Magnolia Oil & Gas (MGY) Update - Jan 31

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Magnolia Oil & Gas (MGY) Update - Jan 31

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MGY has more than double since I started covering it at the end of 2019. In addition to increasing dividends, it has an aggressive stock repurchase plan underway. My updated forecast model will be posted to the EPG website this afternoon.

HOUSTON, January 31, 2023--(BUSINESS WIRE)--Magnolia Oil & Gas Corporation (NYSE: MGY) announced today that its Board of Directors has declared a cash dividend of $0.115 per share of Class A common stock, and a cash distribution of $0.115 per Class B unit payable on March 1, 2023 to shareholders of record as of February 10, 2023. Today’s announcement represents a 15 percent increase to Magnolia’s quarterly dividend rate and would provide an annualized dividend payout rate of $0.46 per share. Although still a young company, this action marks our third consecutive year with an increase in the annual dividend payout per share. Our next quarterly dividend is expected to be declared in May and paid in June.

"Today’s increase to the quarterly base dividend reflects our strong operating and financial performance achieved during 2022 and demonstrates our ongoing confidence in the outlook for the business," said Chris Stavros, Magnolia’s President and CEO. "Our dividend framework is aligned with the characteristics of our business model and reinforces our plan. These principles include maintaining our low leverage, limiting our capital spending to allow for consistent and meaningful free cash flow generation while providing moderate volume growth and strong pre-tax margins. Magnolia’s efforts are geared toward improving the overall business while pursuing actions to increase our dividend per share payout capacity. Last year’s performance reinforced this capability. Our share repurchase activities led to the reduction of our diluted average outstanding shares by approximately 8 percent, and our total production growth exceeded 14 percent.

"Magnolia’s philosophy toward dividends is meant to appeal to long-term investors who seek dividend safety, consistent dividend growth, and a dividend that is paid out of actual earnings generated by the business. We believe that our dividend is secure at product prices below mid-cycle levels and expect the dividend to grow annually as we continue to execute our business plan. We expect to reduce our outstanding shares by at least 1 percent per quarter and estimate our total production to grow by approximately 10 percent in 2023. Our ongoing efforts toward reducing our outstanding shares and delivering moderate annual production growth are expected to support annual dividend growth of approximately 10 percent over time which is an important component of Magnolia’s total shareholder return proposition."

About Magnolia Oil & Gas

Magnolia is a publicly traded oil and gas exploration and production company with operations primarily in South Texas in the core of the Eagle Ford Shale and Austin Chalk formations. Magnolia focuses on generating value for shareholders through steady production growth, strong pre-tax margins, and free cash flow. For more information, visit www.magnoliaoilgas.com.
Dan Steffens
Energy Prospectus Group
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