Magnolia Oil & Gas Corporation (“Magnolia,” “we,” “our,” or
the “Company”) (NYSE: MGY) today announced its financial and
operational results for the first quarter of 2024.
First Quarter 2024 Highlights:
(In millions, except per share
data)
For the
Quarter Ended
March 31, 2024
For the
Quarter Ended
March 31, 2023
Percentage increase
(decrease)
Net income
$
97.6
$
106.7
(9
)%
Adjusted net income(1)
$
101.0
$
119.3
(15
)%
Earnings per share - diluted
$
0.46
$
0.50
(8
)%
Adjusted EBITDAX(1)
$
227.8
$
216.9
5
%
Capital expenditures - D&C
$
119.0
$
139.7
(15
)%
Average daily production (Mboe/d)
84.8
79.3
7
%
Cash balance as of period end
$
399.3
$
667.3
(40
)%
Diluted weighted average total shares
outstanding(2)
204.3
213.9
(5
)%
First Quarter 2024 Highlights:
- Magnolia reported first quarter 2024 net income attributable to
Class A Common Stock of $85.1 million, or $0.46 per diluted share.
First quarter 2024 total net income was $97.6 million and total
adjusted net income(1) was $101.0 million. Diluted weighted average
total shares outstanding decreased by 5% to 204.3 million(2)
compared to first quarter 2023.
- Adjusted EBITDAX(1) was $227.8 million during the first quarter
of 2024. Total drilling and completions (“D&C”) capital was
$119.0 million and below our earlier guidance. First quarter
D&C capital represented approximately 52% of adjusted EBITDAX
and was 15% lower than the prior-year’s first quarter.
- Net cash provided by operating activities was $210.9 million
during the first quarter of 2024 and the Company generated free
cash flow(1) of $117.1 million. Magnolia generated adjusted
operating income(1) as a percentage of revenue of 39% during the
quarter.
- The Company has embarked on a field-level optimization and cost
reduction program across our assets that is expected to deliver a 5
to 10% reduction in cash operating costs (LOE) per boe during the
second half of the year compared to the first quarter 2024.
- Total production in the first quarter of 2024 grew 7% on a
year-over-year basis to 84.8 thousand barrels of oil equivalent per
day (“Mboe/d”) including 37.5 thousand barrels per day of oil.
Production at Giddings and Other was 61.4 Mboe/d, providing overall
growth of 17% compared to last year’s first quarter, including oil
production growth of 16%.
- On April 30, 2024, Magnolia acquired oil and gas properties in
Giddings from a private operator encompassing roughly 27,000 net
acres for approximately $125 million. These assets included total
production of approximately 1,000 Mboe/d (~35% oil), in addition to
leasehold and royalty acres. The acquisition significantly
increases Magnolia’s working interest in future high-return
development areas and adds new acreage which further expands the
Company’s leading position in the Giddings area.
- The Company repurchased 2.4 million of its Class A Common Stock
during the first quarter for $52.4 million. Magnolia has 6.9
million Class A Common shares remaining under its current
repurchase authorization, which are specifically allocated toward
open market share repurchases.
- As previously announced, the Board of Directors declared a cash
dividend of $0.13 per share of Class A common stock, and a cash
distribution of $0.13 per Class B unit, payable on June 3, 2024 to
shareholders of record as of May 13, 2024.
- Magnolia returned $79.2 million(3), or 68% of the Company’s
free cash flow(1), to shareholders during the first quarter through
a combination of share repurchases and dividends while ending the
period with $399.3 million of cash on the balance sheet. The
Company remains undrawn on its $450.0 million revolving credit
facility, has no debt maturities until 2026 and does not currently
plan to increase its bonded indebtedness.
(1)
Adjusted net income, adjusted EBITDAX,
free cash flow, and adjusted operating income are non-GAAP
financial measures. For reconciliations to the most comparable GAAP
measures, please see “Non-GAAP Financial Measures” at the end of
this press release.
