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0001698990false00016989902022-08-022022-08-02

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 2, 2022
Magnolia Oil & Gas Corporation
(Exact name of registrant as specified in its charter)
Delaware 001-38083 81-5365682
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification Number)
Nine Greenway Plaza, Suite 1300
Houston, Texas 77046
(Address of principal executive offices, including zip code)
(713) 842-9050
Registrant’s telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Class A Common Stock, par value $0.0001 Per Share MGY New York Stock Exchange



Item 2.02    Results of Operations and Financial Condition.

On August 2, 2022, Magnolia Oil & Gas Corporation (the “Company”) issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated by reference herein, announcing its financial and operational results for the quarter ended June 30, 2022.
The information furnished pursuant to this Item 2.02 (including Exhibit 99.1) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.

Item 7.01    Regulation FD Disclosure

On August 2, 2022, the Company provided information in an earnings presentation on its website, www.magnoliaoilgas.com, regarding its financial and operational results for the quarter ended June 30, 2022.
The earnings presentation, which is attached hereto as Exhibit 99.2, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise be subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act.

Item 9.01    Financial Statements and Exhibits.
(d)    Exhibits.
Exhibit
Number Description
99.1
99.2
104 Cover Page Interactive Data File (formatted as inline XBRL)






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MAGNOLIA OIL & GAS CORPORATION
Date: August 2, 2022
By:       /s/ Timothy D. Yang
Name:  Timothy D. Yang
Title:    Executive Vice President,
             General Counsel, Corporate Secretary and Land

2
EX-99.1 2 q22022pressrelease.htm EX-99.1 Document
Exhibit 99.1
Magnolia Oil & Gas Corporation Announces Second Quarter 2022 Results

HOUSTON, TX, August 2, 2022 - Magnolia Oil & Gas Corporation (“Magnolia,” “we,” “our,” or the “Company”) (NYSE: MGY) today announced its financial and operational results for the second quarter of 2022.

Second Quarter 2022 Highlights:
(In millions, except per share data) For the
Quarter Ended
June 30, 2022
For the
Quarter Ended
June 30, 2021
Percentage increase (decrease)
Net income $ 299.9  $ 116.2  158  %
Adjusted net income(1)
$ 293.6  $ 135.0  117  %
Diluted weighted average total shares outstanding(2)
222.4  242.2  (8) %
Earnings per share - diluted $ 1.32  $ 0.48  175  %
Adjusted EBITDAX(1)
$ 393.4  $ 195.1  102  %
Capital expenditures - D&C $ 122.0  $ 53.8  127  %
Average daily production (Mboe/d) 74.2  64.9  14  %
Cash balance as of period end $ 501.9  $ 190.3  164  %

Second Quarter 2022 Highlights:

•Magnolia reported second quarter 2022 net income attributable to Class A Common Stock of $250.6 million, or $1.32 per diluted share. Second quarter 2022 total adjusted net income increased 117% to $293.6 million and diluted weighted average total shares outstanding decreased by 8% to 222.4 million(2) compared to second quarter 2021.

•Adjusted EBITDAX was $393.4 million during the second quarter of 2022, driven by strong production growth and significantly higher product prices as compared to prior year results. Total drilling and completions (“D&C”) capital during the second quarter was $122.0 million, representing just 31% of adjusted EBITDAX.

•Net cash provided by operating activities was $379.1 million during the second quarter and the Company generated free cash flow(1) of $250.8 million. Magnolia generated operating income as a percentage of revenue of 68%.

•Total production in the second quarter of 2022 grew 14% to 74.2 thousand barrels of oil equivalent per day (“Mboe/d”) compared to the prior-year quarter and exceeding the high end of our earlier production guidance. As a result, we currently expect full year 2022 production growth in the range of 12% to 14% compared to 2021 levels.

•During the second quarter, Magnolia repurchased a total of 4.1 million shares of Class A and Class B Common Stock, for $102.4 million, and bringing the total shares repurchased during 2022 to 10.1 million shares. At the end of the second quarter 2022, Magnolia had 12.3 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 September 1, 2022 to shareholders of record as of August 12, 2022. Beginning with this distribution, Magnolia will move to a quarterly dividend payment from a semi-annual distribution schedule. This represents a $0.40 per share annualized base payout rate or a 43% increase to Magnolia’s dividend compared to the $0.28 per share distribution for full year 2021. We expect our dividend to grow at least 10 percent annually and will reassess the dividend rate in early 2023.

•Magnolia ended the quarter with $501.9 million of cash on the balance sheet and remains undrawn on its $450.0 million revolving credit facility, with no debt maturities until 2026 and has no plans to increase its debt levels.

(1) Adjusted net income, adjusted EBITDAX and free cash flow are non-GAAP financial measures. For reconciliations to the most comparable GAAP measures, please see “Non-GAAP Financial Measures” at the end of this press release.
(2) Weighted average total shares outstanding include diluted weighted average shares of Class A Common Stock outstanding during the period and shares of Class B Common Stock, which are anti-dilutive in the calculation of weighted average number of common shares outstanding.

1






“Magnolia has just completed its fourth year as a public company, and our business model remains the same. We have consistently executed our strategy, which prioritizes disciplined capital spending, moderate and steady production growth, generating high pre-tax margins and significant free cash flow, while maintaining low levels of debt,” said Chairman, President, and CEO Steve Chazen. “We remain efficient in allocating our cash flows and limit our spending on drilling and completing wells to 55 percent of our EBITDAX, though we will run well below that level this year. These principles in addition to improved operating efficiencies have led to continued profitable growth while generating attractive returns for our shareholders.

