Magnolia Oil & Gas Corporation (MGY) Q4 2025 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 9h ago
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Should l Buy MGY?
Source: SeekingAlpha
Total company production Grew by 11% to approximately 100,000 barrels of oil equivalent per day for the full year 2025. Oil production grew by 4%, averaging nearly 40,000 barrels per day. The growth was driven by stronger-than-expected well results, improved efficiencies, and lower unit costs.
Field level cash operating expenses Declined by 7% to $5.12 per BOE during 2025. This reduction was attributed to operational efficiencies and cost management.
Fourth quarter production Averaged nearly 104,000 barrels of oil equivalent per day and 40,700 barrels of oil per day, marking a sequential increase of 3%. This was due to continued strong performance from wells.
Fourth quarter adjusted net income Approximately $71 million or $0.38 per diluted share. This reflects disciplined capital allocation and strong operational performance.
Fourth quarter adjusted EBITDAX $216 million. This was supported by efficient operations and cost management.
Drilling and completion capital for Q4 Roughly $117 million, representing 54% of adjusted EBITDAX. This reflects efficient capital allocation.
Pretax operating margins Averaged 33% for the year despite a more than 15% annual decline in oil price realizations. This was supported by low-cost operations and high-quality assets.
Free cash flow for 2025 More than $425 million. This was enabled by a low reinvestment rate and disciplined capital spending.
Share repurchases in 2025 Approximately 8.9 million shares, reducing the diluted share count by roughly 4.5%. This enhanced per-share value.
Return on capital employed (ROCE) 18% for 2025, well above the cost of capital, despite lower oil prices. This was driven by prudent capital allocation and high-quality assets.
Proved developed reserves added in 2025 Approximately 50 million BOE, with organic proved developed finding and development costs of $9.25 per BOE. This reflects the high quality and low cost of the asset base.
Adjusted EBITDAX for the full year $906 million, with drilling and completion capital representing 51% of EBITDAX. This indicates efficient capital use.
Cash balance at year-end 2025 $267 million, with total liquidity of approximately $717 million. This strong balance sheet provides financial flexibility.
Dividend growth Increased by 10% to $0.165 per share on a quarterly basis, reflecting strong financial performance and shareholder returns.
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Analyst Views on MGY
Wall Street analysts forecast MGY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MGY is 26.44 USD with a low forecast of 21.00 USD and a high forecast of 31.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
7 Buy
3 Hold
1 Sell
Moderate Buy
Current: 26.210
Low
21.00
Averages
26.44
High
31.00
Current: 26.210
Low
21.00
Averages
26.44
High
31.00
About MGY
Magnolia Oil & Gas Corporation is an 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. The Company’s oil and natural gas properties are located primarily in the Karnes and Giddings areas in South Texas. Its assets consist of a total leasehold position of approximately 817,907 gross (604,057 net) acres, including 79,067 gross (54,936 net) acres in the Karnes area and 738,840 gross (549,121 net) acres in the Giddings area. The Giddings area is comprised of oil and natural gas assets primarily located in Brazos, Burleson, Fayette, Grimes, Lee, Milam, Robertson, and Washington Counties, Texas. The Karnes area is comprised of oil and natural gas assets primarily located in Karnes, Dimmit, Gonzales, and Zavala Counties, Texas, in the core of the Eagle Ford Shale. The acreage comprising the Karnes area also includes the Austin Chalk formation overlying the Eagle Ford Shale.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Magnolia Oil & Gas Reports Strong Q4 2025 Earnings with Record Production
- Significant Production Growth: In 2025, Magnolia achieved an 11% increase in total company production, with oil production rising by 4% to nearly 40,000 barrels per day, demonstrating the company's strong performance and execution amid product price volatility.
- Robust Financial Performance: The fourth quarter adjusted net income was approximately $71 million, translating to $0.38 per diluted share, with adjusted EBITDAX at $216 million, reflecting the company's ongoing commitment to capital discipline and shareholder return strategies.
- Enhanced Shareholder Returns: Magnolia repurchased approximately 8.9 million shares in 2025, reducing its diluted share count by about 4.5%, while also announcing a 10% dividend increase, marking the fifth consecutive year of dividend growth and boosting investor confidence.
- Optimistic Future Outlook: The company expects drilling completions and facility capital expenditures for 2026 to range between $440 million and $480 million, with a planned production growth of approximately 5%, showcasing its ability to adapt flexibly to market changes despite product price volatility.
See More
Magnolia Oil & Gas Q4 Earnings Beat Expectations
- Earnings Highlights: Magnolia Oil & Gas reported a Q4 GAAP EPS of $0.37, beating expectations by $0.01, indicating stable profitability, while revenue of $317.62 million, down 2.7% year-over-year, still exceeded forecasts by $3.88 million, showcasing resilience in a challenging market.
- Capital Expenditure Plans: The company estimates its 2026 drilling and completion capital spending to be between $440 million and $480 million, comparable to last year, which includes a non-operated capital estimate similar to 2025, reflecting a cautious and stable approach to capital allocation.
