Magnolia Oil & Gas Corporation · NYSE:MGY
Magnolia Oil & Gas — Q3 2023 Earnings Presentation
19 slides from Magnolia Oil & Gas's earnings presentation, Nov 2, 2023
Slide 1: Third Quarter 2023 Earnings Presentation
Magnolia Oil & Gas Third Quarter 2023 Earnings Presentation November 2, 2023 Christopher Stavros – President & CEO Brian Corales – Senior Vice President & CFO Jim Johnson – Vice President, Finance, IR & Treasurer
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, and Section 21E of the Securities Exchange Act of 1934, as
Slide 3: Realized Significant Cost Reductions
Realized Significant Cost Reductions Cost reduction initiatives implemented in early 2023 delivering strong results • Reduced 2023 Capex 15% compared Annual D&C Capital Spending ($MM)1 to original guidance • Cost per foot (D,C&F) at Giddings has $505 declined by ~15% since beginning of 15% 2023 Redu
Slide 4: Significant and Flexible Return of Free Cash Flow
Significant and Flexible Return of Free Cash Flow Magnolia’s business model delivers consistent free cash flow, strong return of capital through share repurchases and dividends and excess cash flow that provides options and flexibility to improve the per share value Share Repurchases Dividends Exces
Slide 5: Cash Flow Allocation Matches Magnolia's Business Model
Cash Flow Allocation Matches Magnolia’s Business Model Percentage of Operating Cash Flow (1) – Since Inception - 7/31/18 thru 9/30/23 Cash Build and Dividends 20% Drilling & Completions 45% Share Repurchases 23% Acquisitions 12% (1) Operating Cash Flow is cash flow from operations before changes in
Slide 6: Third Quarter 2023 Key Financial Metrics
Third Quarter 2023 Key Financial Metrics • 3Q23 total production grew 1% sequentially to 82.7 Mboe/d, with D&C capital of $104 million (44% of adjusted EBITDAX(1)) • Operating income as a percentage of revenue improved from 2Q23 to 47% due to higher product price realizations and lower field operati
Slide 7: 3Q 2023 Cash Flow Reconciliation
3Q 2023 Cash Flow Reconciliation (In millions) 1,000 900 13 26 57 800 217 73 700 107 600 500 400 677 300 618 200 100 0 (1) (2) (3) (4) (5) Cash Cash Flow Changes in Dividends Common Stock Acquisitions D&C and Cash 6/30/2023 from Working Capital Repurchases Facilities 9/30/2023 Operations and Other C
Slide 8: Share Repurchase Summary Through 3Q 2023
Share Repurchase Summary Through 3Q 2023 • Since the initial repurchase authorization in 3Q19, Magnolia has reduced its dilutive share count by 32.5(1) million shares of Class A common stock as well as 26.9 million shares of Class B common stock, for a total reduction of 59.4 million shares, or appr
Slide 9: Differentiated Dividend Framework
Magnolia Oil & Gas – Differentiated Dividend Framework Dividend Principles 15% Increase Secure & Sustainable – Dividend is safe, and supported by our strong balance sheet, prudent spending and 43% Increase consistent free cash flow Paid out of Earnings – Dividend is paid out of earnings generate
Slide 10: Summary Balance Sheets
Magnolia Oil & Gas – Summary Balance Sheets (in thousands) September 30, 2023 December 31, 2022 Cash $618,466 $675,441 Current assets 187,282 175,306 Property, plant and equipment, net 1,682,456 1,533,029 Other assets 164,289 188,809 Total assets $2,652,493 $2,572,585 Current liabilities $303,705 $3
Slide 11: 3Q 2023 Capital Structure and Liquidity Overview
3Q 2023 Capital Structure and Liquidity Overview Capital Structure Overview Capitalization & Liquidity ($MM) • Maintaining low financial leverage profile Capitalization Summary As of 9/30/2023 ‒ Currently have a net cash position of $218 MM Cash and Cash Equivalents $618 ‒ Net Debt / Q3 annualized a
Slide 12: Margin and Cost Structure
Magnolia Oil & Gas – Margin and Cost Structure For the Quarter Ended For the Quarter Ended $ / Boe, unless otherwise noted September 30, 2023 September 30, 2022 Revenue $41.52 ∆ $22.88/boe $64.40 Total Cash Operating Costs: Lease Operating Expenses (1) (4.65) (4.59) Gathering, Transportation & Proce
Slide 13: Appendix
Appendix \
Slide 14: Magnolia Oil & Gas – Overview
Magnolia Oil & Gas – Overview • High-quality, low-risk pure-play South Texas operator with a core ~498,000 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 15: Commitment to Sustainability
Commitment to Sustainability 2023 Sustainability Report Highlights Include: • Magnolia record for lowest annual flaring rate1 at 0.11%, a reduction of almost 90% since 2019 • Addition of scope 2 emissions reporting; providing further disclosure of the Company’s operations • Continued production of l
Slide 16: Free Cash Flow Reconciliations
Free Cash Flow Reconciliations For the Quarter Ended For the Quarter Ended (in thousands) September 30, 2023 September 30, 2022 Net cash provided by operating activities $187,310 $410,681 Add back: Changes in operating assets and liabilities 29,419 (49,438) Cash flows from operations before changes
Slide 17: Adjusted EBITDAX Reconciliations
Adjusted EBITDAX Reconciliations For the Quarter Ended For the Quarter Ended (in thousands) September 30, 2023 September 30, 2022 Net income $117,477 $286,963 Exploration expenses 5,128 1,173 Asset retirement obligations accretion 875 814 Depreciation, depletion and amortization 81,158 68,972 Intere
Slide 18: Operating Highlights
Magnolia Oil & Gas – Operating Highlights For the Quarter Ended For the Quarter Ended September 30, 2023 September 30, 2022 Production: Oil (MBbls) 3,024 3,381 Natural gas (MMcf) 14,406 13,364 Natural gas liquids (MBbls) 2,179 1,892 Total (Mboe) 7,604 7,500 Average daily production: Oil (Bbls/d) 32,
Slide 19: Production Results
Magnolia Oil & Gas – Production Results Combined Karnes Giddings & Other Combined Karnes Giddings & Other For the Quarter Ended September 30, 2023 For the Quarter Ended September 30, 2022 Production: Oil (MBbls) 3,024 1,117 1,907 3,381 1,828 1,553 Natural gas (MMcf) 14,406 2,713 11,693 13,364 3,869