(2)
Weighted average total shares outstanding
include diluted weighted average shares of Class A Common Stock
outstanding during the period and shares of Class B Common Stock,
which are anti-dilutive in the calculation of weighted average
number of common shares outstanding.
(3)
Includes $2.9 million of share repurchases
incurred during the first quarter, but settled during the second
quarter of 2024, and excludes $1.7 million of share repurchases
incurred during the fourth quarter of 2023, but settled during the
first quarter of 2024.
“Magnolia’s first quarter performance delivered a solid start to
2024, continuing our strategy of disciplined capital spending,
while delivering steady production growth with strong pre-tax
margins and consistent free cash flow,” said President and CEO
Chris Stavros. “Our growing production and continued low
reinvestment rate provided free cash flow generation of roughly
$117 million. We returned 68 percent of our free cash flow to our
shareholders through our recently increased dividend and share
repurchase program. Higher oil production of 37.5 thousand barrels
per day during the quarter was driven by strong well performance
and additional volumes from assets acquired last year.
“A key objective of Magnolia’s business plan and strategy is to
utilize some of the excess cash generated by the business to pursue
attractive bolt-on oil and gas property acquisitions. Properties
are targeted not to simply replace the oil and gas that has already
been produced but importantly, to improve the future opportunity
set of our overall business and enhance the sustainability of our
high returns. The latest example is an acquisition from a private
operator that we closed at the end of April for $125 million which
includes approximately 27,000 net acres in Giddings and leverages
the significant knowledge we have gained through operating in the
field. While these properties come with a relatively small amount
of current production, they have similar attractive operational
characteristics to our core acreage position in Giddings. The
acquisition further lengthens our already deep inventory of high
return locations in Giddings while adding duration to our overall
portfolio as well as significantly increasing our working interest
in some of our existing inventory. We continue to look for bolt-on
oil and gas property acquisitions utilizing our technical expertise
and where we have a competitive advantage in the development of the
Austin Chalk and Eagle Ford formations in South Texas.
“While I am proud of our teams’ accomplishments, we continue to
seek out areas where we can improve. Our field operations team
recently initiated a field-level optimization and cost reduction
program throughout our assets. Part of these efforts will employ
improved field management systems that will increase efficiencies
and optimize processes across the field while capturing synergies
from acquired assets. These and other initiatives are expected to
deliver a 5 to 10 percent reduction in cash operating costs (LOE)
per boe during the second half of the year compared to the first
quarter. Our goal is to improve on our track record for generating
high operating margins while providing additional free cash flow to
either return to our shareholders or reinvest in the business.”
Operational Update
First quarter 2024 total company production volumes averaged
84.8 Mboe/d including oil production of 37.5 Mbbls/d. Production
from Giddings and Other increased by 17% compared to last year’s
first quarter to 61.4 Mboe/d with oil production growing 15% over
the same period. Total Company production volumes benefited from
continued strong well performance, in addition to some production
from assets acquired last year, as well as a slightly oilier
development program. First quarter 2024 capital spending on
drilling, completions, and associated facilities was $119.0
million.
Magnolia continues to operate two drilling rigs and one
completion crew and expects to maintain this level of activity
throughout the year. While this activity level is similar to the
2023 operating plan, lower well costs combined with improved
operating efficiencies allow for more wells to be drilled,
completed and turned in line during 2024 and help to support
Magnolia’s overall high-margin growth. Most of this year’s
development activity will consist of multi-well development pads in
the Giddings area, with a proportionally smaller amount of
development planned in the Karnes area, in addition to some
appraisal wells on our assets. For Giddings development activity in
2024, we currently expect to drill multi-well pads with somewhat
longer lateral lengths of approximately 8,500 feet as compared to
last year.
On April 30, 2024, Magnolia acquired approximately 27,000 net
acres in Giddings for approximately $125 million. These oil and gas
properties include both leasehold and royalty interests, as well as
approximately 1,000 Mboe/d of total production (~35% oil and ~68%
liquids). The acquisition covers over 80,000 gross acres, a portion
of which Magnolia currently operates. The incremental acreage
offers both new operated development locations in addition to
increasing the working interest in many existing high-return
development locations.
