Magnolia Oil & Gas Corporation · NYSE:MGY

Magnolia Oil & Gas — Investor Presentation (November 2024)

29 slides from Magnolia Oil & Gas's investor presentation, November 2024

  1. Slide 1: November 2024 Investor Presentation

    November 2024 Investor Presentation

  2. Slide 2: Disclaimer

    Disclaimer FORWARD LOOKING STATEMENTS The information in this press release includes 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 amended. All statements, other than statements of pr

  3. Slide 3: Magnolia Oil & Gas Overview

    Magnolia Oil & Gas Overview  High-quality, low-risk pure-play South Texas operator with core Eagle Ford and Austin Chalk positions acquired at Texas attractive entry costs  Significant scale and PDP base generates material free cash Giddings flow, reduces development risk, and increases optionalit

  4. Slide 4: Magnolia's Business Model & Strategy

    Magnolia’s Business Model & Strategy High Quality Assets Drive Low Capital Deliver Mid-Single Digit Long-Term Reinvestment Rate that Provides Growth to the Production Growth with Significant Free Business Cash Flow Limit Capital Spending to 55% of 2024E BOE and Oil Growth of High Single-Digits Annua

  5. Slide 5: Asset Overview

    Asset Overview

  6. Slide 6: Giddings Area Assets

    Giddings Area Assets Asset Overview Texas  ~749,000 gross acres (~555,000 net acres) with high working interest (~98% operated)  >200,000 net acres in development  Appraisal program outside of development area  2023 production averaged 58.3 Mboe/d (36% oil, 66% liquids), or ~71% of total Company

  7. Slide 7: Core Karnes Assets

    Core Karnes Assets Texas Asset Overview  Mature asset offers significant free cash flow and a low base production decline  Acreage located in the core of the Eagle Ford offering very strong economic returns in Karnes, Gonzales and Dewitt counties ~22,000 net acres producing 22.0 Mboe/d (60% oil,

  8. Slide 8: Financial, Capital Allocation & Risk Management Overview

    Financial, Capital Allocation & Risk Management Overview

  9. Slide 9: Cash Flow Allocation Matches Magnolia's Business Model

    Cash Flow Allocation Matches Magnolia’s Business Model Allocation of Operating Cash Flow – Since Inception Dividends & (7/31/2018 – 9/30/2024) Cash Build 9% Magnolia’s “recipe” is a disciplined allocation of capital, low reinvestment rate, a balanced Share Repurchases Drilling & Completions 25% retu

  10. Slide 10: Low Leverage Provides Financial Flexibility

    Low Leverage Provides Financial Flexibility Net Debt / EBITDA (2025E) (1) 2.7 Magnolia has one of the best balance sheets in the industry 1.6 1.3 1.3 1.3 1.2 1.2 1.2 1.2 1.2 1.1 1.1 1.0 1.0 0.9 0.7 0.4 0.4 0.3 0.1 -0.1 (1) Source: FactSet (2025E) as of 11/5/2024. Net debt is calculated as the differ

  11. Slide 11: Low Reinvestment Rate with Strong Production Growth

    Low Reinvestment Rate with Strong Production Growth 3-Year Average Reinvestment Rate1 Production Growth Per Share1 (3-Year CAGR) 78% 79% 23% 64% 19% 58% 17% 56% 54% 54% 51% 51% 45% 45% 46% 46% 47% 14% 43% 41% 42% 38% 38% 40% 11% 34% 35% 10% 10% 10% 9% 7% 6% 5% 5% 4% 4% 0% -1% -2% -4% -4% -5% -6% Mag

  12. Slide 12: Strong Operating Margins

    Strong Operating Margins Operating Margin1 (3-Year Average) 61% 56% 52% 51% 48%  Magnolia has consistently delivered one of the 46% 44% 43% highest operating margins 41% 41% 41% 39% 38% 38% 37% 37% 36% 34% 34% 33%  High-quality asset base and focus on maintaining 29% low costs support top-tier ope

  13. Slide 13: History of Top-Tier Return on Capital Employed

    History of Top-Tier Return on Capital Employed Historical ROCE 25% 22%  High-quality assets, ongoing business model execution – including low debt, 18% disciplined capital spending & low operating costs are critical to sustaining high returns, well-above our cost of capital  Cost reduction & conta

  14. Slide 14: Consistent & Sizable Return to Shareholders

    Consistent & Sizable Return to Shareholders Cumulative Return of Capital ($MM) $1,535 >$1.5 Billion Returned to Shareholders $1,213  Magnolia has a strong track record $908 of returning capital to shareholders  Returned ~30% of current market $466 cap over prior five years Inception  Continue inc

  15. Slide 15: History of Significant & Consistent Share Repurchases

    History of Significant & Consistent Share Repurchases Magnolia’s Consistent Share Repurchases1 (million shares repurchased) Magnolia has reduced its diluted share count by approximately 23% (1) Class A share reduction includes 3.6 million non-compete shares that were paid in lieu of stock in 2021. I

