Magnolia Oil & Gas (MGY) Q4 Results - Feb 19

[dan_s]

Fourth Quarter and Full Year 2024 Highlights:

Magnolia reported fourth quarter and full year 2024 net income attributable to Class A Common Stock of $85.6 million, or $0.44 per diluted share, and $366.0 million or $1.94 per diluted share, respectively. < Slightly above my Q4 forecast.

Fourth quarter and full year 2024 total net income was $88.7 million and $397.3 million, and total adjusted net income was $95.4 million and $400.9 million, respectively. < Q4 Adjusted Net Income beat my forecast of $82.9 million.

My current valuation is $32.00/share.

MGY is unhedged, so they will be getting a nice revenue boost from rising natural gas and NGL prices in South Texas.

“Steady, reliable, and consistent, are some of the words used to describe what was an exceptional period for Magnolia’s operational and financial execution in 2024,” said President and CEO Chris Stavros. “Our high-quality assets and continued low reinvestment rate of 50 percent of adjusted EBITDAX delivered 9 percent total company production growth and 11 percent oil growth year over year, providing more than $430 million of free cash flow in 2024. These strong results were further supported by our team’s success in achieving a 10 percent per boe reduction in our field-level cash operating expenses which provided higher operating margins and additional free cash flow. Our disciplined capital program, further D&C efficiencies and continued strong well performance provided healthy reserve additions at very low proved developed finding and development costs.

“Our strong balance sheet, low cost structure, and consistent free cash flow generation, enabled us to return 88 percent of our free cash flow, or nearly $380 million to shareholders during 2024 through our dividend and share repurchase program. Recent measures taken by Magnolia’s Board include the approval of a 15 percent increase to our quarterly dividend which was supported by last year’s 9 percent production growth combined with a 5 percent reduction in our total outstanding shares. In addition, the Board raised our existing share repurchase authorization by 10 million shares. These actions are part of Magnolia’s ongoing investment proposition of improving our dividend per share payout capacity and underpinned by the ongoing confidence in our business model and the durability of our assets.

“We enter 2025 on solid footing after a strong year of operating performance and with an improved cost structure. Magnolia’s core principles of disciplined capital spending, low leverage and high operating margins, will continue to guide us while delivering moderate production growth and consistent free cash flow during this year. Through our consistent strategy and operating plan we are confident in our ability to achieve similarly strong results this year and to continue to compound value for our shareholders.”