Additional Guidance
We are reiterating the Company’s full-year 2024 capital spending
and production guidance, with D&C capital expected to be in the
range of $450 to $480 million. We estimate this should deliver high
single digit total production growth during this year as compared
to 2023, and with oil production growing at a similar rate. We
expect second quarter D&C capital expenditures to be between
$120 to $125 million and total production for the second quarter to
be approximately 89 Mboe/d.
Magnolia plans to apply the Company’s operating expertise to its
newly acquired assets which should lead to improved field
operations and efficiencies allowing for lower unit operating costs
that we expect to be reflected in the second half of 2024. Our
lengthy experience and knowledge acquired while operating in the
Giddings area gives us confidence that these initiatives should
lead to higher margins on these assets and increased free cash flow
for the Company.
Oil price differentials are anticipated to be approximately a
$3.00 per barrel discount to Magellan East Houston and Magnolia
remains completely unhedged for all its oil and natural gas
production. The fully diluted share count for the second quarter of
2024 is expected to be approximately 203 million shares, which is
approximately 4% lower than second quarter 2023 levels.
Quarterly Report on Form 10-Q
Magnolia's financial statements and related footnotes will be
available in its Quarterly Report on Form 10-Q for the three months
ended March 31, 2024, which is expected to be filed with the U.S.
Securities and Exchange Commission (“SEC”) on May 8, 2024.
Conference Call and Webcast
Magnolia will host an investor conference call on Wednesday, May
8, 2024 at 10:00 a.m. Central (11:00 a.m. Eastern) to discuss these
operating and financial results. Interested parties may join the
webcast by visiting Magnolia's website at
www.magnoliaoilgas.com/investors/events-and-presentations and
clicking on the webcast link or by dialing 1-844-701-1059. A replay
of the webcast will be posted on Magnolia's website following
completion of the call.
About Magnolia Oil & Gas Corporation
Magnolia (MGY) is a publicly traded oil and gas exploration and
production company with operations primarily in South Texas in the
core of the Eagle Ford Shale and Austin Chalk formations. Magnolia
focuses on generating value for shareholders by delivering steady,
moderate annual production growth resulting from its disciplined
and efficient philosophy toward capital spending. The Company
strives to generate high pre‐tax margins and consistent free cash
flow allowing for strong cash returns to our shareholders. For more
information, visit www.magnoliaoilgas.com.
Cautionary Note Regarding Forward-Looking Statements
The information in this press release includes forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements, other than statements of
present or historical fact included in this press release,
regarding Magnolia’s strategy, future operations, financial
position, estimated revenues and losses, projected costs,
prospects, plans and objectives of management are forward looking
statements. When used in this press release, the words could,
should, will, may, believe, anticipate, intend, estimate, expect,
project, the negative of such terms and other similar expressions
are intended to identify forward-looking statements, although not
all forward-looking statements contain such identifying words.
These forward-looking statements are based on management’s current
expectations and assumptions about future events. Except as
otherwise required by applicable law, Magnolia disclaims any duty
to update any forward-looking statements, all of which are
expressly qualified by the statements in this section, to reflect
events or circumstances after the date of this press release.
Magnolia cautions you that these forward-looking statements are
subject to all of the risks and uncertainties, most of which are
difficult to predict and many of which are beyond the control of
Magnolia, incident to the development, production, gathering and
sale of oil, natural gas and natural gas liquids. In addition,
Magnolia cautions you that the forward looking statements contained
in this press release are subject to the following factors: (i) the
supply and demand for oil, natural gas, NGLs, and other products or
services, including impacts of actions taken by OPEC and other
state-controlled oil companies; (ii) the outcome of any legal
proceedings that may be instituted against Magnolia; (iii)
Magnolia’s ability to realize the anticipated benefits of its
acquisitions, which may be affected by, among other things,
competition and the ability of Magnolia to grow and manage growth
profitably; (iv) changes in applicable laws or regulations; (v)
geopolitical and business conditions in key regions of the world;
and (vi) the possibility that Magnolia may be adversely affected by
other economic, business, and/or competitive factors, including
inflation. Should one or more of the risks or uncertainties
described in this press release occur, or should underlying
assumptions prove incorrect, actual results and plans could differ
materially from those expressed in any forward-looking statements.
