Magnolia Oil & Gas Corporation Announces First Quarter 2024 Results
Magnolia Oil & Gas announced its financial and operational results for the first quarter of 2024, reporting net income of $97.6 million, adjusted net income of $101.0 million, and earnings per share of $0.46. The company saw a 7% increase in average daily production, with total drilling and completions capital at $119.0 million, lower than previous guidance.
Increased average daily production by 7% year-over-year to 84.8 Mboe/d.
Generated free cash flow of $117.1 million during the first quarter of 2024.
Repurchased 2.4 million of its Class A Common Stock for $52.4 million.
Declared a cash dividend of $0.13 per share of Class A common stock.
Acquired oil and gas properties in Giddings for approximately $125 million, increasing working interest in high-return development areas.
Net income decreased by 9% to $97.6 million compared to the same quarter last year.
Adjusted net income decreased by 15% to $101.0 million compared to the same quarter last year.
Cash balance decreased by 40% to $399.3 million as of the end of the period.
Total drilling and completions capital was 15% lower than the prior-year's first quarter.
Insights
First Quarter 2024 Highlights:
(In millions, except per share data) |
For the Quarter Ended March 31, 2024 |
For the Quarter Ended March 31, 2023 |
Percentage increase (decrease) |
|||
Net income |
$ |
97.6 |
$ |
106.7 |
(9 |
)% |
Adjusted net income(1) |
$ |
101.0 |
$ |
119.3 |
(15 |
)% |
Earnings per share - diluted |
$ |
0.46 |
$ |
0.50 |
(8 |
)% |
Adjusted EBITDAX(1) |
$ |
227.8 |
$ |
216.9 |
5 |
% |
Capital expenditures - D&C |
$ |
119.0 |
$ |
139.7 |
(15 |
)% |
Average daily production (Mboe/d) |
|
84.8 |
|
79.3 |
7 |
% |
Cash balance as of period end |
$ |
399.3 |
$ |
667.3 |
(40 |
)% |
Diluted weighted average total shares outstanding(2) |
|
204.3 |
|
213.9 |
(5 |
)% |
First Quarter 2024 Highlights:
-
Magnolia reported first quarter 2024 net income attributable to Class A Common Stock of
$85.1 million $0.46 $97.6 million $101.0 million 5% to 204.3 million(2) compared to first quarter 2023.
-
Adjusted EBITDAX(1) was
$227.8 million $119.0 million 52% of adjusted EBITDAX and was15% lower than the prior-year’s first quarter.
-
Net cash provided by operating activities was
$210.9 million $117.1 million 39% during the quarter.
-
The Company has embarked on a field-level optimization and cost reduction program across our assets that is expected to deliver a 5 to
10% reduction in cash operating costs (LOE) per boe during the second half of the year compared to the first quarter 2024.
-
Total production in the first quarter of 2024 grew
7% on a year-over-year basis to 84.8 thousand barrels of oil equivalent per day (“Mboe/d”) including 37.5 thousand barrels per day of oil. Production atGiddings and Other was 61.4 Mboe/d, providing overall growth of17% compared to last year’s first quarter, including oil production growth of16% .
-
On April 30, 2024, Magnolia acquired oil and gas properties in
Giddings from a private operator encompassing roughly 27,000 net acres for approximately$125 million 35% oil), in addition to leasehold and royalty acres. The acquisition significantly increases Magnolia’s working interest in future high-return development areas and adds new acreage which further expands the Company’s leading position in theGiddings area.
