EnerVest Sale of 12,000,000 Shares of Class A Common Stock of Magnolia; Magnolia to Purchase 3,000,000 Shares of Class B Common Stock from EnerVest
Magnolia Oil & Gas (NYSE: MGY) announced that EnerVest affiliates will sell 12,000,000 shares of Magnolia's Class A common stock in an unregistered secondary block trade. Magnolia will not sell any of its shares or receive proceeds from this trade. Additionally, Magnolia agreed to purchase 3,000,000 shares of its Class B common stock from EnerVest at the same price received in the block trade. This purchase is contingent upon the completion of the block trade. Post-transaction, EnerVest will hold approximately 7.6% of Magnolia’s total outstanding shares.
- Magnolia is repurchasing 3,000,000 Class B shares, which could be seen as a commitment to reduce dilution.
- The transaction could suggest confidence from Magnolia in its own stock value by purchasing shares back from EnerVest.
- EnerVest's sale of 12,000,000 shares could indicate a lack of confidence in Magnolia’s future performance.
- The block trade might create downward pressure on Magnolia's stock price due to the large volume of shares being sold.
- Magnolia will not receive any proceeds from the sale, missing out on potential capital influx.
Insights
The sale of 12,000,000 shares of Magnolia's Class A common stock by EnerVest affiliates is a significant move. While Magnolia itself won't receive proceeds from this Block Trade, the agreement for Magnolia to purchase 3,000,000 shares of its Class B common stock from EnerVest affiliates at the same price highlights strategic financial reorganization. The transaction suggests EnerVest's intent to reduce its stake in Magnolia while still maintaining a sizable holding. For retail investors, it's essential to note that such activities can impact share price and market perception. The trade being unregistered under Rule 144 indicates an insider transaction, which might raise questions about the motivation behind the sale. Investors should watch for any resultant volatility in Magnolia's stock price and consider the potential implications for short-term liquidity and long-term strategic positioning.
This trade signals a shift in Magnolia's shareholder composition. EnerVest's reduction in its holdings might be perceived variably by the market. On one hand, it could be seen as a lack of confidence in Magnolia's future growth by a significant insider, potentially leading to short-term negative sentiment. On the other hand, Magnolia's repurchase of its Class B stock could be interpreted positively, signaling company confidence and a move towards a more consolidated ownership structure. Such strategic stock repurchases often aim to reflect a company's belief in its intrinsic value and can potentially bolster investor confidence. However, the actual market response will depend on broader market conditions and investor sentiment at the time of the trade.
The Company has agreed to purchase from the Selling Stockholders 3,000,000 shares of the Company’s Class B common stock (the “Class B Common Stock”) at a price per share equal to the price per share that the Selling Stockholders receive in the Block Trade (the “Class B Common Stock Purchase”). The Class B Common Stock Purchase is conditioned upon the completion of the Block Trade.
Following the closing of the Block Trade and Class B Common Stock Purchase, the Selling Stockholders will own 4,164,961 Class A and 10,957,921 Class B shares of the Company, or approximately
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Magnolia Oil & Gas Corporation
Magnolia (MGY) is a publicly traded oil and gas exploration and production company with operations primarily in
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.
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Contacts for Magnolia Oil & Gas Corporation
Investors
Tom Fitter
(713) 331-4802
tfitter@mgyoil.com
Media
Art Pike
(713) 842-9057
apike@mgyoil.com
Source: Magnolia Oil & Gas Corporation
FAQ
What is Magnolia's stock symbol?
How many shares of Class A common stock will EnerVest sell?
Will Magnolia receive any proceeds from the block trade?
How many shares of Class B common stock will Magnolia purchase from EnerVest?
What percentage of Magnolia's outstanding shares will EnerVest hold post-transaction?
