8-K - MGY - Equibles

UNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 22, 2021


Magnolia Oil & Gas Corporation
(Exact name of registrant as specified in its charter)

Delaware	001-38083	81-5365682
(State or other jurisdiction <br>of incorporation)	(Commission <br>File Number)	(I.R.S. Employer <br>Identification Number)

	Nine Greenway Plaza, Suite 1300<br><br>Houston , Texas ** 77046**
(Address of principal executive offices, including zip code)

	( 713 ) 842-9050
Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Securities registered pursuant to section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.0001 Per Share	MGY	New York Stock Exchange

Item 2.02Results of Operations and Financial Condition.

****On February 22, 2021, Magnolia Oil & Gas Corporation (the “Company”) issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated by reference herein, announcing its financial and operational results for the fourth quarter and full-year ended December 31, 2020.

The information furnished pursuant to this Item 2.02 (including Exhibit 99.1) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.

Item 7.01	Regulation FD Disclosure.

On February 22, 2021, the Company provided information in an earnings presentation on its website, www.magnoliaoilgas.com, regarding its financial and operational results for the fourth quarter and full-year ended December 31, 2020.

The earnings presentation, which is attached hereto as Exhibit 99.2, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise be subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act.

Item 9.01	Financial Statements and Exhibits.

(d)Exhibits.


Exhibit
Number	Description
99.1	Press Release dated February 22, 2021

99.2	Earnings Presentation dated February 23, 2021

104	Cover Page Interactive Data File (formatted as inline XBRL)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

<br><br><br><br>
	MAGNOLIA OIL & GAS CORPORATION


Date: February 22, 2021	By: /s/ Timothy D. Yang
	Name: Timothy D. Yang
	Title: Executive Vice President,<br> General Counsel and Corporate Secretary

YE 2020 Press Release

Exhibit 99.1

Magnolia Oil & Gas Corporation Announces 2020 Fourth Quarter and Year-End Results

HOUSTON, TX, February 22, 2021 - Magnolia Oil & Gas Corporation (“Magnolia,” “we,” “our,” or the “Company”) (NYSE: MGY) today announced its financial and operational results for the fourth quarter and full year 2020.

Fourth Quarter Summary Financial Results:


(In millions, except per share data)	For the<br>Quarter Ended<br>December 31, 2020
Net income	$	42.0
Earnings per share - diluted	0.16
Adjusted net income^(1)^	39.3
Adjusted earnings per share^(1)^	0.15
Adjusted EBITDAX^(1)^	98.1
Capital expenditures - D&C	39.6
Cash balance as of December 31, 2020	$	192.6
Diluted weighted average total shares outstanding^(2)^	255.1

Fourth Quarter and Full Year 2020 Highlights:

•	Magnolia reported fourth quarter 2020 net income attributable to Class A Common Stock of $27.7 million, or $0.16 per share. Fourth quarter 2020 total net income was $42.0 million and adjusted net income was $39.3 million, or $0.15 per diluted share.
•	Adjusted EBITDAX for full year 2020 was $338.6 million with total drilling and completions (“D&C”) capital representing 58% of adjusted EBITDAX, and in line with our business model which is committed to capital discipline. Adjusted EBITDAX was $98.1 million during the fourth quarter of 2020.
---	---
•	D&C capital during the fourth quarter of $39.6 million represented 40% of adjusted EBITDAX, and better than our earlier guidance due to improved efficiencies at our Giddings asset as well as stronger than expected product prices.
---	---
•	Net cash provided by operating activities was $79.1 million during the fourth quarter and $310.1 million during full-year 2020 and the Company generated free cash flow^(1)^ of $44.3 million during the fourth quarter and $87.4 million during full-year 2020.
---	---
•	Total production in the fourth quarter 2020 increased 12% sequentially to 60.6 thousand barrels of oil equivalent per day (“boe/d”), and above the high-end of our guidance range due to better-than expected performance from new wells completed in the Giddings area.
---	---
•	Production at Giddings achieved record levels in the fourth quarter with total volumes of 28.3 Mboe/d and oil production of 8.5 Mbbl/d increasing sequentially by 39% and 70%, respectively.
---	---
•	Magnolia brought online 6 new wells in the initial core development area bringing the total well count here to 20 wells. Production for the 6 new wells is outperforming the average of the earlier core area wells increasing the 90-day production rate for this 70,000-acre area by 4% to 1,621 Boe/d (52% oil).
---	---
•	During the fourth quarter, Magnolia brought 2 additional wells online that were approximately 20 miles from the initial core area. These wells, which were expected to be gassier, had average 90-day production rates of 543 Bbl/d of oil and 7.3 MMcf/d of natural gas per well.
---	---
•	During the fourth quarter, the Company purchased 2.4 million shares of its Class A Common Stock, or about 1% of the total share count, for $15.7 million as part of our ongoing share repurchase program. Repurchases during full-year 2020 totaled 4.5 million shares for $28.7 million, and our Board recently increased the repurchase authorization by 10 million shares.
---	---
•	Magnolia expects to begin paying a cash dividend during 2021.
---	---

^(1)^Adjusted net income, adjusted earnings per share, adjusted EBITDAX, and free cash flow 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.

•	Magnolia added 30.4 MMboe of proved developed reserves, excluding acquisitions and price-related revisions, representing the reserve additions from our 2020 drilling program and replaced 135% of the 2020 production. These proved developed additions provide an organic proved developed Finding & Development (“F&D”) cost of $6.41/boe^(3)^.
•	Magnolia ended the quarter with approximately $192.6 million of cash on its balance sheet and remains undrawn on its $450.0 million revolving credit facility. The Company has no debt maturities until 2026 and has no plans to increase its debt levels.
---	---

“Magnolia ended 2020 with very strong fourth quarter operational and financial performance. Despite last year’s challenging environment, our policy of low financial leverage, commitment to capital discipline and high-quality assets allowed us to exit 2020 in better shape than when we entered,” said Magnolia Chairman, President and CEO, Steve Chazen. “We increased our quarterly production by nearly 12% sequentially while spending only 40% of our adjusted EBITDAX and, repurchasing 2.4 million Magnolia shares or roughly 1% of the outstanding shares. We achieved all this while building our year-end cash position to more than $190 million.

“While we had numerous accomplishments last year, none were more meaningful than the significant strides made in advancing the Giddings assets from appraisal mode to multi-well pad development. Including the 6 new wells completed during the fourth quarter, our 90-day average production rate in our initial core development area has increased 4% to 1,621 Boe/d with an average oil rate of 846 Bbl/d. We also completed 2 additional successful wells that were 20 miles outside of this core area which may provide for additional high-return development potential over time.

