Magnolia Oil & Gas Corporation · NYSE:MGY

Magnolia Oil & Gas — Investor Presentation (June 2024)

29 slides from Magnolia Oil & Gas's investor presentation, June 2024

  1. Slide 1: June 2024 Investor Presentation

    June 2024 Investor Presentation

  2. 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

  3. Slide 3: Magnolia Oil & Gas Overview

    Magnolia Oil & Gas Overview  High-quality, low-risk pure-play South Texas operator with core Eagle Ford and Austin Chalk positions acquired at Texas attractive entry costs  Significant scale and PDP base generates material free cash Giddings flow, reduces development risk, and increases optionalit

  4. Slide 4: 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 Flow1 Limit Capital Spending to 55% of 2024E BOE and Oil Growth of High Single-Digits Annu

  5. Slide 5: Asset Overview

    Asset Overview is MAGNOLIA gits GAS

  6. Slide 6: Giddings Area Assets

    Giddings Area Assets Asset Overview Texas  ~746,000 gross acres (~555,000 net acres) with high working interest (~98% operated)  ~150,000 net acres in development with additional appraisal activity outside of development area  2023 production averaged 58.3 Mboe/d (36% oil, 66% liquids), or ~71% o

  7. Slide 7: 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

  8. Slide 8: Core Karnes Assets

    Core Karnes Assets Asset Overview Texas  Mature asset offers significant free cash flow through low base production decline  2024 production levels expected to be relatively flat Q4 2023 to Q4 2024  Acreage located in the core of the Eagle Ford offering strong economics and high returns in Karnes

  9. Slide 9: Financial, Capital Allocation & Risk Management Overview

    Financial, Capital Allocation & Risk Management Overview

  10. Slide 10: Strong Balance Sheet, Ample Liquidity & Simple Capital Structure

    Strong Balance Sheet, Ample Liquidity & Simple Capital Structure Capital Structure Overview Capitalization & Liquidity ($ million)  Maintaining low financial leverage profile Capitalization Summary As of 3/31/2024 ‒ Net debt(1) position of $1 million as of 3/31/24 Cash and Cash Equivalents $399 ‒ N

  11. Slide 11: Low Leverage Drives Financial Flexibility

    Low Leverage Drives Financial Flexibility Net Debt / EBITDA (2024E) (1) 1.9 1.6 1.5 Magnolia has one of the best 1.4 1.4 1.3 balance sheets in the industry 1.1 1.2 1.2 1.1 0.9 0.9 0.8 0.8 0.7 0.6 0.5 0.4 0.1 0.1 -0.1 0.0 (1) Source: FactSet (2024E) as of 5/9/2024. Net debt is calculated as the diffe

  12. Slide 12: Cash Flow Allocation Matches Magnolia's Business Model

    Cash Flow Allocation Matches Magnolia’s Business Model Allocation of Operating Cash Flow – Since Inception Cash Build & (7/31/2018 – 3/31/2024) Dividends, 11% Share Repurchases, Drilling & Magnolia offers a low reinvestment 24% Completions, 47% rate, balanced return of capital (dividends and share r

  13. Slide 13: Low Reinvestment Rate with Strong Production Growth

    Low Reinvestment Rate with Strong Production Growth 3-Year Average Reinvestment Rate1 Production Growth Per Share1 (3-Year CAGR) 78% 79% 23% 64% 19% 58% 17% 56% 54% 54% 51% 51% 45% 45% 46% 46% 47% 14% 43% 41% 42% 38% 38% 40% 11% 34% 35% 10% 10% 10% 9% 7% 6% 5% 5% 4% 4% 0% -1% -2% -4% -4% -5% -6% Mag

  14. Slide 14: Strong Operating Margins

    Strong Operating Margins Operating Margin1 (3-Year Average) 61% 56%  Magnolia has consistently delivered one of 52% 51% the highest operating margins 48% 46% 44% 43% 41% 41% 41% 39% 38% 38% 37% 37%  High-quality asset base and focus on 36% 34% 34% 33% maintaining low costs support top-tier 29% 27%

  15. Slide 15: History of Top-Tier Return on Capital Employed

    History of Top-Tier Return on Capital Employed 3-Year Average ROCE1 39% 37% 33%  Magnolia delivers top-tier corporate returns (ROCE) 31% 30% 28% 28%  Focus on cost reductions in 2023 and ongoing share 27% 26% 25% repurchases has had a tangible beneficial impact on 23% 22% corporate returns 21% 19%

  16. Slide 16: Consistent & Sizable Return to Shareholders

    Consistent & Sizable Return to Shareholders Cumulative Return of Capital ($MM) >$1.3 Billion Returned to Shareholders $1,213 $1,319  Magnolia has a strong track record $908 of returning capital to shareholders  Returned ~25% of current market $467 cap over prior five years Inception  Continue inc