“Our strong second quarter financial results benefited from record quarterly production and high product price realizations which boosted our pretax operating margins to 68 percent. While we spent just 31 percent of our adjusted EBITDAX drilling and completing wells during the second quarter, our capital was somewhat higher than expected partly due to increased non-operated activity. Continued drilling efficiencies at Giddings and the higher non-op activity added more net wells and more production, resulting in 3 percent sequential volume growth. Compared to year-ago levels, we increased our total production 14 percent, and reduced the fully diluted share count by 8 percent. We returned more than 40 percent of the $251 million of free cash flow generated during the second quarter through share repurchases, while ending the period with more than half a billion dollars of cash.

“We plan to continue operating two drilling rigs during the remainder of the year. Continued strong well performance and ongoing drilling efficiencies at Giddings, combined with higher non-op activity, is expected to provide full-year 2022 production growth of 12 to 14 percent. Additionally, we plan to repurchase at least 1 percent of our outstanding shares each quarter. Magnolia’s board has declared a cash dividend of 10 cents per share payable next month. This payment will transition Magnolia to a quarterly from a semi-annual dividend distribution schedule. Next month’s payment represents a 40 cent per share annualized base rate or a 43 percent increase to Magnolia’s dividend for 2021. Consistent and moderate production growth combined with ongoing share reductions supports our long-term investment proposition of double-digit annual dividend growth.”


Operational Update

Second quarter 2022 total company production averaged 74.2 Mboe/d, representing more than a 3 percent sequential increase and 14 percent higher than the prior year’s second quarter. Overall production grew during the quarter despite spending only 31 percent of adjusted EBITDAX on drilling and completing wells. Production was above the high end of our guidance mainly due to better well performance from both of our operating areas as well as higher non-op activity.

Magnolia continues to operate two drilling rigs and expects to maintain this level of activity for the balance of the year. One rig will continue to drill multi-well development pads in our Giddings asset. The second rig will drill a mix of wells in both the Karnes and Giddings areas, including some appraisal wells in Giddings. We continue to drive improved operating efficiencies to help mitigate some of the oil field service cost inflation. Prices for most goods and services have only recently exceeded levels seen prior to the pandemic when commodity prices were substantially lower resulting in continued high returns on capital and operating income margins.


Additional Guidance

Magnolia has shown consistent and steady production growth due to strong well performance and faster cycle times. Additional non-operated activity has increased in the Eagle Ford which has contributed to both higher production and capital. As a result, we now expect our full-year 2022 production to grow by 12 to 14 percent compared to 2021. Third quarter production is expected to be 74 to 76 Mboe/d and D&C capital is expected to be in the range of $105 to $115 million. Oil price differentials are anticipated to be approximately a $2 to $3 per barrel discount to Magellan East Houston and Magnolia remains completely unhedged for all its oil and natural gas production. The fully diluted total share count for the third quarter of 2022 is expected to be approximately 219 million shares which is 7 percent lower than third quarter 2021 levels.


2


Quarterly Report on Form 10-Q

Magnolia's financial statements and related footnotes will be available in its Quarterly Report on Form 10-Q for the three months ended June 30, 2022, which is expected to be filed with the U.S. Securities and Exchange Commission (“SEC”) on August 3, 2022.
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Conference Call and Webcast

Magnolia will host an investor conference call on Wednesday, August 3, 2022 at 10:00 a.m. Central (11:00 a.m. Eastern) to discuss these operating and financial results. Interested parties may join the webcast by visiting Magnolia's website at www.magnoliaoilgas.com/investors/events-and-presentations and clicking on the webcast link or by dialing 1-844-701-1059. A replay of the webcast will be posted on Magnolia's website following completion of the call.


About Magnolia Oil & Gas Corporation

Magnolia (MGY) is a publicly traded oil and gas exploration and production company with operations primarily in South Texas in the core of the Eagle Ford Shale and Austin Chalk formations. Magnolia focuses on generating value for shareholders through steady production growth, strong pre-tax margins, and free cash flow. For more information, visit www.magnoliaoilgas.com.


Cautionary Note Regarding Forward-Looking Statements

The information in this press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included in this press release, regarding Magnolia’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward looking statements. When used in this press release, the words could, should, will, may, believe, anticipate, intend, estimate, expect, project, the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events. Except as otherwise required by applicable law, Magnolia disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release. Magnolia cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Magnolia, incident to the development, production, gathering and sale of oil, natural gas and natural gas liquids. In addition, Magnolia cautions you that the forward looking statements contained in this press release are subject to the following factors: (i) the economic effects of the COVID-19 pandemic and actions taken by federal, state and local governments and other third parties in response to the pandemic; (ii) the outcome of any legal proceedings that may be instituted against Magnolia; (iii) Magnolia’s ability to realize the anticipated benefits of its acquisitions, which may be affected by, among other things, competition and the ability of Magnolia to grow and manage growth profitably; (iv) changes in applicable laws or regulations; (v) geopolitical and business conditions in key regions of the world; and (vi) the possibility that Magnolia may be adversely affected by other economic, business, and/or competitive factors, including inflation. Should one or more of the risks or uncertainties described in this press release occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Additional information concerning these and other factors that may impact the operations and projections discussed herein can be found in Magnolia’s filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Magnolia’s SEC filings are available publicly on the SEC’s website at www.sec.gov.