-
The Company repurchased 2.4 million of its Class A Common Stock during the first quarter for
$52.4 million
-
As previously announced, the Board of Directors declared a cash dividend of
$0.13 $0.13
-
Magnolia returned
$79.2 million 68% of the Company’s free cash flow(1), to shareholders during the first quarter through a combination of share repurchases and dividends while ending the period with$399.3 million $450.0 million
(1) |
Adjusted net income, adjusted EBITDAX, free cash flow, and adjusted operating income are non-GAAP financial measures. For reconciliations to the most comparable GAAP measures, please see “Non-GAAP Financial Measures” at the end of this press release. |
(2) |
Weighted average total shares outstanding include diluted weighted average shares of Class A Common Stock outstanding during the period and shares of Class B Common Stock, which are anti-dilutive in the calculation of weighted average number of common shares outstanding. |
(3) |
Includes |
“Magnolia’s first quarter performance delivered a solid start to 2024, continuing our strategy of disciplined capital spending, while delivering steady production growth with strong pre-tax margins and consistent free cash flow,” said President and CEO Chris Stavros. “Our growing production and continued low reinvestment rate provided free cash flow generation of roughly
“A key objective of Magnolia’s business plan and strategy is to utilize some of the excess cash generated by the business to pursue attractive bolt-on oil and gas property acquisitions. Properties are targeted not to simply replace the oil and gas that has already been produced but importantly, to improve the future opportunity set of our overall business and enhance the sustainability of our high returns. The latest example is an acquisition from a private operator that we closed at the end of April for
“While I am proud of our teams’ accomplishments, we continue to seek out areas where we can improve. Our field operations team recently initiated a field-level optimization and cost reduction program throughout our assets. Part of these efforts will employ improved field management systems that will increase efficiencies and optimize processes across the field while capturing synergies from acquired assets. These and other initiatives are expected to deliver a 5 to 10 percent reduction in cash operating costs (LOE) per boe during the second half of the year compared to the first quarter. Our goal is to improve on our track record for generating high operating margins while providing additional free cash flow to either return to our shareholders or reinvest in the business.”
Operational Update
First quarter 2024 total company production volumes averaged 84.8 Mboe/d including oil production of 37.5 Mbbls/d. Production from
Magnolia continues to operate two drilling rigs and one completion crew and expects to maintain this level of activity throughout the year. While this activity level is similar to the 2023 operating plan, lower well costs combined with improved operating efficiencies allow for more wells to be drilled, completed and turned in line during 2024 and help to support Magnolia’s overall high-margin growth. Most of this year’s development activity will consist of multi-well development pads in the
On April 30, 2024, Magnolia acquired approximately 27,000 net acres in
Additional Guidance
We are reiterating the Company’s full-year 2024 capital spending and production guidance, with D&C capital expected to be in the range of
Magnolia plans to apply the Company’s operating expertise to its newly acquired assets which should lead to improved field operations and efficiencies allowing for lower unit operating costs that we expect to be reflected in the second half of 2024. Our lengthy experience and knowledge acquired while operating in the
Oil price differentials are anticipated to be approximately a
Quarterly Report on Form 10-Q
Magnolia's financial statements and related footnotes will be available in its Quarterly Report on Form 10-Q for the three months ended March 31, 2024, which is expected to be filed with the
Conference Call and Webcast
Magnolia will host an investor conference call on Wednesday, May 8, 2024 at 10:00 a.m. Central (11:00 a.m. Eastern) to discuss these operating and financial results. Interested parties may join the webcast by visiting Magnolia's website at www.magnoliaoilgas.com/investors/events-and-presentations and clicking on the webcast link or by dialing 1-844-701-1059. A replay of the webcast will be posted on Magnolia's website following completion of the call.
About Magnolia Oil & Gas Corporation
Magnolia (MGY) is a publicly traded oil and gas exploration and production company with operations primarily in
Cautionary Note Regarding 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.