“Importantly, we have lowered our overall well costs in Giddings to approximately $6 million from $8.5 million during 2019 as a result of improved efficiencies and our ability to drill wells nearly twice as fast. The impact of our success in Giddings has resulted in improved capital efficiency, lower F&D costs and higher pretax margins for the overall business.

“We entered 2021 in a strong financial position and with considerable operational momentum driven by our Giddings asset. Our capital spending plan for the year is expected to be no more than 60% of our Adjusted EBITDAX, and consistent with our business model. We expect that this level of spending and activity to provide full-year 2021 production growth of between 5% to 8% compared to 2020 volumes.

“Most of the remaining 40% of unallocated cash flow after capital and interest expense will be dedicated to small, bolt-on property acquisitions and share repurchases. The intent of these actions is to enhance the value of the stock by improving our metrics on a per share basis. We expect to reduce our outstanding shares by roughly 1% per quarter through share repurchases, which should result in annual production per share growth of approximately 10%. In addition to these value enhancing activities, Magnolia intends to begin paying a cash dividend in mid-2021.”

Operational Update

Fourth quarter total company production averaged 60.6 Mboe/d, an increase of 12% from third quarter 2020 levels and exceeding the high end of our guidance range. The higher production outcome was a result of stronger than expected results from the 8 Giddings wells Magnolia brought online during the quarter. Giddings and Other production averaged 28.3 Mboe/d representing a 39% increase in sequential volumes. Oil production at Giddings averaged 8.5 Bbl/d, an increase of 70% sequentially. Production in the Karnes area averaged 32.3 Mboe/d during the fourth quarter of 2020, a decline of 5% sequentially, as we did not complete any operated wells during the period.

Magnolia continues to operate one rig drilling multi-well pads in our Giddings area. Total well costs associated with drilling, completion and hook up have recently declined to $6.2 million per well as operating efficiencies continue to improve. At the current pace of drilling, a single rig can drill approximately 20 to 24 wells per year as drilling days per well continue to decline.

During the fourth quarter, Magnolia brought online 8 wells, 6 of which were located in the 70,000-acre initial core area. The company has now drilled and completed a total of 20 wells in this area. The 6 new wells exceeded the average of the prior 14 wells bringing the updated 90-day average for the 20 total wells to 846 Bbl/d and 4.7 MMcf/d.


	Initial Core Giddings Area Results 90-Day Average
	Current	Previous^(4)^
Well Count	20	14
Bopd	846	783
Boe/d (2-Stream)	1,621	1,557

^(3)^ Organic F&D costs per boe means total costs incurred as defined by GAAP excluding property acquisition costs, exploration costs and asset retirement obligation costs divided by the summation of annual proved developed reserves, on a boe basis, attributable to extensions, revisions of previous estimates (excluding price revisions) and transfers from proved undeveloped reserves at year-end 2019.

^(4)^ The core Giddings area 90-day average production rate was previously disclosed in the Q2 2020 press release, filed with the SEC on exhibit 99.1 of form 8-K on August 5, 2020.

Magnolia also brought online a 2-well pad located approximately 20 miles outside the initial core area and were expected to be gassier than the average Giddings well in the core area. These wells had a 90-day average production rate of 543 Bbl/d of oil and 7.3 MMcf/d of natural gas per well, which were ahead of our expectations.

Updated Guidance

For 2021, Magnolia expects to spend approximately 50% to 60% of our adjusted EBITDAX for drilling and completing wells, which is consistent with our business model. Should product prices remain at current levels, we estimate our capital spending to be in the lower half of the expected range. The 2021 activity plan consists of operating a one rig program at Giddings, drilling multi-well pads primarily in our initial core area. In the Karnes area, we plan to complete 10 drilled but uncompleted wells (“DUCs”), most of which should be brought online during the first half of the year. Non-operated activity at Karnes is expected to increase compared to the 2020 levels. Our 2021 capital and activity plan is expected to deliver mid-single digit production growth on a year-over-year basis.

Looking at the first quarter of 2021, D&C capital should be approximately 50% of our adjusted EBITDAX, at elevated product prices. Operated activity will continue to focus on Giddings and, we expect to begin completing some of the Karnes DUCs in the latter part of the quarter. Production in the first quarter of 2021 is forecast to be relatively flat compared to fourth quarter levels, which incorporates a rough estimate of recent cold weather-related outages in the field. Oil price differentials are anticipated to be roughly a $3 per barrel discount to Magellan East Houston (“MEH”) during the first quarter.

2020 Oil and Gas Reserves Replacement and F&D Costs

Magnolia’s total proved developed reserves at year-end 2020 were 85.8 MMboe. The company added 30.4 MMboe of proved developed reserves during the year, excluding acquisitions and price related revisions and replacing 135% of 2020 production. Total costs incurred excluding property acquisition costs, exploration costs and asset retirement obligation costs were $194.9 million in 2020 resulting in organic proved developed F&D costs of $6.41 per boe.

Total 2020 proved reserves increased to 112.3 MMboe from 109.3 MMboe at year end 2019 and replaced 113% of 2020 production. Magnolia books only one year of proved undeveloped reserves and as a result, 76% of its 2020 proved reserves were developed.

Annual Report on Form 10-K

Magnolia's financial statements and related footnotes will be available in its Annual Report on Form 10-K for the year ended December 31, 2020, which is expected to be filed with the U.S. Securities and Exchange Commission (“SEC”) on February 23, 2021.

Conference Call and Webcast

Magnolia will host an investor conference call on Tuesday, February 23, 2021 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 South Texas in the core of the Eagle Ford Shale and Austin Chalk formations. Magnolia focuses on generating value for shareholders through steady production growth, strong pre-tax margins, and free cash flow. For more information, visit www.magnoliaoilgas.com.

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 and are based on currently available information as to the outcome and timing of 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 length, scope and severity of the ongoing coronavirus disease 2019 (“COVID-19”) pandemic, including the effects of related public health concerns and the impact of continued actions taken by governmental authorities and other third parties in response to the pandemic and its impact on commodity prices, supply and demand considerations, and storage capacity; (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; and (v) the possibility that Magnolia may be adversely 3

affected by other economic, business, and/or competitive factors. 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, 2020, which is expected to be filed with the SEC on February 23, 2021. Magnolia’s SEC filings are available publicly on the SEC’s website at www.sec.gov.