Additional information concerning these and other factors that may
impact the operations and projections discussed herein can be found
in Magnolia’s filings with the SEC, including its Annual Report on
Form 10-K for the fiscal year ended December 31, 2023. Magnolia’s
SEC filings are available publicly on the SEC’s website at
www.sec.gov.
Magnolia Oil & Gas
Corporation
Operating Highlights
For the Quarters Ended
March 31, 2024
March 31, 2023
Production:
Oil (MBbls)
3,415
3,221
Natural gas (MMcf)
13,749
12,650
Natural gas liquids (MBbls)
2,009
1,812
Total (Mboe)
7,715
7,141
Average daily production:
Oil (Bbls/d)
37,531
35,788
Natural gas (Mcf/d)
151,086
140,552
Natural gas liquids (Bbls/d)
22,072
20,129
Total (boe/d)
84,784
79,342
Revenues (in thousands):
Oil revenues
$
259,182
$
239,122
Natural gas revenues
21,095
27,771
Natural gas liquids revenues
39,140
41,489
Total Revenues
$
319,417
$
308,382
Average sales price:
Oil (per Bbl)
$
75.89
$
74.24
Natural gas (per Mcf)
1.53
2.20
Natural gas liquids (per Bbl)
19.49
22.90
Total (per boe)
$
41.40
$
43.18
NYMEX WTI (per Bbl)
$
76.97
$
76.11
NYMEX Henry Hub (per MMBtu)
$
2.24
$
3.45
Realization to benchmark:
Oil (% of WTI)
99
%
98
%
Natural Gas (% of Henry Hub)
68
%
64
%
Operating expenses (in
thousands):
Lease operating expenses
$
46,150
$
42,371
Gathering, transportation and
processing
8,537
12,732
Taxes other than income
17,898
19,292
Depreciation, depletion and
amortization
97,076
70,701
Operating costs per boe:
Lease operating expenses
$
5.98
$
5.93
Gathering, transportation and
processing
1.11
1.78
Taxes other than income
2.32
2.70
Depreciation, depletion and
amortization
12.58
9.90
Magnolia Oil & Gas
Corporation
Consolidated Statements of
Operations
(In thousands, except per
share data)
For the Quarters Ended
March 31, 2024
March 31, 2023
REVENUES
Oil revenues
$
259,182
$
239,122
Natural gas revenues
21,095
27,771
Natural gas liquids revenues
39,140
41,489
Total revenues
319,417
308,382
OPERATING EXPENSES
Lease operating expenses
46,150
42,371
Gathering, transportation and
processing
8,537
12,732
Taxes other than income
17,898
19,292
Exploration expenses
25
11
Asset retirement obligations accretion
1,618
841
Depreciation, depletion and
amortization
97,076
70,701
Impairment of oil and natural gas
properties
—
15,735
General and administrative expenses
23,555
19,766
Total operating expenses
194,859
181,449
OPERATING INCOME
124,558
126,933
OTHER INCOME (EXPENSE)
Interest income (expense), net
(2,312
)
487
Other expense, net
(4,313
)
(1,138
)
Total other expense, net
(6,625
)
(651
)
INCOME BEFORE INCOME TAXES
117,933
126,282
Current income tax expense
11,628
4,202
Deferred income tax expense
8,708
15,403
Total income tax expense
20,336
19,605
NET INCOME
97,597
106,677
LESS: Net income attributable to
noncontrolling interest
12,511
10,342
NET INCOME ATTRIBUTABLE TO CLASS A COMMON
STOCK
$
85,086
$
96,335
NET INCOME PER COMMON SHARE
Basic
$
0.46
$
0.50
Diluted
$
0.46
$
0.50
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING
Basic
182,368
191,780
Diluted
182,424
192,054
WEIGHTED AVERAGE NUMBER OF CLASS B SHARES
OUTSTANDING (1)
21,827
21,827
DILUTED WEIGHTED AVERAGE TOTAL SHARES
OUTSTANDING (1)
204,251
213,881
(1)
Shares of Class B Common Stock, and
corresponding Magnolia LLC Units, are anti-dilutive in the
calculation of weighted average number of common shares
outstanding.
