Magnolia Oil & Gas (MGY) Valuation Update - Feb 15

[dan_s]

I have updated my forecast/valuation model for MGY. My current valuation increases by $1 to $30 per share.
> Solid Q4 results.
> Pristine Balance Sheet and it generates a lot of free cash flow.
> Pays a small dividend and they are aggressively buying back shares of common stock.
> MGY's steady production growth (8% to 10%) is fully funed by operating cash flow.

Magnolia returned 60% and 74% of the free cash flow generated during the fourth quarter and full year 2023, respectively, to the Company’s shareholders through a combination of share repurchases and dividends. Along with the significant return of cash to shareholders, Magnolia ended the year with $401.1 million of cash on its balance sheet. The Company remains undrawn on its $450.0 million revolving credit facility, with no debt maturities until 2026 and does not currently plan to increase its bonded indebtedness.

My updated forecast model will be posted to the EPG website late this morning.