Magnolia Oil & Gas Corporation · NYSE:MGY
Magnolia Oil & Gas — Q2 2024 Earnings Presentation
21 slides from Magnolia Oil & Gas's earnings presentation, Aug 1, 2024
Slide 1: Second Quarter 2024 Earnings Presentation
Second Quarter 2024 Earnings Presentation August 1, 2024 Christopher Stavros – President & CEO Brian Corales – Senior Vice President & CFO Tom Fitter – Director, Investor Relations
Slide 2: Disclaimer
Disclaimer 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 pr
Slide 3: Second Quarter Highlights & Announcements
Second Quarter Highlights & Announcements Financial Operations Corporate Total adjusted net income of $104 million Q2 2024 production of 90.2 Mboe/d As previously announced, closed and operating income margin of 40% (10% year-over-year growth) and Giddings bolt-on acquisition during the oil producti
Slide 4: History of Top-Tier Return on Capital Employed
History of Top-Tier Return on Capital Employed Historical ROCE 25% 23% High-quality asset base and continued business model execution 18% - low leverage, disciplined capital spending and high pre-tax margins are critical to sustaining high returns Focus on cost reductions and ongoing share repur
Slide 5: Key Financial Metrics
Key Financial Metrics Metric Q2 2024 YoY % Change Total Production (Mboe/d) 90.2 10% Oil Production (Mbbls/d) 37.9 11% Giddings Production as a % of total 77% 7% Revenue ($ MM) $337 20% Adjusted EBITDAX ($ MM) $246 21% Adjusted Net Income ($ MM) $104 7% D&C Capex ($ MM) $123 43% D&C Capital % of Adj
Slide 6: 2Q 2024 Cash Flow Reconciliation
2Q 2024 Cash Flow Reconciliation 700 $ In Millions 27 27 600 106 500 233 124 400 126 300 200 399 276 100 0 (1) (2) (3) Cash Cash Flow Changes in Dividends and Share Acquisitions D&C and Cash 3/31/2024 from Working Capital Distributions Repurchases Facilities Capital 6/30/2024 Operations and Other (1
Slide 7: History of Significant & Consistent Share Repurchases
History of Significant & Consistent Share Repurchases Magnolia’s Consistent Share Repurchases1 (million shares repurchased) Magnolia has reduced its diluted share count by approximately 22% (1) Class A share reduction includes 3.6 million non-compete shares that were paid in lieu of stock in 2021. I
Slide 8: Safe, Sustainable and Growing Dividend
Safe, Sustainable and Growing Dividend Annualized Dividend Payout Per Share Magnolia’s dividend has grown at a $0.52 double-digit rate over the past 4 years $0.46 Sustainable dividend growth supported even at lower product prices $0.40 Dividend per share payout capacity is enhanced by moderate
Slide 9: Summary Balance Sheet
Summary Balance Sheet (in thousands) June 30, 2024 December 31, 2023 Cash $275,683 $401,121 Current assets 178,183 190,152 Property, plant and equipment, net 2,260,755 2,052,021 Other assets 128,243 112,922 Total assets $2,842,864 $2,756,216 Current liabilities $354,959 $314,887 Long-term debt, net
Slide 10: Margin and Cost Structure
Margin and Cost Structure For the Quarters Ended $ / Boe, unless otherwise noted June 30, 2024 June 30, 2023 Revenue $41.02 $37.62 Total Cash Operating Costs: Lease Operating Expenses (1) (5.33) (4.87) Gathering, Transportation & Processing (1.03) (1.39) Taxes Other Than Income (2.42) (2.04) Explora
Slide 11: 2024 Operating Plan
2024 Operating Plan 2024 Production & Capital 2024 Capital Third Quarter 2024 Guidance Annual BOE and Oil Growth ~20% Production Karnes High Single-Digit ~91 Mboe/d ~80% 2024 Budget Giddings D&C Capital Spending $450 - $480 Million (DC&F) ~$120 Million 2024 Operating Plan Oil Differential (To Magell
Slide 12: Why Own Magnolia?
Why Own Magnolia? Maintain Conservative Financial Leverage to Provide Financial Flexibility Through Cycle • One of the lowest leverage companies in the E&P space High Quality Assets Drive Low Capital Reinvestment Rate that Provides Growth to the Business • Limit Capital Spending to 55% of Annual Adj
Slide 13: Appendix
Appendix 3 VY MAGNOLIA Oits GAS
Slide 14: Magnolia's Business Model & Strategy
Magnolia’s Business Model & Strategy High Quality Assets Drive Low Capital Deliver Mid-Single Digit Long-Term Reinvestment Rate that Provides Growth to the Production Growth with Significant Free Business Cash Flow Limit Capital Spending to 55% of 2024E BOE and Oil Growth of High Single-Digits Annua
Slide 15: Giddings Bolt-On Acquisition
Giddings Bolt-On Acquisition April Acquisition Highlights Acquired >27,000 net acres in Giddings (>80,000 gross) from a private operator for ~$125 million; closed on April 30th Includes ~1,000 BOEPD (~35% oil, ~68% liquids) Primarily in Fayette, Washington and Lee counties Low PDP assets are
Slide 16: Free Cash Flow Reconciliations
Free Cash Flow Reconciliations For the Quarters Ended (in thousands) June 30, 2024 June 30, 2023 Net cash provided by operating activities $269,398 $201,775 Add back: net change in operating assets and liabilities (36,665) 2,721 Cash flows from operations before net change in operating assets and li
Slide 17: Adjusted EBITDAX Reconciliations
Adjusted EBITDAX Reconciliations For the Quarters Ended (in thousands) June 30, 2024 June 30, 2023 Net income $105,113 $104,596 Interest expense, net 3,516 1,149 Income tax expense 26,769 24,847 EBIT $135,398 $130,592 Depreciation, depletion and amortization 104,743 77,008 Asset retirement obligatio
Slide 18: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation For the Quarters Ended (in thousands) June 30, 2024 June 30, 2023 Net income $105,113 $104,596 Adjustments: Other income adjustment(1) (1,005) (9,193) Change in estimated income tax(2) 205 1,782 Adjusted Net Income $104,313 $97,185 (in thousands) For the Quarters E
Slide 19: Return on Capital Employed
Return on Capital Employed Six Months Ended 5-Year Average For the Years Ended (in thousands) June 30, 2024 2019 - 2023 December 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 Operating income (loss) $258,909 $82,540 $534,485 $1,073,785 $602,594 ($1,925,666) $127,50
Slide 20: Q2 2024 Capital Structure & Liquidity Overview
Q2 2024 Capital Structure & Liquidity Overview Capital Structure Overview Capitalization & Liquidity ($ million) Maintain low financial leverage profile Capitalization Summary As of 6/30/2024 ‒ Currently have a net debt(1) position of $124 million Cash and Cash Equivalents $276 ‒ Net Debt(1) / Q2
Slide 21: Production Results
Production Results Combined Karnes Giddings Combined Karnes Giddings For the Quarter Ended June 30, 2024 For the Quarter Ended June 30, 2023 Production: Oil (MBbls) 3,453 1,092 2,361 3,100 1,260 1,840 Natural gas (MMcf) 14,982 2,467 12,515 13,784 2,977 10,807 Natural gas liquids (MBbls) 2,259 376 1,