Contacts for Magnolia Oil & Gas Corporation

Investors
Brian Corales
(713) 842-9036
bcorales@mgyoil.com

Media
Art Pike
(713) 842-9057
apike@mgyoil.com
4


Magnolia Oil & Gas Corporation
Operating Highlights
 
For the Quarters Ended
For the Six Months Ended
  June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Production:
Oil (MBbls) 3,019  2,903  5,835  5,495 
Natural gas (MMcf) 12,464  9,947  24,842  20,188 
Natural gas liquids (MBbls) 1,656  1,349  3,242  2,654 
Total (Mboe) 6,752  5,910  13,217  11,514 
Average daily production:
Oil (Bbls/d) 33,178  31,897  32,239  30,361 
Natural gas (Mcf/d) 136,966  109,313  137,247  111,536 
Natural gas liquids (Bbls/d) 18,194  14,830  17,911  14,661 
Total (boe/d) 74,200  64,946  73,024  63,611 
Revenues (in thousands):
Oil revenues $ 332,791  $ 188,701  $ 595,459  $ 335,659 
Natural gas revenues 85,345  33,314  141,925  68,977 
Natural gas liquids revenues 66,513  30,035  125,105  56,521 
Total Revenues $ 484,649  $ 252,050  $ 862,489  $ 461,157 
Average sales price:
Oil (per Bbl) $ 110.22  $ 65.01  $ 102.04  $ 61.08 
Natural gas (per Mcf) 6.85  3.35  5.71  3.42 
Natural gas liquids (per Bbl) 40.17  22.26  38.59  21.30 
Total (per boe) $ 71.78  $ 42.64  $ 65.25  $ 40.05 
NYMEX WTI (per Bbl) $ 108.42  $ 66.06  $ 101.44  $ 61.95 
NYMEX Henry Hub (per Mcf) $ 7.17  $ 2.83  $ 6.05  $ 2.77 
Realization to benchmark:
Oil (% of WTI) 102  % 98  % 101  % 99  %
Natural Gas (% of Henry Hub) 96  % 118  % 94  % 123  %
Operating expenses (in thousands):
Lease operating expenses $ 32,604  $ 21,971  $ 61,348  $ 41,363 
Gathering, transportation and processing 16,381  10,287  32,221  20,530 
Taxes other than income 27,411  13,812  48,293  24,574 
Depreciation, depletion and amortization 57,254  43,332  110,360  86,275 
Operating costs per boe:
Lease operating expenses $ 4.83  $ 3.72  $ 4.64  $ 3.59 
Gathering, transportation and processing 2.43  1.74  2.44  1.78 
Taxes other than income 4.06  2.34  3.65  2.13 
Depreciation, depletion and amortization 8.48  7.33  8.35  7.49 
5


Magnolia Oil & Gas Corporation
Consolidated Statements of Operations
(In thousands, except per share data)
For the Quarters Ended
For the Six Months Ended
  June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
REVENUES  
Oil revenues $ 332,791  $ 188,701  $ 595,459  $ 335,659 
Natural gas revenues 85,345  33,314  141,925  68,977 
Natural gas liquids revenues 66,513  30,035  125,105  56,521 
Total revenues 484,649  252,050  862,489  461,157 
OPERATING EXPENSES
Lease operating expenses 32,604  21,971  61,348  41,363 
Gathering, transportation and processing 16,381  10,287  32,221  20,530 
Taxes other than income 27,411  13,812  48,293  24,574 
Exploration expenses 3,408  62  8,946  2,124 
Asset retirement obligations accretion 802  1,405  1,590  2,736 
Depreciation, depletion and amortization 57,254  43,332  110,360  86,275 
Amortization of intangible assets —  7,233  —  9,346 
General and administrative expenses 18,530  24,757  35,601  45,122 
Total operating expenses 156,390  122,859  298,359  232,070 
OPERATING INCOME 328,259  129,191  564,130  229,087 
OTHER INCOME (EXPENSE)
Interest expense, net (7,017) (8,752) (16,374) (16,046)
Loss on derivatives, net —  (2,004) —  (2,486)
Other income (expense), net 6,538  135  6,744  (94)
Total other expense, net (479) (10,621) (9,630) (18,626)
INCOME BEFORE INCOME TAXES 327,780  118,570  554,500  210,461 
Income tax expense 27,875  2,398  45,975  2,797 
NET INCOME 299,905  116,172  508,525  207,664 
LESS: Net income attributable to noncontrolling interest 49,322  31,727  91,903  59,975 
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK 250,583  84,445  416,622  147,689 
NET INCOME PER COMMON SHARE
Basic $ 1.32  $ 0.48  $ 2.23  $ 0.86 
Diluted $ 1.32  $ 0.48  $ 2.22  $ 0.85 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic 188,146  175,169  185,377  171,083 
Diluted 188,589  176,129  185,894  172,085 
WEIGHTED AVERAGE NUMBER OF CLASS B SHARES OUTSTANDING (1)
33,779  66,088  38,994  73,131 
(1) Shares of Class B Common Stock, and corresponding Magnolia LLC Units, are anti-dilutive in the calculation of weighted average number of common shares outstanding.
6


Magnolia Oil & Gas Corporation
Summary Cash Flow Data
(In thousands)
For the Quarters Ended
For the Six Months Ended
June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME $ 299,905  $ 116,172  $ 508,525  $ 207,664 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization 57,254  43,332  110,360  86,275 
Amortization of intangible assets —  7,233  —  9,346 
Asset retirement obligations accretion 802  1,405  1,590  2,736 
Amortization of deferred financing costs 967  1,108  3,779  2,018 
Unrealized loss on derivatives, net —  1,838  —  2,320 
Stock based compensation 3,517  3,528  6,402  6,233 
Other —  —  —  (85)
Net change in operating assets and liabilities 16,690  13,263  (12,652) (10,476)
Net cash provided by operating activities 379,135  187,879  618,004  306,031 
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions (3,292) (8,851) (4,347) (9,409)
Additions to oil and natural gas properties (123,231) (54,190) (207,461) (94,356)
Changes in working capital associated with additions to oil and natural gas properties 11,548  13,558  25,494  11,814 
Other investing (1,149) (239) (1,018) (655)
Net cash used in investing activities (116,124) (49,722) (187,332) (92,606)
CASH FLOW FROM FINANCING ACTIVITIES
Class A Common Stock repurchases (48,669) (24,047) (92,155) (44,328)
Class B Common Stock purchase and cancellation (54,020) (71,750) (138,753) (122,531)
Non-compete settlement —  (24,922) —  (42,074)
Dividends paid (2) —  (37,176) — 
Cash paid for debt modification —  (4,976) (5,272) (4,976)
Distributions to noncontrolling interest owners (4,606) (276) (16,243) (431)
Other financing activities (219) (98) (6,164) (1,364)
Net cash used in financing activities (107,516) (126,069) (295,763) (215,704)
NET CHANGE IN CASH AND CASH EQUIVALENTS 155,495  12,088  134,909  (2,279)
Cash and cash equivalents – Beginning of period 346,396  178,194  366,982  192,561 
Cash and cash equivalents – End of period $ 501,891  $ 190,282  $ 501,891  $ 190,282 

