As more fully discussed in “Item 10. Directors, Executive Officers and Corporate Governance,” if any of our officers becomes aware of a Business Combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such Business Combination opportunity to such entity prior to presenting such Business Combination opportunity to us. All of our officers currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.

We believe our structure will make us an attractive Business Combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other Business Combination. In this situation, the owners of the target business would exchange their shares of stock in the target business for shares of our stock or for a combination of shares of our stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are various costs and obligations associated with being a public company, we believe target businesses will find this method a more certain and cost effective method to becoming a public company than the typical initial public offering. In a typical initial public offering, there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection with a Business Combination with us.

Furthermore, once a proposed Business Combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring. Once public, we believe the target business would then have greater

Magnolia encourages its employees to think and act as owners and to engage, energize, and inspire each other to deliver top performance. The Company plans to remain focused on providing its employees with opportunities to build a winning company that safeguards workers and the ~~sale of the Private Placement Warrants, other than the proceeds deposited in the Trust Account,~~environment, enhances careers, strengthens local communities, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the Trust Account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00. Under Section 281(b) of the Delaware General Corporation Law (the “DGCL”), our plan of dissolution must provideincreases value for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.

Although we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the Trust Account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.

In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek

stakeholders.

access to the Trust Account and except as to any claims under our indemnity of the underwriters of our Public Offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, then our Sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and believe that our Sponsor’s only assets are securities of our company and, therefore, our Sponsor may not be able to satisfy those obligations. None of our other officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

In the event that the proceeds in the Trust Account are reduced below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, and our Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be substantially less than $10.00 per share.

We will seek to reduce the possibility that our Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Our Sponsor will also not be liable as to any claims under our indemnity of the underwriters of our Public Offering against certain liabilities, including liabilities under the Securities Act.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of the Trust Account distributed to our public stockholders upon the redemption of our Public Shares in the event we do not complete our Business Combination within 24 months from the Close Date may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

Furthermore, if the pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our Public Shares in the event we do not complete our Business Combination within 24 months from the Close Date, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we are unable to complete our Business Combination within 24 months from the Close Date, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our Public Shares as soon as reasonably possible following our 24th month and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.

independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the Trust Account is remote. Further, our Sponsor may be liable only to the extent necessary to ensure that the amounts in the Trust Account are not reduced below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of our Public Offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such third-party claims.

If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the Trust Account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

Our public stockholders will be entitled to receive funds from the Trust Account only in the event of the redemption of our Public Shares if we do not complete our initial Business Combination within 24 months from the Close Date or if they redeem their respective shares for cash upon the completion of the initial Business Combination. In no other circumstances will a stockholder have any right or interest of any kind to or in the Trust Account. In the event we seek stockholder approval in connection with our initial Business Combination, a stockholder’s voting in connection with the Business Combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the Trust Account. Such stockholder must have also exercised its redemption rights described above.

~~Amended and Restated Certificate of Incorporation~~

Our amended and restated certificate of incorporation contains certain requirements and restrictions relating to our Public Offering that will apply to us until the consummation of our Business Combination. If we seek to amend any provisions of our amended and restated certificate of incorporation relating to stockholders’ rights or pre-Business Combination activity, we will provide dissenting public stockholders with the opportunity to redeem their Public Shares in connection with any such vote. Our Initial Stockholders have agreed to waive any redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of our Business Combination. Specifically, our amended and restated certificate of incorporation provides, among other things, that:

prior to the consummation of our Business Combination, we shall either (1) seek stockholder approval of our Business Combination at a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for or against the proposed Business Combination, into their pro rata share of the aggregate amount then on deposit in our Trust Account, including interest (which interest shall be net of taxes payable) or (2) provide our public stockholders with the opportunity to tender their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in our Trust Account, including interest (which interest shall be net of taxes payable) in each case subject to the limitations described herein;

we will consummate our Business Combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely if we seek stockholder approval, a majority of the outstanding shares of Capital Stock voted are voted in favor of the Business Combination;

if our Business Combination is not consummated within 24 months from the completion of our Public Offering, then our existence will terminate and we will distribute all amounts in our Trust Account; and

prior to our Business Combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from our Trust Account or (ii) vote on any Business Combination.

These provisions cannot be amended without the approval of holders of 65% of Capital Stock. In the event we seek stockholder approval in connection with our Business Combination, our amended and restated certificate of incorporation provides that we may consummate our Business Combination only if approved by a majority of the shares of Capital Stock voted by our stockholders voting at a duly held stockholders meeting.

~~Competition~~

In identifying, evaluating and selecting a target business for our initial Business Combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting Business Combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than we do. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial Business Combination and our outstanding Warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial Business Combination.

~~Conflicts of Interest~~

TPG manages several investment vehicles. Funds managed by TPG or its affiliates may compete with us for acquisition opportunities in the same industries and sectors as we may target for our initial Business Combination. If these funds decide to pursue any such opportunity, we may be precluded from procuring such opportunities. In addition, investment ideas generated within TPG, including by persons who may make decisions for the company, may be suitable for both us and for a current or future TPG fund, and may be directed to such investment vehicle rather than to us, subject to applicable fiduciary duties. Neither TPG nor members of our management team who are also employed by TPG have any obligation to present us with any opportunity for a potential Business Combination of which they become aware solely in their capacities as officers or managing directors of TPG. TPG and/or our management, in their capacities as officers or managing directors of TPG or in their other endeavors, may choose to present potential Business Combinations to the related entities described above, current or future TPG investment vehicles, or third parties, before they present such opportunities to us.

In addition, TPG or its affiliates may Sponsor other blank check companies similar to ours during the period in which we are seeking an initial Business Combination, and members of our management team (other than Mr. Chazen) may participate in such blank check companies. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among the management teams. However, we do not expect that any such other blank check company would be focused on the energy industry and, as a result, we do not believe that any potential conflicts would materially affect our ability to complete our initial Business Combination.

Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a Business Combination opportunity. Accordingly, if any of our officers or directors becomes aware of a Business Combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such Business Combination opportunity to such entity. We expect that if an opportunity is presented to one of our officers or directors in his or her capacity as an officer or director of one of those other entities, such opportunity would be presented to such other entity and not to us. For more information on the entities to which our officers and directors currently have fiduciary or contractual obligations, please refer to “Management—Conflicts of Interest.” We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial Business Combination. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.

~~Indemnity~~

trust assets, in each case net of the interest which may be withdrawn to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under our indemnity of the underwriters of our Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether our Sponsor has sufficient funds to satisfy their indemnity obligations and believe that our Sponsor’s only assets are securities of our company and, therefore, our Sponsor may not be able to satisfy those obligations. We have not asked our Sponsor to reserve for such eventuality. We believe the likelihood of our Sponsor having to indemnify the Trust Account is limited because we will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

~~Employees~~

We currently have three officers. Members of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial Business Combination. The amount of time that members of our management will devote in any time period will vary based on whether a target business has been selected for our initial Business Combination and the current stage of the Business Combination process.

~~Periodic Reporting and Financial Information~~

Our Units, Class A common stock and Warrants are registered under the Exchange Act and as a result we have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. The public may read and copy any material we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at: http://www.sec.gov. The contents of these websites are not incorporated into this filing. Further, the Company’s references to the uniform resource locators (“URLs”) for these websites are intended to be inactive textual references only.

We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America (“U.S. GAAP”), or International Financing Reporting Standards (“IFRS”), depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the United States Public Company Accounting Oversight Board (“PCAOB”). These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial Business Combination within the prescribed time frame. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.

We are required to evaluate our internal control procedures as of December 31, 2018 as required by the Sarbanes-Oxley Act (“Sarbanes-Oxley Act”). In the event we are deemed to be a large accelerated filer or an accelerated filer as of December 31, 2018, we will be required to have our internal control procedures audited as of December 31, 2019. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such target business to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete a business acquisition with such a target business.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the Close Date, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.

Item 1A. Risk Factors

~~An investment in our securities involves a high degree~~

The nature of ~~risk. You should consider carefully all of~~Magnolia’s business activities subjects the Company to certain hazards and risks. The following risks ~~described below,~~and uncertainties, together with ~~the~~ other information ~~contained~~set forth in this Annual Report on Form 10-K, ~~including our financial statements~~should be carefully considered by current and ~~related notes, before making a decision to invest~~future investors in ~~our~~the Company’s securities. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. TheThese risks and uncertainties ~~described below~~ are not the only ones ~~we face.~~Magnolia faces. Additional risks and uncertainties ~~that we are unaware of,~~presently unknown to Magnolia, or ~~that we~~ currently ~~believe are not material,~~deemed immaterial, also may ~~also become important factors that adversely affect our~~impair the Company’s business ~~financial condition and operating results.~~

~~We are a recently formed blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.~~

We are a recently formed blank check company with no operating results, and we will not commence operations until completing a Business Combination. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial Business Combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning a Business Combination and may be unable to complete our initial Business Combination. If we fail to complete our initial Business Combination, we will never generate any operating revenues.

Our public stockholders may not be afforded an opportunity to vote on our proposed Business Combination, which means we may complete our initial Business Combination even though a majority of our public stockholders do not support such a combination.

We may not hold a stockholder vote to approve our initial Business Combination unless the Business Combination would require stockholder approval under applicable law or the rules of the NYSE or if we decide to hold a stockholder vote for business or other reasons. For instance, the NYSE rules currently allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any Business Combination. Therefore, if we were structuring a Business Combination that required us to issue more than 20% of our outstanding shares, we would seek stockholder approval of such Business Combination. However, except as required by law, the decision as to whether we will seek stockholder approval of a proposed Business Combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may consummate our initial Business Combination even if holders of a majority of our Public Shares do not approve of the Business Combination we consummate. Please refer to “Item 1. Business - Stockholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.

If we seek stockholder approval of our initial Business Combination, our Initial Stockholders, officers and directors have agreed to vote in favor of such initial Business Combination, regardless of how our public stockholders vote.

Unlike many other blank check companies in which the Initial Stockholders agree to vote their Founder Shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial Business Combination, our Initial Stockholders, officers and directors have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote any Founder Shares held by them, as well as any Public Shares purchased during or after our Public Offering, in favor of our initial Business Combination. As a result, in addition to our Initial Stockholders’ Founder Shares, we would need 24,375,001, or approximately 37.5%, of the 65,000,000 Public Shares to be voted in favor of a transaction (assuming all outstanding shares are voted) in order to have an initial Business Combination approved (or, if the applicable rules of the NYSE then

in effect require approval by a majority of the votes cast by public stockholders, we would need 32,500,001 Public Shares to be voted in favor of a transaction). We expect that our Initial Stockholders and their permitted transferees will own at least 20% of our outstanding shares at the time of any such stockholder vote. Accordingly, if we seek stockholder approval of our initial Business Combination, it is more likely that the necessary stockholder approval will be received than would be the case if such persons agreed to vote their Founder Shares in accordance with the majority of the votes cast by our public stockholders.