  16. Slide 16: Track Record of a Safe, Sustainable & Growing Dividend

    Track Record of a Safe, Sustainable & Growing Dividend Annualized Dividend Payout Per Share  Magnolia’s dividend has grown at a $0.52 double-digit rate over the past 4 years $0.46  Sustainable dividend growth supported even at lower product prices $0.40  Dividend per share payout capacity is enha

  17. Slide 17: Business Risks Adequately Managed

    Business Risks Adequately Managed Level of Risk Acceptable to Magnolia Low Risk Moderate Risk Fully Exposed Risk Factor Geologic/Exploratory Political Cost Risk Reinvestment Commodity Financial 17

  18. Slide 18: Why Own Magnolia? – Investment Highlights

    Why Own Magnolia? – Investment Highlights Unique and Durable Business Model & Strategy Texas High Quality Assets Positioned for Success  Leading position in the Giddings area with low breakevens and substantial Giddings running room  Coveted position in the Karnes area in the core of the Eagle For

  19. Slide 19: 2024 Operating Plan & Guidance

    2024 Operating Plan & Guidance 2024E Production & Capital 2024E Capital Fourth Quarter 2024 Guidance ~20% Annual BOE and Oil Growth Production Karnes ~93 Mboe/d High Single-Digit YoY Total Growth; YoY Oil Growth Rate in Excess of Total Growth ~80% Giddings D&C Capital Spending 2024E Capital ~$125 Mi

  20. Slide 20: Magnolia's Commitment to Sustainability

    Magnolia’s Commitment to Sustainability Safeguarding the 86% REDUCTION 12% REDUCTION 35% REDUCTION Environment Flaring Intensity Rate GHG Intensity Rate Hydrocarbon Spill Volume 2019 to 2023 2019 to 2023 2019 to 2023 Supporting Employees 30% DIVERSITY 1,000 SHARES 2023 TOP WORKPLACES and Communities

  21. Slide 21: Appendix

    Appendix 3 VY MAGNOLIA Oits GAS

  22. Slide 22: 3Q 2024 Cash Flow Reconciliation

    3Q 2024 Cash Flow Reconciliation 600 $ In Millions 500 33 105 400 241 15 27 300 61 200 276 276 100 0 (1) (2) (3) (4) Cash Cash Flow Changes in DC&F Capital & Acquisitions Dividends and Share Cash 6/30/2024 from Working Capital Leasehold Distributions Repurchases 9/30/2024 Operations and Other (1) Ca

  23. Slide 23: Summary Balance Sheet

    Summary Balance Sheet (in thousands) September 30, 2024 December 31, 2023 Cash $276,139 $401,121 Current assets 139,059 190,152 Property, plant and equipment, net 2,273,676 2,052,021 Other assets 122,083 112,922 Total assets $2,810,957 $2,756,216 Current liabilities $281,523 $314,887 Long-term debt,

  24. Slide 24: Q3 2024 Capital Structure & Liquidity Overview

    Q3 2024 Capital Structure & Liquidity Overview Capital Structure Overview Capitalization & Liquidity ($ million)  Maintain low financial leverage profile Capitalization Summary As of 9/30/2024 ‒ Currently have a net debt(1) position of $124 million Cash and Cash Equivalents $276 ‒ Net Debt(1) / Q3

  25. Slide 25: Margin and Cost Structure

    Margin and Cost Structure For the Quarters Ended $ / Boe, unless otherwise noted September 30, 2024 September 30, 2023 Revenue $39.92 $41.52 Total Cash Operating Costs: Lease Operating Expenses (1) (5.26) (4.65) Gathering, Transportation & Processing (1.28) (1.35) Taxes Other Than Income (2.19) (1.9

  26. Slide 26: Free Cash Flow Reconciliations

    Free Cash Flow Reconciliations For the Quarters Ended (in thousands) September 30, 2024 September 30, 2023 Net cash provided by operating activities $217,893 $187,310 Add back: net change in operating assets and liabilities 22,928 29,419 Cash flows from operations before net change in operating asse

  27. Slide 27: Adjusted EBITDAX Reconciliations

    Adjusted EBITDAX Reconciliations For the Quarters Ended (in thousands) September 30, 2024 September 30, 2023 Net income $105,912 $117,477 Interest (income) expense, net 3,856 (1,034) Income tax expense 26,530 31,211 EBIT $136,298 $147,654 Depreciation, depletion and amortization 107,336 81,158 Asset

  28. Slide 28: Adjusted Net Income Reconciliation

    Adjusted Net Income Reconciliation For the Quarters Ended (in thousands) September 30, 2024 September 30, 2023 Net income $105,912 $117,477 Adjustments: Non-cash gain on revaluation of contingent consideration (7,009) - Change in estimated income tax(1) 1,353 - Adjusted Net Income $100,256 $117,477

  29. Slide 29: Return on Capital Employed

    Return on Capital Employed For the Quarter 5-Year Average For the Years Ended (in thousands) Ended September 30, 2024 2019 - 2023 December 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 Operating income (loss) $129,012 $82,540 $534,485 $1,073,785 $602,594 ($1,925,66

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