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Magnolia Oil & Gas Corporation (MGY - Free Report) reported a fourth-quarter 2024 net profit of 49 cents per share, which beat the Zacks Consensus Estimate of 46 cents. This outperformance can be attributed to a healthy increase in production volumes. However, the bottom line decreased from the year-ago quarter’s 50 cents, due to a 9.8% increase in operating expenses year over year.
The oil and gas exploration and production company’s total revenues were $326.6 million, which marginally beat the Zacks Consensus Estimate of $326 million. The top line increased 1.2% from $322.6 million recorded in the year-ago period due to higher-than-expected revenues from natural gas liquids. The total natural gas liquids revenues reached $52 million, surpassing the consensus estimate of $45.5 million.
Magnolia Oil & Gas Corp Price, Consensus and EPS Surprise
In the quarter under review, the company recorded $222.6 million in net cash from operating activities and achieved a free cash flow of $90.3 million.
On Feb. 3, South Texas-focused Magnolia declared a cash dividend of 15 cents per share of Class A Common stock and a cash distribution of 15 cents of Class B unit, payable on March 3, to its shareholders of record as of Feb. 14. The quarterly dividend indicates a 15.4% increase, resulting in an annualized dividend rate of 60 cents per share. This marks the fourth consecutive year MGY has raised its dividend since initiating payments in 2021. The company’s continued focus on reducing outstanding shares and achieving steady annual production growth contributes to robust dividend increase.
In the fourth quarter, the company repurchased 2.2 million Class A Common shares for $55.8 million. For the full year of 2024, the company repurchased a total of 11 million shares, consisting of 7.5 million Class A Common shares and 3.5 million Class B shares, resulting in a 5% reduction in its diluted weighted average share count compared with the previous year.
Additionally, MGY’s board of directors approved an increase in the existing share repurchase authorization by 10 million shares, bringing the total remaining authorization to 11.7 million Class A Common shares, designated specifically for open market share repurchases.
Magnolia returned 90% of its free cash flow to shareholders in the fourth quarter and 88% for the full year 2024, through a combination of share repurchases and dividends.
MGY’s Production & Prices
The average daily total output of 93,096 barrels of oil equivalent per day (boe/d) increased from the year-ago quarter’s 85,414 boe/d. However, the figure slightly beat our estimate of 93,000 boe/d. Oil and gas production increased 9% year over year.
Oil volumes totaled 38,821 barrels per day (bpd), up 9.5% from the year-ago quarter’s level. Moreover, the figure exceeded our estimate of 38,500 bpd.
Natural gas volumes reached 167,079 thousand cubic feet per day (Mcf/d), up 7.9% from the fourth quarter of 2023. However, the figure missed our expectations of 175,900 Mcf/d.
The average realized crude oil price was $69.01 per barrel, indicating a 12.1% decrease from the year-ago period’s $77.39. The figure also missed our expectations of $71.87 per barrel.
The average realized natural gas liquids price was $21.27 per barrel, implying an 8% decrease from the year-ago period’s figure. On the other end, natural gas prices were in line with the prior-year figure of $1.85 per Mcf. MGY recorded an average sales price of $38.13 per boe compared with $41.06 a year ago.
MGY’s Balance Sheet & Capital Expenditure
As of Dec. 31, Magnolia had cash and cash equivalents of $260 million and long-term debt of $392.5 million. The total debt-to-total capital was 16.6%.
The company spent $131.6 million on its capital program in the reported quarter. Operating expenses increased to $202.5 million from $184.5 million in the year-ago period.
MGY’s Guidance
Magnolia expects 2025 drilling and completion (D&C) capital spending to be between $460 million and $490 million. Non-operated capital is also expected to be in line with 2024 levels. Production growth is expected to be 5-7% for the year.
The capital spending program is anticipated to result in total production growth of 5-7% for 2025. In the first quarter of 2025, D&C capital spending is estimated to be around $135 million. Total production for the first quarter is expected to be approximately 94 thousand barrels of oil equivalent per day (Mboe/d).
Oil price differentials are expected to be about a $3 per barrel discount to Magellan East Houston and MGY remains unhedged for all oil and natural gas production. The fully diluted share count for the first quarter of 2025 is expected to be about 195 million shares, 5% lower than the first quarter of 2024.
