Magnolia Oil & Gas Corporation · NYSE:MGY
Magnolia Oil & Gas — Q2 2020 Earnings Presentation
17 slides from Magnolia Oil & Gas's earnings presentation, Aug 7, 2020
Slide 1: Second Quarter 2020 Earnings Presentation
Second Quarter 2020 Earnings Presentation August 5, 2020 Stephen Chazen – Chairman, President & CEO Christopher Stavros – Executive Vice President & CFO Brian Corales – Vice President, Investor Relations
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: Second Quarter 2020 Highlights
Magnolia Oil & Gas – Second Quarter 2020 Highlights • Generated adjusted EBITDAX of $40 million versus our D&C Capital of $27 million in 2Q20. Magnolia is on track to spend ~60% of 2020 Adjusted EBITDAX on D&C Capital. • Ended the second quarter of 2020 with $117 million of cash on the balance sheet
Slide 4: Giddings Field – Appraisal to Early Stage Development
Giddings Field – Appraisal to Early Stage Development • MGY has identified some contiguous acreage blocks which have produced consistent results to date ‒ One of these areas comprises ~70,000 acres which we have 14 wells with 180 days of production 30-Day 90-Day 180-Day Well Count 14 14 14 Bopd 781
Slide 5: Q2 2020 Cash Flow Summary
Q2 2020 Cash Flow Summary ($ In Millions) 200 5 180 160 33 34 140 28 120 100 80 146 60 117 40 20 0 Cash Cash Flow Changes in WC & D&C & Facilities Capital Cash (1) (2) (3) 3/31/20 from Operations Capital Accruals Incurred 6/30/20 (1) Cash flow from operations before changes in working capital. (2) I
Slide 6: Q2 2020 Key Metrics
Magnolia Oil & Gas – Q2 2020 Key Metrics Total Production Sequential Giddings Oil Production Total Adjusted Cash Cost (2) 64.1 Mboe/d (53% Oil) 6.4 Mbo/d (2Q20) vs. $8.50/boe 6.5 Mbo/d (1Q20) 29% YOY Decrease Cash Balance at 6/30/2020 Adjusted EBITDAX (1) D&C Capex $117 Million $40 Million $27 Milli
Slide 7: Cost Structure
Magnolia Oil & Gas – Cost Structure Quarter Ended $ / Boe June 30, 2020 Lease Operating Expenses $3.14 Gathering, Transportation & Processing 1.16 Taxes Other Than Income 0.95 Exploration Expense (1) - General & Administrative Expense (2) 2.16 Interest Expense (3) 1.09 Total Adjusted Cash Costs (4)
Slide 8: Summary Balance Sheet
Magnolia Oil & Gas – Summary Balance Sheet (in thousands) June 30, 2020 December 31, 2019 Cash and cash equivalents $116,850 $182,633 Current assets 65,654 110,585 Property, plant and equipment, net 1,181,420 3,116,757 Other assets 49,155 56,431 Total assets $1,413,079 $3,466,406 Current liabilities
Slide 9: 2Q20 Capital Structure and Liquidity Overview
2Q20 Capital Structure and Liquidity Overview Capital Structure Overview Capitalization & Liquidity ($MM) • Maintaining low financial leverage profile Capitalization Summary As of 6/30/2020 ‒ Net Debt / Total Book Capitalization of 24% Cash and Cash Equivalents $117 ‒ Net Debt / TTM EBITDAX of 0.5x
Slide 10: Appendix
Appendix ON
Slide 11: 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 12: Reconciliation of Net Income (Loss) to Adjusted EBITDAX
Reconciliation of Net Income (Loss) to Adjusted EBITDAX (in thousands) Quarter Ended Quarter Ended Adjusted EBITDAX reconciliation to net income: June 30, 2020 June 30, 2019 NET INCOME (LOSS) ($29,391) $31,303 Exploration expense 6,462 3,617 Asset retirement obligation accretion 1,464 1,373 Deprecia
Slide 13: Cash Cost Reconciliation
Magnolia Oil & Gas – Cash Cost Reconciliation Quarter Ended Quarter Ended Quarter Ended $ / Boe June 30, 2020 March 31, 2020 June 30, 2019 Lease Operating Expenses $3.14 $3.88 $4.20 Gathering, Transportation & Processing 1.16 1.29 1.25 Taxes Other Than Income 0.95 1.61 2.21 Exploration Expense 1.11
Slide 14: Operating Margins
Magnolia Oil & Gas – Operating Margins Quarter Ended Quarter Ended June 30, 2020 June 30, 2019 Production: Oil (MBbls) 3,089 3,189 Natural Gas (MMcf) 9,763 10,057 NGLs (MBbls) 1,122 1,060 Total (Mboe) 5,838 5,925 Average Daily Production: Oil (Bbls/d) 33,940 35,044 Natural Gas (Mcf/d) 107,289 110,51
Slide 15: Adjusted Net Income (Loss) Reconciliation
Adjusted Net Income (Loss) Reconciliation Quarter Ended Quarter Ended (in thousands) June 30, 2020 June 30, 2019 NET INCOME (LOSS) ($29,391) $31,303 Income tax expense (benefit) ($3,176) $5,145 Income (Loss) Before Income Taxes (32,567) 36,448 Adjustments: Impairment of unproved properties (1) 6,440
Slide 16: Adjusted Earnings (Loss) Reconciliation
Adjusted Earnings (Loss) Reconciliation Quarter Ended Per Share Quarter Ended Per Share (in thousands) June 30, 2020 Diluted EPS June 30, 2019 Diluted EPS Net income attributable to Class A Common Stock ($18,272) ($0.11) $18,506 $0.12 Adjustments: Impairment of unproved properties (1) 6,440 0.04 - -
Slide 17: Production Results
Magnolia Oil & Gas – Production Results Combined Karnes Giddings & Other Combined Karnes Giddings & Other Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Production: Oil (MBbls) 3,089 2,503 586 3,189 2,797 392 Natural Gas (MMcf) 9,763 3,781 5,982 10,057 3,761 6,296 NGLs (MBbls) 1,1