- Production Growth Outlook: Magnolia anticipates total production growth of approximately 5% for 2026, aligning with its capital expenditure plans, indicating a commitment to enhancing production efficiency and output in the coming year.
- Quarterly Spending Peak: Estimated D&C capital spending for Q1 2026 is approximately $125 million, expected to be the highest quarterly rate for the year, with total production estimated at about 102 Mboe/d, despite a 1.5 Mboe/d downtime impact from a winter storm, all of which has been fully restored, demonstrating the company's quick recovery capabilities.
See More
Magnolia Oil & Gas to Announce Q4 Earnings on February 6
- Earnings Announcement: Magnolia Oil & Gas is set to release its Q4 earnings on February 6 before the market opens, with a consensus EPS estimate of $0.36, reflecting a 10% year-over-year decline, indicating potential profitability pressures in the current oil price environment.
- Revenue Expectations: The anticipated revenue for Q4 is $313.74 million, down 3.4% year-over-year, suggesting challenges in sales growth amid market volatility and oil price uncertainties.
- Performance Revision History: Over the past year, MGY has beaten EPS estimates 50% of the time and revenue estimates 75% of the time, indicating some capacity for exceeding expectations, although recent revision trends may impact investor confidence.
- Revision Trends Analysis: In the last three months, EPS estimates have seen three upward revisions and 13 downward revisions, while revenue estimates have experienced two upward revisions and ten downward revisions, reflecting a cautious market sentiment regarding the company's future performance.
See More
Magnolia Oil & Gas Announces 10% Dividend Increase
- Quarterly Dividend Increase: Magnolia Oil & Gas has declared a quarterly dividend of $0.165 per share, marking a 10% increase from the previous $0.150, reflecting the company's financial resilience amid current oil price volatility.
- Yield Analysis: The forward yield of 2.62% not only provides shareholders with stable cash returns but may also attract more investor interest in the company's stock performance.
- Shareholder Rights Assurance: The dividend will be payable on March 2, with a record date of February 10 and an ex-dividend date also on February 10, ensuring existing shareholders can benefit from this payout in a timely manner.
- Market Reaction Expectations: In an uncertain macro environment for oil prices, the dividend increase from Magnolia Oil & Gas may bolster market confidence, even though its reinvestment rate remains below 55%, indicating the company's commitment to shareholder returns.
See More
Magnolia Oil & Gas Declares Cash Dividend Increase
- Dividend Announcement: Magnolia Oil & Gas declared a cash dividend of $0.165 per share for Class A common stock and Class B units, reflecting the company's confidence in its business model and enhancing shareholder returns.
- Quarterly Dividend Increase: The 10% increase in the dividend represents an annualized payout of $0.66 per share, marking the fifth consecutive year of dividend growth since 2021, indicating stable financial performance and ongoing profitability.
- Production Growth and Share Reduction: The company achieved over 10% production growth in 2025 while reducing shares outstanding by 4%, which not only enhances per-share earnings capacity but also provides greater return potential for shareholders, further solidifying investor confidence.
- Strategic Commitment: Magnolia is committed to maintaining low leverage and prudent capital allocation, ensuring the ability to deliver safe, sustainable dividends even in a low product price environment, showcasing its strategic value for long-term growth.
See More
Magnolia Oil & Gas Announces 10% Increase in Quarterly Cash Dividend
- Dividend Increase: Magnolia has declared a cash dividend of $0.165 per share of Class A common stock and Class B units, payable on March 2, 2026, reflecting the company's confidence in its future performance.
- Consistent Dividend Growth: This marks the fifth consecutive year that Magnolia has increased its dividend rate since initiating payments in 2021, with an annualized dividend of $0.66 per share, driven by over 10% production growth in 2025.
- Robust Financial Strategy: CEO Chris Stavros emphasized that Magnolia's disciplined approach to maintaining low leverage and prudent capital allocation allows for secure, sustainable dividends even during periods of lower product prices, enhancing investor confidence.
- Market Positioning and Growth Potential: Magnolia focuses on oil and gas exploration and production in South Texas, aiming to generate shareholder value through high pre-tax margins and consistent free cash flow, with expectations for moderate annual production growth in the future.
See More
Magnolia Oil & Gas Reports Strong Q4 2025 Earnings with Record Production
- Significant Production Growth: In 2025, Magnolia achieved an 11% increase in total company production, with oil production rising by 4% to nearly 40,000 barrels per day, demonstrating the company's strong performance and execution amid product price volatility.
- Robust Financial Performance: The fourth quarter adjusted net income was approximately $71 million, translating to $0.38 per diluted share, with adjusted EBITDAX at $216 million, reflecting the company's ongoing commitment to capital discipline and shareholder return strategies.
- Enhanced Shareholder Returns: Magnolia repurchased approximately 8.9 million shares in 2025, reducing its diluted share count by about 4.5%, while also announcing a 10% dividend increase, marking the fifth consecutive year of dividend growth and boosting investor confidence.