Magnolia Oil & Gas Corporation |
||||||||
Operating Highlights |
||||||||
|
|
|
|
|
||||
|
|
For the Quarters Ended |
||||||
|
|
March 31, 2024 |
|
March 31, 2023 |
||||
Production: |
|
|
|
|
||||
Oil (MBbls) |
|
|
3,415 |
|
|
|
3,221 |
|
Natural gas (MMcf) |
|
|
13,749 |
|
|
|
12,650 |
|
Natural gas liquids (MBbls) |
|
|
2,009 |
|
|
|
1,812 |
|
Total (Mboe) |
|
|
7,715 |
|
|
|
7,141 |
|
|
|
|
|
|
||||
Average daily production: |
|
|
|
|
||||
Oil (Bbls/d) |
|
|
37,531 |
|
|
|
35,788 |
|
Natural gas (Mcf/d) |
|
|
151,086 |
|
|
|
140,552 |
|
Natural gas liquids (Bbls/d) |
|
|
22,072 |
|
|
|
20,129 |
|
Total (boe/d) |
|
|
84,784 |
|
|
|
79,342 |
|
|
|
|
|
|
||||
Revenues (in thousands): |
|
|
|
|
||||
Oil revenues |
|
$ |
259,182 |
|
|
$ |
239,122 |
|
Natural gas revenues |
|
|
21,095 |
|
|
|
27,771 |
|
Natural gas liquids revenues |
|
|
39,140 |
|
|
|
41,489 |
|
Total Revenues |
|
$ |
319,417 |
|
|
$ |
308,382 |
|
|
|
|
|
|
||||
Average sales price: |
|
|
|
|
||||
Oil (per Bbl) |
|
$ |
75.89 |
|
|
$ |
74.24 |
|
Natural gas (per Mcf) |
|
|
1.53 |
|
|
|
2.20 |
|
Natural gas liquids (per Bbl) |
|
|
19.49 |
|
|
|
22.90 |
|
Total (per boe) |
|
$ |
41.40 |
|
|
$ |
43.18 |
|
|
|
|
|
|
||||
NYMEX WTI (per Bbl) |
|
$ |
76.97 |
|
|
$ |
76.11 |
|
NYMEX Henry Hub (per MMBtu) |
|
$ |
2.24 |
|
|
$ |
3.45 |
|
Realization to benchmark: |
|
|
|
|
||||
Oil (% of WTI) |
|
|
99 |
% |
|
|
98 |
% |
Natural Gas (% of Henry Hub) |
|
|
68 |
% |
|
|
64 |
% |
|
|
|
|
|
||||
Operating expenses (in thousands): |
|
|
|
|
||||
Lease operating expenses |
|
$ |
46,150 |
|
|
$ |
42,371 |
|
Gathering, transportation and processing |
|
|
8,537 |
|
|
|
12,732 |
|
Taxes other than income |
|
|
17,898 |
|
|
|
19,292 |
|
Depreciation, depletion and amortization |
|
|
97,076 |
|
|
|
70,701 |
|
|
|
|
|
|
||||
Operating costs per boe: |
|
|
|
|
||||
Lease operating expenses |
|
$ |
5.98 |
|
|
$ |
5.93 |
|
Gathering, transportation and processing |
|
|
1.11 |
|
|
|
1.78 |
|
Taxes other than income |
|
|
2.32 |
|
|
|
2.70 |
|
Depreciation, depletion and amortization |
|
|
12.58 |
|
|
|
9.90 |
|
Magnolia Oil & Gas Corporation |
||||||||
Consolidated Statements of Operations |
||||||||
(In thousands, except per share data) |
||||||||
|
|
For the Quarters Ended |
||||||
|
|
March 31, 2024 |
|
March 31, 2023 |
||||
REVENUES |
|
|
|
|
||||
Oil revenues |
|
$ |
259,182 |
|
|
$ |
239,122 |
|
Natural gas revenues |
|
|
21,095 |
|
|
|
27,771 |
|
Natural gas liquids revenues |
|
|
39,140 |
|
|
|
41,489 |
|
Total revenues |
|
|
319,417 |
|
|
|
308,382 |
|
OPERATING EXPENSES |
|
|
|
|
||||
Lease operating expenses |
|
|
46,150 |
|
|
|
42,371 |
|
Gathering, transportation and processing |
|
|
8,537 |
|
|
|
12,732 |
|
Taxes other than income |
|
|
17,898 |
|
|
|
19,292 |
|
Exploration expenses |
|
|
25 |
|
|
|
11 |
|
Asset retirement obligations accretion |
|
|
1,618 |
|
|
|
841 |
|
Depreciation, depletion and amortization |
|
|
97,076 |
|
|
|
70,701 |
|
Impairment of oil and natural gas properties |
|
|
— |
|
|
|
15,735 |
|
General and administrative expenses |
|
|
23,555 |
|
|
|
19,766 |
|
Total operating expenses |
