8-K
Magnolia Oil & Gas Corp (MGY)
UNITED STATES
SECURITIES 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): May 9, 2022
| 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 2.02 Results of Operations and Financial Condition.
On May 9, 2022, 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 quarter ended March 31, 2022.
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 May 9, 2022, the Company provided information in an earnings presentation on its website, www.magnoliaoilgas.com, regarding its financial and operational results for the quarter ended March 31, 2022.
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 |
| 99.2 | Earnings Presentation |
| 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.
| MAGNOLIA OIL & GAS CORPORATION | |
|---|---|
| Date: May 9, 2022 | By: /s/ Timothy D. Yang |
| Name: Timothy D. Yang | |
| Title: Executive Vice President,<br> General Counsel, Corporate Secretary and Land |
2
Document
Exhibit 99.1
Magnolia Oil & Gas Corporation Announces First Quarter 2022 Results
HOUSTON, TX, May 9, 2022 - Magnolia Oil & Gas Corporation (“Magnolia,” “we,” “our,” or the “Company”) (NYSE: MGY) today announced its financial and operational results for the first quarter of 2022.
First Quarter 2022 Highlights:
| (In millions, except per share data) | For the<br>Quarter Ended<br>March 31, 2022 | For the<br>Quarter Ended<br>March 31, 2021 | ||
|---|---|---|---|---|
| Net income | $ | 208.6 | $ | 91.5 |
| Diluted weighted average total shares outstanding(1) | 227.4 | 249.9 | ||
| Earnings per share - diluted | $ | 0.90 | $ | 0.37 |
| Adjusted EBITDAX(2) | $ | 298.4 | $ | 150.8 |
| Capital expenditures - D&C | $ | 83.4 | $ | 38.9 |
| Average daily production (Mboe/d) | 71.8 | 62.3 | ||
| Cash balance as of period end | $ | 346.4 | $ | 178.2 |
First Quarter 2022 Highlights:
•Magnolia reported first quarter 2022 net income attributable to Class A Common Stock of $166.0 million, or $0.90 per diluted share. First quarter 2022 total net income increased 128% to $208.6 million and diluted weighted average total shares outstanding decreased by 9% to 227.4 million(1) compared to first quarter 2021.
•Adjusted EBITDAX was $298.4 million during the first quarter of 2022, driven by strong production growth and significantly higher product prices as compared to prior year results. Total drilling and completions (“D&C”) capital during the first quarter was $83.4 million, representing just 28% of adjusted EBITDAX.
•Net cash provided by operating activities was $238.9 million during the first quarter and the Company generated free cash flow(2) of $197.9 million. Magnolia generated operating income as a percentage of revenue of 62%.
•Total production in the first quarter of 2022 grew 15% from the first quarter of 2021 to 71.8 thousand barrels of oil equivalent per day (“Mboe/d”) and at the high end of our production guidance, led by our Giddings asset. Production at Giddings and Other of 42.9 Mboe/d in the first quarter of 2022 grew 24% compared to the prior year first quarter including year-over-year oil production growth of 31%.
•During the first quarter, Magnolia repurchased a total of 6.0 million shares of Class A and Class B Common Stock for $129.6 million. At the end of the first quarter, Magnolia had 14.3 million Class A Common shares remaining under its current repurchase authorization.
•During the quarter, Magnolia paid the final semi-annual cash dividend related to 2021 results of $0.20 per share, bringing the total dividend payment associated with 2021 to $0.28 per share. Magnolia ended the year with $346.4 million of cash on the balance sheet. The Company remains undrawn on its $450 million revolving credit facility, with no debt maturities until 2026 and has no plans to increase its debt levels.
•We currently expect our D&C capital to be approximately $400 million for 2022, compared to our earlier guidance of $350 million. The increase is due to additional net wells in Giddings resulting from faster drilling times, the drilling of longer laterals, as well as other operational efficiencies, combined with oil field service cost inflation. These efficiencies and longer laterals result in greater well activity and are now expected to provide full year 2022 production growth in excess of 10%, compared to our previous estimate of high single-digit growth.
(1) 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.
(2) 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.
“We had a very strong start to the year as demonstrated by our record quarterly financial and operating results,” said Chairman, President, and CEO Steve Chazen. “The ongoing execution of our strategy and business plan, which includes disciplined capital spending, continues to provide moderate and steady production growth, high pre-tax operating margins, and significant free cash flow. The absence of hedges which resulted in strong product price realizations, combined with our continued efforts around cost containment, is reflected in record quarterly pre-tax operating margins of 62 percent. Our operating team continues to make strong progress steadily advancing the development of our Giddings asset. As Giddings is still in the relatively early stages of development, our team has been successful in offsetting some of the oil field cost inflation through ongoing efficiency gains.