Contacts for Magnolia Oil & Gas Corporation

Investors

Brian Corales

(713) 842-9036

bcorales@mgyoil.com

Media

Art Pike

(713) 842-9057

apike@mgyoil.com

Magnolia Oil & Gas Corporation

Operating Highlights


	For the Quarters Ended						For the Years Ended
	December 31, 2020			December 31, 2019			December 31, 2020			December 31, 2019
Production:
Oil (MBbls)	2,646			3,251			11,610			12,867
Natural gas (MMcf)	10,168			10,689			39,429			41,272
Natural gas liquids (MBbls)	1,237			1,254			4,449			4,643
Total (Mboe)	5,577			6,287			22,631			24,389

Average daily production:
Oil (Bbls/d)	28,756			35,337			31,722			35,252
Natural gas (Mcf/d)	110,522			116,185			107,728			113,074
Natural gas liquids (Bbls/d)	13,440			13,630			12,156			12,721
Total (boe/d)	60,617			68,331			61,833			66,819

Revenues (in thousands):
Oil revenues	$	106,738		$	187,972		$	417,891		$	771,981
Natural gas revenues	23,010			22,537			67,248			93,745
Natural gas liquids revenues	19,487			19,200			49,367			70,416
Total revenues	$	149,235		$	229,709		$	534,506		$	936,142

Average sales price:
Oil (per Bbl)	$	40.34		$	57.82		$	35.99		$	60.00
Natural gas (per Mcf)	2.26			2.11			1.71			2.27
Natural gas liquids (per Bbl)	15.75			15.31			11.10			15.17
Total (per boe)	$	26.76		$	36.54		$	23.62		$	38.38

NYMEX WTI (per Bbl)	$	42.67		$	56.96		$	39.40		$	57.04
NYMEX Henry Hub (per Mcf)	$	2.66		$	2.50		$	2.08		$	2.63
Realization to benchmark:
Oil (% of WTI)	95		%	102		%	91		%	105		%
Natural gas (% of Henry Hub)	85		%	84		%	82		%	86		%

Operating expenses (in thousands):
Lease operating expenses	$	17,917		$	23,034		$	79,192		$	93,788
Gathering, transportation, and processing	8,067			8,908			28,645			34,924
Taxes other than income	8,376			12,904			31,250			53,728
Depreciation, depletion and amortization	45,080			137,629			283,353			523,572

Operating costs per boe:
Lease operating expenses	$	3.21		$	3.66		$	3.50		$	3.85
Gathering, transportation, and processing	1.45			1.42			1.27			1.43
Taxes other than income	1.50			2.05			1.38			2.20
Depreciation, depletion and amortization	8.08			21.89			12.52			21.47

Magnolia Oil & Gas Corporation

Consolidated Statements of Operations

(In thousands, except per share data)


	For the Quarters Ended				For the Years Ended
	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
REVENUES
Oil revenues	$	106,738	$	187,972	$	417,891	$	771,981
Natural gas revenues	23,010		22,537		67,248		93,745
Natural gas liquids revenues	19,487		19,200		49,367		70,416
Total revenues	149,235		229,709		534,506		936,142
OPERATING EXPENSES
Lease operating expenses	17,917		23,034		79,192		93,788
Gathering, transportation and processing	8,067		8,908		28,645		34,924
Taxes other than income	8,376		12,904		31,250		53,728
Exploration expense	3,744		2,724		567,333		12,741
Impairment of oil and natural gas properties	—		—		1,381,258		—
Asset retirement obligation accretion	1,315		1,416		5,718		5,512
Depreciation, depletion and amortization	45,080		137,629		283,353		523,572
Amortization of intangible assets	3,626		3,626		14,505		14,505
General and administrative expenses	18,445		16,784		68,918		69,432
Transaction related costs	—		—		—		438
Total operating costs and expenses	106,570		207,025		2,460,172		808,640

OPERATING INCOME (LOSS)	42,665		22,684		(1,925,666)		127,502

OTHER INCOME (EXPENSE)
Income from equity method investee	54		249		2,113		857
Interest expense, net	(7,353)		(6,745)		(28,698)		(28,356)
Gain on derivatives, net	2,774		—		565		—
Other income (expense), net	3,872		(246)		3,363		(238)
Total other expense, net	(653)		(6,742)		(22,657)		(27,737)

INCOME (LOSS) BEFORE INCOME TAXES	42,012		15,942		(1,948,323)		99,765
Income tax expense (benefit)	—		2,311		(79,340)		14,760
NET INCOME (LOSS)	42,012		13,631		(1,868,983)		85,005
LESS: Net income (loss) attributable to noncontrolling interest	14,267		5,516		(660,593)		34,809
NET INCOME (LOSS) ATTRIBUTABLE TO MAGNOLIA	27,745		8,115		(1,208,390)		50,196
LESS: Non-cash deemed dividend related to warrant exchange	—		—		—		2,763
NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCK	$	27,745	$	8,115	$	(1,208,390)	$	47,433

NET INCOME (LOSS) PER SHARE OF CLASS A COMMON STOCK
Basic	$	0.17	$	0.05	$	(7.27)	$	0.29
Diluted	$	0.16	$	0.05	$	(7.27)	$	0.28
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic	164,907		167,331		166,270		161,886
Diluted	169,326		171,647		166,270		167,047
WEIGHTED AVERAGE NUMBER OF CLASS B SHARES OUTSTANDING^(1)^	85,790		90,942		85,790		91,951

^(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. 6

Magnolia Oil & Gas Corporation

Summary Cash Flow Data

(In thousands)


	For the Quarters Ended				For the Years Ended
	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME (LOSS)	$	42,012	$	13,631	$	(1,868,983)	$	85,005
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	45,080		137,629		283,353		523,572
Amortization of intangible assets	3,626		3,626		14,505		14,505
Exploration expense, non-cash	2,370		618		563,999		1,154
Impairment of oil and natural gas properties	—		—		1,381,258		—
Asset retirement obligation accretion	1,315		1,416		5,718		5,512
Amortization of deferred financing costs	918		897		3,628		3,541
Unrealized (gain) on derivatives, net	(2,485)		—		(277)		—
(Gain) on sale of equity method investment	(5,071)		—		(5,071)		—
Deferred taxes	—		2,496		(77,834)		14,261
Stock based compensation	1,158		2,713		10,029		11,089
Other	1,332		(156)		(728)		(668)
Net change in operating assets and liabilities	(11,133)		(3,863)		524		(10,352)
Net cash provided by operating activities	79,122		159,007		310,121		647,619

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of EnerVest properties	—		—		—		4,250
Acquisitions, other	—		—		(73,702)		(93,221)
Proceeds from sale of equity method investment	27,074				27,074		—
Additions to oil and natural gas properties	(40,532)		(73,657)		(197,858)		(425,124)
Changes in working capital associated with additions to oil and natural gas properties	(5,382)		3,481		(24,354)		(9,911)
Other investing	(307)		6		(1,148)		(242)
Net cash used in investing activities	(19,147)		(70,170)		(269,988)		(524,248)

