Magnolia Oil & Gas Corporation · NYSE:MGY
Magnolia Oil & Gas — Investor Presentation (June 2020)
24 slides from Magnolia Oil & Gas's investor presentation, June 2020
Slide 1: Magnolia Oil & Gas Corporation Investor Presentation – June 2020
Magnolia Oil & Gas Corporation Investor Presentation – June 2020
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 (the “Securities Act”), and Section 21E of the Securities E
Slide 3: Magnolia Oil & Gas – Overview
Magnolia Oil & Gas – Overview • High-quality, low-risk pure-play South Texas operator with a core ~450,000 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: Magnolia Oil & Gas – Financial Policy
Magnolia Oil & Gas – Financial Policy Capital Spending Plan Targeted Conservative Financial Statements with at ~60% of annual EBITDAX Low Financial Leverage (Plan expected to deliver modest production (<= 1.0x EBITDAX) growth and consistently generate free cash flow) Acquisitions generally expected
Slide 5: Corporate Business Model and Strategy
Corporate Business Model and Strategy Magnolia Value Creation Strategy Annual Objectives 1 Consistent organic production growth Plan modest growth when prices improve 2 High full-cycle operating margins Targeting full cycle margins of ~50% $146 million of cash and $400 million of 3 Conservative leve
Slide 6: Q1 2020 Cash Flow Summary
Q1 2020 Cash Flow Summary ($ In Millions) 350 300 15 7 69 250 118 200 94 150 100 183 146 50 0 (3) Cash Cash Flow (1) Changes in (2) Common Stock Acquisitions D&C and Cash 12/31/19 from Operations Working Capital Repurchases Facilities Capital 3/31/20 (1) Cash flow from operations before changes in w
Slide 7: Achieving Key Objectives Through Steady Growth
Achieving Key Objectives Through Steady Growth Production Growth Karnes Net Acreage Additions Since Inception Magnolia has added ~9,065 net acres to its Karnes position since inception, or an increase of >60%. (1) (1) Inception production is based Q3 2018 Successor Period is July 31, 2018 through Se
Slide 8: Magnolia Oil & Gas – Cash Operating Margin Reconciliation
Magnolia Oil & Gas – Cash Operating Margin Reconciliation For the Quarter Ended For the Quarter Ended $ / Boe March 31, 2020 March 31, 2019 Revenue $29.15 $38.93 Direct Operating Expenses Lease Operating Expenses (3.88) (3.83) Gathering, Transportation & Processing (1.29) (1.66) Taxes Other Than Inc
Slide 9: Cash Flow Priorities to Maximize Shareholder Returns
Cash Flow Priorities to Maximize Shareholder Returns Accretive Bolt-On Acquisitions Debt Share Reduction Repurchases Return- focused Value Creation With a targeted goal of always being free cash flow positive, Magnolia intends to be a prudent steward of shareholder’s capital 9
Slide 10: Asset Overview
Asset Overview
Slide 11: 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 the Eagle Ford, substantially de-risked ‒ 23,535 net acres, 65% operated, 95% HBP, 44.5 Mboe/d 1Q20 production (69% oil, 84% liq
Slide 12: Located in an Attractive Neighborhood
Located in an Attractive Neighborhood Eagle Ford – Karnes Trough Area Magnolia Fluid Windows BP Oil EOG Wet Gas MRO Dry Gas COP Core position in Karnes County Oil Window adjacent to EOG and Marathon with $28 to $32/barrel breakevens(1) and typically less than 1-year new well paybacks (1) Source: RSE
Slide 13: Karnes County Results Show Superior Economics
Karnes County Results Show Superior Economics • Results in Karnes County are some the best in North America • Karnes Eagle Ford and Austin Chalk type curves produce 216,000 and 332,000 barrels of oil, respectively, in their first 12 months of production supporting paybacks in less than 6 months • Li
Slide 14: Giddings Field – Redeveloping as an Emerging Play
Giddings Field – Redeveloping as an Emerging Play Giddings Asset Overview Lease Map • Emerging, high-growth asset with extensive inventory potential and significant development flexibility ‒ ~430,000 net acres, ~98% HBP and ~87% operated, 21 Mboe/d 1Q20 production (32% oil, 61% liquids) • Horizontal
Slide 15: Giddings Field – Appraisal to Early Stage Development
Giddings Field – Appraisal to Early Stage Development • While appraisal activities and science programs are ongoing, we have identified some contiguous acreage blocks which have produced consistent results to date ‒ One of these areas comprises ~70,000 acres which we have 12 wells with 90 days of pr
Slide 16: Financial Overview
Financial Overview
Slide 17: 1Q20 Capital Structure and Liquidity Overview
1Q20 Capital Structure and Liquidity Overview Capital Structure Overview Capitalization & Liquidity ($MM) • Maintaining low financial leverage profile Capitalization Summary As of 3/31/2020 ‒ Net Debt / Total Book Capitalization of 21% Cash and Cash Equivalents $146 ‒ Net Debt / 1Q20 Annualized Adju
Slide 18: Business Risks Adequately Managed
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 18
Slide 19: Summary Investment Highlights
Summary Investment Highlights High Quality Assets Positioned for Success • Coveted position in core of Karnes County with industry leading breakevens between $28 - $32 per barrel(1) • Emerging position in the Giddings Field with results that continue to improve and provides potential upside Positive
Slide 20: Appendix
Appendix
Slide 21: Magnolia Oil & Gas – Operating Highlights
Magnolia Oil & Gas – Operating Highlights For the Quarter Ended For the Quarter Ended March 31, 2020 March 31, 2019 Production: Oil (MBbls) 3,391 2,906 Natural Gas (MMcf) 10,053 9,763 NGLs (MBbls) 1,155 1,084 Total (Mboe) 6,222 5,617 Average Daily Production: Oil (Bbls/d) 37,259 32,289 Natural Gas (
Slide 22: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow (In thousands) For the Quarter Ended For the Quarter Ended Free Cash Flow Reconciliation March 31, 2020 March 31, 2019 Net Cash provided by operating activities $134,878 $116,562 Changes in operating assets and liabilities (17,321) 33,859 Cash flows from operations b
Slide 23: Reconciliation of Net Income (Loss) to Adjusted EBITDAX
Reconciliation of Net Income (Loss) to Adjusted EBITDAX (In thousands) For the Quarter Ended For the Quarter Ended Adjusted EBITDAX reconciliation to net income (loss): March 31, 2020 March 31, 2019 Net income (loss)(1) ($1,895,299) $22,713 Exploration expense 556,427 2,476 Asset retirement obligati
Slide 24: Magnolia Oil & Gas Share Count Summary
Magnolia Oil & Gas Share Count Summary • A summary of Magnolia’s overall share count is shown in the graph below: Class A Share Breakdown (170.5 MM Shares) (1) ‒ Since the company’s inception, we have repurchased 8 million shares, including 6 million Class B and 2 million Class A shares ‒ Shares rep
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