Magnolia Oil & Gas Corporation · NYSE:MGY
Magnolia Oil & Gas — Investor Presentation (May 2019)
25 slides from Magnolia Oil & Gas's investor presentation, May 2019
Slide 1: Magnolia Oil & Gas Corporation Investor Presentation – May 2019
Magnolia Oil & Gas Corporation Investor Presentation – May 2019
Slide 2: Disclaimer
Disclaimer 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 E
Slide 3: Magnolia Oil & Gas – Overview
Magnolia Oil & Gas – Overview • High-quality, low-risk pure-play South Texas operator with a core ~461,000 Net Acre Position Targeting Two of the Top Eagle Ford and Austin Chalk position acquired at an attractive entry Oil Plays in the U.S. multiple • Significant scale and PDP base generates materia
Slide 4: Corporate Business Model and Strategy
Corporate Business Model and Strategy Magnolia Value Creation Strategy 2019 Expectations 1 Consistent organic production growth Organic production growth of 10% 4Q/4Q 2 High full-cycle operating margins Targeting full cycle margins of ~50% $400 million of principal debt outstanding, 3 Conservative l
Slide 5: Magnolia Oil & Gas – Q1 2019 Key Metrics
Magnolia Oil & Gas – Q1 2019 Key Metrics Earnings and EPS (GAAP) (1) Total Production Oil Realizations (2) $13.0 Million 62.4 Mboe/d $59.07/bbl (108% of WTI) $0.08/sh Adjusted Net Income & Total Shares (3)(4) Adjusted EBITDAX (3) D&C Capex $23.0 Million $160.1 Million $139.8 Million 251.5 Million sh
Slide 6: Q1 2019 Cash Flow Reconciliation
Q1 2019 Cash Flow Reconciliation ($ in millions) $350 $4 $300 $38 $250 $52 $154 $200 $150 $128 $100 $136 $50 $76 $0 (2) (3) Cash Cash Flow Other Changes in Acquisitions D&C and Cash (1) 12/31/18 from Operations Working Capital Facilities Capital 3/31/19 (1) Represents cash flow from operations befor
Slide 7: Cash Flow Reconciliation Since Magnolia’s Inception
Cash Flow Reconciliation Since Magnolia’s Inception ($ in millions) $700 $600 $23 $34 $500 $198 $400 $485 $300 $200 $270 $100 $116 $76 $0 Opening Cash Cash Flow from Other (2) Changes in Acquisitions (3) D&C and Cash at Inception Operations After Working Capital Facilities Capital 3/31/19 Transactio
Slide 8: Achieving Key Objectives Through Steady Growth
Achieving Key Objectives Through Steady Growth Production Growth (1) Karnes Net Acreage Additions Since Inception (1) >70 Mboe/d 3-5% Q/Q Growth 62.4 61.9 58.9 After completing the acquisitions expected to close in Q2 2019, Magnolia expects to have added Production from our 2019 acquisitions is expe
Slide 9: Asset Overview
Asset Overview
Slide 10: Karnes County – Core Eagle Ford and Austin Chalk
Karnes County – Core Eagle Ford and Austin Chalk Key Asset Highlights Premier Position in the Core of the Eagle Ford • World-class acreage footprint located in the core of the Eagle Ford, substantially de-risked ‒ 21,460 net acres, 64% operated, 97% HBP, 40.5 Mboe/d Q1 2019 production (67% oil, 82%
Slide 11: Located in an Attractive Neighborhood
Located in an Attractive Neighborhood Eagle Ford – Karnes Trough Area Magnolia Fluid Windows BP Oil EOG Wet Gas MRO Dry Gas COP Core position in Karnes County Oil Window adjacent to EOG and Marathon with $28 to $32/barrel breakevens(1) and typically less than 1-year new well paybacks (1) Source: RSE
Slide 12: Karnes County Results Show Superior Economics
Karnes County Results Show Superior Economics • Results in Karnes County are some the best in North America • Karnes Eagle Ford and Austin Chalk type curves produce 216,000 and 332,000 barrels of oil, respectively, in their first 12 months of production supporting paybacks in less than 6 months • Li
Slide 13: Giddings Field – Redeveloping as an Emerging Play