CASH FLOW FROM FINANCING ACTIVITIES
Contributions from noncontrolling interest owners	—		—		—		7,301
Distributions to noncontrolling interest owners	(85)		(708)		(680)		(1,424)
Class A Common Stock repurchase	(15,718)		(555)		(28,681)		(10,277)
Class B Common Stock repurchase	—		(69,093)		—		(69,093)
Other financing activities	(144)		(337)		(844)		(3,003)
Net cash used in financing activities	(15,947)		(70,693)		(30,205)		(76,496)

NET CHANGE IN CASH AND CASH EQUIVALENTS	44,028		18,144		9,928		46,875
Cash and cash equivalents – Beginning of period	148,533		164,489		182,633		135,758
Cash and cash equivalents – End of period	$	192,561	$	182,633	$	192,561	$	182,633

Magnolia Oil & Gas Corporation

Summary Balance Sheet Data

(In thousands)


	December 31, 2020		December 31, 2019
Cash and cash equivalents	$	192,561	$	182,633
Other current assets	88,965		110,585
Property, plant and equipment, net	1,149,527		3,116,757
Other assets	22,367		56,431
Total assets	$	1,453,420	$	3,466,406

Current liabilities	$	128,949	$	175,208
Long-term debt, net	391,115		389,835
Other long-term liabilities	93,934		172,834
Common stock	26		26
Additional paid in capital	1,712,544		1,703,362
Treasury stock	(38,958)		(10,277)
Retained earnings (accumulated deficit)	(1,125,450)		82,940
Noncontrolling interest	291,260		952,478
Total liabilities and equity	$	1,453,420	$	3,466,406

Magnolia Oil & Gas Corporation

Costs Incurred, Proved Developed Reserves, Organic F&D Cost Per Boe and Reserve Replacement Ratio

The following tables summarize the Company's costs incurred in oil and gas property acquisition, exploration and development activities, reconciliation of changes in proved developed reserves, calculation of organic proved developed F&D cost per boe and calculation of proved developed reserve replacement ratio for the years ended December 31, 2020 and 2019.


		For the Years Ended
(In thousands)		December 31, 2020		December 31, 2019
Costs incurred:
Proved property acquisition costs		$	49,246	$	106,489
Unproved properties acquisition costs		25,966		29,208
Total acquisition costs		75,212		135,697
Exploration and development costs		188,352		441,482
Total costs incurred		263,564		577,179
Less: Total acquisition costs		(75,212)		(135,697)
Less: Asset retirement obligations		12,839		(3,540)
Less: Exploration expense		(3,334)		(11,586)
Less: Leasehold acquisition costs		(2,966)		(10,003)
Drilling and completion capital	(A)	$	194,891	$	416,353


		For the Years Ended
(In MMboe)		December 31, 2020	December 31, 2019
Proved developed reserves:
Beginning of period		86.8	76.5
End of period		85.8	86.8
Increase (decrease) in proved developed reserves		(1.0)	10.3
Production	(B)	22.6	24.4
Increase in proved developed reserves plus production		21.6	34.7
Less: Purchases of reserves in place		(2.0)	(6.0)
Less: Price-related revisions		10.8	5.4
Increase in proved developed reserves, excluding acquisitions and price-related revisions	(C)	30.4	34.1


		For the Years Ended
		December 31, 2020			December 31, 2019
Organic proved developed F&D cost per boe	(A)/(C)	$	6.41		$	12.21
Reserve replacement ratio	(C)/(B)	135		%	140		%

Magnolia Oil & Gas Corporation

Non-GAAP Financial Measures

Reconciliation of net income (loss) 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 (loss) before interest expense, income taxes, depreciation, depletion and amortization, amortization of intangible assets, exploration costs, and accretion of asset retirement obligation, adjusted to exclude the effect of certain items included in net income (loss).

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 (loss) 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 (loss) 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 (loss) to adjusted EBITDAX, our most directly comparable financial measure, calculated and presented in accordance with GAAP:


	For the Quarters Ended				For the Years Ended
(In thousands)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
NET INCOME (LOSS)	$	42,012	$	13,631	$	(1,868,983)	$	85,005
Exploration expense	3,744		2,724		567,333		12,741
Asset retirement obligation accretion	1,315		1,416		5,718		5,512
Depreciation, depletion and amortization	45,080		137,629		283,353		523,572
Amortization of intangible assets	3,626		3,626		14,505		14,505
Interest expense, net	7,353		6,745		28,698		28,356
Income tax expense (benefit)	—		2,311		(79,340)		14,760
EBITDAX	103,130		168,082		(1,048,716)		684,451
Impairment of oil and natural gas properties	—		—		1,381,258		—
Non-cash stock based compensation expense	1,158		2,713		10,029		11,089
Unrealized (gain) on derivatives, net	(2,485)		—		(277)		—
(Gain) on sale of equity method investment	(5,071)		—		(5,071)		—
Inventory write down	1,386		—		1,386		—
Transaction related costs^(1)^	—		—		—		438
Adjusted EBITDAX	$	98,118	$	170,795	$	338,609	$	695,978

^(1)^Transaction costs incurred related to the execution of our business combination with EnerVest, Ltd. and its affiliates and the Harvest acquisition, including legal fees, advisory fees, consulting fees, accounting fees, employee placement fees, and other transaction and facilitation costs.

Magnolia Oil & Gas Corporation

Non-GAAP Financial Measures

Reconciliation of net income (loss) attributable to Class A Common Stock to adjusted earnings

Our presentation of adjusted earnings and adjusted earnings per share are non-GAAP measures because they exclude the effect of certain items included in net income (loss) attributable to Class A Common Stock. Management uses adjusted earnings and adjusted earnings per share 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 earnings 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 earnings and adjusted earnings per share may not be comparable to similar measures of other companies in our industry.

	For the Quarter Ended<br><br>December 31, 2020		Per Share Diluted EPS		For the Quarter Ended<br><br>December 31, 2019		Per Share Diluted EPS
(In thousands, except per share data)
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK	$	27,745	$	0.16	$	8,115	$	0.05
Adjustments:
Impairment of unproved properties^(1)^	2,370		0.01		—		—
Unrealized (gain) on derivatives, net	(2,485)		(0.01)		—		—
(Gain) on sale of equity method investment	(5,071)		(0.03)		—		—
Inventory write down	1,386		0.01		—		—
Seismic purchases	1,100		0.01		—		—
Noncontrolling interest impact of adjustments	917		—		—		—
ADJUSTED NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK	$	25,962	$	0.15	$	8,115	$	0.05

