Magnolia (MGY) Q2 Earnings Rise Y/Y, Revenues Lag Estimates

Financial Performance - Magnolia Oil & Gas Corporation (MGY) reported a second-quarter 2024 net profit of 51 cents per share, an increase from 48 cents in the prior-year quarter, driven by higher production volumes and oil prices [1] - Total revenues for the quarter were $336.7 million, missing the Zacks Consensus Estimate of $341 million, primarily due to lower-than-expected natural gas revenues, which totaled $18.6 million against a consensus of $24.3 million; however, this figure represented a 4.4% increase from $280.3 million in the year-ago period [2] - The company recorded $269.4 million in net cash from operating activities and achieved a free cash flow of $96.7 million, with operating income constituting 40% of revenues [3] Shareholder Returns - Magnolia declared a cash dividend of 13 cents per share for Class A common stock and Class B units, payable on September 3, to shareholders of record as of August 9 [3] - The company distributed approximately $130 million to shareholders in the second quarter through dividends and share repurchases, having repurchased 4 million shares for $102.7 million [4][5] Production and Pricing - The average daily total output was 90,207 barrels of oil equivalent per day (boe/d), up from 81,881 boe/d in the year-ago quarter, exceeding estimates of 89,000 boe/d; oil production increased by 11.4% to 37,943 barrels per day (bpd) [6] - The average realized crude oil price was $79.74 per barrel, a 10.8% increase from $71.98 a year ago, while natural gas prices decreased by 17.9% to $1.24 per thousand cubic feet [7] Balance Sheet and Capital Expenditure - As of June 30, Magnolia had cash and cash equivalents of $275.7 million and long-term debt of $394.1 million, with a total debt-to-total capital ratio of 17% [8] - The company spent $123.4 million on its capital program in the reported quarter, with operating expenses rising to $202.4 million from $159 million in the previous year [8] Future Guidance - Magnolia plans to maintain its current operating tempo of two drilling rigs and one completion crew throughout 2024, expecting significant cost reductions and operational enhancements to drive high-margin growth [9] - The company anticipates full-year 2024 capital spending to range from $450 to $480 million, projecting high single-digit growth in total production compared to 2023 [11] - Third-quarter D&C capital expenditures are estimated at $120 million, with total production expected to reach 91 thousand boe/d [12]