Magnolia Oil & Gas Corporation · NYSE:MGY
Magnolia Oil & Gas — Q4 2019 Earnings Presentation
20 slides from Magnolia Oil & Gas's earnings presentation, Feb 19, 2020
Slide 1: Fourth Quarter 2019 Earnings Presentation
Fourth Quarter 2019 Earnings Presentation February 19, 2020 Stephen I. Chazen – Chairman, President & CEO Christopher Stavros – Executive Vice President & CFO Brian Corales – Vice President, Investor Relations
Slide 2: Disclaimer
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
Slide 3: Magnolia Oil & Gas – 2019 Highlights
Magnolia Oil & Gas – 2019 Highlights 3 • Total D&C capital for 2019 was 60% of our EBITDAX and in line with our business model prioritizing free cash flow generation • Generated $647.6 million net cash flow from operating activities and $223 million of free cash flow during 2019 • Exited 2019 with t
Slide 4: Q4 2019 Key Metrics
Magnolia Oil & Gas – Q4 2019 Key Metrics 4 Net Income, Earnings and EPS (GAAP) (1) Total Production 68.3 Mboe/d (52% oil) ~10% YOY Growth Adj. Net Income, Adj. EPS and TSO (2)(3) $12.5 Million Adjusted EPS $0.05 253.1 Million Shares Adjusted EBITDAX (2) $170.8 Million D&C Capex $72.2 Million (42% of
Slide 5: Q4 2019 Cash Flow Summary
Q4 2019 Cash Flow Summary 164 163 4 70 70 183 $0 $50 $100 $150 $200 $250 $300 $350 Cash 9/30/19 Cash Flow from Operations Changes in Working Capital Common Stock Repurchases D&C and Facilities Capital Cash 12/31/19 (1) (2) 5 ($ In Millions) (1) Cash flow from operations before changes in working cap
Slide 6: Magnolia Oil & Gas Share Count Summary
155.8 171.3 91.8 85.8 7.3 9.2 (7.0) 247.6 257.1 0.0 50.0 100.0 150.0 200.0 250.0 300.0 Beginning Share Count Acquisitions Warrant Conversion Shares Repurchased 12/31/2019 Share Count Class A Shares Class B Shares (1) (1) (2) Total Share Count Since Inception (MM Shares) • A summary of Magnolia’s ove
Slide 7: Summary Balance Sheet
Magnolia Oil & Gas – Summary Balance Sheet 7 (in thousands) December 31, 2019 December 31, 2018 Cash $182,633 $135,758 Current assets 110,585 156,601 Property, plant and equipment, net 3,116,757 3,073,204 Other assets 56,431 67,960 Total assets $3,466,406 $3,433,523 Current liabilities $175,208 $197
Slide 8: Margins
Magnolia Oil & Gas – Margins 8 (1) General & administrative expense excludes non-cash stock based compensation of $2.7 million, $1.9 million, and $11.1 million, or $0.43 per Boe, $0.32 per Boe, and $0.45 per Boe, for the quarter ended December 31, 2019, the quarter ended December 31, 2018, and the y
Slide 9: 2019 Proved Reserves & Costs Incurred
2019 Proved Reserves & Costs Incurred 9 ($ in thousands) For the Year Ended December 31, 2019 Costs incurred: Proved property acquisition costs $106,489 Unproved properties acquistions costs 29,208 Total acquisition costs $135,697 Exploration and development costs 441,482 Total costs incurred $577,1
Slide 10: 2019 Cash Flow Summary
2019 Cash Flow Summary 136 658 11 79 86 435 183 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 Cash 1/1/2019 Cash Flow From Operations Changes in Working Capital Common Stock Repurchases Acquisitions D&C and Facilities Capital Cash 12/31/19 10 (1) (2) (3) (1) Cash flow from operations before change
Slide 11: Karnes Net Acreage Additions Since Inception
11 Karnes Net Acreage Additions Since Inception Magnolia has added ~7,600 net acres to its Karnes position since inception and 5,200 net acres during 2019. Achieving Key Objectives Through Steady Growth Production Growth (1) Inception production is based on Q3 2018 Successor Period which is July 31,
Slide 12: Appendix
Appendix
Slide 13: Overview
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 • Ass
Slide 14: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow 14 (1) Free cash flow is a non-GAAP measure. For reasons management believes these are useful to Investors, refer to slide 2 “Non-GAAP Financial Measures.” (in thousands) Free Cash Flow Reconciliation For the Quarter Ended December 31, 2019 For the Quarter Ended Dece
Slide 15: Reconciliation of Net Income to Adjusted EBITDAX
Reconciliation of Net Income to Adjusted EBITDAX 15 (1) Includes net income attributable to noncontrolling interest. (2) Transaction costs incurred related to the execution of our business combination with EnerVest, Ltd. and its affiliates and the Harvest acquisition, including legal fees, advisory
Slide 16: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation 16 (1) Includes net income attributable to noncontrolling interest. (2) Represents corporate income taxes at an assumed effective tax rate of 22% for the quarter ended December 31, 2019, 19% for the quarter ended for the quarter ended December 31, 2018, and 22% for
Slide 17: Adjusted Earnings Reconciliation
Adjusted Earnings Reconciliation 17 (1) Adjusted earnings 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 December 31, 2019 Per Share Diluted EPS For the Quarter Ended December 31
Slide 18: Operating Highlights
Magnolia Oil & Gas – Operating Highlights 18 (1) Benchmarks are the NYMEX WTI and NYMEX HH average prices for oil and natural gas, respectively. For the Quarter Ended December 31, 2019 For the Quarter Ended December 31, 2018 For the Year Ended December 31, 2019 Production: Oil (MBbls) 3,251 3,054 12
Slide 19: Production Results
Magnolia Oil & Gas – Production Results 19 Combined Karnes Giddings & Other Combined Karnes Giddings & Other Three Months Ended December 31, 2019 Three Months Ended December 31, 2018 Production: Oil (MBbls) 3,251 2,740 511 3,054 2,564 490 Natural Gas (MMcf) 10,690 4,207 6,483 8,795 3,788 5,007 NGLs
Slide 20: Cash Flow Summary from Inception
Cash Flow Summary from Inception 116 979 5 28 79 233 577 183 $0 $200 $400 $600 $800 $1,000 $1,200 Opening cash after transaction Cash flow from operations after transaction costs incurred during close Changes in Working Capital Other Common Stock Repurchases Acquisitions D&C and Facilities Capital C