	For the <br>Year Ended<br>December 31, 2020		Per Share Diluted EPS		For the <br>Year Ended <br>December 31, 2019		Per Share Diluted EPS
(In thousands, except per share data)
NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCK	$	(1,208,390)	$	(7.27)	$	47,433	$	0.28
Adjustments:
Non-cash deemed dividend	—		—		2,763		0.02
Impairment of proved oil and natural gas properties	1,381,258		8.31		—		—
Impairment of unproved properties^(1)^	563,999		3.39		—		—
Unrealized (gain) on derivatives, net	(277)		—		—		—
(Gain) on sale of equity method investment	(5,071)		(0.03)		—		—
Inventory write down	1,386		0.01		—		—
Seismic purchases	1,100		0.01		—		—
Transaction costs	—		—		438		—
Noncontrolling interest impact of adjustments	(658,210)		(3.96)		—		—
Change in estimated income tax	(78,327)		(0.48)		(92)		—
ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCK	$	(2,532)	$	(0.02)	$	50,542	$	0.30

^(1)^ Impairment of unproved properties is included within Exploration expense on the consolidated statements of operations. 11

Magnolia Oil & Gas Corporation

Non-GAAP Financial Measures

Reconciliation of net income (loss) to adjusted net income (loss)

Our presentation of adjusted net income (loss) is a non-GAAP measures because it excludes the effect of certain items included in net income (loss) and adjusts for income taxes assuming the exchange of all outstanding Magnolia LLC Units and corresponding Class B Common Stock for shares of Class A Common Stock. Management uses adjusted net income (loss) 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 (loss) 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 (loss) may not be comparable to similar measures of other companies in our industry.


	For the Quarters Ended				For the Years Ended
(In thousands)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
NET INCOME (LOSS)	$	42,012	$	13,631	$	(1,868,983)	$	85,005
Income tax expense (benefit)	—		2,311		(79,340)		14,760
INCOME (LOSS) BEFORE INCOME TAXES	42,012		15,942		(1,948,323)		99,765
Adjustments:
Impairment of proved oil and natural gas properties	—		—		1,381,258		—
Impairment of unproved properties^(1)^	2,370		—		563,999		—
Unrealized (gain ) on derivatives, net	(2,485)		—		(277)		—
(Gain) on sale of equity method investment	(5,071)		—		(5,071)		—
Inventory write down	1,386		—		1,386		—
Seismic purchases	1,100		—		1,100		—
Transaction costs	—		—		—		438
ADJUSTED INCOME (LOSS) BEFORE INCOME TAXES	39,312		15,942		(5,928)		100,203
Adjusted income tax expense (benefit)^(2)^	—		3,475		(1,293)		22,116
ADJUSTED NET INCOME (LOSS)	$	39,312	$	12,467	$	(4,635)	$	78,087

Diluted weighted average shares of Class A Common Stock outstanding during the period	169,326		171,647		166,270		167,047
Weighted average shares of Class B Common Stock outstanding during the period^(3)^	85,790		90,942		85,790		91,951
Total weighted average shares of Class A and B Common Stock, including dilutive impact of other securities^(3)^	255,116		262,589		252,060		258,998

^(1)^ Impairment of unproved properties is included within Exploration expense on the consolidated statements of operations.

^(2)^Represents corporate income taxes at an assumed effective tax rate of 0% and 22% for the quarters ended December 31, 2020 and 2019, respectively, and 22% for each of the years ended December 31, 2020 and 2019.

^(3)^ 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 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 is frequently included in published research when providing investment recommendations. Free cash flow, therefore, is an additional measure of liquidity, but 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				For the Years Ended
(In thousands)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Net cash provided by operating activities	$	79,122	$	159,007	$	310,121	$	647,619
Add back: net change in operating assets and liabilities	11,133		3,863		(524)		10,352
Cash flows from operations before net change in operating assets and liabilities	90,255		162,870		309,597		657,971
Additions to oil and natural gas properties	(40,532)		(73,657)		(197,858)		(425,124)
Changes in working capital associated with additions to oil and natural gas properties	(5,382)		3,481		(24,354)		(9,911)
Free cash flow	$	44,341	$	92,694	$	87,385	$	222,936