Magnolia Oil & Gas
Corporation
Summary Cash Flow Data
(In thousands)
For the Quarters Ended
March 31, 2024
March 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME
$
97,597
$
106,677
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and
amortization
97,076
70,701
Exploration expenses, non-cash
1
5
Impairment of oil and natural gas
properties
—
15,735
Asset retirement obligations accretion
1,618
841
Amortization of deferred financing
costs
1,089
1,042
Deferred income tax expense
8,708
15,403
Loss on revaluation of contingent
consideration
4,205
—
Stock based compensation
4,658
3,772
Other
2,921
—
Net change in operating assets and
liabilities
(6,941
)
5,647
Net cash provided by operating
activities
210,932
219,823
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions
(13,359
)
3,691
Deposits for acquisitions of oil and
natural gas properties (1)
(13,150
)
—
Additions to oil and natural gas
properties
(120,986
)
(138,645
)
Changes in working capital associated with
additions to oil and natural gas properties
20,244
(14,977
)
Other investing
(57
)
(284
)
Net cash used in investing activities
(127,308
)
(150,215
)
CASH FLOW FROM FINANCING ACTIVITIES
Class A Common Stock repurchases
(51,201
)
(45,844
)
Dividends paid
(24,010
)
(22,578
)
Distributions to noncontrolling interest
owners
(2,837
)
(2,510
)
Other financing activities
(7,380
)
(6,833
)
Net cash used in financing activities
(85,428
)
(77,765
)
NET CHANGE IN CASH AND CASH
EQUIVALENTS
(1,804
)
(8,157
)
Cash and cash equivalents – Beginning of
period
401,121
675,441
Cash and cash equivalents – End of
period
$
399,317
$
667,284
(1)
Associated with the acquisitions of
certain oil and gas producing properties including leasehold and
mineral interests in the Giddings area, that closed in the second
quarter of 2024.
Magnolia Oil & Gas
Corporation
Summary Balance Sheet
Data
(In thousands)
March 31, 2024
December 31, 2023
Cash and cash equivalents
$
399,317
$
401,121
Other current assets
198,218
190,152
Property, plant and equipment, net
2,093,942
2,052,021
Other assets
116,465
112,922
Total assets
$
2,807,942
$
2,756,216
Current liabilities
$
350,011
$
314,887
Long-term debt, net
393,480
392,839
Other long-term liabilities
166,667
165,822
Common stock
24
23
Additional paid in capital
1,745,157
1,743,930
Treasury stock
(591,175
)
(538,445
)
Retained earnings
547,261
486,162
Noncontrolling interest
196,517
190,998
Total liabilities and equity
$
2,807,942
$
2,756,216
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of net income to adjusted EBITDAX
In this press release, we refer to adjusted EBITDAX, a
supplemental non-GAAP financial measure that is used by management
and external users of our consolidated financial statements, such
as industry analysts, investors, lenders, and rating agencies. We
define adjusted EBITDAX as net income before interest (income)
expense, income taxes, depreciation, depletion and amortization,
exploration expenses, and accretion of asset retirement
obligations, adjusted to exclude the effect of certain items
included in net income. Adjusted EBITDAX is not a measure of net
income in accordance with GAAP.