“During the first quarter of 2022, we grew our total production by more than 3 percent sequentially while spending just 28 percent of our adjusted EBITDAX. We generated nearly $200 million of free cash flow during the quarter and returned 89 percent of this to our shareholders, mainly through share repurchases of $130 million as well as $46 million for the final semi-annual dividend payment related to our 2021 results. We repurchased a total of 6 million shares during the first quarter, and our total diluted shares outstanding declined by 9 percent compared to last year’s first quarter. Despite the significant return of cash to our shareholders, we ended the quarter with $346 million of cash on our balance sheet, and roughly unchanged during the quarter.
“We continue to operate two drilling rigs with one completion crew split between our two assets at Giddings and in the Karnes County area. Our gradual and measured approach toward both the appraisal and development of the Giddings field has created operating efficiencies leading to some acceleration of our well activity this year. Faster drilling combined with the drilling of longer laterals at Giddings, and oil field service cost inflation is expected to add a small amount of capital to our program for the remainder of the year. This is also expected to boost our full year production growth to more than 10 percent compared to our previous outlook of high single-digits. At current product prices, we expect our capital spending to be around a third of our adjusted EBITDAX, well-below our 55 percent spending cap, and resulting in significant free cash flow. Most of the free cash flow is expected to be allocated toward improving the per share value of the company, including our plan to repurchase more than 1 percent of our outstanding shares each quarter. We would also expect our dividend to grow at least 10 percent annually based on the continued successful execution of our strategy.”
Operational Update
First quarter 2022 total company production averaged 71.8 Mboe/d, representing a more than 3 percent sequential increase and 15 percent higher than the prior year’s first quarter. Overall production grew during the quarter despite our spending only 28 percent of adjusted EBITDAX on drilling and completing wells. Production was at the high end of our guidance mainly due to better well performance at our Giddings asset. Compared to the same period last year, Giddings and Other production grew 24 percent and oil production at Giddings grew 31 percent.
Magnolia continues to operate two drilling rigs and expects to maintain this level of activity for the balance of the year. One rig will continue to drill multi-well development pads in our Giddings asset. The second rig will drill a mix of wells in both the Karnes and Giddings areas, including some appraisal wells in Giddings. We continue to realize efficiency gains at Giddings as evidenced by approximately a 20 percent improvement in our drilling feet per day compared to the first quarter of 2021. Our average lateral length per well continues to rise and we expect this year’s average length to be around 8,000 feet with some wells surpassing 10,000 feet. We also plan to drill some larger pads in Giddings during the second half of the year. Efficiencies such as the reduction in drilling times, longer laterals, and more wells per pad leads to more net well activity during the year and a little more capital. These efficiencies should also help mitigate some of the service cost inflation in addition to boosting our production during the remainder of 2022 and into early next year.
Our overall lease operating expenses increased compared to the prior year mainly due to higher workover related activity, which can vary from period to period. G&A expenses declined on a year-over-year basis as a result of savings from the termination of the EnerVest operating services agreement, and partly offset by higher personnel costs associated with our growth.
Additional Guidance
We estimate our second quarter D&C capital to be approximately $100 to $110 million and currently expect it to be in this range for the remaining quarters of the year, and with full year capital estimated at about $400 million. Total production for
the second quarter is estimated to be approximately 72 to 74 Mboe/d. Most of our wells in the current quarter are expected to be turned in line during the latter half of the period and resulting in higher production during the second half of the year. Based on continued strong well performance, faster drilling times and other operational efficiencies seen at Giddings, we now expect our total production growth to exceed 10 percent for the full year 2022 and compared to our earlier estimate of high single-digit growth. Production at Giddings is also expected to grow approximately 25 percent during this year.
Oil price differentials are anticipated to be approximately a $3 per barrel discount to Magellan East Houston and Magnolia remains completely unhedged for all its oil and natural gas production. The fully diluted total share count for the second quarter of 2022 is expected to be approximately 223 million shares which is 8 percent lower than second quarter 2021 levels.
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, 2022, which is expected to be filed with the U.S. Securities and Exchange Commission (“SEC”) on May 10, 2022.
