Magnolia Oil & Gas Corporation (MGY Quick QuoteMGY - Free Report) posted first-quarter 2026 net profit of 54 cents per share, beating the Zacks Consensus Estimate of 51 cents by 5.9%. This outperformance can be attributed to higher production, led by Giddings, alongside disciplined spending that supported sizable free cash flow generation. Total output increased 6% year over year to 102.6 thousand barrels of oil equivalent per day (Mboe/d), which also exceeded the consensus estimate by 0.44%, providing a key operating tailwind. However, the bottom line declined from the year-ago quarter’s 55 cents mainly because operating expenses increased nearly 8% during the quarter, compressing margins.

The oil and gas exploration and production company’s total revenues of $358.5 million rose 2.3% from the year-ago quarter and topped the consensus mark of $335 million by about 7%, driven by a higher year-over-year contribution from oil revenues.

Magnolia Oil & Gas Corp Price, Consensus and EPS Surprise

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

MGY's Volumes Rise on Giddings Strength

Magnolia reported the average daily total output of 102,564 barrels of oil equivalent per day (boe/d), increasing 6.2% from the year-ago quarter’s 96,549 boe/d. The figure also beat the model estimate of 102,000 boe/d.

Magnolia’s oil volumes averaged 40,678 barrels per day (bpd) in the quarter, up from 39,078 bpd a year ago. Moreover, the figure topped our estimate of 40,500 bpd. Natural gas volumes improved to 193,143 thousand cubic feet (Mcf) per day from 183,248 Mcf/d. The figure also surpassed our estimate of 192,700 Mcf/d. NGL volumes increased to 29,696 bpd from 26,930 bpd. Moreover, the figure beat our estimate of 29,300 bpd.

Management highlighted that Giddings continued to drive the company’s growth profile, with its production representing 82% of total volumes during the quarter. Giddings total production increased 9% year over year, with oil volumes up 8%, supported by strong well performance.

Magnolia's Revenue Mix Reflects Strong Oil Pricing

Oil remained the largest revenue contributor, with oil revenues of $257.3 million compared with $245.5 million in the year-ago period. Natural gas revenues were $51.8 million, modestly higher year over year, while NGL revenues declined to $49.4 million from $53.4 million.

Realizations were mixed across products. The average realized crude oil price was $70.29 per barrel, indicating a 0.7% increase from the year-ago period’s $69.81 and beating our estimate of $55.49. The average realized natural gas price of $2.98 per Mcf decreased from the year-ago period’s $3.11. However, it beat our estimate of $2.77 per Mcf. Additionally, the average realized natural gas liquids price was $18.48 per barrel, implying a 16.1% decrease from the year-ago period’s figure and missing our estimate of $19.75.

MGY recorded an average sales price of $38.84 per boe, unchanged from the year-ago level and beating our estimate of $32.97. Oil realized 97% of WTI, while natural gas realized 60% of Henry Hub, indicating weaker relative gas pricing capture in the quarter.

MGY's Costs, Firm and Operating Margin Headwinds

Operating expenses increased to $230.7 million from $214.5 million a year ago, reflecting higher general and administrative expense and higher gathering, transportation and processing costs. Lease operating expense was $47.8 million, essentially flat year over year, while gathering, transportation and processing rose to $18.2 million from $15 million.

Operating income was $127.8 million compared with $135.8 million in the prior-year quarter. The company’s pre-tax operating income margin was 36% in the quarter, down from 39% a year ago, alongside total adjusted cash operating costs of $11.57 per boe, which decreased slightly from $11.74.

Magnolia Converts Cash Flow Into Shareholder Returns

Net cash provided by operating activities totaled $197.6 million. Free cash flow was $145.6 million, supported by a drilling and completion capital program of $128.7 million, which represented about 51% of adjusted EBITDAX.

Magnolia returned $83.3 million to its shareholders during the quarter, or 57% of free cash flow, through a combination of dividends and share repurchases. The company repurchased 2 million shares across Class A and Class B for $51.9 million, and it declared a quarterly dividend of 16.5 cents per Class A share payable June 1, 2026.