Our management believes that adjusted EBITDAX is useful because
it allows them to more effectively evaluate our operating
performance and compare the results of our operations from period
to period and against our peers without regard to our financing
methods or capital structure. We also believe that securities
analysts, investors, and other interested parties may use adjusted
EBITDAX in the evaluation of our Company. We exclude the items
listed above from net income in arriving at adjusted EBITDAX
because these amounts can vary substantially from company to
company within our industry depending upon accounting methods and
book values of assets, capital structures and the method by which
the assets were acquired. Adjusted EBITDAX should not be considered
as an alternative to, or more meaningful than, net income as
determined in accordance with GAAP or as an indicator of our
operating performance or liquidity. Certain items excluded from
adjusted EBITDAX are significant components in understanding and
assessing a company’s financial performance, such as a company’s
cost of capital and tax structure, as well as the historic costs of
depreciable assets, none of which are components of adjusted
EBITDAX. Our presentation of adjusted EBITDAX should not be
construed as an inference that our results will be unaffected by
unusual or non-recurring items. Our computations of adjusted
EBITDAX may not be comparable to other similarly titled measures of
other companies.
The following table presents a reconciliation of net income to
adjusted EBITDAX, our most directly comparable financial measure,
calculated and presented in accordance with GAAP:
For the Quarters Ended
(In thousands)
March 31, 2024
March 31, 2023
NET INCOME
$
97,597
$
106,677
Interest (income) expense, net
2,312
(487
)
Income tax expense
20,336
19,605
EBIT
120,245
125,795
Depreciation, depletion and
amortization
97,076
70,701
Asset retirement obligations accretion
1,618
841
EBITDA
218,939
197,337
Exploration expenses
25
11
EBITDAX
218,964
197,348
Impairment of oil and natural gas
properties
—
15,735
Non-cash stock based compensation
expense
4,658
3,772
Loss on revaluation of contingent
consideration
4,205
—
Adjusted EBITDAX
$
227,827
$
216,855
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of net income to adjusted net income
Our presentation of adjusted net income is a non-GAAP measures
because it excludes the effect of certain items included in net
income. Management uses adjusted net income to evaluate our
operating and financial performance because it eliminates the
impact of certain items that management does not consider to be
representative of the Company’s on-going business operations. As a
performance measure, adjusted net income may be useful to investors
in facilitating comparisons to others in the Company’s industry
because certain items can vary substantially in the oil and gas
industry from company to company depending upon accounting methods,
book value of assets, and capital structure, among other factors.
Management believes adjusting these items facilitates investors and
analysts in evaluating and comparing the underlying operating and
financial performance of our business from period to period by
eliminating differences caused by the existence and timing of
certain expense and income items that would not otherwise be
apparent on a GAAP basis. However, our presentation of adjusted net
income may not be comparable to similar measures of other companies
in our industry.
For the Quarters Ended
(In thousands)
March 31, 2024
March 31, 2023
NET INCOME
$
97,597
$
106,677
Adjustments:
Loss on revaluation of contingent
consideration
4,205
—
Impairment of oil and natural gas
properties
—
15,735
Change in estimated income tax (1)
(795
)
(3,089
)
ADJUSTED NET INCOME
$
101,007
$
119,323
Diluted weighted average shares of Class A
Common Stock outstanding during the period
182,424
192,054
Weighted average shares of Class B Common
Stock outstanding during the period (2)
21,827
21,827
Total weighted average shares of Class A
and B Common Stock, including dilutive impact of other securities
(2)
204,251
213,881
(1)
Represents corporate income taxes at an
assumed annual effective tax rate of 18.9% and 19.6% for the
quarters ended March 31, 2024 and 2023, respectively.
(2)
Shares of Class B Common Stock, and
corresponding Magnolia LLC Units, are anti-dilutive in the
calculation of weighted average number of common shares
outstanding.
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of revenue to adjusted cash operating margin
and operating income margin
Our presentation of adjusted cash operating margin and total
adjusted cash operating costs are supplemental non-GAAP financial
measures that are used by management. Total adjusted cash operating
costs exclude the impact of non-cash activity. We define adjusted
cash operating margin per boe as total revenues per boe less cash
operating costs per boe. Management believes that total adjusted
cash operating costs per boe and adjusted cash operating margin per
boe provide relevant and useful information, which is used by our
management in assessing the Company’s profitability and
comparability of results to our peers.