Conference Call and Webcast
Magnolia will host an investor conference call on Tuesday, May 10, 2022 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. 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 emergence and spread of variant strains of COVID-19, 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 and, supply and demand considerations; (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, 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 | ||||||
| March 31, 2022 | March 31, 2021 | |||||
| Production: | ||||||
| Oil (MBbls) | 2,816 | 2,593 | ||||
| Natural gas (MMcf) | 12,378 | 10,240 | ||||
| Natural gas liquids (MBbls) | 1,586 | 1,304 | ||||
| Total (Mboe) | 6,465 | 5,604 | ||||
| Average daily production: | ||||||
| Oil (Bbls/d) | 31,289 | 28,808 | ||||
| Natural gas (Mcf/d) | 137,532 | 113,783 | ||||
| Natural gas liquids (Bbls/d) | 17,624 | 14,490 | ||||
| Total (boe/d) | 71,835 | 62,262 | ||||
| Revenues (in thousands): | ||||||
| Oil revenues | $ | 262,667 | $ | 146,958 | ||
| Natural gas revenues | 56,580 | 35,663 | ||||
| Natural gas liquids revenues | 58,592 | 26,486 | ||||
| Total Revenues | $ | 377,839 | $ | 209,107 | ||
| Average sales price: | ||||||
| Oil (per Bbl) | $ | 93.28 | $ | 56.68 | ||
| Natural gas (per Mcf) | 4.57 | 3.48 | ||||
| Natural gas liquids (per Bbl) | 36.94 | 20.31 | ||||
| Total (per boe) | $ | 58.44 | $ | 37.32 | ||
| NYMEX WTI (per Bbl) | $ | 94.38 | $ | 57.80 | ||
| NYMEX Henry Hub (per Mcf) | $ | 4.92 | $ | 2.70 | ||
| Realization to benchmark: | ||||||
| Oil (% of WTI) | 99 | % | 98 | % | ||
| Natural Gas (% of Henry Hub) | 93 | % | 129 | % | ||
| Operating expenses (in thousands): | ||||||
| Lease operating expenses | $ | 28,744 | $ | 19,392 | ||
| Gathering, transportation and processing | 15,840 | 10,243 | ||||
| Taxes other than income | 20,882 | 10,762 | ||||
| Depreciation, depletion and amortization | 53,106 | 42,944 | ||||
| Operating costs per boe: | ||||||
| Lease operating expenses | $ | 4.45 | $ | 3.46 | ||
| Gathering, transportation and processing | 2.45 | 1.83 | ||||
| Taxes other than income | 3.23 | 1.92 | ||||
| Depreciation, depletion and amortization | 8.21 | 7.66 |
Magnolia Oil & Gas Corporation
Consolidated Statements of Operations
(In thousands, except per share data)
| For the Quarters Ended | ||||
|---|---|---|---|---|
| March 31, 2022 | March 31, 2021 | |||
| REVENUES | ||||
| Oil revenues | $ | 262,667 | $ | 146,958 |
| Natural gas revenues | 56,580 | 35,663 | ||
| Natural gas liquids revenues | 58,592 | 26,486 | ||
| Total revenues | 377,839 | 209,107 | ||
| OPERATING EXPENSES | ||||
| Lease operating expenses | 28,744 | 19,392 | ||
| Gathering, transportation and processing | 15,840 | 10,243 | ||
| Taxes other than income | 20,882 | 10,762 | ||
| Exploration expenses | 5,538 | 2,062 | ||
| Asset retirement obligations accretion | 789 | 1,331 | ||
| Depreciation, depletion and amortization | 53,106 | 42,944 | ||
| Amortization of intangible assets | — | 2,113 | ||
| General and administrative expenses | 17,070 | 20,364 | ||
| Total operating expenses | 141,969 | 109,211 | ||
| OPERATING INCOME | 235,870 | 99,896 | ||
| OTHER INCOME (EXPENSE) | ||||
| Interest expense, net | (9,357) | (7,294) | ||
| Loss on derivatives, net | — | (482) | ||
| Other income (expense), net | 207 | (229) | ||
| Total other expense, net | (9,150) | (8,005) | ||
| INCOME BEFORE INCOME TAXES | 226,720 | 91,891 | ||
| Income tax expense | 18,100 | 399 | ||
| NET INCOME | 208,620 | 91,492 | ||
| LESS: Net income attributable to noncontrolling interest | 42,581 | 28,248 | ||
| NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK | 166,039 | 63,244 | ||
| NET INCOME PER COMMON SHARE | ||||
| Basic | $ | 0.90 | $ | 0.38 |
| Diluted | $ | 0.90 | $ | 0.37 |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||||
| Basic | 182,578 | 166,952 | ||
| Diluted | 183,163 | 169,636 | ||
| WEIGHTED AVERAGE NUMBER OF CLASS B SHARES OUTSTANDING (1) | 44,267 | 80,253 |
(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, 2022 | March 31, 2021 | |||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||
| NET INCOME | $ | 208,620 | $ | 91,492 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||
| Depreciation, depletion and amortization | 53,106 | 42,944 | ||
| Amortization of intangible assets | — | 2,113 | ||
| Asset retirement obligations accretion | 789 | 1,331 | ||
| Amortization of deferred financing costs | 2,812 | 910 | ||