MGY Expands Position With Bolt-On Acquisitions

A notable corporate development in the quarter was a series of bolt-on acquisitions in both Karnes area and Giddings. The company spent approximately $155 million in cash to add about 6,200 net acres and roughly 500 boe/d of low-decline production, about 45% oil, with the majority closing late in the quarter.

On the earnings call, management framed the Karnes purchase as creating a largely contiguous 10,000-gross-acre block that adds multiple years of drilling inventory at Magnolia’s pace, while the Giddings deals increased working and royalty interests around existing operations.

MGY’s Balance Sheet

The balance sheet remained conservative following the quarter’s capital returns and acquisitions. Cash and cash equivalents ended at $124.4 million. The company had long-term debt of $393.4 million, reflecting a debt-to-capitalization of 16.2%. Magnolia noted an undrawn $450 million revolving credit facility, supporting total liquidity of about $574 million.

Guidance

For second-quarter 2026, the company expects production of approximately 105 Mboe/d. Drilling and Completion (D&C) capital spending is anticipated to be in the range of $120-$125 million.  Fully diluted share count is projected to be approximately 185 million.

This Zacks Rank #1 (Strong Buy) company reiterated its two-rig and one-completion-crew operating cadence and expects total production growth of about 5% in 2026. You can see the complete list of today’s Zacks #1 Rank stocks here.

Looking ahead, the company expects fiscal 2026 total production growth of approximately 5%. For 2026, D&C capital expenditures are projected in the range of $440-$480 million. The 2026 operating plan includes running approximately two rigs and one completion crew. Regarding the 2026 capital allocation plan, roughly 75-80% of capital is expected to be directed toward Giddings, while approximately 20-25% is allocated to Karnes.

Important Earnings at a Glance

While we have discussed MGY’s first-quarter results in detail, let us take a look at three other key reports in this space.

Halliburton Company (HAL Quick QuoteHAL - Free Report) , a Houston, TX-based oil and gas equipment and services provider, posted first-quarter 2026 adjusted net income per share of 55 cents, beating the Zacks Consensus Estimate of 49 cents. The outperformance primarily reflects successful cost reduction initiatives. However, the bottom line fell from the year-ago adjusted profit of 60 cents.

Halliburton reported first-quarter capital expenditure of $192 million. As of March 31, 2026, this oil and gas equipment and services company had approximately $2 billion in cash/cash equivalents and $7.1 billion in long-term debt, representing a debt-to-capitalization ratio of 39.6.

Kinder Morgan Inc. (KMI Quick QuoteKMI - Free Report) , a Houston, TX-based oil and gas storage and transportation company,posted first-quarter 2026 adjusted earnings per share of 48 cents, which beat the Zacks Consensus Estimate of 38 cents. The bottom line increased year over year from 34 cents. The strong quarterly results can be primarily attributed to contributions from the Natural Gas Pipelines business segment.

As of March 31, 2026, KMI reported $72 million in cash and cash equivalents. At the quarter's end, its long-term debt amounted to $29.72 billion. KMI’s project backlog was reported at $10.1 billion by the end of the first quarter. The midstream energy major added that natural gas projects comprise approximately 92% of its project backlog, with nearly 60% dedicated to supporting local distribution companies and power generation.

Range Resources Corporation (RRC Quick QuoteRRC - Free Report) , a Fort Worth, TX-based oil and gas exploration and production company, posted first-quarter 2026 adjusted earnings of $1.52 per share, which beat the Zacks Consensus Estimate of $1.33. The bottom line also improved from the prior-year level of 96 cents. Strong quarterly results can be attributed to higher gas-equivalent production and increased natural gas price realization.

Drilling and completion expenditure totaled $130 million. An additional $5 million was spent on acreage and $4 million on infrastructure and other investments. At the end of the first quarter, Range Resources reported a total debt of $819.3 million, net of deferred financing costs.