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Magnolia (MGY) Q3 Earnings Beat Estimates, Revenues In Line

Magnolia Oil & Gas Corporation MGY reported a third-quarter 2023 adjusted net income of 54 cents per share, which beat the Zacks Consensus Estimate of 53 cents. The outperformance can be primarily attributed to a 1.4% increase in production volumes year over year. The bottom line, however, deteriorated from the year-ago quarter’s level of $1.29 due to a decline in commodity prices.

Total revenues came in at $316 million, in line with the Zacks Consensus Estimate. The top line declined 34.6% from $483 million recorded in the year-ago period.

South Texas-focused Magnolia declared a cash dividend of 11.5 cents per share of Class A common stock and a cash distribution of 11.5 cents per Class B unit, payable on Dec 1, 2023, to shareholders of record as of Nov 10, 2023. The company repurchased 2.5 million of its Class A common shares for $56.8 million in the reported quarter.

Magnolia Oil & Gas Corp Price, Consensus and EPS Surprise

Magnolia Oil & Gas Corp Price, Consensus and EPS Surprise
Magnolia Oil & Gas Corp Price, Consensus and EPS Surprise

Magnolia Oil & Gas Corp price-consensus-eps-surprise-chart | Magnolia Oil & Gas Corp Quote

Production & Prices

The average daily total output of 82,651 barrels of oil equivalent per day (boe/d) increased from the year-ago quarter’s figure of 81,529 boe/d. The figure also beat our estimate of 81,971 boe/d.

Oil and gas production increased a little more than 1.4% year over year. Oil volumes totaled 32,867 barrels per day (bpd), down 10.6% from that reported in the third quarter of 2022. The figure missed our estimate of 36,012 bpd.

The average realized crude oil price was $80.6 per barrel, indicating a 14.1% decline from the year-ago period’s level of $93.8. The average realized natural gas liquids price was $20.7 per barrel, implying a 40.4% deterioration from the year-ago period’s figure. Natural gas price decreased 74.9% year over year to $1.9 per thousand cubic feet. MGY recorded $41.5 per boe compared with $64.5 a year ago.

Balance Sheet & Capital Expenditure

As of Sep 30, Magnolia had cash and cash equivalents of $618.5 million and long-term debt of $392.2 million. The total debt-to-total capital was 17.5%.

The company spent $104.3 million on its capital program in the reported quarter. Operating expenses decreased to $167.5 million from $171.2 million in the year-ago period.

Guidance

The company expects the diluted share count for the fourth quarter to be approximately 207 million.

MGY plans to offer a discount of $3.00 per barrel to Magellan East Houston, leaving it unhedged for all oil and natural gas production.

It expects total drilling & completions capital expenditures to be $430 million and $100 million for 2023 and the fourth quarter, respectively.

The company plans to raise its guidance for full-year production growth to 8%.

Zacks Rank and Key Picks

Currently, MYG carries a Zacks Rank #3 (Buy).

Investors interested in the energysector might look at some better-ranked stocks like Liberty Energy Inc. LBRT, sporting a Zacks Rank #1 (Strong Buy), and CVR Energy, Inc. CVI and Delek US Holdings, Inc. DK, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Liberty Energy is valued at $3.41 billion. LBRT currently pays a dividend of 20 cents per share, or 0.99% on an annual basis.

LBRT is a leading provider of hydraulic fracturing and other auxiliary services to North American onshore exploration and production companies.

CVR Energy is valued at $3.28 billion. In the past year, its shares have lost 19%.

CVI currently pays a dividend of $2 per share or 6.13% on an annual basis. Its payout ratio currently sits at 30% of earnings.

Delek US Holdings is worth approximately $1.69 billion. DK currently pays a dividend of 94 cents per share, or 3.61% on an annual basis.

The company operates in the integrated downstream energy business in the United States. It operates under three segments — refining, logistics and retail.

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CVR Energy Inc. (CVI) : Free Stock Analysis Report

Delek US Holdings, Inc. (DK) : Free Stock Analysis Report

Liberty Energy Inc. (LBRT) : Free Stock Analysis Report

Magnolia Oil & Gas Corp (MGY) : Free Stock Analysis Report

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