Magnolia Oil & Gas (MGY) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 production of 90,200 BOE/d, up 10% year-over-year, with oil production at 37,900–38,000 Bbl/d, up 11% year-over-year.

• Adjusted net income was $104 million, with adjusted EBITDAX of $246 million and a 40% operating income margin.

• Integrated a $125 million bolt-on acquisition in Giddings, adding 27,000 net acres and expanding the core area to over 200,000 net acres.

• Returned $130 million to shareholders through $103 million in share repurchases and dividends.

• Continued focus on cost reduction, digital field management, and operational efficiency, resulting in lower LOE and improved margins.

Financial highlights

• Q2 2024 revenues were $336.7–$337 million, up 20% year-over-year; adjusted net income grew 7% and adjusted EBITDAX rose 21%.

• Free cash flow reached $96.7–$97 million; D&C capital expenditures totaled $123.4 million.

• Ended Q2 with $275.7–$276 million in cash and $400 million in senior notes due 2026.

• Operating income margin was 40%; adjusted cash operating margin per BOE was 73%.

• Net income for Q2 2024 was $105.1 million, with diluted EPS of $0.51, up from $0.48 in Q2 2023.

Outlook and guidance

• 2024 D&C capital spending expected at $450–$480 million; Q3 D&C capex projected at ~$120 million.

• Total and oil production expected to grow high single digits annually; Q3 production guidance is ~91,000 BOE/d.

• Oil price differentials anticipated at ~$3/Bbl discount to Magellan East Houston; company remains unhedged.

• Effective tax rate expected at 21%, cash tax rate at 9–10% for 2024.

• Long-term strategy targets mid-single digit production growth and ~10% annual dividend growth.