Exhibit 99.2

Fourth Quarter 2020<br>Earnings Presentation<br>February 23, 2021<br>Stephen Chazen – Chairman, President & CEO<br>Christopher Stavros – Executive Vice President & CFO<br>Brian Corales – Vice President, Investor Relations
Disclaimer<br>2<br>FORWARD LOOKING STATEMENTS<br>The information in this presentation and the oral statements made in connection therewith include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as<br>amended (the “Securities Act”), 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 presentation,<br>regarding Magnolia Oil & Gas Corporation’s (“Magnolia,” “we,” “us,” “our” or the “Company”) financial and production guidance, strategy, future operations, financial position, estimated revenues, and<br>losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, including any oral statements made in connection therewith, the<br>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<br>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<br>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<br>reflect events or circumstances after the date of this presentation. Magnolia cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult<br>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<br>that the forward looking statements contained in this press release are subject to the following factors: (i) the length, scope and severity of the ongoing coronavirus disease 2019 (“COVID-19”) pandemic,<br>including the effects of related public health concerns and the impact of continued actions taken by governmental authorities and other third parties in response to the pandemic and its impact on<br>commodity prices, supply and demand considerations, and storage capacity; (ii) the outcome of any legal proceedings that may be instituted against Magnolia; (iii) Magnolia’s ability to realize the<br>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<br>regulations; and (v) the possibility that Magnolia may be adversely affected by other economic, business, and/or competitive factors. Should one or more of the risks or uncertainties described in this press<br>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<br>these and other factors that may impact Magnolia's operations and projections can be found in its filings with the Securities and Exchange Commission (the "SEC"), its Annual Report on Form 10-K for the<br>fiscal year ended December 31, 2020, which is expected to be filed with the SEC on February 23, 2021. Magnolia’s SEC filings are available publicly on the SEC’s website at www.sec.gov.<br>NON-GAAP FINANCIAL MEASURES<br>This presentation includes non-GAAP financial measures, including free cash flow, EBITDAX, adjusted EBITDAX, adjusted net income, adjusted earnings, adjusted cash costs and adjusted cash operating<br>margin. Magnolia believes these metrics are useful because they allow Magnolia to more effectively evaluate its operating performance and compare the results of its operations from period to period and<br>against its peers without regard to accounting methods or capital structure. Magnolia does not consider these non-GAAP measures in isolation or as an alternative to similar financial measures determined<br>in accordance with GAAP. The computations of these non-GAAP measures may not be comparable to other similarly titled measures of other companies.<br>Magnolia excludes certain items from net income in arriving at adjusted net income and adjusted earnings because these amounts can vary substantially from company to company within its industry<br>depending upon accounting methods, book values of assets and the method by which the assets were acquired. Adjusted EBITDAX, adjusted net income, and adjusted earnings should not be considered as<br>alternatives to, or more meaningful than, net income as determined in accordance with GAAP. Certain items excluded from free cash flow, adjusted EBITDAX, adjusted net income, adjusted earnings,<br>adjusted cash costs and adjusted cash operating margin are significant components in understanding and assessing a company’s financial performance, and should not be construed as an inference that its<br>results will be unaffected by unusual or non-recurring terms.<br>As performance measures, adjusted EBITDAX, adjusted net income, adjusted earnings, adjusted cash costs and adjusted cash operating margin may be useful to investors in facilitating comparisons to<br>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<br>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<br>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. As a liquidity<br>measure, 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<br>internally fund drilling and completion activities, fund acquisitions, and service debt. Our presentation of adjusted EBITDAX, adjusted net income, free cash flow, adjusted earnings, adjusted cash costs and<br>adjusted cash operating margin may not be comparable to similar measures of other companies in our industry. A free cash flow reconciliation is shown on page 14, adjusted EBITDAX reconciliation is<br>shown on page 15 of the presentation, adjusted net income reconciliation is shown on page 16, adjusted earnings reconciliation is shown on page 17 and adjusted cash costs and adjusted cash operating<br>margin reconciliations are shown on page 10.<br>INDUSTRY AND MARKET DATA<br>This presentation has been prepared by Magnolia and includes market data and other statistical information from sources believed by Magnolia to be reliable, including independent industry publications,<br>governmental publications or other published independent sources. Some data is also based on the good faith estimates of Magnolia, which are derived from its review of internal sources as well as the<br>independent sources described above. Although Magnolia believes these sources are reliable, it has not independently verified the information and cannot guarantee its accuracy and completeness.
---
Magnolia Oil & Gas – 4Q and Full Year 2020 Highlights<br>3<br>• Will commence paying a semi-annual dividend in 2021.<br>• Generated adjusted EBITDAX of $98.1 million versus our D&C Capital of $39.6 million, or just 40% of adjusted EBITDAX,<br>during the 4th quarter. For 2020, Magnolia generated $338.6 million of adjusted EBITDAX with total D&C capital of<br>$194.9 million or 58% of adjusted EBITDAX and inline with our business model.<br>• Generated free cash flow of $44.3 million during the fourth quarter and $87.4 million for the year.<br>• Ended the 4th quarter 2020 with $193 million of cash on the balance sheet and an undrawn $450 million revolver,<br>providing MGY with $643 million(1) of liquidity.<br>• Production increased 12% sequentially led by the Giddings area. Giddings production increased 39% with oil production<br>increasing 70% sequentially.<br>• At Giddings, Magnolia has 20 horizontal wells in the 70,000 acre initial core area. These wells have an average 90-day<br>production rate of 846 bbls/d of oil production and 4.7 MMcf/d of natural gas.<br>• Had a successful two-well step-out approximately 20 miles outside the initial core area at Giddings. These wells had an<br>average per well, 90-day production rate of 543 bbl/d of oil and 7.3 MMcf/d of natural gas.<br>• Magnolia repurchased 2.4 million shares (about 1% of the total share count) at an average price of $6.62/share during<br>the 4th quarter. During 2020, Magnolia repurchased 4.5 million shares at an average price of $6.41/share.<br>(1) Liquidity defined as cash plus availability under revolving credit facility.