Your only opportunity to affect the investment decision regarding a potential Business Combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of the Business Combination.

~~At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks~~operations. The occurrence of one or more target businesses. Since our board of directors may complete a Business Combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the Business Combination, unless we seek such stockholder vote. Accordingly, if we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential Business Combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial Business Combination.

The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential Business Combination targets, which may make it difficult for us to enter into a Business Combination with a target.

We may seek to enter into a Business Combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the Business Combination. Furthermore, in no event will we redeem our Public Shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial Business Combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related Business Combination and may instead search for an alternate Business Combination. Prospective targets will be aware of these risks or uncertainties could materially and ~~thus, may be reluctant to enter into a Business Combination transaction with us.~~

~~The ability~~adversely affect the Company’s business, its financial condition, and the results of ~~our public stockholders to exercise redemption rights with respect to a large number~~Magnolia’s operations, which in turn could negatively impact the value of ~~our shares may not allow us to complete~~ the ~~most desirable Business Combination or optimize our capital structure.~~

At the time we enter into an agreement for our initial Business Combination, we will not know how many stockholders may exercise their redemption rights, and therefore we will need to structure the transaction based on our expectations asCompany’s securities.

Risks Related to the ~~number~~Ongoing COVID-19 Pandemic

COVID-19 and other pandemic outbreaks could negatively impact Magnolia’s business and results of shares that will be submitted for redemption. If our initial Business Combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the Trust Account to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially expected, weoperations.

The Company may ~~need to restructure the transaction to reserve a greater portion of the cash in the Trust Account or arrange for third party financing. Raising~~face additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable Business Combination available to us or optimize our capital structure.

The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial Business Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.

If our initial Business Combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial Business Combination would be unsuccessful is increased. If our initial Business Combination is unsuccessful, you would not receive your pro rata portion of the Trust Account until we liquidate the Trust Account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discountrisks related to the ~~pro rata amount per share~~ongoing COVID-19 pandemic. International, federal, state, and local public health and governmental authorities have taken extraordinary and wide-ranging actions to contain and combat the outbreak and spread of COVID-19 and variants thereof in regions across the Trust Account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market.

The requirement that we complete our initial Business Combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a Business Combination and may decrease our ability to conduct due diligence on potential Business Combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial Business Combination on terms that would produce value for our stockholders.

Any potential target business with which we enter into negotiations concerning a Business Combination will be aware that we must complete our initial Business Combination within 24 months from the Close Date. Consequently, such target business may obtain leverage over us in negotiating a Business Combination, knowing that if we do not complete our initial Business Combination with that particular target business, we may be unable to complete our initial Business Combination with any target business. This risk will increase as we get closer to the deadline described above. In addition, we may have limited time to conduct due diligence and may enter into our initial Business Combination on terms that we would have rejected upon a more comprehensive investigation.

We may not be able to complete our initial Business Combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our Public Shares and liquidate, in which case our public stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our Warrants will expire worthless.

Our Sponsor, officers and directors have agreed that we must complete our initial Business Combination within 24 months from the Close Date. We may not be able to find a suitable target business and complete our initial Business Combination within such time period. If we have not completed our initial Business Combination within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account, and not previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditorsUnited States and the ~~requirements~~world, including mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. To the extent the COVID-19 pandemic, including the emergence and spread of ~~other applicable law,~~new variants of COVID-19, and variants thereof continues or worsens, governments may impose additional similar restrictions. The full impact of COVID-19 is unknown and continues to rapidly evolve. The pandemic and any preventative or protective actions that the Company, its customers, or governmental authorities may take in ~~which case our public stockholders may only receive $10.00 per share, or less than in certain circumstances, and our Warrants will expire worthless.~~

~~If we seek stockholder approval of our initial Business Combination, our Sponsor, directors, officers, advisors and their affiliates may elect~~response to ~~purchase shares from public stockholders, which may influence a vote on a proposed Business Combination and reduce the public “float” of our Class A common stock.~~

If we seek stockholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer rules, our Sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial Business Combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our Sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the initial Business Combination and thereby increase the likelihood of obtaining stockholder approval of the initial Business Combination, or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial Business Combination, where it appears that such requirement would otherwise not be met. Thisthis virus may result in ~~the completion of our initial Business Combination that may not otherwise have been possible.~~

In addition, if such purchases are made, the public “float” of our Class A common stock and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a ~~national securities exchange.~~

If a stockholder fails to receive notice of our offer to redeem our Public Shares in connection with our initial Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial Business Combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer

documents or proxy materials, as applicable, that we will furnish to holders of our Public Shares in connection with our initial Business Combination will describe the various procedures that must be complied with in order to validly tender or redeem Public Shares. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed. See “Item 1. Business - Tendering stock certificates in connection with a tender offer or redemption rights.”

You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your Public Shares or Warrants, potentially at a loss.

Our public stockholders will be entitled to receive funds from the Trust Account only upon the earliest to occur of: (i) the completion of our initial Business Combination, (ii) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our Public Shares if we do not complete our initial Business Combination within 24 months from the Close Date and (iii) the redemption of all of our Public Shares if we are unable to complete an initial Business Combination within 24 months from the Close Date, subject to applicable law and as further described herein. In addition, if we are unable to complete our initial Business Combination within 24 months from the Close Date for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in the Trust Account. In that case, public stockholders may be forced to wait beyond 24 months from the Close Date before they receive funds from our Trust Account. In no other circumstances will a public stockholder have any right or interest of any kind in the Trust Account. Accordingly, to liquidate your investment, you may be forced to sell your Public Shares or Warrants, potentially at a loss.

~~The NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.~~

We cannot assure you that our securities will continue to be listed on the NYSE in the future or prior to our initial Business Combination. In order to continue listing our securities on the NYSE prior to our initial Business Combination, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum number of holders of our securities (300 round lot holders). Additionally, in connection with our initial Business Combination, we will be required to demonstrate compliance with the NYSE’s initial listing requirements, which are more rigorous than the NYSE’s continued listing requirements, in order to continue to maintain the listing of our securities on the NYSE. For instance, our stock price would generally be required to be at least $4.00 per share. We cannot assure you that we will be able to meet those initial listing requirements at that time.

If the NYSE delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

~~a limited availability of market quotations for our securities;~~

~~reduced liquidity for our securities;~~

a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

~~a limited amount of news and analyst coverage; and~~

~~a decreased ability to issue additional securities or obtain additional financing in the future.~~

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Units, Class A common stock and Warrants are listed on the NYSE, our Units, Class A common stock and Warrants will be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the state of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on the NYSE, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.

~~You will not be entitled to protections normally afforded to investors of many other blank check companies.~~

Because we have net tangible assets in excess of $5,000,000 and filed a Current Report on Form 8-K after the Close Date, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our Units were immediately tradable at the Close Date and we will have a longer period of time to complete our initial Business Combination than do companies subject to Rule 419. Moreover, if we were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the Trust Account to us unless and until the funds in the Trust Account were released to us in connection with our completion of an initial Business Combination.

If we seek stockholder approval of our initial Business Combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.

If we seek stockholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in our Public Offering, which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial Business Combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial Business Combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributionsdisruption, including with respect to the ~~Excess Shares~~Company’s financial reporting capabilities and its operations generally, and could potentially impact the Company’s customers, distribution partners, and third parties. In addition, many of the Company’s non-operational employees worked remotely following the outbreak of the COVID-19 pandemic in 2020, which increased the risk of security breaches or other cyber-incidents or attacks, loss of data, fraud, and other disruptions. On October 1, 2020, the substantial majority of Magnolia’s employees returned to the office. Any resulting impacts from the pandemic cannot be reasonably estimated at this time, and may materially affect the business and the Company’s financial condition and results of operations. The extent and duration of such impacts will depend on future developments, which are highly uncertain and cannot be predicted, including, among others, new information which may emerge concerning the severity of, and the actions to contain or curb the impact of COVID-19 and variants thereof.

The marketability of Company production is dependent upon market demand, vehicles, transportation and storage facilities, and other facilities, most of which the Company does not control. If these vehicles or facilities are unavailable, or if ~~we complete our initial Business Combination. And~~the Company is unable to access such vehicles or facilities on commercially reasonable terms, operations could be interrupted, production could be curtailed or shut in, and revenues could be reduced.

The marketing of oil, natural gas, and NGL production depends in large part on the availability, proximity, and capacity of trucks, pipelines, and storage facilities, natural gas gathering systems, and other transportation, processing, and refining facilities, as well as the existence of adequate markets. If there is a ~~result, you will~~resurgence of the COVID-19 outbreak, or if variants of COVID-19 continue to ~~hold that number of shares exceeding 15%~~emerge, across the United States and ~~in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a loss.~~

~~Because of our limited resources~~other locations across the world and the ~~significant competition~~related social distancing guidelines, travel restrictions, stay-at-home orders, or other responsive measures due to the pandemic are continued, renewed, or newly imposed, and if such events reduce demand for ~~Business Combination opportunities, it~~oil and natural gas, available storage and transportation capacity for the Company’s production may be ~~more difficult for us to complete our initial Business Combination.~~limited or unavailable in the future. If we are unable to complete our initial Business Combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption, and our Warrants will expire worthless.

We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing forthere is insufficient capacity, if the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire, our ability to compete with respectcapacity is unavailable to the ~~acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing~~Company, or if the ~~acquisition of certain target businesses. Furthermore, if we are obligated to pay cash~~capacity is unavailable on commercially reasonable terms, the prices Magnolia receives for the shares of Class A common stock which our public stockholders redeemed and, in the event we seek stockholder approval of our initial Business Combination, we make purchases of our Class A common stock, potentially reducing the resources available to us for our initial Business Combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a Business Combination. If we are unable to complete our initial Business Combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of the Trust Account and our Warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares. See “—If third parties bring claims against us, the proceeds held in the Trust Accountits production could be ~~reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.~~

If the net proceeds of our Public Offering and sale of Private Placement Warrants not being held in the Trust Account are insufficient to allow us to operate for at least 24 months after the Close Date, we may be unable to complete our initial Business Combination.