While we have discussed MGY’s fourth-quarter results in detail, let us take a look at three other key reports of this space.
Oil and gas equipment and services provider Liberty Energy (LBRT - Free Report) reported a fourth-quarter 2024 adjusted net income of 10 cents per share, which marginally beat the Zacks Consensus Estimate of 9 cents, due to a year-over-year decrease in costs and expenses. However, the bottom line underperformed the year-ago quarter’s reported figure of 54 cents, due to poor equipment and service execution, along with lower activity.
As of Dec. 31, Liberty had approximately $20 million in cash and cash equivalents. The pressure pumper’s long-term debt of $190.5 million represented a debt-to-capitalization of 8.8%.
Another oil and gas equipment and services provider Halliburton Company (HAL - Free Report) posted a fourth-quarter 2024 adjusted net income per share of 70 cents, same as the Zacks Consensus Estimate but below the year-ago quarter’s profit of 86 cents (adjusted). The numbers indicated softer activity in the region of North America, partly offset by improved fluid work in the Gulf of Mexico.
As of Dec. 31, 2024, the company had approximately $2.6 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. The company generated $1.5 billion of cash flow from operations in the fourth quarter, leading to a free cash flow of $1.1 billion.
Energy infrastructure provider Kinder Morgan (KMI - Free Report) reported fourth-quarter adjusted earnings per share of 32 cents, shy of the Zacks Consensus Estimate of 33 cents. The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures and lower crude, CO2 and NGL volumes. KMI’s fourth-quarter DCF was $1.3 billion, up from $1.2 billion a year ago.
As of Dec. 31, 2024, Kinder Morgan reported $88 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For 2025, Kinder Morgan anticipates a net income of $2.8 billion, up 8% from the prior-year level, and an adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates budgeted adjusted EBITDA of $8.3 billion, up 4% from the previous-year level.
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Magnolia Q4 Earnings & Revenues Beat Estimates, Dividend Raised
Magnolia Oil & Gas Corporation (MGY - Free Report) reported a fourth-quarter 2024 net profit of 49 cents per share, which beat the Zacks Consensus Estimate of 46 cents. This outperformance can be attributed to a healthy increase in production volumes. However, the bottom line decreased from the year-ago quarter’s 50 cents, due to a 9.8% increase in operating expenses year over year.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The oil and gas exploration and production company’s total revenues were $326.6 million, which marginally beat the Zacks Consensus Estimate of $326 million. The top line increased 1.2% from $322.6 million recorded in the year-ago period due to higher-than-expected revenues from natural gas liquids. The total natural gas liquids revenues reached $52 million, surpassing the consensus estimate of $45.5 million.
Magnolia Oil & Gas Corp Price, Consensus and EPS Surprise
Magnolia Oil & Gas Corp price-consensus-eps-surprise-chart | Magnolia Oil & Gas Corp Quote
In the quarter under review, the company recorded $222.6 million in net cash from operating activities and achieved a free cash flow of $90.3 million.
On Feb. 3, South Texas-focused Magnolia declared a cash dividend of 15 cents per share of Class A Common stock and a cash distribution of 15 cents of Class B unit, payable on March 3, to its shareholders of record as of Feb. 14. The quarterly dividend indicates a 15.4% increase, resulting in an annualized dividend rate of 60 cents per share. This marks the fourth consecutive year MGY has raised its dividend since initiating payments in 2021. The company’s continued focus on reducing outstanding shares and achieving steady annual production growth contributes to robust dividend increase.
In the fourth quarter, the company repurchased 2.2 million Class A Common shares for $55.8 million. For the full year of 2024, the company repurchased a total of 11 million shares, consisting of 7.5 million Class A Common shares and 3.5 million Class B shares, resulting in a 5% reduction in its diluted weighted average share count compared with the previous year.
Additionally, MGY’s board of directors approved an increase in the existing share repurchase authorization by 10 million shares, bringing the total remaining authorization to 11.7 million Class A Common shares, designated specifically for open market share repurchases.