---
Cash Flow Allocation Matches Magnolia’s Business Model<br>4<br>(Percentage of Operating Cash Flow (1) – Since Inception - 7/31/18 thru 12/31/20)<br>(1) Operating Cash Flow is cash flow from operations before changes in working capital.<br>Drilling & Completions<br>60%<br>Acquisitions<br>26%<br>Share<br>Repurchases<br>8%<br>Cash<br>Build<br>6%
---
Giddings Field – Appraisal to Development<br>• MGY has identified some contiguous acreage blocks which have<br>produced consistent results to date<br>‒ One of these areas comprises ~70,000 acres which we have 20<br>wells with 90+ days of production<br>• 2020 was a transition year, moving from appraisal drilling to multi-<br>well pad drilling in our early-stage development area<br>‒ Reduced well costs by more than 25% to $6.2 million through<br>efficiencies and cost reductions<br>• Highlights of early-stage development program:<br>‒ Multi-well pads<br>‒ Expect 2021 wells to average completed well cost of $6 million<br>‒ Continued delineation: 20 – 24 well program planned for 2021<br>• Benefits of Giddings:<br>‒ Low entry costs and high economic returns<br>‒ Shallower production declines<br>‒ High EURs with improving F&D Costs<br>Magnolia Acreage<br>Note: All MGY Giddings acreage not displayed on map.<br>5<br>Current Previous<br>90-Day 90-Day<br>Well Count 20 Well Count 14<br>Bopd 846 Bopd 783<br>Boe/d (2-Stream) 1,621 Boe/d (2-Stream) 1,557
---
Magnolia Oil & Gas – 4Q 2020 Key Metrics<br>6<br>Adj. Net Income (1) & Adj. EPS (1) Total Production<br>60.6 Mboe/d<br>(12% sequential growth)<br>Adjusted EBITDAX (1)<br>$98.1 Million<br>D&C Capex<br>$39.6 Million<br>40% of Adj. EBITDAX<br>Free Cash Flow (1)<br>$44.3 million<br>Giddings Production<br>28.3 Mboe/d<br>(39% sequential growth)<br>(70% sequential oil growth)<br>(1) Adjusted EPS, Adjusted Net Income, Free Cash Flow and Adjusted EBITDAX are non-GAAP measures. For a reconciliation to the most directly comparable GAAP<br>measure see pages 17, 16, 14 and 15.<br>$39.3 million<br>$0.15/share
---
4Q 2020 Cash Flow Summary<br>149<br>90<br>27 16<br>16<br>41<br>193<br>Cash<br>9/30/20<br>CFFO Ironwood Sale Changes<br>in WC<br>Common Stock<br>Repurchases<br>DC&F<br>Capital<br>Cash<br>12/31/20<br>(1) Cash flow from operations before changes in working capital.<br>(2) Includes $11 million decrease in working capital and $5 million decrease in capital accruals which are included in the investing activities of the statement of cash flows.<br>($ In Millions)<br>(1)<br>(2)<br>7
---
Magnolia Oil & Gas – Summary Balance Sheet<br>8<br>(in thousands)<br>December 31, 2020 December 31, 2019<br>Cash $192,561 $182,633<br>Current assets 88,965 110,585<br>Property, plant and equipment, net 1,149,527 3,116,757<br>Other assets 22,367 56,431<br>Total assets $1,453,420 $3,466,406<br>Current liabilities $128,949 $175,208<br>Long-term debt, net 391,115 389,835<br>Other long-term liabilities 93,934 172,834<br>Total equity 839,422 2,728,529<br>Total liabilities and equity $1,453,420 $3,466,406
---
4Q20 Capital Structure and Liquidity Overview<br>9<br>Capital Structure Overview<br>• Maintaining low financial leverage profile<br>‒ Net Debt / Total Book Capitalization of 17%<br>‒ Net Debt / Q4 Annualized adjusted EBITDAX of 0.5x<br>• Current Liquidity of $643 million, including fully undrawn credit facility (1)<br>• No debt maturities until senior unsecured notes mature in 2026<br>Debt Maturity Schedule ($MM)<br>(1) Liquidity defined as cash plus availability under revolving credit facility.<br>(2) Total Equity includes noncontrolling interest.<br>Capitalization & Liquidity ($MM)<br>Capitalization Summary As of 12/31/2020<br>Cash and Cash Equivalents $193<br>Revolving Credit Facility $0<br>6.00% Senior Notes Due 2026 $400<br>Total Principal Debt Outstanding $400<br>Total Equity (2) $839<br>Net Debt / Q4 Annualized Adjusted EBITDAX 0.5x<br>Net Debt / Total Book Capitalization 17%<br>Liquidity Summary As of 12/31/2020<br>Cash and Cash Equivalents $193<br>Credit Facility Availability $450<br>Liquidity (1) $643<br>$450<br>$400<br>2020 2021 2022 2023 2024 2025 2026<br>Borrowing<br>Base<br>Credit Facility<br>Borrowings<br>(as of 12/31/20)<br>$0<br>6.00% Senior<br>Unsecured<br>Notes
---
Magnolia Oil & Gas – Margin and Cost Structure<br>10<br>(1) Exploration expense excludes unproved property impairment of $2.4 million, or $0.42 per boe, and $0.6 million, or $0.10 per boe, for the 4th quarters of 2020 and 2019, respectively.<br>(2) General & administrative expense excludes non-cash stock based compensation of $1.1 million, or $0.20 per boe, and $2.7 million, or $0.43 per boe, for the 4th quarters of 2020 and 2019. Lease operating<br>expenses excludes non-cash stock based compensation of $0.1 million, or $0.01 per boe for the 4th quarter of 2020.<br>(3) Interest Expense excludes amortization of deferred financing costs of $0.9 million, or $0.16 per boe, and $0.9 million, or $0.14 per boe, for the 4th quarters of 2020 and 2019, respectively.<br>(4) Adjusted cash costs and adjusted cash operating margin are non-GAAP measures. For reasons management believes these are useful to Investors, refer to slide 2 “Non-GAAP Financial Measures.”<br>$ / Boe For the Quarter Ended<br>December 31, 2020<br>For the Quarter Ended<br>December 31, 2019<br>Revenue $26.76 $36.54<br>Total Cash Costs:<br>Lease Operating Expenses (1) (3.20) (3.66)<br>Gathering, Transportation & Processing (1.45) (1.42)<br>Taxes Other Than Income (1.50) (2.05)<br>Exploration Expense (2) (0.25) (0.33)<br>General & Administrative Expense (1) (3.11) (2.24)<br>Interest Expense, net (3) (1.16) (0.93)<br>Total Adjusted Cash Costs(4) ($10.67) ($10.63)<br>Adjusted Cash Operating Margin(4) $16.09 $25.91<br>Depreciation, Depletion, and Amortization (8.08) (21.89)<br>Full Cycle Costs ($18.75) ($32.52)<br>Full Cycle Margin $8.01 $4.02
---
Proved Developed Reserves Detail<br>11<br>(In thousands) For the Year Ended<br>December 31, 2020<br>Costs incurred:<br>Proved property acquisition costs $49,246<br>Unproved properties acquisitions costs 25,966<br>Total acquisition costs $75,212<br>Exploration and development costs 188,352<br>Total costs incurred $263,564<br>Less: Total acquisition costs ($75,212)<br>Less: Asset retirement obligations $12,839<br>Less: Exploration expense ($3,334)<br>Less: Leasehold acquisition costs ($2,966)<br>Drilling and completion capital (A) $194,891<br>Proved developed reserves:<br>Beginning of period 86.8<br>End of period 85.8<br>Increase (decrease) in proved developed reserves (1.0)<br>Production (B) 22.6<br>Increase in proved developed reserves plus production 21.6<br>Less: Purchase of reserves in place (2.0)<br>Less: Price-related revisions 10.8<br>Increase in proved developed reserves, excluding<br>acquisitions and price-related revisions (C) 30.4<br>Organic proved developed F&D cost per boe (A)/(C) $6.41<br>Reserve replacement ratio (C)/(B) 135%
---
Appendix
---
