MGY - Magnolia Oil & Gas: Returns About To Shift Into High Gear

2024-05-31 16:06:14 ET

Summary

• Magnolia Oil & Gas Corporation reported a solid quarter, with production in line and higher-than-expected oil cut.
• EBITDA and Free Cash Flow beat expectations due to strong commodity price realizations and disciplined spending.
• The balance sheet remains rock solid following a shareholder sale repurchase and another bolt on.
• We expect the dividend to shift into a higher gear in time as potential selling shareholder sales dwindle.

In mid-May, Magnolia Oil & Gas Corporation ( MGY ) reported yet another solid quarter. Production was inline with expectations but oilier than expected, helping to generate a 5% EBITDAX beat. The two rig, one frac crew program continues to widely under spend cash flow. The balance sheet can only be described as fortress-like, and they continue to pay their modest Base-only dividend while repurchasing about 1% of their shares each quarter....

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