As a performance measure, total adjusted cash operating costs
and adjusted cash operating margin may be useful to investors in
facilitating comparisons to others in the Company’s industry
because certain items can vary substantially in the oil and gas
industry from company to company depending upon accounting methods,
book value of assets, and capital structure, among other factors.
Management believes excluding these items facilitates investors and
analysts in evaluating and comparing the underlying operating and
financial performance of our business from period to period by
eliminating differences caused by the existence and timing of
certain expense and income items that would not otherwise be
apparent on a GAAP basis. However, our presentation of adjusted
cash operating margin may not be comparable to similar measures of
other companies in our industry.
For the Quarters Ended
(in $/boe)
March 31, 2024
March 31, 2023
Revenue
$
41.40
$
43.18
Total cash operating costs:
Lease operating expenses (1)
(5.91
)
(5.87
)
Gathering, transportation and
processing
(1.11
)
(1.78
)
Taxes other than income
(2.32
)
(2.70
)
Exploration expenses
—
—
General and administrative expenses
(2)
(2.52
)
(2.30
)
Total adjusted cash operating
costs
(11.86
)
(12.65
)
Adjusted cash operating margin
$
29.54
$
30.53
Margin (%)
71
%
71
%
Non-cash costs:
Depreciation, depletion and
amortization
$
(12.58
)
$
(9.90
)
Impairment of oil and natural gas
properties
—
(2.20
)
Asset retirement obligations accretion
(0.21
)
(0.12
)
Non-cash stock based compensation
(0.60
)
(0.53
)
Total non-cash costs
(13.39
)
(12.75
)
Operating income margin
$
16.15
$
17.78
Add back: Impairment of oil and natural
gas properties
—
2.20
Adjusted operating income
margin
$
16.15
$
19.98
Margin (%)
39
%
46
%
(1)
Lease operating expenses exclude non-cash
stock based compensation of $0.6 million, or $0.07 per boe, and
$0.4 million, or $0.06 per boe, for the quarters ended March 31,
2024 and 2023, respectively.
(2)
General and administrative expenses
exclude non-cash stock based compensation of $4.1 million, or $0.53
per boe, and $3.4 million, or $0.47 per boe, for the quarters ended
March 31, 2024 and 2023, respectively.
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of net cash provided by operating activities
to free cash flow
Free cash flow is a non-GAAP financial measure. Free cash flow
is defined as cash flows from operations before net change in
operating assets and liabilities less additions to oil and natural
gas properties and changes in working capital associated with
additions to oil and natural gas properties. Management believes
free cash flow is useful for investors and widely accepted by those
following the oil and gas industry as financial indicators of a
company’s ability to generate cash to internally fund drilling and
completion activities, fund acquisitions, and service debt. It is
also used by research analysts to value and compare oil and gas
exploration and production companies and are frequently included in
published research when providing investment recommendations. Free
cash flow is used by management as an additional measure of
liquidity. Free cash flow is not a measure of financial performance
under GAAP and should not be considered an alternative to cash
flows from operating, investing, or financing activities.
For the Quarters Ended
(In thousands)
March 31, 2024
March 31, 2023
Net cash provided by operating
activities
$
210,932
$
219,823
Add back: net change in operating assets
and liabilities
6,941
(5,647
)
Cash flows from operations before net
change in operating assets and liabilities
217,873
214,176
Additions to oil and natural gas
properties
(120,986
)
(138,645
)
Changes in working capital associated with
additions to oil and natural gas properties
20,244
(14,977
)
Free cash flow
$
117,131
$
60,554
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507945356/en/
Investors Tom Fitter (713) 331-4802
tfitter@mgyoil.com
Media Art Pike (713) 842-9057 apike@mgyoil.com
Magnolia Oil and Gas (NYSE:MGY)
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From Apr 2024 to May 2024
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From May 2023 to May 2024