| Unrealized loss on derivatives, net | — | 482 | ||
| Stock based compensation | 2,885 | 2,705 | ||
| Other | — | (84) | ||
| Net change in operating assets and liabilities | (29,343) | (23,740) | ||
| Net cash provided by operating activities | 238,869 | 118,153 | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||
| Acquisitions | (1,055) | (558) | ||
| Additions to oil and natural gas properties | (84,230) | (40,166) | ||
| Changes in working capital associated with additions to oil and natural gas properties | 13,946 | (1,744) | ||
| Other investing | 131 | (416) | ||
| Net cash used in investing activities | (71,208) | (42,884) | ||
| CASH FLOW FROM FINANCING ACTIVITIES | ||||
| Class A Common Stock repurchases | (43,486) | (20,281) | ||
| Class B Common Stock purchase and cancellation | (84,733) | (50,781) | ||
| Non-compete settlement | — | (17,152) | ||
| Dividends paid | (37,174) | — | ||
| Cash paid for debt modification | (5,272) | — | ||
| Distributions to noncontrolling interest owners | (11,637) | (155) | ||
| Other financing activities | (5,945) | (1,267) | ||
| Net cash used in financing activities | (188,247) | (89,636) | ||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | (20,586) | (14,367) | ||
| Cash and cash equivalents – Beginning of period | 366,982 | 192,561 | ||
| Cash and cash equivalents – End of period | $ | 346,396 | $ | 178,194 |
Magnolia Oil & Gas Corporation
Summary Balance Sheet Data
(In thousands)
| March 31, 2022 | December 31, 2021 | |||
|---|---|---|---|---|
| Cash and cash equivalents | $ | 346,396 | $ | 366,982 |
| Other current assets | 183,856 | 150,936 | ||
| Property, plant and equipment, net | 1,248,491 | 1,216,087 | ||
| Other assets | 15,871 | 12,737 | ||
| Total assets | $ | 1,794,614 | $ | 1,746,742 |
| Current liabilities | $ | 238,734 | $ | 218,545 |
| Long-term debt, net | 388,647 | 388,087 | ||
| Other long-term liabilities | 94,865 | 94,861 | ||
| Common stock | 24 | 24 | ||
| Additional paid in capital | 1,649,111 | 1,689,500 | ||
| Treasury stock | (209,418) | (164,599) | ||
| Accumulated deficit | (542,129) | (708,168) | ||
| Noncontrolling interest | 174,780 | 228,492 | ||
| Total liabilities and equity | $ | 1,794,614 | $ | 1,746,742 |
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 expense, income taxes, depreciation, depletion and amortization, amortization of intangible assets, exploration costs, 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, 2022 | March 31, 2021 | ||
| NET INCOME | $ | 208,620 | $ | 91,492 |
| Exploration expenses | 5,538 | 2,062 | ||
| Asset retirement obligations accretion | 789 | 1,331 | ||
| Depreciation, depletion and amortization | 53,106 | 42,944 | ||
| Amortization of intangible assets | — | 2,113 | ||
| Interest expense, net | 9,357 | 7,294 | ||
| Income tax expense | 18,100 | 399 | ||
| EBITDAX | 295,510 | 147,635 | ||
| Non-cash stock based compensation expense | 2,885 | 2,705 | ||
| Unrealized loss on derivatives, net | — | 482 | ||
| Adjusted EBITDAX | $ | 298,395 | $ | 150,822 |
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of revenue to adjusted cash operating margin and to 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 operating expenses 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, 2022 | March 31, 2021 | ||||
| Revenue | $ | 58.44 | $ | 37.32 | ||
| Total cash operating costs: | ||||||
| Lease operating expenses (1) | (4.41) | (3.44) | ||||
| Gathering, transportation and processing | (2.45) | (1.83) | ||||
| Taxes other than income | (3.23) | (1.92) | ||||
| Exploration expenses | (0.86) | (0.37) | ||||
| General and administrative expenses (2) | (2.23) | (3.17) | ||||
| Total adjusted cash operating costs | (13.18) | (10.73) | ||||
| Adjusted cash operating margin | $ | 45.26 | $ | 26.59 | ||
| Margin (%) | 77 | % | 71 | % | ||
| Non-cash costs: | ||||||
| Depreciation, depletion and amortization | $ | (8.21) | $ | (7.66) | ||
| Asset retirement obligations accretion | (0.12) | (0.24) | ||||
| Amortization of intangible assets | — | (0.38) | ||||
| Non-cash stock based compensation | (0.45) | (0.48) | ||||
| Total non-cash costs | (8.78) | (8.76) | ||||
| Operating income margin | $ | 36.48 | $ | 17.83 | ||
| Margin (%) | 62 | % | 48 | % |
(1) Lease operating expenses exclude non-cash stock based compensation of $0.2 million, or $0.04 per boe, and $0.1 million, or $0.02 per boe, for the quarters ended March 31, 2022 and 2021, respectively.
