Magnolia Oil & Gas Corporation · NYSE:MGY
Magnolia Oil & Gas — Investor Presentation (August 2023)
22 slides from Magnolia Oil & Gas's investor presentation, August 2023
Slide 1: Magnolia Oil & Gas Corporation Investor Presentation – August 2023
Magnolia Oil & Gas Corporation Investor Presentation – August 2023
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: Magnolia Oil & Gas – Overview
Magnolia Oil & Gas – Overview • High-quality, low-risk pure-play South Texas operator with a core ~483,000 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: Business Model & Strategy
Magnolia Oil & Gas – Business Model & Strategy Magnolia Value Creation Principles Objectives & Execution Generate moderate annual organic production • 2022 production growth was 14% 1 growth Limit D&C capital to 55% of annual Adjusted • Actual D&C capital spending since company 2 EBITDAX, providing
Slide 5: Prudent Financial Policy
Magnolia Oil & Gas – Prudent Financial Policy Conservative Financial Statements with Capital Spending Plan Limited Low Financial Leverage to 55% of Annual Adj. EBITDAX (Expected to deliver modest production (<= 1.0x EBITDAX) growth and consistent free cash flow) Acquisitions generally expected to be
Slide 6: Accretive Bolt-On Acquisitions
Magnolia Oil & Gas – Prudent Deployment of Free Cash Flow Accretive Share Bolt-On Repurchases Acquisitions Return- focused Value Creation Debt Dividend Reduction Consistent free cash flow generation allows for prudent and effective reinvestment to maximize Magnolia’s total shareholder return proposi
Slide 7: 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 6/30/23) Cash Build + Dividend 20% Drilling & Completions 45% Share Repurchases 23% Acquisitions 12% (1) Operating Cash Flow is cash flow from operations before changes in w
Slide 8: Share Repurchase Summary Through 2Q 2023
Share Repurchase Summary Through 2Q 2023 • Since the initial repurchase authorization in 3Q19, Magnolia has reduced its dilutive share count by 30.0(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 56.9 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: Business Risks Adequately Managed
Magnolia Oil & Gas – 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 10
Slide 11: Asset Overview
Asset Overview
Slide 12: Giddings Field – Development & Appraisal Opportunities
Giddings Field – Development & Appraisal Opportunities Giddings Asset Overview Lease Map • Emerging, high-growth asset with extensive inventory potential and significant development flexibility • ~650,000 gross acres (~460,000 net acres) that is 99% HBP and 98% operated. 2Q 2023 production averaged
Slide 13: Giddings Field – Development
Giddings Field – Development • MGY has identified some contiguous acreage blocks which have produced consistent results to date. One of these areas comprises ~70,000 acres. ‒ Operating one full-time rig drilling development wells in this area ‒ Have greater than 90 horizontal wells online • 2Q23 pro
Slide 14: 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 Eagle Ford – Karnes Trough the Eagle Ford, substantially de-risked Magnolia Fluid Windows BP Oil ‒ ~22,800 net acres, 60% operat
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: Summary Investment Highlights
Magnolia Oil & Gas – Summary Investment Highlights High Quality Assets Positioned for Success • Coveted position in core of Karnes County with industry leading breakevens • Emerging position in the Giddings Field with 70,000 acres now in development. Positive Free Cash Flow and Leading Margins • One
Slide 17: Appendix
Appendix
Slide 18: 2Q 2023 Capital Structure and Liquidity Overview
2Q 2023 Capital Structure and Liquidity Overview Capital Structure Overview Capitalization & Liquidity ($MM) • Maintaining low financial leverage profile Capitalization Summary As of 6/30/2023 ‒ Currently have a net cash position of $277 MM Cash and Cash Equivalents $677 ‒ Net Debt / Q2 annualized a
Slide 19: Free Cash Flow Reconciliations
Free Cash Flow Reconciliations For the Quarter Ended For the Quarter Ended (in thousands) June 30, 2023 June 30, 2022 Net cash provided by operating activities $201,775 $379,135 Add back: Changes in operating assets and liabilities 2,721 (16,690) Cash flows from operations before changes in operatin
Slide 20: Margin and Cost Structure
Magnolia Oil & Gas – Margin and Cost Structure For the Quarter Ended For the Quarter Ended $ / Boe, unless otherwise noted June 30, 2023 June 30, 2022 Revenue $37.62 $71.78 >100% of the decrease in $34.16/Boe Total Cash Operating Costs: Adjusted Operating Lease Operating Expenses (1) Margin is due t
Slide 21: Adjusted EBITDAX Reconciliations
Adjusted EBITDAX Reconciliations For the Quarter Ended For the Quarter Ended (in thousands) June 30, 2023 June 30, 2022 Net income $104,596 $299,905 Exploration expenses - 3,408 Asset retirement obligations accretion 823 802 Depreciation, depletion and amortization 77,008 57,254 Interest expense, ne
Slide 22: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation For the Quarter Ended For the Quarter Ended (in thousands) June 30, 2023 June 30, 2022 Net income $104,596 $299,905 Adjustments: Other income adjustment (1) (9,193) (6,333) Change in estimated income tax(2) 1,782 - Adjusted Net Income (3) $97,185 $293,572 (in thous
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