7



Magnolia Oil & Gas Corporation
Summary Balance Sheet Data
(In thousands)
June 30, 2022 December 31, 2021
Cash and cash equivalents $ 501,891  $ 366,982 
Other current assets 248,589  150,936 
Property, plant and equipment, net 1,319,577  1,216,087 
Other assets 16,733  12,737 
Total assets $ 2,086,790  $ 1,746,742 
Current liabilities $ 333,027  $ 218,545 
Long-term debt, net 389,216  388,087 
Other long-term liabilities 95,990  94,861 
Common stock 24  24 
Additional paid in capital 1,647,637  1,689,500 
Treasury stock (257,837) (164,599)
Accumulated deficit (291,546) (708,168)
Noncontrolling interest 170,279  228,492 
Total liabilities and equity $ 2,086,790  $ 1,746,742 


8


Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures


Reconciliation of net income to adjusted EBITDAX

In this press release, we refer to adjusted EBITDAX, a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders, and rating agencies. We define adjusted EBITDAX as net income before interest expense, income taxes, depreciation, depletion and amortization, amortization of intangible assets, exploration costs, and accretion of asset retirement obligations, adjusted to exclude the effect of certain items included in net income. Adjusted EBITDAX is not a measure of net income in accordance with GAAP.

Our management believes that adjusted EBITDAX is useful because it allows them to more effectively evaluate our operating performance and compare the results of our operations from period to period and against our peers without regard to our financing methods or capital structure. We also believe that securities analysts, investors, and other interested parties may use adjusted EBITDAX in the evaluation of our Company. We exclude the items listed above from net income in arriving at adjusted EBITDAX because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from adjusted EBITDAX are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of adjusted EBITDAX. Our presentation of adjusted EBITDAX should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of adjusted EBITDAX may not be comparable to other similarly titled measures of other companies.

The following table presents a reconciliation of net income to adjusted EBITDAX, our most directly comparable financial measure, calculated and presented in accordance with GAAP:
For the Quarters Ended
(In thousands) June 30, 2022 June 30, 2021
NET INCOME $ 299,905  $ 116,172 
Exploration expenses 3,408  62 
Asset retirement obligations accretion 802  1,405 
Depreciation, depletion and amortization 57,254  43,332 
Amortization of intangible assets —  7,233 
Interest expense, net 7,017  8,752 
Income tax expense 27,875  2,398 
EBITDAX 396,261  179,354 
Service agreement transition costs (1)
—  10,345 
Other income adjustment (6,333) — 
Non-cash stock based compensation expense 3,517  3,528 
Unrealized loss on derivatives, net —  1,838 
Adjusted EBITDAX $ 393,445  $ 195,065 

(1) Costs incurred during the transition period related to the termination of the Services Agreement with EnerVest Operating L.L.C. included within “General and administrative expenses” on the Company's consolidated statements of operations.
9




Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures

Reconciliation of net income to adjusted net income

Our presentation of adjusted net income is a non-GAAP measures because it excludes the effect of certain items included in net income. Management uses adjusted net income to evaluate our operating and financial performance because it eliminates the impact of certain items that management does not consider to be representative of the Company’s on-going business operations. As a performance measure, adjusted net income may be useful to investors in facilitating comparisons to others in the Company’s industry because certain items can vary substantially in the oil and gas industry from company to company depending upon accounting methods, book value of assets, and capital structure, among other factors. Management believes adjusting these items facilitates investors and analysts in evaluating and comparing the underlying operating and financial performance of our business from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted net income may not be comparable to similar measures of other companies in our industry.

For the Quarters Ended
(In thousands) June 30, 2022 June 30, 2021
NET INCOME $ 299,905  $ 116,172 
Adjustments:
Service agreement transition costs (1)
—  10,345 
Other income adjustment (6,333) — 
Accelerated amortization of intangible —  5,877 
Unrealized loss on derivatives, net —  1,838 
Interest expense costs related to debt modification —  1,147 
Change in estimated income tax —  (357)
ADJUSTED NET INCOME $ 293,572  $ 135,022 
Diluted weighted average shares of Class A Common Stock outstanding during the period 188,589  176,129 
Weighted average shares of Class B Common Stock outstanding during the period (2)
33,779  66,088 
Total weighted average shares of Class A and B Common Stock, including dilutive impact of other securities (2)
222,368  242,217 

(1) Costs incurred during the transition period related to the termination of the Services Agreement with EnerVest Operating L.L.C. included within “General and administrative expenses” on the Company's consolidated statements of operations.
(2) Shares of Class B Common Stock, and corresponding Magnolia LLC Units, are anti-dilutive in the calculation of weighted average number of common shares outstanding.
10



Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures

Reconciliation of revenue to adjusted cash operating margin and to operating income margin

Our presentation of adjusted cash operating margin and total adjusted cash operating costs are supplemental non-GAAP financial measures that are used by management. Total adjusted cash operating costs exclude the impact of non-cash activity. We define adjusted cash operating margin per boe as total revenues per boe less operating expenses per boe. Management believes that total adjusted cash operating costs per boe and adjusted cash operating margin per boe provide relevant and useful information, which is used by our management in assessing the Company’s profitability and comparability of results to our peers.

As a performance measure, total adjusted cash operating costs and adjusted cash operating margin may be useful to investors in facilitating comparisons to others in the Company’s industry because certain items can vary substantially in the oil and gas industry from company to company depending upon accounting methods, book value of assets, and capital structure, among other factors. Management believes excluding these items facilitates investors and analysts in evaluating and comparing the underlying operating and financial performance of our business from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted cash operating margin may not be comparable to similar measures of other companies in our industry.