(2) General and administrative expenses exclude non-cash stock based compensation of $2.7 million, or $0.41 per boe, and $2.6 million, or $0.46 per boe, for the quarters ended March 31, 2022 and 2021, respectively.
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, 2022 | March 31, 2021 | ||
| Net cash provided by operating activities | $ | 238,869 | $ | 118,153 |
| Add back: net change in operating assets and liabilities | 29,343 | 23,740 | ||
| Cash flows from operations before net change in operating assets and liabilities | 268,212 | 141,893 | ||
| Additions to oil and natural gas properties | (84,230) | (40,166) | ||
| Changes in working capital associated with additions to oil and natural gas properties | 13,946 | (1,744) | ||
| Free cash flow | $ | 197,928 | $ | 99,983 |
11
mgy_1q22xearningspresent
First Quarter 2022 Earnings Presentation May 10, 2022 Stephen Chazen – Chairman, President & CEO Christopher Stavros – Executive Vice President & CFO Brian Corales – Vice President, Investor Relations Exhibit 99.2
Disclaimer 2 FORWARD LOOKING STATEMENTS 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 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, 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 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 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 presentation. 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 emergence and spread of variant strains of COVID-19, including the effects of related public health concerns and the impact of continued or new actions taken by governmental authorities and other third parties in response to the pandemic and its impact on commodity prices and supply and demand considerations; (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 Magnolia's operations and projections can be found in its filings with the Securities and Exchange Commission (the "SEC"), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the SEC on February 17, 2022. Magnolia’s SEC filings are available publicly on the SEC’s website at www.sec.gov. NON-GAAP FINANCIAL MEASURES This presentation includes non-GAAP financial measures, including free cash flow, EBITDAX, adjusted EBITDAX, adjusted cash operating costs and adjusted cash operating 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 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 in accordance with GAAP. The computations of these non-GAAP measures may not be comparable to other similarly titled measures of other companies. Adjusted EBITDAX should not be considered an alternative to, or more meaningful than, net income as determined in accordance with GAAP. Certain items excluded from free cash flow, adjusted EBITDAX, adjusted cash operating 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 results will be unaffected by unusual or non-recurring terms. As performance measures, adjusted EBITDAX, 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. As a liquidity 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 internally fund drilling and completion activities, fund acquisitions, and service debt. Our presentation of adjusted EBITDAX, free cash flow, adjusted cash operating costs and 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 shown on page 15 of the presentation, and adjusted cash operating costs and adjusted cash operating margin reconciliations are shown on page 10. INDUSTRY AND MARKET DATA 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, 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 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 – 1Q 2022 Highlights 3 • Generated total net income of $209 million during the 1st quarter which was 128% higher than 1Q21. GAAP diluted earnings per share of $0.90 was 143% higher than prior year levels. • Adjusted EBITDAX of $298 million increased 98% from 1Q21. Total 1Q22 D&C Capital of $83 million was just 28% of adjusted EBITDAX. • Generated free cash flow of $198 million during 1Q22 and our operating income margin was 62%. • Total production for 1Q22 increased 15% year over year to 71.8 Mboe/d. • Giddings & Other production increased 24% from prior year levels and Giddings oil production increased 31%. • We are increasing our D&C Capex from $350 million to $400 million for 2022. The increase is due to additional net wells in Giddings resulting from faster drilling times, the drilling of longer laterals, as well as other operational efficiencies, combined with oil field service cost inflation. • The resulting additional well activity and longer laterals is now expected to provide full year 2022 production growth in excess of 10%, compared to our previous estimate of high single-digit growth. • Magnolia spent $130 million to repurchase 6.0 million shares during the 1st quarter. MGY’s diluted share count was 9% lower than 1Q21 levels and since our initial authorization in 3Q19, we repurchased 42.8 million shares. (1) • Magnolia paid its semi-annual cash dividend of $0.20 per share bringing the total dividend associated with 2021 results to $0.28 per share. MGY plans to grow its dividend by at least 10% annually. (1) Includes 3.6 million non-compete shares that were paid in cash in lieu of stock in 2021.
