Magnolia Oil & Gas Lifts Output 11% Despite Lower Oil Prices

Core Insights - Magnolia Oil & Gas Corporation reported third-quarter 2025 net earnings of $0.41 per share, matching analyst estimates but down from $0.52 last year due to higher operating expenses offsetting gains from increased output [1] - Total revenue reached $324.9 million, slightly above expectations, supported by stronger natural gas and NGL sales, although overall revenue declined 2.5% year over year due to weaker oil prices [1] Revenue Breakdown - Oil revenue decreased by 13% to $230.5 million, while natural gas revenue nearly doubled to $43.2 million, and NGL revenue rose to $51.2 million [2] - Production averaged 100,507 barrels of oil equivalent per day (boe/d), up 10.8% from the prior year, exceeding consensus forecasts [2] Pricing and Sales - The average oil price realized was $63.55 per barrel, down 14% year over year but ahead of forecasts [3] - Gas prices averaged $2.46 per Mcf, while NGLs fetched $18.98 per barrel, with average sales prices across all products at $35.14 per boe, slightly below last year's level [3] Cash Flow and Shareholder Returns - Magnolia generated $247 million in operating cash flow and $134 million in free cash flow, returning $80.3 million—or 60% of free cash flow—to shareholders via dividends and share repurchases [4] - The company bought back 2.15 million shares for $51.4 million and declared a $0.15 dividend per share, payable December 1 [4] Financial Position - With a cash balance of $280 million and long-term debt of $393 million (16% debt-to-capital ratio), Magnolia remains financially strong [5] - The company spent $118 million in capex during the quarter and expects full-year spending near the midpoint of its $430–470 million range [5] Future Outlook - For Q4, Magnolia anticipates record production near 101,000 boe/d and continued cost reductions, targeting lease operating expenses around $5.20 per boe [6] - The company remains unhedged, operating two drilling rigs and one completion crew, with 75–80% of 2025 activity centered on Giddings Field, its 240,000-acre core [6]