Magnolia Oil & Gas Announces Bolt-On Asset Acquisition in Giddings
- Enhances Giddings Asset Quality and Scale - Acquisition adds approximately 48,000 net acres in Giddings, driving further efficiencies of scale.
- High-Margin Production - Expects production of approximately 5,000 Boe/d (greater than 70% oil) at closing, providing high cash operating margins.
- Immediately Accretive to Key Financial Metrics - Expects immediate accretion to key per share financial metrics including cash flow, free cash flow, and earnings.
- Supplements Existing High-Return Inventory - Attractive development locations in Eagle Ford and Austin Chalk formations expected to sustain high margin production and free cash flow generation.
- Attractive Use of Cash with Best-in-Class Balance Sheet - Cash outlay at closing of approximately $260 million to be funded with abundant cash on hand, driving superior financial returns.
- None.
Transaction Highlights:
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Enhances Giddings Asset Quality and Scale – Acquisition adds approximately 48,000 net acres in
Giddings (96% operated,91% working interest), enhancing Magnolia’s already significant depth of development opportunities. Combined with a smaller acquisition that closed in July 2023, Magnolia’s position inGiddings now totals over 500,000 net acres, driving further efficiencies of scale. -
High-Margin Production – Magnolia expects production of approximately 5,000 Boe/d (greater than
70% oil) at closing. Similar to the Company’s currentGiddings position, the acquired assets provide high cash operating margins through access to premium Gulf Coast pricing and low per-unit operating costs. -
Immediately Accretive to Key Financial Metrics – Magnolia expects immediate accretion to key per share financial metrics including cash flow, free cash flow and earnings, in addition to enhancing corporate margins and reinvestment rates. The acquired assets are attractively valued at 2.9x estimated 2024 EBITDA and are expected to generate a free cash flow yield of more than
20% during 2024 at current strip prices. -
Supplements Existing High-Return Inventory – Attractive development locations in both the Eagle Ford and Austin Chalk formations are expected to be seamlessly folded into Magnolia’s ongoing
Giddings development program beginning in 2024, allowing the asset to sustain its high margin production and free cash flow generation. -
Attractive Use of Cash with Best-in-Class Balance Sheet – Expected cash outlay at closing of approximately
to be funded with abundant cash on hand driving superior financial returns. This demonstrates Magnolia’s ability to utilize its strong balance sheet and prudently allocate surplus capital to improve the overall business and enhance per share value.$260 million
Magnolia President and CEO Chris Stavros stated, “We continue to leverage our accumulated knowledge and advanced understanding of
About Magnolia Oil & Gas
Magnolia is a publicly traded oil and gas exploration and production company with operations primarily in
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Investors
Jim Johnson
713-842-9033
jjohnson@mgyoil.com
Tom Fitter
713-331-4802
tfitter@mgyoil.com
Media
Art Pike
713-842-9057
apike@mgyoil.com
Source: Magnolia Oil & Gas Corporation