- Optimistic Future Outlook: The company expects drilling completions and facility capital expenditures for 2026 to range between $440 million and $480 million, with a planned production growth of approximately 5%, showcasing its ability to adapt flexibly to market changes despite product price volatility.
See More
Magnolia Oil & Gas Q4 Earnings Beat Expectations
- Earnings Highlights: Magnolia Oil & Gas reported a Q4 GAAP EPS of $0.37, beating expectations by $0.01, indicating stable profitability, while revenue of $317.62 million, down 2.7% year-over-year, still exceeded forecasts by $3.88 million, showcasing resilience in a challenging market.
- Capital Expenditure Plans: The company estimates its 2026 drilling and completion capital spending to be between $440 million and $480 million, comparable to last year, which includes a non-operated capital estimate similar to 2025, reflecting a cautious and stable approach to capital allocation.
- Production Growth Outlook: Magnolia anticipates total production growth of approximately 5% for 2026, aligning with its capital expenditure plans, indicating a commitment to enhancing production efficiency and output in the coming year.
- Quarterly Spending Peak: Estimated D&C capital spending for Q1 2026 is approximately $125 million, expected to be the highest quarterly rate for the year, with total production estimated at about 102 Mboe/d, despite a 1.5 Mboe/d downtime impact from a winter storm, all of which has been fully restored, demonstrating the company's quick recovery capabilities.
See More
Magnolia Oil & Gas to Announce Q4 Earnings on February 6
- Earnings Announcement: Magnolia Oil & Gas is set to release its Q4 earnings on February 6 before the market opens, with a consensus EPS estimate of $0.36, reflecting a 10% year-over-year decline, indicating potential profitability pressures in the current oil price environment.
- Revenue Expectations: The anticipated revenue for Q4 is $313.74 million, down 3.4% year-over-year, suggesting challenges in sales growth amid market volatility and oil price uncertainties.
- Performance Revision History: Over the past year, MGY has beaten EPS estimates 50% of the time and revenue estimates 75% of the time, indicating some capacity for exceeding expectations, although recent revision trends may impact investor confidence.
- Revision Trends Analysis: In the last three months, EPS estimates have seen three upward revisions and 13 downward revisions, while revenue estimates have experienced two upward revisions and ten downward revisions, reflecting a cautious market sentiment regarding the company's future performance.
See More
Magnolia Oil & Gas Announces 10% Dividend Increase
- Quarterly Dividend Increase: Magnolia Oil & Gas has declared a quarterly dividend of $0.165 per share, marking a 10% increase from the previous $0.150, reflecting the company's financial resilience amid current oil price volatility.
- Yield Analysis: The forward yield of 2.62% not only provides shareholders with stable cash returns but may also attract more investor interest in the company's stock performance.
- Shareholder Rights Assurance: The dividend will be payable on March 2, with a record date of February 10 and an ex-dividend date also on February 10, ensuring existing shareholders can benefit from this payout in a timely manner.
- Market Reaction Expectations: In an uncertain macro environment for oil prices, the dividend increase from Magnolia Oil & Gas may bolster market confidence, even though its reinvestment rate remains below 55%, indicating the company's commitment to shareholder returns.
See More
Magnolia Oil & Gas Declares Cash Dividend Increase
- Dividend Announcement: Magnolia Oil & Gas declared a cash dividend of $0.165 per share for Class A common stock and Class B units, reflecting the company's confidence in its business model and enhancing shareholder returns.
- Quarterly Dividend Increase: The 10% increase in the dividend represents an annualized payout of $0.66 per share, marking the fifth consecutive year of dividend growth since 2021, indicating stable financial performance and ongoing profitability.
- Production Growth and Share Reduction: The company achieved over 10% production growth in 2025 while reducing shares outstanding by 4%, which not only enhances per-share earnings capacity but also provides greater return potential for shareholders, further solidifying investor confidence.
- Strategic Commitment: Magnolia is committed to maintaining low leverage and prudent capital allocation, ensuring the ability to deliver safe, sustainable dividends even in a low product price environment, showcasing its strategic value for long-term growth.
See More
Magnolia Oil & Gas Announces 10% Increase in Quarterly Cash Dividend
- Dividend Increase: Magnolia has declared a cash dividend of $0.165 per share of Class A common stock and Class B units, payable on March 2, 2026, reflecting the company's confidence in its future performance.
- Consistent Dividend Growth: This marks the fifth consecutive year that Magnolia has increased its dividend rate since initiating payments in 2021, with an annualized dividend of $0.66 per share, driven by over 10% production growth in 2025.
- Robust Financial Strategy: CEO Chris Stavros emphasized that Magnolia's disciplined approach to maintaining low leverage and prudent capital allocation allows for secure, sustainable dividends even during periods of lower product prices, enhancing investor confidence.
- Market Positioning and Growth Potential: Magnolia focuses on oil and gas exploration and production in South Texas, aiming to generate shareholder value through high pre-tax margins and consistent free cash flow, with expectations for moderate annual production growth in the future.
See More
