Energy Prospectus

TipRanks: "On 10/16/2023 Truist Securities analyst Neal Dingmann raised the price target on Magnolia Oil & Gas Corp. (NYSE: MGY) to $30.00 (from $29.00) while maintaining a Buy rating. In the last 3 months, 9 ranked analysts set 12-month price targets for MGY. The average price target among the analysts is $27.83."

None of MGY's production is hedged.

I have updated my forecast valuation model for lower oil price for Q4 ($85) that is offset by higher ngas prices in Q3 and Q4. For now, my valuation stays at $30.

MGY pays a decent dividend that should be increased in 2024 and they seem to have 10% or more annual production growth locked in for several years. It has a super strong balance sheet and lots of running room. The Giddings Acquisition should close in November, adding ~5,000 Boepd (70% oil) and more high-quality development drilling inventory.

Magnolia had $677 million cash at 6/30/23. Their guided CAPEX for 2023 is $400-425 million. Their 48,000 acre bolt on requires $260 million cash to close. They are running two rigs and are unhedged. I wouldn't be surprised to see them add another rig soon. Don't know if they would do that before 2024 but at today's prices it would be a great move. While they don't typically publish well info I would expect their wells pay out in less than a year. I know from several of my clients receiving royalty checks from wells in the Giddings Field that these wells typically come on at strong rates and produce at a high level for a year then declining significantly. Thus it would make sense to get more wells online now. They obviously don't have any debt issues.

Increasing dividends and the Company's aggressive stock buyback should push my stock valuation higher. This is a rock-solid company.