|
|
194,859 |
|
|
|
181,449 |
|
|
|
|
|
|
||||
OPERATING INCOME |
|
|
124,558 |
|
|
|
126,933 |
|
|
|
|
|
|
||||
OTHER INCOME (EXPENSE) |
|
|
|
|
||||
Interest income (expense), net |
|
|
(2,312 |
) |
|
|
487 |
|
Other expense, net |
|
|
(4,313 |
) |
|
|
(1,138 |
) |
Total other expense, net |
|
|
(6,625 |
) |
|
|
(651 |
) |
|
|
|
|
|
||||
INCOME BEFORE INCOME TAXES |
|
|
117,933 |
|
|
|
126,282 |
|
|
|
|
|
|
||||
Current income tax expense |
|
|
11,628 |
|
|
|
4,202 |
|
Deferred income tax expense |
|
|
8,708 |
|
|
|
15,403 |
|
Total income tax expense |
|
|
20,336 |
|
|
|
19,605 |
|
|
|
|
|
|
||||
NET INCOME |
|
|
97,597 |
|
|
|
106,677 |
|
LESS: Net income attributable to noncontrolling interest |
|
|
12,511 |
|
|
|
10,342 |
|
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK |
|
$ |
85,086 |
|
|
$ |
96,335 |
|
|
|
|
|
|
||||
NET INCOME PER COMMON SHARE |
||||||||
Basic |
|
$ |
0.46 |
|
|
$ |
0.50 |
|
Diluted |
|
$ |
0.46 |
|
|
$ |
0.50 |
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING |
||||||||
Basic |
|
|
182,368 |
|
|
|
191,780 |
|
Diluted |
|
|
182,424 |
|
|
|
192,054 |
|
WEIGHTED AVERAGE NUMBER OF CLASS B SHARES OUTSTANDING (1) |
|
|
21,827 |
|
|
|
21,827 |
|
DILUTED WEIGHTED AVERAGE TOTAL SHARES OUTSTANDING (1) |
|
|
204,251 |
|
|
|
213,881 |
|
(1) |
Shares of Class B Common Stock, and corresponding Magnolia LLC Units, are anti-dilutive in the calculation of weighted average number of common shares outstanding. |
Magnolia Oil & Gas Corporation |
||||||||
Summary Cash Flow Data |
||||||||
(In thousands) |
||||||||
|
|
For the Quarters Ended |
||||||
|
|
March 31, 2024 |
|
March 31, 2023 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
NET INCOME |
|
$ |
97,597 |
|
|
$ |
106,677 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation, depletion and amortization |
|
|
97,076 |
|
|
|
70,701 |
|
Exploration expenses, non-cash |
|
|
1 |
|
|
|
5 |
|
Impairment of oil and natural gas properties |
|
|
— |
|
|
|
15,735 |
|
Asset retirement obligations accretion |
|
|
1,618 |
|
|
|
841 |
|
Amortization of deferred financing costs |
|
|
1,089 |
|
|
|
1,042 |
|
Deferred income tax expense |
|
|
8,708 |
|
|
|
15,403 |
|
Loss on revaluation of contingent consideration |
|
|
4,205 |
|
|
|
— |
|
Stock based compensation |
|
|
4,658 |
|
|
|
3,772 |
|
Other |
|
|
2,921 |
|
|
|
— |
|
Net change in operating assets and liabilities |
|
|
(6,941 |
) |
|
|
5,647 |
|
Net cash provided by operating activities |
|
|
210,932 |
|
|
|
219,823 |
|
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Acquisitions |
|
|
(13,359 |
) |
|
|
3,691 |
|
Deposits for acquisitions of oil and natural gas properties (1) |
|
|
(13,150 |
) |
|
|
— |
|
Additions to oil and natural gas properties |
|
|
(120,986 |
) |
|
|
(138,645 |
) |
Changes in working capital associated with additions to oil and natural gas properties |
|
|
20,244 |
|
|
|
(14,977 |
) |
Other investing |
|
|
(57 |
) |
|
|
(284 |
) |
Net cash used in investing activities |
|
|
(127,308 |
) |
|
|
(150,215 |
) |
|
|
|
|
|
||||
CASH FLOW FROM FINANCING ACTIVITIES |
||||||||
Class A Common Stock repurchases |
