Magnolia Oil & Gas (MGY) Update - June 9

Magnolia Oil & Gas (MGY) Update - June 9

Postby dan_s » Wed Jun 09, 2021 5:31 pm

If you want maximum exposure to rising oil and NGL prices, take a hard look at MGY. NONE OF THEIR LIQUIDS ARE HEDGED and all of their natural gas collars with $3.00 ceilings expire at the end of August.

MGY is a small-cap with a super strong balance sheet that is committed to funding future production growth of 5% to 10% by spending less than 60% of their EBITDA on drilling and completions. They will start paying dividends on Q3 and they will continue to fund a stock repurchase plan. Plus, they have lots of running room within their existing leasehold, so they don't need to make acquisitions to keep growing. They have more than enough liquidity to make a significant strategic acquisition if one becomes available.

My updated valuation is $18.00 per share, but if oil prices keep rising so will my valuation.

My updated forecast model has been posted to the EPG website and we will publish an updated profile on June 10.
Dan Steffens
Energy Prospectus Group
Posts: 25565
Joined: Fri Apr 23, 2010 8:22 am

Return to Picks and tips from the EP community

Who is online

Users browsing this forum: No registered users and 12 guests