First Quarter 2022 Key Financial Metrics 4 Key Financial Metrics 1Q22 1Q21 % Change Net income ($ MM) $209 $91 130% Diluted EPS (GAAP) $0.90 $0.37 143% Operating income margin % 62% 48% 14% Total production (Mboe/d) 71.8 62.3 15% Giddings production as a % of total 60% 55% 5% Adjusted EBITDAX ($ MM) (1) $298 $151 97% D&C capex ($ MM) $83 $39 113% D&C capex as a % of adjusted EBITDAX 28% 26% 2% Free cash flow ($ MM) (1) $198 $100 98% Cash balance as of period end ($ MM) $346 $178 94% Weighted average diluted shares outstanding (MM) (2) 227 249 -9% • Stronger year over year product prices combined with higher production volumes resulted in significantly improved financial metrics across the board compared to the prior-year period. • Performance at Giddings continues to excel, generating ongoing operating efficiencies including faster drilling times, more wells per pad, and longer laterals. This year’s growth at Giddings is expected to be about 25%. • Generated ~$200 million of free cash flow in 1Q22 returning the majority of this to our shareholders through share repurchases and the final semi-annual dividend payment (associated with FY2021 results), leaving cash balances about the same as year-end 2021. • During 1Q22, we repurchased a total of 6 million shares reducing our total diluted outstanding shares by 9% from Q1 2021 levels. (1) Adjusted EBITDAX and Free Cash Flow are non-GAAP measures. For a reconciliation of the most comparable GAAP measure see pages 15 and 14. (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.
1Q 2022 QTD Cash Flow Reconciliation 367 268 28 49 84 128 346 0 100 200 300 400 500 600 700 Cash 12/31/21 Cash Flow from Operations Changes in WC and Other Dividends D&C and Facilities Capital Common Stock Repurchases Cash 3/31/22 (1) (3)(2) (4) (5) (In millions) 1) Cash flow from operations before changes in working capital 2) Includes $15 MM change in working capital including capital accruals and $13 MM change in other investing and financing items. 3) Includes $37 MM of dividends paid to Class A shareholders and $12 MM of distributions to noncontrolling interest holders 4) D&C capital of $84 MM includes $14 MM of capital activities that have been accrued but not yet paid 5) Comprised of $43 MM Class A Common Stock and $85 MM Class B Common Stock 5
Share Repurchase Summary Through 1Q 2022 6 Share Reduction Summary (Million Shares) • Since the initial repurchase authorization in 3Q19, Magnolia has reduced its dilutive share count by 19.9(1) million shares of Class A common stock as well as 22.9 million shares of Class B common stock, for a total reduction of 42.8 million shares, or approximately 17% of the diluted shares outstanding as of the authorization date. ‒ Repurchased 6.0 MM shares during 1Q22. • Magnolia plans to continue to opportunistically repurchase at least 1% of the total shares outstanding each quarter. • There are 14.3 million shares remaining under the current share repurchase authorization. (1) Class A share reduction includes 3.6 million non-compete shares that were paid in cash in lieu of stock in 2021. (1)
$0.08/share $0.20/share 3Q21 1Q22 Magnolia Oil & Gas – Differentiated Dividend Framework 7 • Differentiated dividend framework is aligned with the principles of our business model and reinforces our plan. • The dividend conveys our continued confidence in the business plan and the quality of our assets. • Our approach is meant to appeal to long-term investors who seek dividend safety, moderate and regular dividend growth, and a dividend that is paid out of actual earnings. • We intend to use this dividend framework to demonstrate the underlying results of our business in a stable product price environment ($55 oil and $2.75 natural gas), and within our current cost structure. • Our objective is to provide a superior total shareholder return by improving the per share value of the enterprise while providing a secure and growing dividend. Dividend Principles Secure & Sustainable – Dividend is safe, and supported by our strong balance sheet, prudent spending and consistent free cash flow Paid out of Earnings – Dividend is paid out of earnings generated by the business and, will not exceed 50% of the prior year’s reported net income Dividend Growth – We expect each of these regular dividend payments to grow annually based on execution of our plan, which includes moderate production growth and share reduction First interim semi-annual dividend – based on ~$40 Oil Second dividend payment – based on the prior year’s results & our view of long-term product prices – $55 Oil