  17. Slide 17: Significant Share Repurchases Since 2019

    Significant Share Repurchases Since 2019 Magnolia’s Consistent Share Repurchases1 5-Year Change in Diluted Shares Outstanding2 (million shares repurchased by year) (2019 – 2023) 339% Magnolia has reduced its diluted share count by approximately 20% 178% 97% 87% 64% 65% 40% 42% 2% 7% 12% 0% 1% -6% -3

  18. Slide 18: Safe, Sustainable and Growing Dividend

    Safe, Sustainable and Growing Dividend Annualized Dividend Payout Per Share  Magnolia’s dividend has grown at a $0.52 substantial rate over the past four years $0.46  Sustainable dividend growth supported even at low commodity prices $0.40  Higher than peer average dividend growth supported by mo

  19. Slide 19: Business Risks Adequately Managed

    Business Risks Adequately Managed Level of Risk Acceptable to Magnolia Low Risk Moderate Risk Fully Exposed Risk Factor Geologic/Exploratory Political Cost Risk Reinvestment Commodity Financial 19

  20. Slide 20: Why Own Magnolia? – Investment Highlights

    Why Own Magnolia? – Investment Highlights Unique and Durable Business Model & Strategy Texas High Quality Assets Positioned for Success  Leading position in the Giddings area with low breakevens and Giddings substantial running room  Coveted position in the Karnes area in the core of the Eagle For

  21. Slide 21: 2024 Operating Plan & Guidance

    2024 Operating Plan & Guidance 2024 Production & Capital 2024 Capital Second Quarter 2024 Guidance Annual BOE and Oil Growth ~20% Production Karnes High Single-Digit ~89 Mboe/d ~80% 2024 Budget Giddings D&C Capital Spending $450 - $480 Million (DC&F) $120 to $125 Million 2024 Operating Plan Oil Diff

  22. Slide 22: Magnolia Commitment to Sustainability

    Magnolia Commitment to Sustainability 2023 Sustainability Report Highlights Include: Flaring Intensity(1) Total Recordable Incident Rate(2) (TRIR)  Magnolia record for lowest annual flaring rate1 at 0.11%, a 0.99% reduction of almost 90% since 2019 0.57 0.69%  Addition of scope 2 emissions reporti

  23. Slide 23: Appendix

    Appendix 3 VY MAGNOLIA ore & GAS

  24. Slide 24: Summary Balance Sheet

    Summary Balance Sheet (in thousands) March 31, 2024 December 31, 2023 Cash $399,317 $401,121 Current assets 198,218 190,152 Property, plant and equipment, net 2,093,942 2,052,021 Other assets 116,465 112,922 Total assets $2,807,942 $2,756,216 Current liabilities $350,011 $314,887 Long-term debt, net

  25. Slide 25: Margin and Cost Structure

    Margin and Cost Structure For the Quarters Ended $ / Boe, unless otherwise noted March 31, 2024 March 31, 2023 Revenue $41.40 $43.18 Total Cash Operating Costs: Lease Operating Expenses (1) (5.91) (5.87) Gathering, Transportation & Processing (1.11) (1.78) Taxes Other Than Income (2.32) (2.70) Explo

  26. Slide 26: 1Q 2024 Cash Flow Reconciliation

    1Q 2024 Cash Flow Reconciliation 700 $ In Millions 6 27 600 27 51 500 218 121 400 300 200 401 399 100 0 (4) (5) (1) (2) (3) Cash Cash Flow Changes in Acquisitions Dividends and Share D&C and Cash 12/31/2023 from Working Capital Distributions Repurchases Facilities Capital 3/31/2024 Operations and Ot

  27. Slide 27: Free Cash Flow Reconciliations

    Free Cash Flow Reconciliations For the Quarters Ended (in thousands) March 31, 2024 March 31, 2023 Net cash provided by operating activities $210,932 $219,823 Add back: net change in operating assets and liabilities 6,941 (5,647) Cash flows from operations before net change in operating $217,873 $21

  28. Slide 28: Adjusted EBITDAX Reconciliations

    Adjusted EBITDAX Reconciliations For the Quarters Ended (in thousands) March 31, 2024 March 31, 2023 Net income $97,597 $106,677 Interest (income) expense, net 2,312 (487) Income tax expense 20,336 19,605 EBIT $120,245 $125,795 Depreciation, depletion and amortization 97,076 70,701 Asset retirement

  29. Slide 29: Adjusted Net Income Reconciliations

    Adjusted Net Income Reconciliations For the Quarters Ended (in thousands) March 31, 2024 March 31, 2023 Net income $97,597 $106,677 Adjustments: Loss on revaluation of contingent consideration 4,205 - Impairment of oil and natural gas properties - 15,735 Change in estimated income tax(1) (795) (3,08

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