Magnolia Oil & Gas (MGY) Q3 Results - Nov 2
Posted: Wed Nov 02, 2022 9:10 am
MGY reported outstanding Q3 results. My valuation of $32/share will be going up.
Third Quarter 2022 Highlights:
Magnolia reported third quarter 2022 net income attributable to Class A Common Stock of $245.5 million, or $1.29 per diluted share. Third quarter 2022 total net income increased 79% to $287.0 million and diluted weighted average total shares outstanding decreased by 8% to 217.8 million compared to third quarter 2021. < Compares to my forecast of $216 million net income.
Adjusted EBITDAX was $386.0 million during the third quarter of 2022, driven by higher production and higher product prices as compared to prior year results. Total drilling and completions ("D&C") capital during the third quarter was $114.5 million, representing just 30% of adjusted EBITDAX(1).
Net cash provided by operating activities was $410.7 million during the third quarter of 2022 and the Company generated free cash flow(1) of $233.9 million. Magnolia generated operating income as a percentage of revenue of 65%. < FCF beat my forecast.
Total production in the third quarter of 2022 set a quarterly record for the Company, growing 21% compared to the prior-year quarter and 10% sequentially to 81.5 thousand barrels of oil equivalent per day ("Mboe/d"). Total volumes were 7% ahead of the high end of our production guidance range. < Beat my forecast of 76,000 Boepd.
During the third quarter, Magnolia repurchased a total of 3.0 million shares of Class A Common Stock, for $62.4 million, bringing the total Class A and Class B shares repurchased during 2022 to 13.1 million shares. At the end of the third quarter 2022, Magnolia had 9.3 million Class A Common shares remaining under its current repurchase authorization.
As previously announced, the Board of Directors declared a cash dividend of $0.10 per share of Class A common stock, and a cash distribution of $0.10 per Class B unit, payable on December 1, 2022 to shareholders of record as of November 7, 2022. We expect our dividend to grow at least 10 percent annually and plan to revisit the dividend rate in early 2023.
Magnolia returned 36% of the free cash flow generated during the third quarter through a combination of share repurchases and dividends while ending the period with $689.5 million of cash on the balance sheet. The Company remains undrawn on its $450.0 million revolving credit facility, has no debt maturities until 2026 and has no plan to increase its debt levels.
Third Quarter 2022 Highlights:
Magnolia reported third quarter 2022 net income attributable to Class A Common Stock of $245.5 million, or $1.29 per diluted share. Third quarter 2022 total net income increased 79% to $287.0 million and diluted weighted average total shares outstanding decreased by 8% to 217.8 million compared to third quarter 2021. < Compares to my forecast of $216 million net income.
Adjusted EBITDAX was $386.0 million during the third quarter of 2022, driven by higher production and higher product prices as compared to prior year results. Total drilling and completions ("D&C") capital during the third quarter was $114.5 million, representing just 30% of adjusted EBITDAX(1).
Net cash provided by operating activities was $410.7 million during the third quarter of 2022 and the Company generated free cash flow(1) of $233.9 million. Magnolia generated operating income as a percentage of revenue of 65%. < FCF beat my forecast.
Total production in the third quarter of 2022 set a quarterly record for the Company, growing 21% compared to the prior-year quarter and 10% sequentially to 81.5 thousand barrels of oil equivalent per day ("Mboe/d"). Total volumes were 7% ahead of the high end of our production guidance range. < Beat my forecast of 76,000 Boepd.
During the third quarter, Magnolia repurchased a total of 3.0 million shares of Class A Common Stock, for $62.4 million, bringing the total Class A and Class B shares repurchased during 2022 to 13.1 million shares. At the end of the third quarter 2022, Magnolia had 9.3 million Class A Common shares remaining under its current repurchase authorization.
As previously announced, the Board of Directors declared a cash dividend of $0.10 per share of Class A common stock, and a cash distribution of $0.10 per Class B unit, payable on December 1, 2022 to shareholders of record as of November 7, 2022. We expect our dividend to grow at least 10 percent annually and plan to revisit the dividend rate in early 2023.
Magnolia returned 36% of the free cash flow generated during the third quarter through a combination of share repurchases and dividends while ending the period with $689.5 million of cash on the balance sheet. The Company remains undrawn on its $450.0 million revolving credit facility, has no debt maturities until 2026 and has no plan to increase its debt levels.