For the Quarters Ended
(in $/boe) June 30, 2022 June 30, 2021
Revenue $ 71.78  $ 42.64 
Total cash operating costs:
Lease operating expenses (1)
(4.78) (3.70)
Gathering, transportation and processing (2.43) (1.74)
Taxes other than income (4.06) (2.34)
Exploration expenses (0.50) (0.01)
General and administrative expenses (2)
(2.27) (3.61)
Total adjusted cash operating costs (14.04) (11.40)
Adjusted cash operating margin $ 57.74  $ 31.24 
Margin (%) 80  % 73  %
Non-cash costs:
Depreciation, depletion and amortization $ (8.48) $ (7.33)
Asset retirement obligations accretion (0.12) (0.24)
Amortization of intangible assets —  (1.22)
Non-cash stock based compensation (0.52) (0.60)
Total non-cash costs (9.12) (9.39)
Operating income margin $ 48.62  $ 21.85 
Margin (%) 68  % 51  %

(1) Lease operating expenses exclude non-cash stock based compensation of $0.3 million, or $0.05 per boe, and $0.1 million, or $0.02 per boe, for the quarters ended June 30, 2022 and 2021, respectively.
(2) General and administrative expenses exclude non-cash stock based compensation of $3.2 million, or $0.47 per boe, and $3.4 million, or $0.58 per boe, for the quarters ended June 30, 2022 and 2021, respectively.

11



Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures

Reconciliation of net cash provided by operating activities to free cash flow

Free cash flow is a non-GAAP financial measure. Free cash flow is defined as cash flows from operations before net change in operating assets and liabilities less additions to oil and natural gas properties and changes in working capital associated with additions to oil and natural gas properties. Management believes free cash flow is useful for investors and widely accepted by those following the oil and gas industry as financial indicators of a company’s ability to generate cash to internally fund drilling and completion activities, fund acquisitions, and service debt. It is also used by research analysts to value and compare oil and gas exploration and production companies and are frequently included in published research when providing investment recommendations. Free cash flow is used by management as an additional measure of liquidity. Free cash flow is not a measure of financial performance under GAAP and should not be considered an alternative to cash flows from operating, investing, or financing activities.

For the Quarters Ended
(In thousands) June 30, 2022 June 30, 2021
Net cash provided by operating activities $ 379,135  $ 187,879 
Add back: net change in operating assets and liabilities (16,690) (13,263)
Cash flows from operations before net change in operating assets and liabilities 362,445  174,616 
Additions to oil and natural gas properties (123,231) (54,190)
Changes in working capital associated with additions to oil and natural gas properties 11,548  13,558 
Free cash flow $ 250,762  $ 133,984 

12
EX-99.2 3 a2q22epspresentationfina.htm EX-99.2 a2q22epspresentationfina
Magnolia Oil & Gas Second Quarter 2022 Earnings Presentation August 3, 2022 Stephen Chazen – Chairman, President & CEO Christopher Stavros – Executive Vice President & CFO Brian Corales – Vice President, Investor Relations Exhibit 99.2


 
Disclaimer 2 FORWARD LOOKING STATEMENTS The information in this presentation and the oral statements made in connection therewith include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included in this presentation, regarding Magnolia Oil & Gas Corporation’s (“Magnolia,” “we,” “us,” “our” or the “Company”) financial and production guidance, strategy, future operations, financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, including any oral statements made in connection therewith, the words could, should, will, may, believe, anticipate, intend, estimate, expect, project, the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events. Except as otherwise required by applicable law, Magnolia disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this presentation. Magnolia cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Magnolia, incident to the development, production, gathering and sale of oil, natural gas and natural gas liquids. In addition, Magnolia cautions you that the forward looking statements contained in this press release are subject to the following factors: (i) the economic effects of the COVID-19 pandemic and actions taken by federal, state and local governments and other third parties in response to the pandemic; (ii) the outcome of any legal proceedings that may be instituted against Magnolia; (iii) Magnolia’s ability to realize the anticipated benefits of its acquisitions, which may be affected by, among other things, competition and the ability of Magnolia to grow and manage growth profitably; (iv) changes in applicable laws or regulations; (v) geopolitical and business conditions in key regions of the world; and (vi) the possibility that Magnolia may be adversely affected by other economic, business, and/or competitive factors, including inflation. Should one or more of the risks or uncertainties described in this press release occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Additional information concerning these and other factors that may impact Magnolia's operations and projections can be found in its filings with the Securities and Exchange Commission (the "SEC"), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the SEC on February 17, 2022. Magnolia’s SEC filings are available publicly on the SEC’s website at www.sec.gov. NON-GAAP FINANCIAL MEASURES This presentation includes non-GAAP financial measures, including adjusted net income, free cash flow, EBITDAX, adjusted EBITDAX, adjusted cash operating costs and adjusted cash operating margin. Magnolia believes these metrics are useful because they allow Magnolia to more effectively evaluate its operating performance and compare the results of its operations from period to period and against its peers without regard to accounting methods or capital structure. Magnolia does not consider these non-GAAP measures in isolation or as an alternative to similar financial measures determined in accordance with GAAP. The computations of these non-GAAP measures may not be comparable to other similarly titled measures of other companies. Adjusted EBITDAX should not be considered an alternative to, or more meaningful than, net income as determined in accordance with GAAP. Certain items excluded from free cash flow, adjusted EBITDAX, adjusted cash operating costs and adjusted cash operating margin are significant components in understanding and assessing a company’s financial performance, and should not be construed as an inference that its results will be unaffected by unusual or non-recurring terms. As performance measures, adjusted net income, adjusted EBITDAX, adjusted cash operating costs and adjusted cash operating margin may be useful to investors in facilitating comparisons to others in the Company’s industry because certain items can vary substantially in the oil and gas industry from company to company depending upon accounting methods, book value of assets, and capital structure, among other factors. Management believes excluding these items facilitates investors and analysts in evaluating and comparing the underlying operating and financial performance of our business from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis. As a liquidity measure, management believes free cash flow is useful for investors and widely accepted by those following the oil and gas industry as financial indicators of a company’s ability to generate cash to internally fund drilling and completion activities, fund acquisitions, and service debt. Our presentation of adjusted net income, adjusted EBITDAX, free cash flow, adjusted cash operating costs and adjusted cash operating margin may not be comparable to similar measures of other companies in our industry. A free cash flow reconciliation is shown on page 13, adjusted EBITDAX reconciliation is shown on page 14 of the presentation, adjusted net income is shown on page 15, and adjusted cash operating costs and adjusted cash operating margin reconciliations are shown on page 9. INDUSTRY AND MARKET DATA This presentation has been prepared by Magnolia and includes market data and other statistical information from sources believed by Magnolia to be reliable, including independent industry publications, governmental publications or other published independent sources. Some data is also based on the good faith estimates of Magnolia, which are derived from its review of internal sources as well as the independent sources described above. Although Magnolia believes these sources are reliable, it has not independently verified the information and cannot guarantee its accuracy and completeness.