Magnolia returned 90% of its free cash flow to shareholders in the fourth quarter and 88% for the full year 2024, through a combination of share repurchases and dividends.
MGY’s Production & Prices
The average daily total output of 93,096 barrels of oil equivalent per day (boe/d) increased from the year-ago quarter’s 85,414 boe/d. However, the figure slightly beat our estimate of 93,000 boe/d. Oil and gas production increased 9% year over year.
Oil volumes totaled 38,821 barrels per day (bpd), up 9.5% from the year-ago quarter’s level. Moreover, the figure exceeded our estimate of 38,500 bpd.
Natural gas volumes reached 167,079 thousand cubic feet per day (Mcf/d), up 7.9% from the fourth quarter of 2023. However, the figure missed our expectations of 175,900 Mcf/d.
The average realized crude oil price was $69.01 per barrel, indicating a 12.1% decrease from the year-ago period’s $77.39. The figure also missed our expectations of $71.87 per barrel.
The average realized natural gas liquids price was $21.27 per barrel, implying an 8% decrease from the year-ago period’s figure. On the other end, natural gas prices were in line with the prior-year figure of $1.85 per Mcf. MGY recorded an average sales price of $38.13 per boe compared with $41.06 a year ago.
MGY’s Balance Sheet & Capital Expenditure
As of Dec. 31, Magnolia had cash and cash equivalents of $260 million and long-term debt of $392.5 million. The total debt-to-total capital was 16.6%.
The company spent $131.6 million on its capital program in the reported quarter. Operating expenses increased to $202.5 million from $184.5 million in the year-ago period.
MGY’s Guidance
Magnolia expects 2025 drilling and completion (D&C) capital spending to be between $460 million and $490 million. Non-operated capital is also expected to be in line with 2024 levels. Production growth is expected to be 5-7% for the year.
The capital spending program is anticipated to result in total production growth of 5-7% for 2025. In the first quarter of 2025, D&C capital spending is estimated to be around $135 million. Total production for the first quarter is expected to be approximately 94 thousand barrels of oil equivalent per day (Mboe/d).
Oil price differentials are expected to be about a $3 per barrel discount to Magellan East Houston and MGY remains unhedged for all oil and natural gas production. The fully diluted share count for the first quarter of 2025 is expected to be about 195 million shares, 5% lower than the first quarter of 2024.
MGY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Earnings at a Glance
While we have discussed MGY’s fourth-quarter results in detail, let us take a look at three other key reports of this space.
Oil and gas equipment and services provider Liberty Energy (LBRT - Free Report) reported a fourth-quarter 2024 adjusted net income of 10 cents per share, which marginally beat the Zacks Consensus Estimate of 9 cents, due to a year-over-year decrease in costs and expenses. However, the bottom line underperformed the year-ago quarter’s reported figure of 54 cents, due to poor equipment and service execution, along with lower activity.
As of Dec. 31, Liberty had approximately $20 million in cash and cash equivalents. The pressure pumper’s long-term debt of $190.5 million represented a debt-to-capitalization of 8.8%.
Another oil and gas equipment and services provider Halliburton Company (HAL - Free Report) posted a fourth-quarter 2024 adjusted net income per share of 70 cents, same as the Zacks Consensus Estimate but below the year-ago quarter’s profit of 86 cents (adjusted). The numbers indicated softer activity in the region of North America, partly offset by improved fluid work in the Gulf of Mexico.
As of Dec. 31, 2024, the company had approximately $2.6 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. The company generated $1.5 billion of cash flow from operations in the fourth quarter, leading to a free cash flow of $1.1 billion.
Energy infrastructure provider Kinder Morgan (KMI - Free Report) reported fourth-quarter adjusted earnings per share of 32 cents, shy of the Zacks Consensus Estimate of 33 cents. The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures and lower crude, CO2 and NGL volumes. KMI’s fourth-quarter DCF was $1.3 billion, up from $1.2 billion a year ago.
As of Dec. 31, 2024, Kinder Morgan reported $88 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For 2025, Kinder Morgan anticipates a net income of $2.8 billion, up 8% from the prior-year level, and an adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates budgeted adjusted EBITDA of $8.3 billion, up 4% from the previous-year level.