|
|
(51,201 |
) |
|
|
(45,844 |
) |
Dividends paid |
|
|
(24,010 |
) |
|
|
(22,578 |
) |
Distributions to noncontrolling interest owners |
|
|
(2,837 |
) |
|
|
(2,510 |
) |
Other financing activities |
|
|
(7,380 |
) |
|
|
(6,833 |
) |
Net cash used in financing activities |
|
|
(85,428 |
) |
|
|
(77,765 |
) |
|
|
|
|
|
||||
NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
|
(1,804 |
) |
|
|
(8,157 |
) |
Cash and cash equivalents – Beginning of period |
|
|
401,121 |
|
|
|
675,441 |
|
Cash and cash equivalents – End of period |
|
$ |
399,317 |
|
|
$ |
667,284 |
|
(1) |
Associated with the acquisitions of certain oil and gas producing properties including leasehold and mineral interests in the |
Magnolia Oil & Gas Corporation |
||||||||
Summary Balance Sheet Data |
||||||||
(In thousands) |
||||||||
|
|
March 31, 2024 |
|
December 31, 2023 |
||||
Cash and cash equivalents |
|
$ |
399,317 |
|
|
$ |
401,121 |
|
Other current assets |
|
|
198,218 |
|
|
|
190,152 |
|
Property, plant and equipment, net |
|
|
2,093,942 |
|
|
|
2,052,021 |
|
Other assets |
|
|
116,465 |
|
|
|
112,922 |
|
Total assets |
|
$ |
2,807,942 |
|
|
$ |
2,756,216 |
|
|
|
|
|
|
||||
Current liabilities |
|
$ |
350,011 |
|
|
$ |
314,887 |
|
Long-term debt, net |
|
|
393,480 |
|
|
|
392,839 |
|
Other long-term liabilities |
|
|
166,667 |
|
|
|
165,822 |
|
Common stock |
|
|
24 |
|
|
|
23 |
|
Additional paid in capital |
|
|
1,745,157 |
|
|
|
1,743,930 |
|
Treasury stock |
|
|
(591,175 |
) |
|
|
(538,445 |
) |
Retained earnings |
|
|
547,261 |
|
|
|
486,162 |
|
Noncontrolling interest |
|
|
196,517 |
|
|
|
190,998 |
|
Total liabilities and equity |
|
$ |
2,807,942 |
|
|
$ |
2,756,216 |
|
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of net income to adjusted EBITDAX
In this press release, we refer to adjusted EBITDAX, a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders, and rating agencies. We define adjusted EBITDAX as net income before interest (income) expense, income taxes, depreciation, depletion and amortization, exploration expenses, and accretion of asset retirement obligations, adjusted to exclude the effect of certain items included in net income. Adjusted EBITDAX is not a measure of net income in accordance with GAAP.
Our management believes that adjusted EBITDAX is useful because it allows them to more effectively evaluate our operating performance and compare the results of our operations from period to period and against our peers without regard to our financing methods or capital structure. We also believe that securities analysts, investors, and other interested parties may use adjusted EBITDAX in the evaluation of our Company. We exclude the items listed above from net income in arriving at adjusted EBITDAX because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from adjusted EBITDAX are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of adjusted EBITDAX. Our presentation of adjusted EBITDAX should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of adjusted EBITDAX may not be comparable to other similarly titled measures of other companies.