 
Second Quarter 2022 Key Financial Metrics 3 Key Financial Metrics 2Q22 2Q21 % Change Adjusted net income ($ MM)(1) $294 $135 117% Diluted EPS (GAAP) $1.32 $0.48 175% Operating income margin % 68% 51% 17% Total production (Mboe/d) 74.2 64.9 14% Giddings & Other production (Mboe/d) 44.1 36.2 22% Adjusted EBITDAX ($ MM) (1) $393 $195 102% D&C capex ($ MM) $122 $54 127% D&C capex as a % of adjusted EBITDAX 31% 28% 3% Free cash flow ($ MM) (1) $251 $134 87% Cash balance as of period end ($ MM) $502 $190 164% Weighted average diluted shares outstanding (MM) (2) 222 242 -8% • Stronger year-over-year product prices combined with higher production volumes resulted in significantly improved financial metrics across the board compared to the prior year period. • Based on strong well results from both of our assets, ongoing efficiencies and improved cycle times, as well as higher non-operated activity, we are raising our expectations for full-year 2022 production growth to between 12 and 14 percent compared to 2021. • Generated $251 million of free cash flow and 68% Operating Income margins in 2Q22. • Transitioned to a quarterly base dividend from a semi-annual dividend with an initial quarterly rate of $0.10 per share, representing a 43% annualized increase from 2021. • During 2Q22, we repurchased a total of 4.1 million shares reducing our total diluted outstanding shares by 8% from Q2 2021 levels. (1) Adjusted net income, adjusted EBITDAX and Free Cash Flow are non-GAAP measures. For a reconciliation of the most comparable GAAP measure see pages 15,14, and 13. (2) Weighted average total shares outstanding include diluted weighted average shares of Class A Common Stock outstanding during the period and shares of Class B Common Stock, which are anti-dilutive in the calculation of weighted average number of common shares outstanding.


 
2Q 2022 QTD Cash Flow Reconciliation 346 362 21 102 123 502 0 100 200 300 400 500 600 700 800 Cash 3/31/22 Cash Flow from Operations Changes in Working Capital and Other Common Stock Repurchases D&C and Facilities Capital Cash 6/30/22 (1) (3)(2) (4) (In millions) (1) Cash flow from operations before changes in working capital (2) Includes $28MM change in working capital including capital accruals and offset by a $7 MM change in other investing and financing items (3) Includes $48 MM Class A Common Stock and $54 MM Class B Common Stock. (4) D&C capital of $123 million includes $11 million of capital activities that have been accrued but not yet paid. 4


 
Share Repurchase Summary Through 2Q 2022 5 Share Reduction Summary (Million Shares) • Since the initial repurchase authorization in 3Q19, Magnolia has reduced its dilutive share count by 22.0(1) million shares of Class A common stock as well as 24.9 million shares of Class B common stock, for a total reduction of 46.9 million shares, or approximately 18% of the diluted shares outstanding as of the authorization date. ‒ Repurchased 4.1 MM shares during 2Q22. • Magnolia plans to continue to opportunistically repurchase at least 1% of the total shares outstanding each quarter. • There are 12.3 million shares remaining under the current share repurchase authorization. (1) Class A share reduction includes 3.6 million non-compete shares that were paid in cash in lieu of stock in 2021. (1)


 
Magnolia Oil & Gas – Differentiated Dividend Framework 6 • We are moving to a quarterly dividend, from a semi-annual dividend, with an initial quarterly rate of $0.10 per share, a 43% annualized increase from 2021. • Differentiated dividend framework is aligned with the principles of our business model and reinforces our plan and demonstrates the quality of our assets. • Our approach is meant to appeal to long-term investors who seek dividend safety, moderate and regular dividend growth, and a dividend that is paid out of actual earnings. • We intend to use this dividend framework to demonstrate the underlying results of our business in a stable product price environment ($55 oil and $3.50 natural gas), and within our current cost structure. • Our objective is to provide a superior total shareholder return by improving the per share value of the enterprise while providing a secure and growing dividend. Dividend Principles  Secure & Sustainable – Dividend is safe, and supported by our strong balance sheet, prudent spending and consistent free cash flow  Paid out of Earnings – Dividend is paid out of earnings generated by the business, and will not exceed 50% of the prior year’s reported net income  Dividend Growth – We expect each of these regular dividend payments to grow annually based on execution of our plan, which includes moderate production growth and share reduction $0.28/share $0.40/share 2021 2022 43% Increase


 
Magnolia Oil & Gas – Summary Balance Sheets 7 (in thousands) June 30, 2022 December 31, 2021 Cash $501,891 $366,982 Current assets 248,589 150,936 Property, plant and equipment, net 1,319,577 1,216,087 Other assets 16,733 12,737 Total assets $2,086,790 $1,746,742 Current liabilities $333,027 $218,545 Long-term debt, net 389,216 388,087 Other long-term liabilities 95,990 94,861 Total equity 1,268,557 1,045,249 Total liabilities and equity $2,086,790 $1,746,742