At December 31, 2017, we had $851,466 available to us outside the Trust Account to fund our working capital requirements. The funds available to us outside of the Trust Account may not be sufficient to allow us to operate for at least the 24 months after the Close Date, assuming that our initial Business Combination is not completed during that time. We expect to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital are discussed in ‘‘Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.’’ However, our affiliates are not obligated to make loans to

significantly depressed.

us in the future, and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses. Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.

We believe that the funds available to us outside of the Trust Account, plus funds available to us for working capital needs from interest income earned on the Trust Account up to $750,000 per year, will be sufficient to allow us to operate for at least the 24 months after the Close Date; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed Business Combination, although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as

As a result of ~~our breach~~ future storage and/or ~~otherwise), we might not have sufficient funds~~market shortages, the Company could be forced to ~~continue searching for,~~temporarily shut in some or ~~conduct~~all of its production or delay or discontinue drilling plans and commercial production following a discovery of hydrocarbons while the Company constructs or purchases its own facilities or system or is able to locate necessary storage and transportation. If the Company is forced to shut in production, it may incur greater costs to bring the associated production back online. Potential cost increases associated with bringing wells back online may be significant enough that such wells may become non-economic at low commodity price levels, which may lead to decreases in proved reserve estimates and potential impairments and associated charges to earnings. If the Company is able to bring wells back online, there is no assurance that such wells will be as productive following recommencement as they were prior to being shut in. For example, in the second quarter of 2020, the Company temporarily shut in some low producing wells due ~~diligence with respect~~ to ~~a target business. If we are unable to complete our initial Business Combination, our public stockholders may receive only approximately $10.00 per share on the liquidation~~depressed commodity prices. Additionally, some of the ~~Trust Account~~Company’s non-operated wells were shut in. Many of the wells have returned to production and our Warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares. See “—If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

~~Subsequent to our completion of our initial Business Combination, we may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have~~there was not a significant ~~negative effect~~impact on ~~our~~net production, however, should sustained periods of lower oil and natural gas prices return, the Company may further shut in wells or curtail production.

Risks Related to Magnolia’s Overall Business Operations

Oil, natural gas, and NGL prices are volatile. A sustained period of low oil, natural gas, and NGL prices could adversely affect Magnolia’s business, financial condition, results of operations, and ~~our stock price,~~ability to meet its expenditure obligations and financial commitments.

The prices Magnolia receives for its oil, natural gas, and NGL production will heavily influence its revenue, profitability, access to capital, future rate of growth, and the carrying value of its properties. Oil, natural gas, and NGLs are commodities, and their prices may fluctuate widely in response to market uncertainty and to relatively minor changes in the supply of and demand for oil, natural gas, and NGLs. Historically, oil, natural gas, and NGL prices have been volatile. The prices Magnolia receives for its production and the levels of Magnolia’s production depend on numerous factors beyond Magnolia’s control, which ~~could cause you to lose some or all of your investment.~~

Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all material issues that may be present inside a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outsideinclude, without limitation, the following:

•the length, scope, and severity of the ~~target business~~ongoing COVID-19 pandemic, including the emergence and ~~outside~~spread of ~~our control will not later arise. As a result~~variant strains of ~~these factors, we may be forced~~COVID-19, including the effects of related public health concerns and the impact of continued or new actions taken by governmental authorities and other third parties in response to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arisethe pandemic and ~~previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate~~its impact on ~~our liquidity,~~commodity prices and supply and demand considerations;

•U.S. federal, state, local, and non-U.S. governmental regulation and taxes;

•worldwide and regional economic conditions impacting the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders who choose to remain stockholders following the Business Combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.

~~If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.~~

Our placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption of our Public Shares, if we are unable to complete our initial Business Combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial Business Combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per share initially held in the Trust Account, due to claims of such creditors.

Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under our indemnity of the underwriters of our Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and believe that our Sponsor’s only assets are securities of our company. Our Sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our Sponsor to reserve for such obligations and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for our initial Business Combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial Business Combination, and you would receive such lesser amount per share in connection with any redemption of your Public Shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Our directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public stockholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per public share or (ii) such lesser amount per share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations.

While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our public stockholders may be reduced below $10.00 per share.

If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.

If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors.

If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial Business Combination.

~~If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:~~

~~restrictions on the nature of our investments; and~~

~~restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial Business Combination.~~

~~In addition, we may have imposed upon us burdensome requirements, including:~~

~~registration as an investment company;~~

~~adoption of a specific form of corporate structure; and~~

~~reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.~~

We do not believe that our anticipated principal activities will subject us to the Investment Company Act. On the Close Date, the proceeds held in the Trust Account were invested by the trustee in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds is, and will remain, restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate a Business Combination. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a Business Combination. If we are unable to complete our initial Business Combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of the Trust Account and our Warrants will expire worthless.

~~Changes in laws, regulations or rules, or a failure to comply with any laws, regulations and rules, may adversely affect our business, investments and results of operations.~~

We are subject to laws, regulations and rules enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations and rules, and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and applied, could have a material adverse effect on our business and results of operations.

If we are unable to consummate our initial Business Combination within 24 months of the Close Date, our public stockholders may be forced to wait beyond such 24 months before redemption from the Trust Account.

If we are unable to consummate our initial Business Combination within 24 months from the Close Date, we will distribute the aggregate amount then on deposit in the Trust Account (less up to $100,000 of the net interest earned thereon to pay dissolution expenses), pro rata to our public stockholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein. Any redemption of public stockholders from the Trust Account shall be effected automatically by function of our amended and restated certificate of incorporation prior to any voluntary winding up. If we are required to windup, liquidate the Trust Account and distribute such amount therein, pro rata, to our public stockholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the DGCL. In that case, investors may be forced to wait beyond the initial 24 months before the redemption proceeds of the Trust Account become available to them and they receive the return of their pro rata portion of the proceeds from the Trust Account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless we consummate our initial Business Combination prior thereto and only then in cases where investors have sought to redeem their common stock. Only upon our redemption or any liquidation will public stockholders be entitled to distributions if we are unable to complete our initial Business Combination

~~Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.~~

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of the Trust Account distributed to our public stockholders upon the redemption of our Public Shares in the event we do not complete our initial Business Combination within 24 months from the Close Date may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our Public Shares as soon as reasonably possible following the 24th month from the Close Date in the event we do not complete our Business Combination and, therefore, we do not intend to comply with the foregoing procedures.

Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations are limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of the Trust Account distributed to our public stockholders upon the redemption of our Public Shares in the event we do not complete our initial Business Combination within 24 months from the Close Date is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.

We may not hold an annual meeting of stockholders until after the consummation of our initial Business Combination. Our public stockholders will not have the right to elect directors prior to the consummation of our initial Business Combination.

In accordance with the NYSE corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on the NYSE. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. In addition, as holders of our shares of Class A common stock, our public stockholders do not have the right to vote on the election of directors. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial Business Combination. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial Business Combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.

We are not registering the shares of Class A common stock issuable upon exercise of the Warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise Warrants, thus precluding such investor from being able to exercise its Warrants except on a cashless basis and potentially causing such Warrants to expire worthless.

We are not registering the shares of Class A common stock issuable upon exercise of the Warrants under the Securities Act or any state securities laws at this time. However, under the terms of the Warrant agreement, we have agreed, as soon as practicable, but in no event later than fifteen (15) business days after the closing of our initial Business Combination, to use our best efforts to file a registration statement under the Securities Act covering such shares and maintain a current prospectus relating to the Class A common stock issuable upon exercise of the Warrants, until the expiration of the Warrants in accordance with the provisions of the Warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the Warrants are not registered under the Securities Act, we will be required to permit holders to exercise their Warrants on a cashless basis. However, no Warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is

available. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public Warrants who exercise their Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any Warrant, nor will we be required to issue securities or other compensation in exchange for the Warrants in the event that we are unable to register or qualify the stock including the Warrants under applicable state securities laws. If the issuance of the shares upon exercise of the Warrants is not so registered or qualified or exempt from registration or qualification, the holder of such Warrant shall not be entitled to exercise such Warrant and such Warrant may have no value and expire worthless. In such event, holders who acquired their Warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Class A common stock included in the units. If and when the Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of Class A common stock for sale under all applicable state securities laws.

The grant of registration rights to our Initial Stockholders and holders of our Private Placement Warrants may make it more difficult to complete our initial Business Combination, and the future exercise of such rights may adversely affect the market price of our Class A common stock.

Pursuant to an agreement entered into concurrently with our Public Offering, our Initial Stockholders and their permitted transferees can demand that we register their Founder Shares, after those shares convert to Class A common stock at the time of our initial Business Combination. In addition, holders of our Private Placement Warrants and their permitted transferees can demand that we register the Private Placement Warrants and the shares of Class A common stock issuable upon exercise of the Private Placement Warrants and holders of Warrants that may be issued upon conversion of working capital loans may demand that we register such Warrants or the Class A common stock issuable upon exercise of such Warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence of the registration rights may make our initial Business Combination more costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock that is expected when the securities owned by our Initial Stockholders, holders of our Private Placement Warrants or holders of our working capital loans or their respective permitted transferees are registered.

Because we are not limited to a particular industry, or any specific target businesses with which to pursue our initial Business Combination, you will be unable to ascertain the merits or risks of any particular target business’ operations.

Although we expect to focus our search for a target business in the energy industry, we may seek to complete a Business Combination with an operating company in any industry or sector. However, we will not, under our amended and restated certificate of incorporation, be permitted to effectuate our initial Business Combination with another blank check company or similar company with nominal operations. To the extent we complete our initial Business Combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a Business Combination target. Accordingly, any stockholders who choose to remain stockholders following the Business Combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value of their shares.

~~Because we intend to seek a Business Combination with a target business in the energy industry, we expect our future operations to be subject to risks associated with this industry.~~

We intend to focus our search for a target business in the energy industry in the United States, although we may seek to complete a Business Combination in any industry or location. Our management team has extensive experience across the upstream, midstream, services, refining and chemicals sectors. Accordingly, we may pursue a target business in these sectors or any other sector within the energy industry. We cannot provide specific risks of any Business Combination. However, risks inherent in investments in the energy industry include, but are not limited to, the following:

~~Changes in~~ global supply and demand for oil, natural gas, and ~~other energy related commodities;~~

NGLs;

~~Competitive pressures in~~ •the ~~energy industry, primarily in wholesale markets, as a result~~price and quantity of ~~consumer demand, technological advances, greater availability~~foreign imports of ~~natural gas and other factors;~~

~~Volatility in prices for~~ oil, natural gas, and NGLs;

•political and economic conditions in or affecting other producing regions or countries, including the Middle East, Africa, South America, and Russia;

•actions of the Organization of the Petroleum Exporting Countries, its members, and other state-controlled oil companies relating to oil price and production controls;

•the level of global exploration, development, and production;

•the level of global inventories;

•prevailing prices on local price indexes in the areas in which Magnolia operates;

•the proximity, capacity, cost, and availability of gathering and transportation facilities;

•localized and global supply, demand fundamentals, and transportation availability;

•the cost of exploring for, developing, producing, and transporting reserves;

•weather conditions and natural disasters;

•technological advances affecting energy ~~related commodities;~~

consumption;

~~Price~~•the price and availability of alternative fuels;

•expectations about future commodity prices; and

•other events that impact global market demand.