Magnolia Oil & Gas – Summary Balance Sheet 8 (in thousands) March 31, 2022 December 31, 2021 Cash $346,396 $366,982 Current assets 183,856 150,936 Property, plant and equipment, net 1,248,491 1,216,087 Other assets 15,871 12,737 Total assets $1,794,614 $1,746,742 Current liabilities $238,734 $218,545 Long-term debt, net 388,647 388,087 Other long-term liabilities 94,865 94,861 Total stockholders' equity 1,072,368 1,045,249 Total liabilities and equity $1,794,614 $1,746,742
$400 $450 2022 2023 2024 2025 2026 1Q 2022 Capital Structure and Liquidity Overview 9 Capital Structure Overview • Maintaining low financial leverage profile ‒ Net Debt / Total Book Capitalization of 4% ‒ Net Debt / Q1 Annualized adjusted EBITDAX of 0.0x • Current Liquidity of $796 million, including fully undrawn credit facility (1) • No debt maturities until senior unsecured notes mature in 2026 Debt Maturity Schedule ($MM) (1) Liquidity defined as cash plus availability under revolving credit facility. (2) Total Equity includes noncontrolling interest. Capitalization & Liquidity ($MM) Borrowing Base Credit Facility Borrowings (as of 3/31/22) $0 6.00% Senior Unsecured Notes Capitalization Summary As of 3/31/2022 Cash and Cash Equivalents $346 Revolving Credit Facility $0 6.00% Senior Notes Due 2026 $400 Total Principal Debt Outstanding $400 Total Equity (2) $1,072 Net Debt / Q4 Annualized Adjusted EBITDAX 0.0x Net Debt / Total Book Capitalization 4% Liquidity Summary As of 3/31/2022 Cash and Cash Equivalents $346 Credit Facility Availability $450 Liquidity (1) $796
$ / Boe, unless otherwise noted For the Quarter Ended March 31, 2022 For the Quarter Ended March 31, 2021 Revenue $58.44 $37.32 Total Cash Operating Costs: Lease Operating Expenses (1) (4.41) (3.44) Gathering, Transportation & Processing (2.45) (1.83) Taxes Other Than Income (3.23) (1.92) Exploration Expenses (0.86) (0.37) General & Administrative Expense (2) (2.23) (3.17) Total Adjusted Cash Operating Costs (3) (13.18) (10.73) Adjusted Cash Operating Margin (3) $45.26 $26.59 Margin % 77% 71% Non-Cash Costs: Depreciation, Depletion, and Amortization (8.21) (7.66) Asset Retirement Obligations Accretion (0.12) (0.24) Amortization on Intangible Assets - (0.38) Non-cash stock based compensation (0.45) (0.48) Total non-cash expenses (8.78) (8.76) Operating Income Margin $36.48 $17.83 Margin % 62% 48% Magnolia Oil & Gas – Margin and Cost Structure 10 (1) Lease operating expenses exclude non-cash stock based compensation of $0.2 MM, or $0.04 per boe, and $0.1 MM, or $0.02 per boe, for the quarters ended March 31, 2022 and 2021, respectively. (2) General and administrative expenses exclude non-cash stock based compensation of $2.7 MM, or $0.41 per boe, and $2.6 MM, or $0.46 per boe, for the quarters ended March 31, 2022 and 2021, respectively. (3) Adjusted cash operating costs and adjusted cash operating margin are non-GAAP measures. For reasons management believes this is useful to investors, refer to slide 2 “Non-GAAP Financial Measures.” $21.12/boe Increase $2.45/boe Increase $18.65/boe Increase
Commitment to Sustainability 11 ENVIRONMENTAL SOCIAL GOVERNANCE Flaring Flare less than 1% of our total net production Fugitive Emissions Operate vent and flare systems to minimize fugitive emissions from storage tanks Water Resources Operations do not produce large volumes of water after initial production Groundwater Design wells to minimize the possibility of well failure and ensure groundwater is protected Workforce Health & Safety Both employee total recordable incident rate and fatality rate were zero in 2020 Diversity As of December 31, 2021, 26% of employee population are women (38% in our Houston corporate office) and 31% identify as a minority group, as defined by the U.S. EEOC(1) Community Support In 2021, Magnolia gave nearly $160,000 to local communities, supporting more than 100 organizations Board Independence 71% of board members are independent Board Diversity 29% of board members are women Executive Compensation Ratio of 2021 Chief Executive Officer’s compensation to median employee’s compensation was 2.14 to 1 Say-on-Pay More than 99% of stockholders approved say-on-pay at 2021 Annual Meeting of Stockholders Magnolia 2021 Sustainability Report is Available on Our Website Under the Sustainability Tab (1) U.S. Equal Employment Opportunity Commission