 
$400 $450 2022 2023 2024 2025 2026 2Q 2022 Capital Structure and Liquidity Overview 8 Capital Structure Overview • Maintaining low financial leverage profile ‒ Currently have a net cash position of $102 MM ‒ Net Debt / Q2 Annualized adjusted EBITDAX of -0.1x • Current Liquidity of $952 million, including fully undrawn credit facility (1) • No debt maturities until senior unsecured notes mature in 2026 Debt Maturity Schedule ($MM) (1) Liquidity defined as cash plus availability under revolving credit facility. (2) Total Equity includes noncontrolling interest. Capitalization & Liquidity ($MM) Borrowing Base Credit Facility Borrowings (as of 6/30/22) $0 6.00% Senior Unsecured Notes Capitalization Summary As of 6/30/2022 Cash and Cash Equivalents $502 Revolving Credit Facility $0 6.00% Senior Notes Due 2026 $400 Total Principal Debt Outstanding $400 Total Equity (2) $1,269 Net Debt / Q2 Annualized Adjusted EBITDAX -0.1x Net Debt / Total Book Capitalization -6% Liquidity Summary As of 6/30/2022 Cash and Cash Equivalents $502 Credit Facility Availability $450 Liquidity (1) $952


 
$ / Boe, unless otherwise noted For the Quarter Ended June 30, 2022 For the Quarter Ended June 30, 2021 Revenue $71.78 $42.64 Total Cash Operating Costs: Lease Operating Expenses (1) (4.78) (3.70) Gathering, Transportation & Processing (2.43) (1.74) Taxes Other Than Income (4.06) (2.34) Exploration Expenses (0.50) (0.01) General & Administrative Expenses (2) (2.27) (3.61) Total Adjusted Cash Operating Costs (3) (14.04) (11.40) Adjusted Cash Operating Margin (3) $57.74 $31.24 Margin % 80% 73% Non-Cash Costs: Depreciation, Depletion, and Amortization (8.48) (7.33) Asset Retirement Obligations Accretion (0.12) (0.24) Amortization on Intangible Assets - (1.22) Non-cash stock-based compensation (0.52) (0.60) Total non-cash expenses (9.12) (9.39) Operating Income Margin $48.62 $21.85 Margin % 68% 51% Magnolia Oil & Gas – Margin and Cost Structure 9 (1) Lease operating expenses exclude non-cash stock based compensation of $0.3 MM, or $0.05 per boe, and $0.1 MM, or $0.02 per boe, for the quarters ended June 30, 2022 and 2021, respectively. (2) General and administrative expenses exclude non-cash stock based compensation of $3.2 MM, or $0.47 per boe, and $3.4 MM, or $0.58 per boe, for the quarters ended June 30, 2022 and 2021, respectively. (3) Adjusted cash operating costs and adjusted cash operating margin are non-GAAP measures. For reasons management believes this is useful to investors, refer to slide 2 “Non-GAAP Financial Measures.” ∆ $29.14/boe ∆ $2.64/boe ∆ $26.77/boe


 
Commitment to Sustainability 10 ENVIRONMENTAL SOCIAL GOVERNANCE Air Emissions Reduced our 2021 GHG intensity rate by 9.5% compared to 2020, following an 8.2% reduction in 2019 Flaring Do not conduct routine flaring; reduced our 2021 gas flared as a percent of total production by 72% compared to 2019 Fugitive Emissions Integrate vapor recovery towers and units into storage tanks to minimize fugitive emissions Surface Impacts Use pad drilling to significantly reduce surface acreage needed for operations Groundwater Routinely install 7 alternating layers of steel and cement as a barrier between wellbores and groundwater Workforce Health & Safety Have not recorded a fatal accident in connection with our operations since the company’s inception Training In 2021, full-time field employees each received an average of 37 hours of safety training Diversity As of December 31, 2021, 26% of our employees were women (38% in our Houston corporate office) and 31% identified as a member of a minority group, as defined by the U.S. EEOC(1) Compensation In 2021, every Magnolia employee received a minimum of 1,000 shares under our long-term incentive program Workplace Flexibility We offer a workplace flexibility program to eligible employees who can work from home effectively Board Independence 71% of board members are independent Board Diversity 29% of board members are women; 14% identify as a member of a minority group Executive Compensation Ratio of 2021 Chief Executive Officer’s compensation to median employee’s compensation was 2.14 to 1 Say-on-Pay More than 92% of stockholders approved say-on-pay at 2022 Annual Meeting of Stockholders Oversight Expanded the duties of our Nominating and Corporate Governance Committee to include formal oversight of ESG policies and practices Magnolia 2022 Sustainability Report is Available on Our Website Under the Sustainability Tab (1) U.S. Equal Employment Opportunity Commission


 
Appendix


 
Magnolia Oil & Gas – Overview • High-quality, low-risk pure-play South Texas operator with a core Eagle Ford and Austin Chalk position acquired at an attractive entry multiple • Significant scale and PDP base generates material free cash flow, reduces development risk, and increases optionality • Asset Overview: – ~23,800 net acres in a well-delineated, low-risk position in the core of Karnes County, representing some of the most prolific acreage in the United States with industry leading break-evens – ~450,000 net acres in the Giddings area, a re-emerging oil play with significant upside and what we believe to be substantial inventory – Both assets expected to remain self funding and within cash flow 12 ~472,000 Net Acre Position Targeting Two of the Top Oil Plays in the U.S. Market Statistics Trading Symbol (NYSE) MGY Share Price as of 7/29/2022 $24.13 Common Shares Outstanding (1) 219 million Market Capitalization $5.3 billion Long-term Debt – Principal $400 million Cash as of 6/30/2022 $502 million Total Enterprise Value $5.2 billion Operating Statistics Karnes Giddings Total Net Acreage 23,767 447,924 471,691 2Q22 Net Production (Mboe/d) (2) 30.1 44.1 74.2 (1) Common Stock outstanding includes Class A and Class B Stock. (2) Giddings includes other production not located in the Giddings Field. Karnes County Giddings Field Dewitt Gonzales