Lower commodity prices may reduce Magnolia’s cash flow and borrowing ability. If Magnolia is unable to obtain needed capital or financing on satisfactory terms, its ability to develop future reserves could be adversely affected. Also, using lower prices in estimating proved reserves may result in a reduction in proved reserves volumes due to economic limits. In addition, sustained periods with lower oil and natural gas prices may adversely affect drilling economics and Magnolia’s ability to raise capital, which may require it to re-evaluate and postpone or eliminate its development program, and result in the reduction of some proved undeveloped reserves and related standardized measure. If Magnolia is required to curtail its drilling program, Magnolia may be unable to hold leases that are scheduled to expire, which may further reduce reserves. As a result, a substantial or extended decline in commodity prices may materially and adversely affect Magnolia’s future business, financial condition, results of operations, liquidity, and ability to finance planned capital expenditures.

Part of Magnolia’s business strategy involves using some of the latest available horizontal drilling and completion techniques, which involve risks and uncertainties in their application.

Magnolia’s operations involve utilizing some of the latest drilling and completion (“D&C”) techniques. The difficulties Magnolia faces drilling horizontal wells include landing its wellbore in the desired drilling zone, staying in the desired drilling zone while drilling horizontally through the formation, running its casing the entire length of the wellbore, and being able to run tools and other equipment consistently through the horizontal wellbore.

The difficulties that Magnolia faces while completing its wells include the ability to fracture stimulate the planned number of stages, the ability to run tools the entire length of the wellbore during completion operations, and the ability to successfully clean out the wellbore after completion of the final fracture stimulation stage.

Use of new technologies may not prove successful and could result in significant cost overruns or delays or reductions in production, and, in extreme cases, the abandonment of a well. In addition, certain of the new techniques may cause irregularities or

~~Significant federal, state~~interruptions in production due to offset wells being shut in and ~~local regulation, taxation~~the time required to drill and ~~regulatory approval processes~~complete multiple wells before any such wells begin producing. Furthermore, the results of drilling in new or emerging formations are more uncertain initially than drilling results in areas that are more developed and have a longer history of established production. Newer and emerging formations and areas have limited or no production history and, consequently, Magnolia may be more limited in assessing future drilling results in these areas. If its drilling results are less favorable than anticipated, the return on investment for a particular project may not be as attractive as anticipated, and Magnolia could incur material write-downs of unevaluated properties, and the value of undeveloped acreage could decline in the future.

For example, potential complications associated with the new D&C techniques that Magnolia utilizes may cause Magnolia to be unable to develop its assets in line with current expectations and projections. Further, Magnolia’s recent well ~~as changes~~results may not be indicative of its future well results.

Drilling for and producing oil and natural gas are high risk activities with many uncertainties that could adversely affect Magnolia’s business, financial condition, or results of operations.

Magnolia’s future financial condition and results of operations will depend on the success of its development, production, and acquisition activities, which are subject to numerous risks beyond its control, including the risk that drilling will not result in ~~applicable laws~~commercially viable oil and ~~regulations;~~

natural gas production.

~~The speculative nature~~Magnolia’s decisions to develop or purchase prospects or properties will depend, in part, on the evaluation of data obtained through geophysical and ~~high degree~~geological analysis, production data, and engineering studies, which are often inconclusive or subject to varying interpretations. For a discussion of ~~risk~~the uncertainty involved in ~~investments in the upstream sector more broadly, and of exploration and development in particular, including relying on estimates of oil and gas reserves and the impacts of regulatory and tax changes;~~

Drilling, exploration and development risks, including encountering unexpected formations or pressures, premature declines of reservoirs, blow outs, equipment failures and other accidents, cratering, sour gas releases, uncontrollable flows ofthese processes, see “Crude oil, natural gas, and NGL reserves are estimates, and actual recoveries may vary significantly.” In addition, the cost of drilling, completing, and operating wells is often uncertain.

Further, many factors may curtail, delay, or ~~well fluids,~~ cancel scheduled drilling projects, including:

•delays imposed by, or resulting from, permitting activities, compliance with regulatory requirements, including limitations on wastewater disposal, emission of greenhouse gases (“GHGs”), and hydraulic fracturing;

•pressure or irregularities in geological formations;

•sustained periods of low oil and natural gas prices;

•shortages of or delays in obtaining equipment and qualified personnel or in obtaining water for hydraulic fracturing activities;

•equipment failures, accidents, or other unexpected operational events;

•lack of available gathering facilities or delays in construction of gathering facilities;

•lack of available capacity on interconnecting transmission pipelines;

•adverse weather ~~conditions, pollution, fires,~~conditions;

•issues related to compliance with environmental regulations;

•environmental or safety hazards, such as oil and natural gas leaks, oil spills, pipeline and tank ruptures, and unauthorized discharges of brine, well stimulation and completion fluids, toxic gases, or other pollutants into the surface and subsurface environment;

•limited availability of financing on acceptable terms;

•title issues;

•other market limitations in Magnolia’s industry;

•the length, scope, and severity of the ongoing COVID-19 pandemic, including the emergence and spread of variant strains of COVID-19, including the effects of related public health concerns and the impact of continued or new actions taken by governmental authorities and other ~~environmental risks, any~~third parties in response to the pandemic and its impact on commodity prices and supply and demand considerations; and

•changes in the supply chain of ~~which~~the Company’s vendors that may adversely impact the supply of key components.

Crude oil, natural gas, and NGL reserves are estimates, and actual recoveries may vary significantly.

The process of estimating oil and natural gas reserves is complex. It requires interpretations of available technical data and many assumptions, including assumptions relating to current and future economic conditions and commodity prices. Any significant inaccuracies in these interpretations or assumptions could ~~lead~~materially affect the estimated quantities and present value of reserves. In order to ~~environmental damage, injury~~prepare the reserve estimates, Magnolia must project production rates and ~~loss~~timing of ~~life~~ development expenditures. The Company must also analyze available geological, geophysical, production, and engineering data. The extent, quality, and reliability of this data can vary. The process also requires economic assumptions about matters such as oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes, and availability of funds. Magnolia cannot assure you that its management team’s assumptions with respect to projected production and/or the ~~destruction~~timing of ~~property;~~

development expenditures will not materially change in subsequent periods.

~~Proximity~~Magnolia’s management team and ~~capacity~~board may determine to secure and deploy development capital at a faster or slower pace than currently assumed.

Actual future production, oil prices, natural gas prices, NGL prices, revenues, taxes, development expenditures, operating expenses, and quantities of ~~transportation~~recoverable oil and ~~support infrastructure to~~natural gas reserves may vary from Magnolia’s estimates. For instance, initial production ~~facilities;~~

~~Availability of key inputs, such as strategic consumables, raw materials and drilling and processing equipment;~~

~~Impact of energy conservation efforts;~~

~~Technological advances affecting energy production and consumption;~~

~~Overall domestic and global economic conditions;~~

~~Availability of, and potential disputes with, independent contractors;~~

~~Natural disasters, terrorist acts and similar dislocations; and~~

~~Value of U.S. dollar relative to the currencies of~~rates reported by Magnolia or other ~~countries.~~

~~Past performance by TPG, including our management team,~~operators may not be indicative of future ~~performance~~or long-term production rates, recovery efficiencies may be worse than expected, and production declines may be greater than anticipated and may be more rapid and irregular when compared to initial production rates. In addition, estimates of ~~an investment~~proved reserves may be adjusted to reflect additional production history, results of development activities, current commodity prices, and other existing factors. Any significant variance could materially affect the estimated quantities and present value of reserves. Moreover, there can be no assurance that reserves will ultimately be produced or that proved undeveloped reserves will be developed within the periods anticipated.

Actual future prices and costs may differ materially from those used in the ~~Company.~~

Information regarding performance by, or businesses associated with, TPG and its affiliates is presented for informational purposes only. Past performance by TPG and our management team, including Mr. Chazen’s past performance, particularly at Occidental, is notpresent value estimate. If spot prices are below such calculated amounts, using more recent prices in estimating proved reserves may result in a ~~guarantee either (i) that we will be able~~reduction in proved reserve volumes due to ~~identify a suitable candidate for our initial Business Combination or (ii)~~economic limits.

The standardized measure of success with respect to any Business Combination we may consummate. You should not rely on the historical record of TPG or our management team’s performance as indicative of our future performance or of an investment in the company or the returns the company will, or is likely to, generate going forward. You should not rely on the historical record of TPG’s or our management team’s, including Mr. Chazen’s, performance as indicative of our future performance. Furthermore, an investment in us is not an investment in TPG.

~~We may seek acquisition opportunities in industries or sectors that may be outside of our management’s areas of expertise.~~

While our initial focus will be to pursue companies in energy or energy-related industries, we will consider a Business Combination outside of our management’s areas of expertise if a Business Combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertiseestimated reserves may not be ~~directly applicable~~an accurate estimate of the current fair value of estimated oil and natural gas reserves.

The standardized measure is a reporting convention that provides a common basis for comparing oil and gas companies subject to ~~its evaluation~~the rules and regulations of the SEC. The standardized measure requires historical 12-month pricing as required by the SEC as well as operating and development costs prevailing as of the date of computation. Consequently, it may not reflect the prices ordinarily received or ~~operation,~~that will be received for oil and natural gas production because of varying market conditions, and it also may not reflect the ~~information contained~~actual costs that will be required to produce or develop the oil and natural gas properties. In addition, the sellers in the Business Combination were generally not subject to U.S. federal, state, or local income taxes other than certain state franchise taxes. Magnolia is subject to U.S. federal, state, and local income taxes. As a result, estimates included in this Annual Report on Form 10-K ~~regarding~~of future net cash flow may be materially different from the ~~areas~~future net cash flows that are ultimately received. Therefore, the standardized measure of ~~our management’s expertise would~~estimated reserves included in this Annual Report on Form 10-K should not be ~~relevant to an understanding~~construed as accurate estimates of the current fair value of such proved reserves.

Properties Magnolia has acquired or will acquire may not produce as projected, and Magnolia may be unable to determine reserve potential, identify liabilities associated with such properties, or obtain protection from sellers against such liabilities.

