Magnolia Oil & Gas (MGY) Q3 2024 earnings summary

Executive summary

• Achieved strong financial and operational performance in Q3 2024, with production up 10% year-over-year to 90.7 Mboe/d and oil production up 18%, supporting consistent execution of the annual plan.

• Adjusted net income was $100 million and adjusted EBITDAX reached $244 million, with a 39% operating income margin and 42% reinvestment rate.

• Returned $88 million (70% of free cash flow) to shareholders via dividends and share repurchases, maintaining a strong balance sheet with $276 million in cash and $726 million in total liquidity.

• Maintained focus on efficient capital deployment, shareholder returns, and selective bolt-on acquisitions to enhance asset quality and sustainability.

• Disciplined capital allocation prioritized reinvestment, share repurchases, and dividends, with $72.5 million in dividends declared YTD and 5.3 million shares repurchased for $127 million.

Financial highlights

• Q3 2024 net income was $106 million, adjusted net income $100 million ($0.51 per diluted share), and total revenues were $333.1 million, up 6% year-over-year.

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

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

• Annualized return on capital employed was 22%; operating income margin was 39% of revenue.

• Cash and cash equivalents at quarter-end were $276 million, with $726 million in total liquidity, and $400 million in senior notes maturing in 2026.

Outlook and guidance

• Full-year 2024 production growth expected in the high single digits, with oil production growth outpacing total BOE growth.

• Q4 2024 production guidance is ~93,000 BOE/d; capital spending for the year expected at ~$470 million, with Q4 D&C capital at ~$125 million.

• Effective tax rate projected at 21%, with a cash tax rate of 5%-7% for Q4 and full year.

• Additional four-well pad in Giddings to be drilled in Q4, providing operational flexibility for 2025.

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