The following table presents a reconciliation of net income to adjusted EBITDAX, our most directly comparable financial measure, calculated and presented in accordance with GAAP:
|
|
For the Quarters Ended |
||||||
(In thousands) |
|
March 31, 2024 |
|
March 31, 2023 |
||||
NET INCOME |
|
$ |
97,597 |
|
$ |
106,677 |
|
|
Interest (income) expense, net |
|
|
2,312 |
|
|
(487 |
) |
|
Income tax expense |
|
|
20,336 |
|
|
19,605 |
|
|
EBIT |
|
|
120,245 |
|
|
125,795 |
|
|
Depreciation, depletion and amortization |
|
|
97,076 |
|
|
70,701 |
|
|
Asset retirement obligations accretion |
|
|
1,618 |
|
|
841 |
|
|
EBITDA |
|
|
218,939 |
|
|
197,337 |
|
|
Exploration expenses |
|
|
25 |
|
|
11 |
|
|
EBITDAX |
|
|
218,964 |
|
|
197,348 |
|
|
Impairment of oil and natural gas properties |
|
|
— |
|
|
15,735 |
|
|
Non-cash stock based compensation expense |
|
|
4,658 |
|
|
3,772 |
|
|
Loss on revaluation of contingent consideration |
|
|
4,205 |
|
|
— |
|
|
Adjusted EBITDAX |
|
$ |
227,827 |
|
$ |
216,855 |
|
|
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of net income to adjusted net income
Our presentation of adjusted net income is a non-GAAP measures because it excludes the effect of certain items included in net income. Management uses adjusted net income to evaluate our operating and financial performance because it eliminates the impact of certain items that management does not consider to be representative of the Company’s on-going business operations. As a performance measure, adjusted net income may be useful to investors in facilitating comparisons to others in the Company’s industry because certain items can vary substantially in the oil and gas industry from company to company depending upon accounting methods, book value of assets, and capital structure, among other factors. Management believes adjusting these items facilitates investors and analysts in evaluating and comparing the underlying operating and financial performance of our business from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted net income may not be comparable to similar measures of other companies in our industry.
|
For the Quarters Ended |
|||||||
(In thousands) |
March 31, 2024 |
|
March 31, 2023 |
|||||
NET INCOME |
$ |
97,597 |
|
|
$ |
106,677 |
|
|
Adjustments: |
|
|
|
|||||
Loss on revaluation of contingent consideration |
|
4,205 |
|
|
|
— |
|
|
Impairment of oil and natural gas properties |
|
— |
|
|
|
15,735 |
|
|
Change in estimated income tax (1) |
|
(795 |
) |
|
|
(3,089 |
) |
|
ADJUSTED NET INCOME |
$ |
101,007 |
|
|
$ |
119,323 |
|
|
|
|
|
|
|||||
Diluted weighted average shares of Class A Common Stock outstanding during the period |
|
182,424 |
|
|
|
192,054 |
|
|
Weighted average shares of Class B Common Stock outstanding during the period (2) |
|
21,827 |
|
|
|
21,827 |
|
|
Total weighted average shares of Class A and B Common Stock, including dilutive impact of other securities (2) |
|
204,251 |
|
|
|
213,881 |
|
|
(1) |
Represents corporate income taxes at an assumed annual effective tax rate of |
(2) |
Shares of Class B Common Stock, and corresponding Magnolia LLC Units, are anti-dilutive in the calculation of weighted average number of common shares outstanding. |
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of revenue to adjusted cash operating margin and operating income margin
Our presentation of adjusted cash operating margin and total adjusted cash operating costs are supplemental non-GAAP financial measures that are used by management. Total adjusted cash operating costs exclude the impact of non-cash activity. We define adjusted cash operating margin per boe as total revenues per boe less cash operating costs per boe. Management believes that total adjusted cash operating costs per boe and adjusted cash operating margin per boe provide relevant and useful information, which is used by our management in assessing the Company’s profitability and comparability of results to our peers.