Acquiring oil and natural gas properties requires Magnolia to assess reservoir and infrastructure characteristics, including recoverable reserves, future oil and natural gas prices and their applicable differentials, development and operating costs, and potential liabilities, including environmental liabilities. In connection with these assessments, Magnolia performs a review of the subject properties that it believes to be generally consistent with industry practices. Such assessments are inexact and inherently uncertain. For these reasons, the properties Magnolia has acquired or will acquire may not produce as expected. In connection with the assessments, Magnolia performs a review of the subject properties, but such a review may not reveal all existing or potential problems. In the course of due diligence, Magnolia may not review every well, pipeline, or associated facility. Magnolia cannot necessarily observe structural and environmental problems, such as groundwater contamination, when a review is performed. Magnolia may be unable to obtain or successfully enforce contractual indemnities from the seller for liabilities created prior to Magnolia’s purchase of the property. Magnolia may be required to assume the risk of the physical condition of the properties in addition to the risk that the properties may not perform in accordance with its expectations. Additionally, the success of future acquisitions will depend on Magnolia’s ability to integrate effectively the then-acquired business into its then-existing operations. The process of integrating acquired assets may involve unforeseen difficulties and may require a disproportionate amount of managerial and financial resources. Magnolia’s failure to achieve consolidation savings, to incorporate the additionally acquired assets into its then-existing operations successfully, or to minimize any unforeseen operational difficulties, or the failure to acquire future assets at all, could have a material adverse effect on its financial condition and results of operations.

Magnolia is not the operator on all of its acreage or drilling locations, and, therefore, is not able to control the timing of exploration or development efforts, associated costs, or the rate of production of any non-operated assets and could be liable for certain financial obligations of the operators or any of its contractors to the extent such operator or contractor is unable to satisfy such obligations.

Magnolia conducts many of its exploration and production operations through joint operating agreements with other parties under which the Company may not control decisions, either because the Company does not have a controlling interest or is not an operator under the subject agreement. There is risk that ~~we elect~~these parties may at any time have economic, business, or legal interests or goals that are inconsistent with Magnolia’s, and therefore decisions may be made that are not what the Company believes are in its

best interest. Moreover, parties to ~~acquire.~~these agreements may be unable or unwilling to meet their economic or other obligations, and Magnolia may be required to fulfill those obligations alone. In either case, the value of Magnolia’s investment may be adversely affected.

Magnolia’s producing properties are predominantly located in South Texas, making Magnolia vulnerable to risks associated with operating in a limited geographic area.

Substantially all of Magnolia’s producing properties are geographically concentrated in the Karnes County portion of the Eagle Ford Shale in South Texas and the Giddings area of the Austin Chalk. As a result, ~~our management~~Magnolia may be disproportionately exposed to various factors, including, among others: (i) the impact of regional supply and demand factors, (ii) delays or interruptions of production from wells in such areas caused by governmental regulation, (iii) processing or transportation capacity constraints, (iv) market limitations, (v) availability of equipment and personnel, (vi) water shortages or other drought related conditions, or (vii) interruption of the processing or transportation of oil, natural gas, or NGLs. The concentration of Magnolia’s assets in a limited geographic area also increases its exposure to changes in local laws and regulations, certain lease stipulations designed to protect wildlife and unexpected events that may occur in the regions such as natural disasters, severe weather events, seismic events, industrial accidents, or labor difficulties. Any one of these factors has the potential to cause producing wells to be shut-in, delay operations, decrease cash flows, increase operating and capital costs, and prevent development of lease inventory before expirations. Any of the risks described above could have a material adverse effect on Magnolia’s business, financial condition, results of operations, and cash flow.

Magnolia may incur losses as a result of title defects in the properties in which it invests.

The existence of a material title deficiency can render a lease worthless and adversely affect Magnolia’s results of operations and financial condition. While Magnolia typically obtains title opinions prior to commencing drilling operations on a lease or in a unit, the failure of title may not be discovered until after a well is drilled, in which case Magnolia may lose the lease and the right to produce all or a portion of the minerals under the property. Additionally, if an examination of the title history of a property reveals that an oil or natural gas lease or other developed right has been purchased in error from a person who is not the owner of the mineral interest desired, Magnolia’s interest would substantially decline in value. In such cases, the amount paid for such oil or natural gas lease or leases would be lost.

The development of proved undeveloped reserves may take longer and may require higher levels of capital expenditures than anticipated. Therefore, proved undeveloped reserves may not be ultimately developed or produced.

As of December 31, 2021, Magnolia’s assets contained 25.6 MMboe of proved undeveloped reserves consisting of 12.0 MMBbls of oil, 39.1 Bcf of natural gas, and 7.0 MMBbls of NGLs. Development of these proved undeveloped reserves may take longer and require higher levels of capital expenditures than anticipated. Magnolia’s ability to fund these expenditures is subject to a number of risks. Magnolia may be unable to obtain required capital or financing on satisfactory terms, which could lead to a decline in its ability to access or grow production and reserves. Delays in the development of reserves, increases in costs to drill and develop such reserves, or decreases in commodity prices will reduce the value of the proved undeveloped reserves and future net revenues estimated for such reserves, and may result in some projects becoming uneconomic. In addition, delays in the development of reserves could cause Magnolia to have to reclassify proved undeveloped reserves as unproved reserves. Furthermore, there is no certainty that Magnolia will be able to convert proved undeveloped reserves to developed reserves, or that undeveloped reserves will be economically viable or technically feasible to produce.

Certain factors could require Magnolia to write-down the carrying values of its properties, including commodity prices decreasing to a level such that future undiscounted cash flows from its properties are less than their carrying value.

Accounting rules require that Magnolia periodically review the carrying value of its properties for possible impairment. Based on prevailing commodity prices, specific market factors, circumstances at the time of prospective impairment reviews, the continuing evaluation of development plans, production data, economics, and other factors, Magnolia may be required to write-down the carrying value of its properties. A write-down constitutes a non-cash impairment charge to earnings. Declines in commodity prices may adversely affect proved reserve values, which would likely result in a proved property impairment of Magnolia’s properties, which could have a material adverse effect on results of operations for the periods in which such charges are taken. During the first quarter of 2020, Magnolia recorded impairments of $1.9 billion related to proved and unproved properties as a result of a sharp decline in commodity prices. Proved property impairment of $1.4 billion is included in “Impairment of oil and natural gas properties” and unproved property impairment of $0.6 billion is included in “Exploration expenses” on the Company’s consolidated statements of operations for the year ended December 31, 2020. Magnolia could experience additional material write-downs as a result of lower commodity prices or other factors, including low production results or high lease operating expenses, capital expenditures, or transportation fees.

Unless Magnolia replaces its reserves with new reserves and develops those new reserves, its reserves and production will decline, which would adversely affect future cash flows and results of operations.

Producing oil and natural gas reservoirs generally are characterized by declining production rates that vary depending upon reservoir characteristics and other factors. Unless Magnolia conducts successful ongoing exploration and development activities or continually acquires properties containing proved reserves, proved reserves will decline as those reserves are produced. Magnolia’s future reserves and production, and therefore future cash flow and results of operations, are highly dependent on Magnolia’s success in efficiently developing current reserves and economically finding or acquiring additional recoverable reserves. Magnolia may not be able to ~~adequately ascertain~~develop, find, or ~~assess all of the significant risk factors. Accordingly, any stockholders who choose~~acquire sufficient additional reserves to ~~remain stockholders following our initial Business Combination could suffer a reduction in~~replace future production. If Magnolia is unable to replace such production, the value of ~~their shares. Such stockholders are unlikely~~its reserves will decrease, and its business, financial condition, and results of operations would be materially and adversely affected.

Properties that Magnolia decides to drill may not yield oil or natural gas in commercially viable quantities.

Properties that Magnolia decides to drill that do not yield oil or natural gas in commercially viable quantities will adversely affect its results of operations and financial condition. There is no way to predict in advance of drilling and testing whether any particular prospect will yield oil or natural gas in sufficient quantities to recover drilling or completion costs or to be economically viable. The use of seismic data and other technologies and the study of producing fields in the same area will not enable Magnolia to know conclusively prior to drilling whether oil or natural gas will be present or, if present, whether oil or natural gas will be present in commercial quantities. Magnolia cannot ensure that the analogies drawn from available data from other wells, more fully explored prospects, or producing fields will be applicable to its drilling prospects. Further, Magnolia’s drilling operations may be curtailed, delayed, or canceled as a result of numerous factors, including unexpected drilling conditions, title issues, pressure or lost circulation in formations, equipment failures or accidents, adverse weather conditions, compliance with environmental and other governmental or contractual requirements, and increases in the cost of, and shortages or delays in the availability of, electricity, supplies, materials, drilling or workover rigs, equipment, and services.

Magnolia depends upon a small number of significant purchasers for the sale of most of its oil, natural gas, and NGL production. The loss of one or more of such purchasers could, among other factors, limit Magnolia’s access to suitable markets for the oil, natural gas, and NGLs it produces.

Magnolia normally sells its production to a relatively small number of customers, as is customary in the oil and natural gas business. In 2021, there were four purchasers who accounted for an aggregate 63% of the total revenue attributable to Magnolia’s assets. The loss of any significant purchaser could adversely affect Magnolia’s revenues in the short-term. Magnolia expects to depend upon these or other significant purchasers for the sale of most of its oil and natural gas production. Magnolia cannot ensure that it will continue to have ready access to suitable markets for its future oil and natural gas production.

The unavailability or high cost of drilling rigs, equipment, supplies, personnel, and oilfield services could adversely affect Magnolia’s ability to execute its development plans within its budget and on a ~~remedy~~timely basis.

The demand for ~~such reduction~~drilling rigs, pipe, and other equipment and supplies, as well as for qualified and experienced field personnel to drill wells and conduct field operations, geologists, geophysicists, engineers, and other professionals in ~~value.~~

~~Although we~~the oil and gas industry, can fluctuate significantly, often in correlation with oil, natural gas, and NGL prices, causing periodic shortages of supplies and needed personnel. Magnolia’s operations are concentrated in areas in which oilfield activity levels have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial Business Combination with a target that does not meet such criteria and guidelines,increased rapidly, and as a result, demand for such drilling rigs, equipment, and personnel, as well as access to transportation, processing, and refining facilities in these areas, have increased, as have the ~~target business with~~costs for those items. To the extent that commodity prices continue to improve in the future, the demand for and prices of these goods and services are likely to increase, and Magnolia could encounter delays in securing, or an inability to secure, the personnel, equipment, power, services, resources, and facilities access necessary for it to resume or increase Magnolia’s development activities, which ~~we enter into our initial Business Combination~~could result in production volumes being below its forecasted volumes. In addition, any such negative effect on production volumes, or significant increases in costs, could have a material adverse effect on cash flow and profitability. Furthermore, if it is unable to secure a sufficient number of drilling rigs at reasonable costs, Magnolia may not ~~have attributes entirely consistent with our general criteria~~be able to drill all of its acreage before its leases expire.

