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1. Company Snapshot

1.a. Company Description

Magnolia Oil & Gas Corporation engages in the acquisition, development, exploration, and production of oil, natural gas, and natural gas liquids reserves in the United States.Its properties are located primarily in Karnes County and the Giddings Field in South Texas principally comprising the Eagle Ford Shale and the Austin Chalk formation.As of December 31, 2021, the company's assets consisted of a total leasehold position of 4,71,263 net acres, including 23,785 net acres in Karnes and 4,47,478 net acres in the Giddings area, as well as holds 1,292 net wells with a total production capacity of 66.0 thousand barrels of oil equivalent per day.


The company was incorporated in 2017 and is headquartered in Houston, Texas.

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1.b. Last Insights on MGY

The recent 3-month performance of Magnolia Oil & Gas Corporation was negatively impacted by a lack of significant catalysts, despite a Q4 earnings beat and revenue growth. The absence of a substantial increase in production and a relatively stable capex budget may have contributed to the muted performance. Additionally, the company's Q1 2025 earnings expectations, while still positive, may not be enough to drive significant stock movement. The recent upgrade to a Zacks Rank #2 (Buy) and the upcoming conference call for Q1 2025 results may provide some near-term support, but the overall market sentiment remains cautious.

1.c. Company Highlights

2. Magnolia Oil & Gas' Strong Q4 Earnings Driven by Operational Efficiency

Magnolia Oil & Gas reported adjusted net income of $71 million or $0.37 per diluted share, slightly beating analyst estimates of $0.36 per share. The company's adjusted EBITDAX for the quarter was $216 million, with total capital associated with drilling completions and associated facilities of $117 million, representing 54% of its adjusted EBITDAX. For the full year 2025, the company generated free cash flow of more than $425 million and repurchased approximately 8.9 million shares, reducing its diluted share count by roughly 4.5%. The company's financial performance was driven by stronger-than-expected well results, improved efficiencies, and lower unit costs.

Publication Date: Feb -17

📋 Highlights
  • Production Growth:: 11% annual increase to 100,000 BOE/day in 2025 (104,000 BOE/day in Q4).
  • Cost Efficiency:: Field-level cash operating expenses fell 7% to $5.12/BOE in 2025.
  • Financial Performance:: Adjusted EBITDAX reached $216M, with $71M adjusted net income ($0.38/share).
  • Capital Discipline:: 2026 D&C capex guided at $440–480M (54% of EBITDAX in 2025), 5% production growth target.
  • Shareholder Returns:: $425M free cash flow in 2025, 8.9M shares repurchased (-4.5% share count).

Operational Highlights

Total company production grew by 11% to approximately 100,000 barrels of oil equivalent per day in 2025, with oil production growing by 4% and averaging nearly 40,000 barrels per day. Field-level cash operating expenses declined by 7% to $5.12 per BOE during 2025. The company achieved a new company record for production in the fourth quarter, averaging nearly 104,000 barrels of oil equivalent per day and 40,700 barrels of oil per day.

Guidance and Outlook

For 2026, Magnolia Oil & Gas expects to deliver total production growth of approximately 5% and has guided its drilling and completion capital expenditures to be in the range of $440 million to $480 million. The company's guidance suggests a steady growth rate, albeit with a step back in the first quarter due to weather impacts. With a current P/E Ratio of 15.03 and an EV/EBITDA ratio of 5.73, the market is pricing in moderate growth expectations. Analysts estimate the company's revenue growth at 9.8% for the next year, indicating a potential upside.

Capital Efficiency and Return on Investment

Magnolia Oil & Gas has demonstrated strong capital efficiency, with a return on invested capital (ROIC) of 14.77% and a return on equity (ROE) of 16.76%. The company's ability to generate free cash flow and maintain a strong balance sheet provides flexibility to pursue opportunistic acquisitions and return capital to shareholders. With a net debt to EBITDA ratio of 0.14, the company's leverage profile is conservative, allowing it to navigate product price uncertainty.

Valuation and Dividend Yield

The company's current valuation metrics, including a P/S Ratio of 3.74 and a P/B Ratio of 2.52, suggest a reasonable valuation. Additionally, the company's dividend yield of 2.3% provides a relatively stable source of return for investors. With a free cash flow yield of 8.02%, the company is generating significant cash flow relative to its market capitalization, indicating potential for future growth or increased returns to shareholders.