Appendix
Magnolia Oil & Gas – Overview • High-quality, low-risk pure-play South Texas operator with a core Eagle Ford and Austin Chalk position acquired at an attractive entry multiple • Significant scale and PDP base generates material free cash flow, reduces development risk, and increases optionality • Asset Overview: – ~23,800 net acres in a well-delineated, low-risk position in the core of Karnes County, representing some of the most prolific acreage in the United States with industry leading break-evens – ~450,000 net acres in the Giddings area, a re-emerging oil play with significant upside and what we believe to be substantial inventory – Both assets expected to remain self funding and within cash flow 13 ~471,000 Net Acre Position Targeting Two of the Top Oil Plays in the U.S. Market Statistics Trading Symbol (NYSE) MGY Share Price as of 5/6/2022 $25.67 Common Shares Outstanding (1) 223 million Market Capitalization $5.7 billion Long-term Debt – Principal $400 million Cash as of 3/31/2022 $346 million Total Enterprise Value $5.8 billion Operating Statistics Karnes Giddings Total Net Acreage 23,793 447,415 471,208 1Q22 Net Production (Mboe/d) (2) 28.9 42.9 71.8 Industry Leading Breakevens ($/Bbl WTI) $28 $32 $34 $35 $38 $39 $39 $45 Karnes Austin Chalk Karnes Lower Eagle Ford Midland Delaware DJ Basin Eagle Ford STACK Bakken Source: RSEG. (1) Common Stock outstanding includes Class A and Class B Stock. (2) Giddings includes other production not located in the Giddings Field. Karnes County Giddings Field Source: IHS Performance Evaluator. Wilson Dewitt Gonzales
Free Cash Flow Reconciliation 14 (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.” (in thousands) For the Quarter Ended March 31, 2022 For the Quarter Ended March 31, 2021 Net cash provided by operating activities $238,869 $118,153 Add back: net changes in operating assets and liabilities 29,343 23,740 Cash flows from operations before changes in operating assets and liabilities $268,212 $141,893 Additions to oil and natural gas properties (84,230) (40,166) Changes in working capital associated with additions to oil & gas properties 13,946 (1,744) Free cash flow(1) $197,928 $99,983
Adjusted EBITDAX Reconciliation 15 (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 Measures.” (in thousands) For the Quarter Ended March 31, 2022 For the Quarter Ended March 31, 2021 Net income $208,620 $91,492 Exploration expenses 5,538 2,062 Asset retirement obligations accretion 789 1,331 Depreciation, depletion and amortization 53,106 42,944 Amortization of intangible assets - 2,113 Interest expense, net 9,357 7,294 Income tax expense 18,100 399 EBITDAX (1) $295,510 $147,635 Non-cash stock based compensation expense $2,885 $2,705 Unrealized loss on derivatives, net - $482 Adjusted EBITDAX (1) $298,395 $150,822
Magnolia Oil & Gas – Operating Highlights 16 (1) Benchmarks are the NYMEX WTI and NYMEX HH average prices for oil and natural gas, respectively. For the Quarter Ended March 31, 2022 For the Quarter Ended March 31, 2021 Production: Oil (MBbls) 2,816 2,593 Natural gas (MMcf) 12,378 10,240 Natural gas liquids (MBbls) 1,586 1,304 Total (Mboe) 6,465 5,604 Average daily production: Oil (Bbls/d) 31,289 28,808 Natural gas (Mcf/d) 137,532 113,783 Natural gas liquids (Bbls/d) 17,624 14,490 Total (Boe/d) 71,835 62,262 Revenues (in thousands): Oil revenues $262,667 $146,958 Natural gas revenues 56,580 35,663 Natural gas liquids revenues 58,592 26,486 Total Revenues $377,839 $209,107 Average Sales Price: Oil (per Bbl) $93.28 $56.68 Natural gas (per Mcf) 4.57 3.48 Natural gas liquids (per Bbl) 36.94 20.31 Total (per Boe) $58.44 $37.32 NYMEX WTI (per Bbl) $94.38 $57.80 NYMEX Henry Hub (per Mcf) $4.92 $2.70 Realization to benchmark: (1) Oil (% of WTI) 99% 98% Natural gas (% of Henry Hub) 93% 129%
Magnolia Oil & Gas – Production Results 17 Combined Karnes Giddings & Other Combined Karnes Giddings & Other Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Production: Oil (MBbls) 2,816 1,487 1,329 2,593 1,579 1,014 Natural gas (MMcf) 12,378 3,549 8,829 10,240 2,923 7,317 Natural gas liquids (MBbls) 1,586 526 1,060 1,304 430 874 Total (Mboe) 6,465 2,605 3,860 5,604 2,496 3,108 Average Daily Production Volume: Oil (MBbls/d) 31.3 16.5 14.8 28.8 17.5 11.3 Natural gas (MMcf/d) 137.5 39.4 98.1 113.8 32.5 81.3 Natural gas liquids (MBbls/d) 17.6 5.8 11.8 14.5 4.8 9.7 Total (MBoe/d) 71.8 28.9 42.9 62.3 27.7 34.6