Competition in the oil and ~~guidelines.~~

~~Although we have identified general criteria~~gas industry is intense, making it more difficult for Magnolia to acquire properties, market oil or natural gas, and ~~guidelines~~secure trained personnel.

Magnolia’s ability to acquire additional prospects to complement or expand the Company’s current business and to find and develop reserves in the future will depend on its ability to evaluate and select suitable properties for ~~evaluating prospective target businesses,~~acquisitions and to consummate transactions in a highly competitive environment for acquiring properties, marketing oil and natural gas, and securing trained personnel. However, there is no guarantee that Magnolia will be able to identify attractive acquisition opportunities. In the event it is ~~possible that~~able to identify attractive acquisition opportunities, Magnolia may not be able to complete the acquisition or do so on commercially

acceptable terms. Competition for capital available for investment in the oil and gas industry, specifically for acquisitions, may also increase the cost of, or cause Magnolia to refrain from, completing acquisitions. Many other oil and gas companies possess and employ greater financial, technical, and personnel resources than Magnolia. Those companies may be able to pay more for productive properties and exploratory prospects and to evaluate, bid for, and purchase a ~~target business with~~greater number of properties and prospects than Magnolia’s financial or personnel resources permit. Magnolia may not be able to compete successfully in the future in acquiring prospective reserves, developing reserves, marketing hydrocarbons, attracting and retaining quality personnel, and raising additional capital, which ~~we enter into our initial Business Combination will~~could have a material adverse effect on its business.

The loss of senior management or technical personnel could adversely affect operations.

Magnolia depends on the services of its senior management and technical personnel. Magnolia does not ~~have all~~maintain, nor does Magnolia plan to obtain, any insurance against the loss of any of these ~~positive attributes.~~individuals. The loss of the services of its senior management could have a material adverse effect on its business, financial condition, and results of operations.

Magnolia may not be able to keep pace with technological developments in its industry.

The oil and gas industry is characterized by rapid and significant technological advancement and the introduction of new products and services using new technologies. As others use or develop new technologies, Magnolia may be placed at a competitive disadvantage or may be forced by competitive pressures to implement those new technologies at substantial cost. In addition, other oil and gas companies may have greater financial, technical, and personnel resources that allow them to enjoy technological advantages and that may in the future allow them to implement new technologies before Magnolia can. Magnolia may not be able to respond to these competitive pressures or implement new technologies on a timely basis or at an acceptable cost. If ~~we complete our initial Business Combination~~one or more of the technologies it expects to use were to become obsolete, Magnolia’s business, financial condition, or results of operations could be materially and adversely affected.

Magnolia’s business could be adversely affected by security threats, including cyber security threats, and related disruptions.

Magnolia relies heavily on its information systems, and the availability and integrity of these systems is essential to conducting Magnolia’s business and operations. Technical system flaws, power loss, cyber security risks, including cyber or phishing-attacks, unauthorized access, malicious software, data privacy breaches by employees or others with authorized access, ransomware, and other cyber security issues could compromise computer and telecommunications systems and result in disruptions to the Company’s business operations or the access, disclosure, or loss of Company data and proprietary information. Additionally, as a ~~target~~producer of natural gas and oil, Magnolia faces various security threats that ~~does~~could render its information or systems unusable, and threats to the security of its facilities and infrastructure or the facilities and infrastructure of third parties, such as gathering and processing and other facilities, refineries and pipelines, or the cloud. If any of these security breaches were to occur, they could lead to losses of, or damage to, sensitive information, facilities, infrastructure, and systems essential to its business and operations, as well as data corruption, communication interruptions, or other disruptions to its operations, which, in turn, could have a material adverse effect on its business, financial position, results of operations, and cash flows.

Magnolia’s implementation of various procedures and controls to monitor and mitigate such security threats and to increase security for its information, systems, facilities, and infrastructure may result in increased costs. Moreover, there can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring.

Potential future legislation may generally affect the taxation of natural gas and oil exploration and development companies and may adversely affect Magnolia’s future cash flows and results of operations.

From time to time, federal legislation has been proposed that would, if enacted into law, make significant changes to tax laws, including to certain key U.S. federal and state income tax provisions currently available to natural gas and oil exploration and development companies. For example, the Biden Administration has set forth several tax proposals that would, if enacted into law, make significant changes to U.S. tax laws. Such proposals include, but are not ~~meet~~limited to, (i) an increase in the U.S. income tax rate applicable to corporations and (ii) the elimination of certain tax subsidies for fossil fuels. Congress could consider some or all of these ~~guidelines,~~proposals in connection with future tax reform, including the tax reform being undertaken by the Biden Administration.It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such ~~combination~~changes could take effect. The passage of any legislation as a result of these proposals and other similar changes in U.S. federal income tax laws could adversely affect Magnolia’s future cash flows and results of operations.

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of Magnolia’s income or other tax returns could adversely affect its financial condition and results of operations.

Magnolia is subject to taxes by U.S. federal, state, and local tax authorities. Magnolia’s future effective tax rates could be subject to volatility or adversely affected by a number of factors, including changes in the valuation of Magnolia’s deferred tax assets and liabilities, expected timing and amount of the release of any tax valuation allowances, tax effects of stock based compensation, or changes in tax laws, regulations, or interpretations thereof.

In addition, Magnolia may be subject to audits of its income, sales, and other transaction taxes by U.S. federal, state, and local taxing authorities. Outcomes from these audits could have an adverse effect on the Company’s financial condition and results of operations.

Risks Related to Environmental and Political Conditions

Magnolia’s operations are subject to environmental and occupational health and safety laws and regulations that may expose the Company to significant costs and liabilities.

Magnolia’s operations are subject to stringent and complex federal, state, and local laws and regulations governing the discharge of materials into the environment, health and safety aspects of the Company’s operations or otherwise relating to environmental protection. These laws and regulations may impose numerous obligations applicable to Magnolia’s operations, including the acquisition of a permit or other approval before conducting regulated activities; the restriction of types, quantities, and concentration of materials that can be released into the environment; the limitation or prohibition of drilling activities on certain lands lying within wilderness, wetlands, and other protected areas; the application of specific health and safety criteria addressing worker protection; and the imposition of substantial liabilities for pollution resulting from the Company’s operations. Failure to comply with these laws and regulations may result in the assessment of sanctions, including administrative, civil or criminal penalties.

Certain environmental laws impose strict joint and several liability for costs required to remediate and restore sites where hazardous substances, hydrocarbons or solid wastes have been stored or released. Magnolia may be required to remediate contaminated properties currently or formerly operated by the Company or facilities of third parties that received waste generated by the Company.

Magnolia may incur substantial losses and be subject to substantial liability claims as a result of operations. Additionally, Magnolia may not be insured for, or insurance may be inadequate to protect Magnolia against, these risks.

Magnolia is not insured against all risks. Losses and liabilities arising from uninsured and underinsured events could materially and adversely affect its business, financial condition, or results of operations.

Magnolia’s development activities are subject to all of the operating risks associated with drilling for and producing oil and natural gas, including the possibility of environmental hazards, such as ~~successful~~uncontrollable releases of oil, natural gas, brine, well fluids, toxic gas, or other pollution into the environment, including groundwater, air, and shoreline contamination, or the presence of endangered or threatened species; abnormally pressured formations; mechanical difficulties, such as stuck oilfield drilling and service tools and casing collapse; fires, explosions, and ruptures of pipelines; personal injuries and death; natural disasters; and terrorist attacks targeting oil and natural gas related facilities and infrastructure.

Events that could adversely affect Magnolia’s ability to conduct operations or result in substantial loss as a ~~combination with a business that does meet~~result of claims include injury or loss of life, damage to and destruction of property, natural resources, and equipment, pollution and other environmental damage, regulatory investigations and penalties, and repair and remediation costs.

Magnolia may elect not to obtain insurance for any or all of ~~our general criteria and guidelines.~~these risks if it believes that the cost of available insurance is excessive relative to the risks presented. In addition, ~~if we announce~~pollution and environmental risks generally are not fully insurable. The occurrence of an event that is not fully covered by insurance could have a

material adverse effect on business, financial condition, and results of operations.

~~prospective Business Combination~~

Certain of Magnolia’s properties are subject to land use restrictions, which could limit the manner in which Magnolia conducts business.

Certain of Magnolia’s properties are subject to land use restrictions, including city ordinances, which could limit the manner in which Magnolia conducts business. Such restrictions could affect, among other things, access to and the permissible uses of facilities as well as the manner in which Magnolia produces oil and natural gas and may restrict or prohibit drilling in general. The costs incurred to comply with such restrictions may be significant in nature, and Magnolia may experience delays or curtailment in the pursuit of development activities and perhaps even be precluded from the drilling of wells.

Magnolia’s operations are subject to a ~~target~~series of risks arising from climate change.

The threat of climate change continues to attract considerable attention globally. In the United States, no comprehensive climate change legislation has been implemented at the federal level. However, President Biden has highlighted addressing climate change as a priority of his administration, and federal regulators, state and local governments, and private parties have taken (or announced that ~~does not meet our general criteria~~they plan to take) actions that have or may have a significant influence on the Company’s operations. For example, following the determination that emissions of carbon dioxide, methane, and ~~guidelines,~~other GHGs present an endangerment to public health and welfare, the EPA has adopted regulations to regulate GHG emissions from certain large stationary sources, require the monitoring and reporting of GHG emissions from certain sources, and (together with the National Highway Traffic Safety Administration), implement GHG emissions limits on vehicles manufactured for operation in the United States, among other things. Moreover, the regulation of methane from oil and gas facilities has been subject to uncertainty in recent years. On November 15, 2021, the EPA published a ~~greater~~proposed rule that would strengthen the existing emissions reduction requirements in Subpart OOOOa and create a Subpart OOOOb to expand reduction requirements for new, modified and reconstructed oil and natural gas sources, and would impose methane emissions limitations on existing oil and natural gas sources nationwide for the first time. In addition, the proposed rule would establish “Emissions Guidelines,” creating a Subpart OOOOc that would require states to develop plans to reduce methane emissions from existing sources that must be at least as effective as presumptive standards set by the EPA. Under the proposed rule, states would have three years to develop their compliance plan for existing sources and the regulations for new sources would take effect immediately upon issuance of a final rule. The EPA is expected to issue both a supplemental proposed rule, that may expand or modify the current proposed rule, and a final rule by the end of 2022. As a result of these regulatory changes, the scope of any final methane regulations or the costs for complying with federal methane regulations are uncertain.