Magnolia Oil & Gas – Overview<br>• High-quality, low-risk pure-play South Texas operator with a core<br>Eagle Ford and Austin Chalk position acquired at an attractive entry<br>multiple<br>• Significant scale and PDP base generates material free cash flow,<br>reduces development risk, and increases optionality<br>• Asset Overview:<br>– ~23,500 net acres in a well-delineated, low-risk position in the<br>core of Karnes County, representing some of the most prolific<br>acreage in the United States with industry leading break-evens<br>– ~440,000 net acres in the Giddings area, a re-emerging oil play<br>with significant upside and what we believe to be substantial<br>inventory<br>– Both assets expected to remain self funding and within cash flow<br>13<br>~460,000 Net Acre Position Targeting Two of the Top<br>Oil Plays in the U.S.<br>Market Statistics<br>Trading Symbol (NYSE) MGY<br>Share Price as of 2/19/2021 $10.11<br>Common Shares Outstanding (1) 249.1 million<br>Market Capitalization $2.5 billion<br>Long-term Debt – Principal $400 million<br>Cash as of 12/31/2020 $193 million<br>Total Enterprise Value $2.7 billion<br>Operating Statistics Karnes Giddings Total<br>Net Acreage 23,513 436,885 460,398<br>4Q20 Net Production (Mboe/d) (2) 32.3 28.3 60.6<br>Industry Leading Breakevens ($/Bbl WTI)<br>$28 $32 $34 $35 $38 $39 $39<br>$45<br>Karnes Austin<br>Chalk<br>Karnes Lower<br>Eagle Ford<br>Midland Delaware DJ Basin Eagle Ford STACK Bakken<br>Source: RSEG.<br>(1) Common Stock outstanding includes Class A and Class B Stock.<br>(2) Giddings Includes other production not located in the Giddings Field.<br>Karnes County<br>Giddings Field<br>Source: IHS Performance Evaluator.<br>Wilson<br>Dewitt<br>Gonzales
---
Free Cash Flow Reconciliation<br>14<br>(1) Free cash flow is a non-GAAP measure. For reasons management believes this is useful to investors, refer to slide 2 “Non-GAAP Financial Measures.”<br>(in thousands)<br>Free Cash Flow Reconciliation For the Quarter Ended<br>December 31, 2020<br>For the Quarter Ended<br>December 31, 2019<br>Net cash provided by operating activities $79,122 $159,007<br>Add back: net changes in operating assets and liabilities 11,133 3,863<br>Cash flows from operations before changes in operating<br>assets and liabilities $90,255 $162,870<br>Additions to oil and natural gas properties (40,532) (73,657)<br>Changes in working capital associated with additions<br>to oil & gas properties (5,382) 3,481<br>Free cash flow(1) $44,341 $92,694
---
Reconciliation of Net Income to Adjusted EBITDAX<br>15<br>(1) EBITDAX and Adjusted EBITDAX are non-GAAP measures. For reasons management believes these are useful to Investors, refer to slide 2 “Non-GAAP Financial<br>Measures.”<br>(in thousands)<br>Adjusted EBITDAX reconciliation to net income: For the Quarter Ended<br>December 31, 2020<br>For the Quarter Ended<br>December 31, 2019<br>Net income $42,012 $13,631<br>Exploration expense 3,744 2,724<br>Asset retirement obligation accretion 1,315 1,416<br>Depreciation, depletion and amortization 45,080 137,629<br>Amortization of intangible assets 3,626 3,626<br>Interest expense, net 7,353 6,745<br>Income tax expense - 2,311<br>EBITDAX (1) $103,130 $168,082<br>Non-cash stock based compensation expense $1,158 $2,713<br>Unrealized (gain) on derivatives, net ($2,485) -<br>(Gain) on sale of equity method investment ($5,071) -<br>Inventory write down $1,386 -<br>Adjusted EBITDAX (1) $98,118 $170,795
---
Adjusted Net Income Reconciliation<br>16<br>(1) Represents corporate income taxes at an assumed effective tax rate of 0% and 22% for the quarters ended December 31, 2020 and 2019, respectively.<br>(2) Adjusted Net Income is a non-GAAP measure. For reasons management believes this is useful to investors, refer to slide 2 “Non-GAAP Financial Measure.”<br>(3) 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.<br>(in thousands)<br>Adjusted Net Income For the Quarter Ended<br>December 31, 2020<br>For the Quarter Ended<br>December 31, 2019<br>Net income $42,012 $13,631<br>Income tax expense - $2,311<br>Income Before Income Taxes 42,012 15,942<br>Adjustments:<br>Impairment of unproved properties 2,370 -<br>Unrealized (gain) on derivatives, net (2,485) -<br>(Gain) on sale of equity method investment (5,071) -<br>Inventory write down 1,386 -<br>Seismic purchases 1,100 -<br>Adjusted income tax expense (1) - 3,475<br>Adjusted Net Income (2) $39,312 $12,467<br>(in thousands)<br>Total Share Count For the Quarter Ended<br>December 31, 2020<br>For the Quarter Ended<br>December 31, 2019<br>Diluted weighted average of Class A Common Stock outstanding during the<br>period 169,326 171,647<br>Weighted average shares of Class B Common Stock outstanding during the<br>period (3) 85,790 90,942<br>Total weighted average shares of Class A and B Common Stock, including<br>dilutive impact of other securities (3) 255,116 262,589
---
Adjusted Earnings Reconciliation<br>17<br>(1) Adjusted earnings is a non-GAAP measure. For reasons management believes this is useful to investors, refer to slide 2 “Non-GAAP Financial Measures.”<br>(in thousands)<br>For the Quarter Ended<br>December 31, 2020<br>Per Share<br>Diluted EPS<br>For the Quarter Ended<br>December 31, 2019<br>Per Share<br>Diluted EPS<br>Net income attributable to Class A Common Stock $27,745 $0.16 $8,115 $0.05<br>Adjustments:<br>Impairment of unproved properties (1) 2,370 0.01 --<br>Unrealized (gain) on derivatives, net (2,485) (0.01) --<br>(Gain) on sale of equity method investment (5,071) (0.03) --<br>Inventory write down 1,386 0.01 --<br>Seismic purchases 1,100 0.01 --<br>Noncontrolling interest impact of adjustments 917 ---<br>Adjusted net income attributable to Class A Common Stock (1) $25,962 $0.15 $8,115 $0.05
---
Magnolia Oil & Gas – Operating Highlights<br>18<br>(1) Benchmarks are the NYMEX WTI and NYMEX HH average prices for oil and natural gas, respectively.<br>For the Quarter Ended<br>December 31, 2020<br>For the Quarter Ended<br>December 31, 2019<br>Production:<br>Oil (MBbls) 2,646 3,251<br>Natural gas (MMcf) 10,168 10,689<br>Natural gas liquids (MBbls) 1,237 1,254<br>Total (Mboe) 5,577 6,287<br>Average daily production:<br>Oil (Bbls/d) 28,756 35,337<br>Natural gas (Mcf/d) 110,522 116,185<br>Natural gas liquids (Bbls/d) 13,440 13,630<br>Total (Mboe) 60,617 68,331<br>Revenues (in thousands):<br>Oil revenues $106,738 $187,972<br>Natural gas revenues 23,010 22,537<br>Natural gas liquids revenues 19,487 19,200<br>Total Revenues $149,235 $229,709<br>Average Sales Price:<br>Oil (per Bbl) $40.34 $57.82<br>Natural gas (per Mcf) 2.26 2.11<br>Natural gas liquids (per Bbl) 15.75 15.31<br>Total (per Boe) $26.76 $36.54<br>NYMEX WTI (per Bbl) $42.67 $56.96<br>NYMEX Henry Hub (per Mcf) 2.66 2.50<br>Realization to benchmark: (1)<br>Oil (% of WTI) 95% 102%<br>Natural gas (% of Henry Hub) 85% 84%
---
Magnolia Oil & Gas – Production Results<br>19<br>Combined Karnes Giddings &<br>Other Combined Karnes Giddings &<br>Other<br>Three Months Ended December 31, 2020 Three Months Ended December 31, 2019<br>Production:<br>Oil (MBbls) 2,646 1,862 784 3,251 2,740 511<br>Natural gas (MMcf) 10,168 3,463 6,705 10,690 4,207 6,483<br>Natural gas liquids (MBbls) 1,237 526 711 1,254 692 562<br>Total (Mboe) 5,577 2,965 2,612 6,287 4,133 2,154<br>Average Daily Production Volume:<br>Oil (MBbls/d) 28.8 20.3 8.5 35.3 29.8 5.5<br>Natural gas (MMcf/d) 110.5 37.6 72.9 116.2 45.7 70.5<br>Natural gas liquids (MBbls/d) 13.4 5.7 7.7 13.6 7.5 6.1<br>Total (MBoe/d) 60.6 32.3 28.3 68.3 44.9 23.4
---