Magnolia Oil & Gas (MGY) Q3 2024 earnings summary

Executive summary

• Achieved strong Q3 2024 financial and operational performance, with adjusted net income of $100 million, adjusted EBITDAX of $244 million, and a 39% operating income margin, supported by 10% production growth and 18% oil production growth year-over-year.

• Returned 70% of free cash flow to shareholders through dividends and share repurchases, totaling about $88 million in Q3.

• Maintained a strong balance sheet with $276 million in cash, $400 million in senior notes due 2026, and total liquidity of $726 million.

• Continued disciplined capital allocation, focusing on high returns, low capital intensity, and bolt-on acquisitions to enhance the asset base.

• Diluted share count declined 5% year-over-year to 198.4 million.

Financial highlights

• Q3 2024 revenue was $333 million, up 6% year-over-year, with net income of $106 million and adjusted net income of $100 million.

• Adjusted EBITDA/EBITDAX reached $244 million; free cash flow was $126 million.

• Lease operating expenses per BOE declined 11% sequentially to $5.33.

• Operating income margin was 39%, down from 47% in Q3 2023.

• Cash balance at quarter-end was $276 million, down 55% year-over-year.

Outlook and guidance

• Full-year 2024 capital spending guidance is $470 million, with Q4 D&C capital projected at $125 million.

• Q4 2024 production forecast at 93,000 BOE/day, supporting high single-digit annual production growth, with oil growth outpacing total BOE growth.

• 2025 plan targets mid-single digit annual production growth with continued capital discipline.

• Effective tax rate expected at 21%, with a cash tax rate of 5%-7%.