Magnolia Oil & Gas (MGY) Valuation Update - Feb 16

[dan_s]

MGY reported strong Q4 results and their guidance is for 10% production growth in 2023 after 14.1% growth in 2022.

Stong Balance Sheet with no debt problems.
Cash balance at 12/31/2022 + over $1 billion of 2023 operating cash flow compares to the D&C capex program for 2023 of ~$520.
Free cash flow should result in rising dividend payouts + they continue to buyback common stock.

My valuation increases by $2 to $30 per share.

TipRanks: "In the last 3 months, 6 ranked analysts set 12-month price targets for MGY. The average price target among the analysts is $29.50. The 6 price targets range from $25 to $35."

MGY does not hedge their production. Revenues are heavily weighted to sale of liquids.

My updated forecast/valuation model should be up on the EPG website by 5PM.