Separately, a number of ~~stockholders may exercise their redemption rights, which may make it difficult~~states have developed programs that are aimed at reducing GHG emissions by means of cap and trade programs, carbon taxes, or encouraging the use of renewable energy or alternative low-carbon fuels. Cap and trade programs typically require major sources of GHG emissions to acquire and surrender emission allowances in return for ~~us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash.~~emitting those GHGs. In addition, ~~if stockholder approval~~efforts have been made and continue to be made in the international community toward the adoption of international treaties or protocols that would address global climate change issues. For example, President Biden issued written notification to the United Nations of the ~~transaction is required~~United States’ intention to rejoin the Paris Agreement, which became effective on February 19, 2021. The Paris Agreement includes nonbinding pledges to limit or reduce future emissions. In addition, in September 2021, President Biden publicly announced the Global Methane Pledge, a pact that aims to reduce global methane emissions at least 30% below 2020 levels by ~~law, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult for us to attain stockholder approval of our initial Business Combination if~~2030. Since its formal launch at the target business does not meet our general criteria and guidelines. If we are unable to complete our initial Business Combination, our public stockholders may receive only approximately $10.00 per share onUnited Nations Climate Change Conference (COP26), over 100 countries have joined the ~~liquidation of the Trust Account and our Warrants will expire worthless.~~

We may seek acquisition opportunities with a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues or earnings or difficulty in retaining key personnel.

pledge. To the extent ~~we complete our initial Business Combination with~~the United States or other countries implement or impose climate change regulations on the oil and gas industry, it could have an adverse effect on the Company’s business.

Concern over climate change has also resulted in political risks in the United States, including climate-related pledges by certain candidates now in public office. Litigation risks are also increasing, as a ~~financially unstable business~~number of cities and other local governments have sought to bring suit against the largest oil and gas companies in state or ~~an entity lacking an established record~~federal court, alleging, among other things, that such companies created public nuisances by producing fuels that contributed to climate change or alleging that the companies have been aware of ~~sales~~the adverse effects of climate change for some time but failed to adequately disclose such impacts to their investors or ~~earnings, we~~customers.

Additionally, Magnolia’s access to capital may be ~~affected~~impacted by ~~numerous risks inherent~~climate-related policies. Financial institutions may elect in the future to shift some or all of their investment into non-fossil fuel related sectors. There is also a risk that financial institutions may be required to adopt policies that have the effect of reducing the funding provided to the fossil fuel sector. Ultimately, this could make it more difficult to secure funding for exploration and production activities. Additionally, activist shareholders have introduced proposals that may seek to force companies to adopt aggressive emission reduction targets or to shift away from more carbon-intensive industries. Separately, activists may also pursue other means of curtailing oil and natural gas operations, such as through litigation. The Company continually monitors the global climate change agenda initiatives, including stakeholder concerns, and responds accordingly based on its assessment of such initiatives on its business.

Separately, many scientists have concluded that increasing concentrations of GHG in the earth’s atmosphere may produce significant physical effects, such as increased frequency and severity of storms, droughts, and floods, among other climatic phenomena. If any of those effects were to occur in areas where Magnolia’s facilities are located, they could have an adverse effect on the Company’s assets and operations.

Federal, state, and local legislative and regulatory initiatives relating to hydraulic fracturing as well as governmental reviews of such activities could result in increased costs, additional operating restrictions or delays in the completion of oil and natural gas wells, and adversely affect Magnolia’s production.

The hydraulic fracturing process involves the injection of water, proppants, and chemicals under pressure into targeted subsurface formations to fracture the surrounding rock and stimulate production. It is typically done at substantial depths in formations with low permeability. Magnolia routinely uses fracturing techniques in the U.S. to expand the available space for natural gas and oil to migrate toward the wellbore. Hydraulic fracturing is typically regulated by state oil and natural gas commissions, but certain federal agencies have asserted regulatory authority over certain aspects of the ~~business with which we combine. These risks include volatile revenues or earnings~~process, including air emissions, fracturing fluid constituents, and ~~difficulties in obtaining and retaining key personnel. By their nature, distressed companies are subject~~wastewater disposal, among others.

From time to ~~heightened risks and our acquisition~~time the U.S. Congress has considered proposals to regulate hydraulic fracturing under the U.S. Safe Drinking Water Act. While, to date, those proposals have not been enacted, such proposals may be considered again in the future. Several states have already enacted or are otherwise considering legislation to regulate hydraulic fracturing practices through more stringent permitting, fluid disclosure, and well construction requirements on hydraulic-fracturing operations or otherwise seek to ban fracturing activities altogether. Hydraulic fracturing of wells and subsurface water disposal via injection wells are also under public and governmental scrutiny due to potential environmental and physical impacts, including possible contamination of groundwater and drinking water and possible links to seismic events. In addition, some municipalities have significantly limited or prohibited drilling activities and/or hydraulic fracturing or are considering doing so. Although it is not possible at ~~greater risk. For example, distressed companies~~this time to predict the final outcome of the legislation regarding hydraulic fracturing, any new federal, state, or local restrictions on hydraulic fracturing that may ~~have reduced access to credit and substantial interest expense,~~be imposed in areas in which ~~may~~the Company conducts business could result in ~~lower working capital~~increased compliance costs or additional operating restrictions in the U.S.

Risks Related to Financing and ~~reduced profitability. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we~~Liquidity

Magnolia may not be able to ~~properly ascertain or assess~~generate sufficient cash to service all of ~~the significant risk factors~~its indebtedness and wemay be forced to take other actions to satisfy debt obligations, which may not ~~have adequate time~~be successful.

Magnolia’s ability to ~~complete due diligence. Furthermore,~~make scheduled payments on or to refinance its indebtedness obligations, including the RBL Facility and the 2026 Senior Notes, depends on Magnolia’s financial condition and operating performance, which are subject to prevailing economic and competitive conditions, industry cycles and certain financial, business, and other factors affecting Magnolia’s operations, many of which are beyond Magnolia’s control. Magnolia may not be able to maintain a level of cash flow from operating activities sufficient to permit Magnolia to pay the principal, premium, if any, and interest on its indebtedness. Failure to make required payments on its indebtedness will result in an event of default under the agreement governing the applicable indebtedness, entitling the requisite lenders of such indebtedness to accelerate the payment of obligations thereunder and to exercise other remedies, including in respect of collateral (if any) securing such indebtedness. As of December 31, 2021, the Company had $400.0 million of principal debt related to the 2026 Senior Notes outstanding and no outstanding borrowings related to the RBL Facility and $450.0 million of borrowing capacity of the RBL Facility.

If Magnolia’s cash flow and capital resources are insufficient to fund debt service obligations, Magnolia may be forced to reduce or delay investments and capital expenditures, sell assets, seek additional capital, or restructure or refinance existing indebtedness. Magnolia’s ability to restructure or refinance indebtedness will depend on the condition of the capital markets and its financial condition at such time. Any refinancing of indebtedness may be at higher interest rates and may require Magnolia to comply with more onerous covenants, which could further restrict business operations. The terms of Magnolia’s existing or future debt instruments may restrict it from adopting some of these ~~risks~~alternatives. In addition, any failure to make payments of interest and principal on outstanding indebtedness on a timely basis would likely harm Magnolia’s ability to incur additional indebtedness. In the absence of sufficient cash flows and capital resources, Magnolia could face substantial liquidity problems and might be required to dispose of material assets or operations to meet debt service and other obligations. The RBL Facility and the indenture governing the 2026 Senior Notes limit Magnolia’s ability to dispose of assets and use the proceeds from such dispositions. Magnolia may not be able to consummate those dispositions, and the proceeds of any such disposition may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit Magnolia to meet scheduled debt service obligations.

Restrictions in Magnolia’s existing and future debt agreements could limit Magnolia’s growth and ability to engage in certain activities.

Magnolia’s ability to meet its expenses and debt obligations and comply with the covenants and restrictions contained therein will depend on its future performance, which will be affected by financial, business, economic, industry, regulatory, and other factors, many of which are beyond Magnolia’s control. If market or other economic conditions deteriorate, Magnolia’s ability to comply with these covenants may be ~~outside~~impaired. For example, Magnolia’s RBL Facility requires Magnolia to maintain quarterly compliance with a leverage and current ratio and the satisfaction of ~~our control~~certain conditions, including the absence of defaults and ~~leave us with no~~events of default thereunder, to borrow money. The RBL Facility also includes “anti-cash hoarding” provisions, which limit Magnolia Operating’s ability to ~~control~~maintain a consolidated cash balance in excess of $65 million any time there are borrowings outstanding. Magnolia’s debt agreements also restrict the payment of dividends and distributions by certain of its subsidiaries to it, which could affect its access to cash. In addition, Magnolia’s ability to comply with the financial and other restrictive covenants in the agreements governing its indebtedness will be affected by the levels of cash flow from operations, future events, and other circumstances beyond Magnolia’s control. Breach of these covenants or ~~reduce~~restrictions will result in a default under Magnolia’s debt agreements, which if not cured or waived within the ~~chances~~applicable grace period (if any), would permit the acceleration of all indebtedness outstanding thereunder by the requisite holders of such indebtedness. Upon acceleration, the indebtedness would become immediately due and payable, together with accrued and unpaid interest, and any commitments of a lender to make further loans to Magnolia may terminate. Even if new financing were then available, it may not be on terms that ~~those risks will adversely impact a target business.~~

We are ~~not required~~acceptable to ~~obtain~~Magnolia. In addition to accelerating the indebtedness, the requisite group of affected lenders may exercise remedies upon the incurrence of an opinion from an independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial pointevent of ~~view.~~

~~Unless we complete our initial Business Combination with an affiliated entity or our board cannot independently determine the fair market value~~default, including through foreclosure, in respect of the ~~target~~collateral securing any such secured financing arrangements. Moreover, any subsequent replacement of Magnolia’s financing arrangements may require it to comply with more restrictive covenants, which could further restrict business ~~or businesses, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, that~~operations.

Any significant reduction in Magnolia’s borrowing base under the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial Business Combination.

We may issue additional common stock or preferred stock to complete our initial Business Combination or under an employee incentive plan after completion of our initial Business Combination. We may also issue shares of Class A common stock upon the conversion of the Class F common stock at a ratio greater than one-to-one at the time of our initial Business CombinationRBL Facility as a result of the ~~anti-dilution provisions contained~~periodic borrowing base redeterminations or otherwise may negatively impact Magnolia’s ability to fund its operations.