As a performance measure, total adjusted cash operating costs and adjusted cash operating margin may be useful to investors in facilitating comparisons to others in the Company’s industry because certain items can vary substantially in the oil and gas industry from company to company depending upon accounting methods, book value of assets, and capital structure, among other factors. Management believes excluding these items facilitates investors and analysts in evaluating and comparing the underlying operating and financial performance of our business from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted cash operating margin may not be comparable to similar measures of other companies in our industry.
|
|
For the Quarters Ended |
||||||
(in $/boe) |
|
March 31, 2024 |
|
March 31, 2023 |
||||
Revenue |
|
$ |
41.40 |
|
|
$ |
43.18 |
|
Total cash operating costs: |
|
|
|
|
||||
Lease operating expenses (1) |
|
|
(5.91 |
) |
|
|
(5.87 |
) |
Gathering, transportation and processing |
|
|
(1.11 |
) |
|
|
(1.78 |
) |
Taxes other than income |
|
|
(2.32 |
) |
|
|
(2.70 |
) |
Exploration expenses |
|
|
— |
|
|
|
— |
|
General and administrative expenses (2) |
|
|
(2.52 |
) |
|
|
(2.30 |
) |
Total adjusted cash operating costs |
|
|
(11.86 |
) |
|
|
(12.65 |
) |
Adjusted cash operating margin |
|
$ |
29.54 |
|
|
$ |
30.53 |
|
Margin (%) |
|
|
71 |
% |
|
|
71 |
% |
Non-cash costs: |
|
|
|
|
||||
Depreciation, depletion and amortization |
|
$ |
(12.58 |
) |
|
$ |
(9.90 |
) |
Impairment of oil and natural gas properties |
|
|
— |
|
|
|
(2.20 |
) |
Asset retirement obligations accretion |
|
|
(0.21 |
) |
|
|
(0.12 |
) |
Non-cash stock based compensation |
|
|
(0.60 |
) |
|
|
(0.53 |
) |
Total non-cash costs |
|
|
(13.39 |
) |
|
|
(12.75 |
) |
Operating income margin |
|
$ |
16.15 |
|
|
$ |
17.78 |
|
Add back: Impairment of oil and natural gas properties |
|
|
— |
|
|
|
2.20 |
|
Adjusted operating income margin |
|
$ |
16.15 |
|
|
$ |
19.98 |
|
Margin (%) |
|
|
39 |
% |
|
|
46 |
% |
(1) |
Lease operating expenses exclude non-cash stock based compensation of |
(2) |
General and administrative expenses exclude non-cash stock based compensation of |
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of net cash provided by operating activities to free cash flow
Free cash flow is a non-GAAP financial measure. Free cash flow is defined as cash flows from operations before net change in operating assets and liabilities less additions to oil and natural gas properties and changes in working capital associated with additions to oil and natural gas properties. Management believes free cash flow is useful for investors and widely accepted by those following the oil and gas industry as financial indicators of a company’s ability to generate cash to internally fund drilling and completion activities, fund acquisitions, and service debt. It is also used by research analysts to value and compare oil and gas exploration and production companies and are frequently included in published research when providing investment recommendations. Free cash flow is used by management as an additional measure of liquidity. Free cash flow is not a measure of financial performance under GAAP and should not be considered an alternative to cash flows from operating, investing, or financing activities.
|
|
For the Quarters Ended |
||||||
(In thousands) |
|
March 31, 2024 |
|
March 31, 2023 |
||||
Net cash provided by operating activities |
|
$ |
210,932 |
|
|
$ |
219,823 |
|
Add back: net change in operating assets and liabilities |
|
|
6,941 |
|
|
|
(5,647 |
) |
Cash flows from operations before net change in operating assets and liabilities |
|
|
217,873 |
|
|
|
214,176 |
|
Additions to oil and natural gas properties |
|
|
(120,986 |
) |
|
|
(138,645 |
) |
Changes in working capital associated with additions to oil and natural gas properties |
|
|
20,244 |
|
|
|
(14,977 |
) |
Free cash flow |
|
$ |
117,131 |
|
|
$ |
60,554 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507945356/en/
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 was Magnolia Oil & Gas 's net income for the first quarter of 2024?
What was the average daily production of Magnolia Oil & Gas in the first quarter of 2024?
How much did Magnolia Oil & Gas spend on drilling and completions capital in the first quarter of 2024?
What was the cash balance of Magnolia Oil & Gas as of the end of the first quarter of 2024?
Did Magnolia Oil & Gas repurchase any of its Class A Common Stock in the first quarter of 2024?
