Magnolia Oil & Gas (MGY) Valuation Update - June 8

[dan_s]

Key for MGY: NONE of Magnolia's production is hedged.

At the time of this post MGY was trading for $30.25.

I have updated my forecast/valuation for my current oil & gas price deck. WTI and HH ngas are now above my price deck.

My valuation of MGY increases by $3 to $37/share.
> Simple story that is easy to model.
> Strong balance sheet and generating lots of free cash flow. Operating cash flow s/b over $1.3 billion this year. FCF s/b over $900 million.
> Steady production growth. Up 6.7% YOY in 2021 and guidance is for ~12% YOY growth in 2022.
> Q1 2022 production of 71,835 Boepd. 43.6% crude oil, 31.9% natural gas, 24.5% NGLs
> MGY pays a small dividend and they have a stock repurchase program underway