Giddings Field – Redeveloping as an Emerging Play Giddings Asset Overview Lease Map • Emerging, high-growth asset with extensive inventory potential and significant development flexibility ‒ ~439,342 net acres, ~98% HBP and ~87% operated, ~20 Mboe/d Q1 2019 production (26% oil, 56% liquids) • HBP na
Slide 14: Financial Overview
Financial Overview
Slide 15: Magnolia Oil & Gas – Financial Policy
Magnolia Oil & Gas – Financial Policy Capital Spending Plan Targeted Conservative Financial Statements with at 50 - 60% of annual EBITDAX Low Financial Leverage (Plan expected to deliver 10%+ of annual (<= 1.0x EBITDAX) production growth and consistently generate free cash flow) Acquisitions general
Slide 16: Level of Risk Generally Acceptable to Magnolia
Business Risks Adequately Managed Level of Risk Generally Acceptable to Magnolia Risk Factor Low Moderate Fully Exposed Geologic/Exploratory Political Cost Risk Reinvestment Commodity Financial 16
Slide 17: Q1 2019 Capital Structure and Liquidity Overview
Q1 2019 Capital Structure and Liquidity Overview Capital Structure Overview Capitalization & Liquidity ($MM) • Maintaining low financial leverage profile Capitalization Summary As of 3/31/2019 ‒ Net Debt / Total Book Capitalization of 12% Cash and Cash Equivalents $76 ‒ Net Debt / Q1 annualized Adju
Slide 18: Magnolia Oil & Gas – Summary Balance Sheet
Magnolia Oil & Gas – Summary Balance Sheet (in thousands) March 31, 2019 December 31, 2018 Cash $76,307 $135,758 Current assets 126,938 156,601 Property, plant and equipment, net 3,168,544 3,073,204 Other assets 66,184 67,960 Total assets $3,437,973 $3,433,523 Current liabilities $184,460 $197,361 L
Slide 19: Cash Flow Priorities to Maximize Shareholder Returns
Cash Flow Priorities to Maximize Shareholder Returns Accretive Bolt-On Acquisitions Debt Share Reduction Repurchases Return- focused Value Creation With a targeted goal of always being free cash flow positive, Magnolia intends to be a prudent steward of shareholder’s capital 19
Slide 20: Summary Investment Highlights
Summary Investment Highlights High Quality Assets Positioned for Success • Coveted position in core of Karnes County with industry leading breakevens between $28 - $32 per barrel(1) • Emerging position in the Giddings Field with results that continue to improve and provides potential upside Positive
Slide 21: Appendix
Appendix
Slide 22: Magnolia Oil & Gas – Operating Highlights
Magnolia Oil & Gas – Operating Highlights For the Quarter Ended For the Quarter Ended March 31, 2019 December 31, 2018 Production: Oil (MBbls) 2,906 3,054 Natural Gas (MMcf) 9,763 8,795 NGLs (MBbls) 1,084 1,179 Total (Mboe) 5,617 5,699 Revenues (in thousands): Oil Sales $171,654 $198,891 Natural Gas
Slide 23: Reconciliation of Net Income to EBITDAX & Adjusted EBITDAX
Reconciliation of Net Income to EBITDAX & Adjusted EBITDAX (in thousands) For the Quarter Ended For the Quarter Ended Adjusted EBITDAX reconciliation to net income: March 31, 2019 December 31, 2018 Net income (1) $22,713 $57,808 Exploration expense 2,476 661 Asset retirement obligation accretion 1,3
Slide 24: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation (in thousands) For the Quarter Ended For the Quarter Ended Adjusted Net Income March 31, 2019 December 31, 2018 Net income (1) $22,713 $57,808 Adjustments for certain items affecting comparability: Transaction costs 353 2,241 Tax impact of adjustments (74) (471) Ad
Slide 25: Magnolia Oil & Gas – Margins
Magnolia Oil & Gas – Margins For the Quarter Ended For the Quarter Ended $ / Boe, unless otherwise noted March 31, 2019 December 31, 2018 Revenue $38.93 $44.75 Less: Lease Operating Expenses (3.83) (3.46) Less: Gathering, Transportation & Processing (1.66) (1.60) Less: Taxes Other Than Income (2.56)
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