3. NewsRoom

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Head-To-Head Comparison: Magnolia Oil & Gas (NYSE:MGY) versus HyperDynamics (OTCMKTS:HDYNQ)

Feb -28

Source: defenseworld.net

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AlphaQuest LLC Has $51,000 Position in Magnolia Oil & Gas Corp $MGY

Feb -16

Source: defenseworld.net

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Magnolia Oil & Gas Corporation (MGY) Q4 2025 Earnings Call Transcript

Feb -07

Source: seekingalpha.com

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Magnolia Beats Q4 Earnings & Revenue Estimates on Strong Production

Feb -06

Source: zacks.com

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Magnolia Oil & Gas: Strong Capital Efficiency Results In 11% Total Production Growth In 2025 (Rating Downgrade)

Feb -06

Source: seekingalpha.com

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Magnolia Oil & Gas Corp (MGY) Tops Q4 Earnings and Revenue Estimates

Feb -05

Source: zacks.com

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Magnolia Oil & Gas Corporation Announces 2025 Fourth Quarter and Year End Results

Feb -05

Source: businesswire.com

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What's in Store for Magnolia Oil & Gas Stock in Q4 Earnings?

Feb -02

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.60%)

6. Segments

Oil

Expected Growth: 3.5%

Magnolia Oil & Gas Corporation's 3.5% growth in oil production is driven by increased drilling activities in the Eagle Ford shale, improved operational efficiencies, and strategic acquisitions. Additionally, rising global demand and favorable crude oil prices contribute to the growth. The company's focus on cost reduction and capital discipline also supports its ability to maintain a strong growth trajectory.

Natural Gas Liquids

Expected Growth: 3.8%

Magnolia Oil & Gas Corporation's 3.8% growth in Natural Gas Liquids is driven by increasing demand from petrochemicals and refining industries, coupled with strategic acquisitions and efficient operations. Additionally, favorable market conditions, including rising prices and growing production volumes, contribute to the company's growth momentum.

Natural Gas

Expected Growth: 4.2%

Magnolia Oil & Gas Corporation's 4.2% growth in Natural Gas is driven by increasing demand from power generation and industrial sectors, coupled with strategic acquisitions and efficient operations. Additionally, favorable weather conditions and rising LNG exports contribute to the growth. The company's focus on cost reduction and capital discipline also supports its growth momentum.

7. Detailed Products

Crude Oil

Magnolia Oil & Gas Corporation extracts and refines crude oil from its oil fields, providing a vital energy source for various industries.

Natural Gas

The company explores, produces, and transports natural gas, a clean-burning fuel used for power generation, heating, and cooking.

Natural Gas Liquids (NGLs)

Magnolia Oil & Gas Corporation extracts and processes NGLs, a group of hydrocarbons used in various industrial and commercial applications.

Refined Petroleum Products

The company refines crude oil into various petroleum products, including gasoline, diesel, jet fuel, and lubricants.

Oilfield Services

Magnolia Oil & Gas Corporation provides a range of oilfield services, including drilling, completion, and production optimization.

8. Magnolia Oil & Gas Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Magnolia Oil & Gas Corporation is moderate due to the availability of alternative energy sources such as solar and wind power.

Bargaining Power Of Customers

The bargaining power of customers is low due to the lack of negotiating power of individual consumers in the oil and gas industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers is high due to the concentration of suppliers in the oil and gas industry, giving them significant negotiating power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the oil and gas industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the oil and gas industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 19.22%
Debt Cost 3.95%
Equity Weight 80.78%
Equity Cost 14.09%
WACC 12.14%
Leverage 23.79%

11. Quality Control: Magnolia Oil & Gas Corporation passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Permian Resources

A-Score: 6.4/10

Value: 7.7

Growth: 7.8

Quality: 6.9

Yield: 6.0

Momentum: 4.5

Volatility: 5.3

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Magnolia Oil & Gas

A-Score: 6.0/10

Value: 6.1

Growth: 6.6

Quality: 7.7

Yield: 5.0

Momentum: 4.0

Volatility: 6.7

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Matador Resources

A-Score: 5.9/10

Value: 8.5

Growth: 8.8

Quality: 7.5

Yield: 4.0

Momentum: 2.0

Volatility: 4.7

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Murphy Oil

A-Score: 5.8/10

Value: 7.9

Growth: 4.6

Quality: 6.1

Yield: 7.0

Momentum: 5.0

Volatility: 4.3

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Northern Oil and Gas

A-Score: 5.5/10

Value: 8.4

Growth: 5.4

Quality: 4.9

Yield: 9.0

Momentum: 1.0

Volatility: 4.0

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Chesapeake Energy

A-Score: 5.0/10

Value: 5.1

Growth: 1.6

Quality: 6.1

Yield: 8.0

Momentum: 6.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

28.42$

Current Price

28.42$

Potential

-0.00%

Expected Cash-Flows