Magnolia Oil & Gas Corporation · NYSE:MGY
Magnolia Oil & Gas — Investor Presentation (February 2019)
24 slides from Magnolia Oil & Gas's investor presentation, Feb 26, 2019
Slide 1: Magnolia Oil & Gas Corporation Investor Presentation – February 2019
Exhibit 99.1 Magnolia Oil & Gas Corporation Investor Presentation – February 2019Exhibit 99.1 Magnolia Oil & Gas Corporation Investor Presentation – February 2019
Slide 2: Disclaimer – Forward Looking Statements
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 ~456,000 Net Acre Position Targeting Two of the Top • High‐quality, low‐risk pure‐play South Texas operator with a core 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: Corporate Execution of Business Model and Strategy
Corporate Execution of Business Model and Strategy (1) Magnolia Value Creation Strategy 2018 and Q4 Achievements 1 Consistent organic production growth Organic production growth of 5% Q/Q 2 High full‐cycle operating margins Continue to target full cycle margins of 50% $400 million of principal debt
Slide 5: Magnolia Oil & Gas – Q4 Key Metrics
Magnolia Oil & Gas – Q4 Key Metrics Q4 2018 Earnings Q4 Total Production Q4 2018 Production Guidance $33 Million or $0.21/sh 61.9 Mboe/d 59 Mboe/d $58 Million (Including NCI) (1) (1) Q4 2018 D&C Capex Q4 2018 Adjusted EBITDAX Adjusted Operating Margin ($/Boe, %) $13.39 / 30% $193 Million $111 Millio
Slide 6: Magnolia Oil & Gas - Free Cash Flow Model
Magnolia Oil & Gas - Free Cash Flow Model • Our objective is to manage the business to generate meaningful free cash flow while providing moderate production growth • D&C capex spend is planned within 60% of EBITDAX, irrespective of commodity price ‒ During 2018, we invested 57% of our Adjusted EBIT
Slide 7: Successor Period Cash Flow Reconciliation
Successor Period Cash Flow Reconciliation ($ in millions) $22 $142 $331 $147 $136 $116 (2) (3) Opening Cash Operating Cash Flow Other Capital Spending Acquisitions Cash After 12/31/18 (1) Transaction (1) Represents cash remaining after cash held in Trust ($656 MM), proceeds from debt ($400 MM) and e
Slide 8: Magnolia Oil & Gas – Focus on High Margins
Magnolia Oil & Gas – Focus on High Margins Successor Successor For the Quarter Ended July 31, 2018 through $ / Boe, unless otherwise noted December 31, 2018 December 31, 2018 Revenue $44.75 $46.63 Less: Lease Operating Expenses (3.46) (3.31) Less: Gathering, Transportation & Processing (1.60) (1.55)
Slide 9: Asset Overview
Asset OverviewAsset Overview
Slide 10: 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 ‒ 16,841 net acres (31,078 gross acres), 69% operated, 97% HBP, 41.3 Mboe/d Q3 2018 prod
Slide 11: Located in an Attractive Neighborhood
Located in an Attractive Neighborhood BP Core position in Karnes County Oil Window adjacent to EOG and Marathon with $28 to $32/barrel (1) breakevens and less than 1‐year new well paybacks (1) Source: RSEG 11Located in an Attractive Neighborhood BP Core position in Karnes County Oil Window adjacent
Slide 12: Karnes County Results Show Superior Economics
Karnes County Results Show Superior Economics • Results in Karnes County are some the best in North America • Karnes Eagle Ford and Austin Chalk type curves produce 216,000 and 332,000 barrels of oil, respectively, in their first 12 months of production supporting paybacks in less than 6 months (2)
Slide 13: Giddings Field – Redeveloping as an Emerging Play
Giddings Field – Redeveloping as an Emerging Play Giddings Asset Overview Lease Map • Emerging, high‐growth asset with extensive inventory potential and significant development flexibility ‒ ~439,123 net acres, ~98% HBP and ~87% operated, 20.6 Mboe/d Q4 2018 production (26% oil, 56% liquids) • HBP n
Slide 14: Financial Overview
Financial OverviewFinancial Overview
Slide 15: Magnolia Oil & Gas – Financial Policy
Magnolia Oil & Gas – Financial Policy Capital Spending Plan Targeted at 50 ‐ Conservative Financial Statements with 60% of annual EBITDAX Low Financial Leverage (Plan expected to deliver 10%+ of annual production growth and consistently generate (<= 1.0x EBITDAX) free cash flow) Acquisitions general
Slide 16: Business Risks Adequately Managed
Business Risks Adequately Managed Level of Risk Generally Acceptable to Magnolia Low Fully Exposed Risk Factor Moderate Geologic/Exploratory Political Cost Risk Reinvestment Commodity Financial 16Business Risks Adequately Managed Level of Risk Generally Acceptable to Magnolia Low Fully Exposed Risk
Slide 17: Q4 2018 Capital Structure and Liquidity Overview
Q4 2018 Capital Structure and Liquidity Overview Capital Structure Overview Capitalization & Liquidity ($MM) • Maintaining low financial leverage profile Capitalization Summary As of 12/31/2018 ‒ Net Debt / Total Book Capitalization of 9% Cash and Cash Equivalents $136 ‒ Net Debt / Q4 annualized EBI
Slide 18: Magnolia Oil & Gas – Summary Balance Sheet
Magnolia Oil & Gas – Summary Balance Sheet (in thousands) Successor Predecessor December 31, 2018 December 31, 2017 Cash $135,758 $‐ Current assets 156,601 114,536 Property, plant and equipment, net 3,073,204 1,565,537 Other assets 67,960 8,901 Total assets $3,433,523 $1,688,974 Current liabilities
Slide 19: 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 19Cash Flow Priorities t
Slide 20: Summary Investment Highlights
Summary Investment Highlights High Quality Assets Positioned for Success (1) • Coveted position in core of Karnes County with industry leading breakevens between $28 - $32 per barrel • Emerging position in the Giddings Field with results that continue to improve and substantial running room Positive
Slide 21: Appendix
AppendixAppendix
Slide 22: Magnolia Oil & Gas – Operating Highlights
Magnolia Oil & Gas – Operating Highlights Successor Successor For the Quarter Ended July 31, 2018 through December 31, 2018 December 31, 2018 Production: Oil (MBbls) 3,054 5,078 Natural Gas (MMcf) 8,795 14,136 NGLs (MBbls) 1,179 1,857 Total (Mboe) 5,699 9,291 Revenues (in thousands): Oil Sales $198,
Slide 23: Reconciliation of Net Income to Adjusted EBITDAX
Reconciliation of Net Income to Adjusted EBITDAX (in thousands) Successor Successor For the Quarter Ended July 31, 2018 through Adjusted EBITDAX reconciliation to net income: December 31, 2018 December 31, 2018 Net income attributable to Class A Common Stock (GAAP) $32,921 $39,095 Net income attribu
Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of net income attributable to Class A Common Stock to adjusted earnings Our presentation of adjusted earnings and adjusted earnings per share are non‐GAAP measures because they exclude the effect of certain items included in Income Attributable to Class A C
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