of 16.5%[25] - The company reported a realization of 97% of WTI for oil and 82% of Henry Hub for natural gas during the quarter[25] - Revenue per barrel of oil equivalent (boe) for the quarter ended December 31, 2025, was $33.26, a decrease from $38.13 in the same quarter of 2024, indicating a decline of approximately 21.5%[46]