 
Free Cash Flow Reconciliations 13 (1) Free cash flow is a non-GAAP measure. For reasons management believes this is useful to investors, refer to slide 2 “Non-GAAP Financial Measures.” (in thousands) Free Cash Flow Reconciliations For the Quarter Ended June 30, 2022 For the Quarter Ended June 30, 2021 Net cash provided by operating activities $379,135 $187,879 Add back: Net change in operating assets and liabilities (16,690) (13,263) Cash flows from operations before net change in operating assets and liabilities $362,445 $174,616 Additions to oil and natural gas properties (123,231) (54,190) Changes in working capital associated with additions to oil & gas properties 11,548 13,558 Free cash flow(1) $250,762 $133,984


 
Adjusted EBITDAX Reconciliation 14 (1) EBITDAX and Adjusted EBITDAX are non-GAAP measures. For reasons management believes these are useful to Investors, refer to slide 2 “Non-GAAP Financial Measures.” (2) Costs incurred during the transition period related to the termination of the Services Agreement with EnerVest Operating L.L.C. included within “General and administrative expenses” on the Company's consolidated statements of operations. (in thousands) Adjusted EBITDAX reconciliation to net income: For the Quarter Ended June 30, 2022 For the Quarter Ended June 30, 2021 Net income $299,905 $116,172 Exploration expenses 3,408 62 Asset retirement obligations accretion 802 1,405 Depreciation, depletion and amortization 57,254 43,332 Amortization of intangible assets - 7,233 Interest expense, net 7,017 8,752 Income tax expense 27,875 2,398 EBITDAX (1) $396,261 $179,354 Service Agreement transition costs(2) - 10,345 Other income changes (6,333) - Non-cash stock based compensation expense 3,517 3,528 Unrealized loss on derivatives, net - 1,838 Adjusted EBITDAX (1) $393,445 $195,065


 
Adjusted Net Income Reconciliation 15 (1) Costs incurred during the transition period related to the termination of the Services Agreement with EnerVest Operating L.L.C. included within “General and administrative expenses” on the Company's consolidated statements of operations. (2) Adjusted Net Income is a non-GAAP measure. For reasons management believes this is useful to investors, refer to slide 2 “Non-GAAP Financial Measure.” (3) Shares of Class B Common Stock, and corresponding Magnolia LLC Units, are anti-dilutive in the calculation of weighted average number of common shares outstanding. (in thousands) Adjusted Net Income For the Quarter Ended June 30, 2022 For the Quarter Ended June 30, 2021 Net income $299,905 $116,172 Adjustments: Service agreement transition costs (1) - 10,345 Other income adjustment (6,333) - Accelerated amortization of intangible - 5,877 Unrealized loss on derivatives, net - 1,838 Interest expense costs related to debt modification 1,147 Change in estimated income tax - (357) Adjusted Net Income (2) $293,572 $135,022 (in thousands) Total Share Count For the Quarter Ended June 30, 2022 For the Quarter Ended June 30, 2021 Diluted weighted average of Class A Common Stock outstanding during the period 188,589 176,129 Weighted average shares of Class B Common Stock outstanding during the period (3) 33,779 66,088 Total weighted average shares of Class A and B Common Stock, including dilutive impact of other securities (3) 222,368 242,217


 
Magnolia Oil & Gas – Operating Highlights 16 (1) Benchmarks are the NYMEX WTI and NYMEX HH average prices for oil and natural gas, respectively. For the Quarter Ended June 30, 2022 For the Quarter Ended June 30, 2021 Production: Oil (MBbls) 3,019 2,903 Natural gas (MMcf) 12,464 9,947 Natural gas liquids (MBbls) 1,656 1,349 Total (Mboe) 6,752 5,910 Average daily production: Oil (Bbls/d) 33,178 31,897 Natural gas (Mcf/d) 136,966 109,313 Natural gas liquids (Bbls/d) 18,194 14,830 Total (Mboe) 74,200 64,946 Revenues (in thousands): Oil revenues $332,791 $188,701 Natural gas revenues 85,345 33,314 Natural gas liquids revenues 66,513 30,035 Total Revenues $484,649 $252,050 Average Sales Price: Oil (per Bbl) $110.22 $65.01 Natural gas (per Mcf) 6.85 3.35 Natural gas liquids (per Bbl) 40.17 22.26 Total (per Boe) $71.78 $42.64 NYMEX WTI (per Bbl) $108.42 $66.06 NYMEX Henry Hub (per Mcf) $7.17 $2.83 Realization to benchmark: (1) Oil (% of WTI) 102% 98% Natural gas (% of Henry Hub) 96% 118%


 
Magnolia Oil & Gas – Production Results 17 Combined Karnes Giddings & Other Combined Karnes Giddings & Other For the Quarter Ended June 30, 2022 For the Quarter Ended June 30, 2021 Production: Oil (MBbls) 3,019 1,656 1,363 2,903 1,755 1,148 Natural gas (MMcf) 12,464 3,390 9,074 9,947 2,752 7,195 Natural gas liquids (MBbls) 1,656 519 1,137 1,349 404 945 Total (Mboe) 6,752 2,740 4,012 5,910 2,618 3,292 Average Daily Production Volume: Oil (MBbls/d) 33.2 18.2 15.0 31.9 19.3 12.6 Natural gas (MMcf/d) 137.0 37.3 99.7 109.3 30.2 79.1 Natural gas liquids (MBbls/d) 18.2 5.7 12.5 14.8 4.4 10.4 Total (MBoe/d) 74.2 30.1 44.1 64.9 28.7 36.2