The RBL Facility limits the amounts Magnolia can borrow up to a borrowing base amount, which the lenders determine, in ~~our~~good faith, in accordance with their respective usual and customary oil and natural gas lending criteria, based upon the loan value of the proved oil and natural gas reserves located within the geographic boundaries of the United States included in the most recent reserve report provided to the lenders. As of December 31, 2021, the Company had $450.0 million of borrowing base capacity and no borrowings.

The RBL Facility requires periodic borrowing base redeterminations based on reserve reports. Additionally, the borrowing base is subject to unscheduled reductions due to certain issuances of new junior lien indebtedness, unsecured indebtedness or subordinated indebtedness, certain sales or acquisitions of borrowing base properties, or early monetizations or terminations of certain hedge or swap positions. An unscheduled redetermination may also be requested by the requisite lenders under the original RBL Facility, once within a 12-month period, or by Magnolia, twice within a 12-month period. A reduced borrowing base could render Magnolia unable to access adequate funding under the RBL Facility. Additionally, if the aggregate amount outstanding under the RBL Facility exceeds the borrowing base at any time, Magnolia would be required to repay any indebtedness in excess of the borrowing base or to provide mortgages on additional borrowing base properties to eliminate such excess. As a result of a mandatory prepayment and/or reduced access to funds under the RBL Facility, Magnolia may be unable to implement its drilling and development plan, make acquisitions, or otherwise carry out business plans, which would have a material adverse effect on its financial condition and results of operations.

Magnolia’s development projects and acquisitions require substantial capital expenditures. Magnolia may be unable to obtain required capital or financing on satisfactory terms, which could lead to a decline in its ability to access or grow production and reserves.

The oil and gas industry is capital-intensive. Magnolia makes, and expects to continue to make, substantial capital expenditures related to development and acquisition projects. Magnolia has funded, and expects to continue to fund, its capital budget with cash generated by operations and potentially through borrowings under the RBL Facility. However, Magnolia’s financing needs may require it to alter or increase its capitalization substantially through the issuance of debt or equity securities or the sale of assets. The issuance of additional indebtedness would require that an additional portion of cash flow from operations be used for the payment of interest and principal on its indebtedness, thereby further reducing Magnolia’s ability to use cash flow from operations to fund working capital, capital expenditures, and acquisitions. The issuance of additional equity securities would be dilutive to existing stockholders. The actual amount and timing of future capital expenditures may differ materially from estimates as a result of, among other things: commodity prices; actual drilling results; the availability of drilling rigs and other services and equipment; and legislative, regulatory, technological, competitive, and other economic or industry developments. A reduction in commodity prices from current levels may result in a decrease in actual capital expenditures, which would negatively impact Magnolia’s ability to grow production.

Magnolia’s cash flow from operations and access to capital is subject to a number of variables, including:

•the prices at which Magnolia’s production is sold;

•proved reserves;

•the amount of hydrocarbons Magnolia is able to produce from its wells;

•Magnolia’s ability to acquire, locate, and produce new reserves;

•the amount of Magnolia’s operating expenses;

•Magnolia’s ability to borrow under the RBL Facility;

•restrictions in the instruments governing Magnolia’s debt, and Magnolia’s ability to incur additional indebtedness; and

•Magnolia’s ability to access the capital markets.

If Magnolia’s revenues or the borrowing base under the RBL Facility decrease as a result of lower oil, natural gas, and NGL prices, operational difficulties, declines in reserves or for any other reason, Magnolia may have limited ability to obtain the capital necessary to sustain operations at current levels. If additional capital is needed, Magnolia may not be able to obtain debt or equity financing on terms acceptable to it, if at all. If cash flow generated by Magnolia’s operations or available borrowings under the RBL Facility are insufficient to meet Magnolia’s capital requirements, the failure to obtain additional financing could result in a curtailment of the development of Magnolia’s properties, which in turn could lead to a decline in reserves and production and could materially and adversely affect Magnolia’s business, financial condition, and results of operations. If Magnolia incurs additional indebtedness, the operational risks that Magnolia faces could intensify, and Magnolia may be unable to service its existing debt service obligations.

A negative shift in investor or shareholder sentiment of the oil and gas industry could adversely affect Magnolia’s business and ability to raise debt and equity capital.

Certain segments of the investor community have developed negative sentiment towards investing in the oil and gas industry. Recent equity returns in the sector versus other industry sectors have led to lower oil and natural gas representation in certain key equity market indices. In addition, some investors, including investment advisors and certain sovereign wealth, pension funds, university endowments, and family foundations, have stated policies to disinvest in the oil and gas sector based on their social and environmental considerations. Certain other stakeholders have also pressured commercial and investment banks to reduce or stop financing oil and natural gas and related infrastructure projects.

In addition, shareholder activism has been recently increasing in the oil and gas industry, and shareholders may attempt to effect changes to Magnolia’s business or governance, whether by shareholder proposals, public campaigns, proxy solicitations, or otherwise. Such actions could adversely impact the Company’s business by distracting management and other personnel from their primary responsibilities, require the Company to incur increased costs, and/or result in reputational harm.

Such developments, including environmental activism and initiatives aimed at limiting climate change and reducing air pollution, could result in downward pressure on the stock prices of oil and gas companies, including Magnolia’s. This may also potentially result in a reduction of available capital funding for potential development projects, impacting the Company’s future financial results.

Risks Related to Magnolia’s Class A Common Stock and Capital Structure

Magnolia is a holding company. Magnolia’s sole material asset is its equity interest in Magnolia LLC, and Magnolia is accordingly dependent upon distributions from Magnolia LLC to pay taxes and cover its corporate and other overhead expenses.

Magnolia is a holding company and has no material assets other than its equity interest in Magnolia LLC. Magnolia has no independent means of generating revenue. To the extent Magnolia LLC has available cash, Magnolia intends to cause Magnolia LLC to make (i) generally pro rata distributions to its unitholders, including Magnolia, in an amount at least sufficient to allow Magnolia to pay its taxes and (ii) non-pro rata payments to Magnolia to reimburse it for its corporate and other overhead expenses. To the extent that Magnolia needs funds and Magnolia LLC or its subsidiaries are restricted from making such distributions or payments under applicable law or regulation or under the terms of any financing arrangements, or are otherwise unable to provide such funds, Magnolia’s liquidity and financial condition could be materially adversely affected.

Magnolia’s second amended and restated certificate of ~~incorporation. Any such issuances would dilute~~incorporation and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the ~~interest~~market price of ~~our stockholders and likely present other risks.~~

~~Our~~Magnolia’s Class A Common Stock.

Magnolia’s second amended and restated certificate of incorporation authorizes ~~the issuance~~its board of updirectors to ~~200,000,000 shares of Class A common stock, par value $0.0001 per share, 20,000,000 shares of Class F common stock, par value $0.0001 per share, and 1,000,000 shares of~~issue preferred stock ~~par value $0.0001 per share. There are 135,000,000 and 3,750,000 authorized but unissued shares~~without stockholder approval. If Magnolia’s board of Class A common stock and Class F common stock available, respectively, for issuance, which amount takes into account the shares of Class A common stock reserved for issuance upon exercise of outstanding Warrants but not the conversion of the Class F common stock. Shares of Class F common stock are automatically convertible into shares of our Class A common stock at the time of our initial Business Combination, or earlier at the option of the holder, initially at a one-for-one ratio but subjectdirectors elects to ~~adjustment as set forth herein. At December 31, 2017, there are no preferred shares issued and outstanding.~~

~~We may~~ issue ~~a substantial number of additional shares of common or~~ preferred stock, to complete our initial Business Combination or under an employee incentive plan after completion of our initial Business Combination. We may also issue shares of Class A common stock upon conversion of the Class F common stock at a ratio greater than one-to-one at the time of our initial Business Combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. However, our amended and restated certificate of incorporation provides, among other things, that prior to our initial Business Combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the Trust Account or (ii) vote on any initial Business Combination. The issuance of additional shares of common or preferred stock:

~~may significantly dilute the equity interest of investors in our Public Offering;~~

~~may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;~~

could cause a change in control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and

~~may adversely affect prevailing market prices for our Units, Class A common stock and/or Warrants.~~

~~Resources~~it could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial Business Combination, our public stockholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of the Trust Account and our Warrants will expire worthless.

We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial Business Combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial Business Combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial Business Combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of the Trust Account and our Warrants will expire worthless.

~~We are dependent upon our officers and directors and their departure could adversely affect our ability to operate.~~

Our operations are dependent upon a relatively small group of individuals and, in particular, Mr. Chazen. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial Business Combination. In addition, our officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential Business Combinations and monitoring the related due diligence. We do not intend to have any full-time employees prior to the completion of our initial Business Combination. Moreover, certain of our officers and directors have time and attention requirements for private investment funds of which affiliates of TPG are the investment managers. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.

In addition, certain of our officers and directors are employed by affiliates of our Sponsor, which is an investment manager to various private investment funds, which make investments in securities or other interests of or relating to companies in industries we may target for our initial Business Combination. Our independent directors also serve as officers and board members for other entities. If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs, which may have a negative impact on our ability to complete our initial Business Combination. For a complete discussion of our officers’ and directors’ other business affairs, please see the section entitled “Item 10. Directors, Executive Officers and Corporate Governance”.

Our ability to successfully effect our initial Business Combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial Business Combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.

Our ability to successfully effect our initial Business Combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial Business Combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial Business Combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.

Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular Business Combination. These agreements may provide for them to receive compensation following our initial Business Combination and as a result, may cause them to have conflicts of interest in determining whether a particular Business Combination is the most advantageous.

Our key personnel may be able to remain with the company after the completion of our initial Business Combination only if they are able to negotiate employment or consulting agreements in connection with the Business Combination. Such negotiations would take place simultaneously with the negotiation of the Business Combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the Business Combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business, subject to their fiduciary duties under Delaware law. However, we believe the ability of such individuals to remain with us after the completion of our initial Business Combination will not be the determining factor in our decision as to whether or not we will proceed with any potential Business Combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial Business Combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial Business Combination.

We may have a limited ability to assess the management of a prospective target business and, as a result, may effect our initial Business Combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.

When evaluating the desirability of effecting our initial Business Combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders who choose to remain stockholders following the Business Combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.

The officers and directors of an acquisition candidate may resign upon completion of our initial Business Combination. The departure of a Business Combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidates’ key personnel upon the completion of our initial Business Combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial Business Combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.

Our officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial Business Combination.

Our officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a Business Combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial Business Combination. Each of our officers is engaged in several other business endeavors for which he may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of hours per week to our affairs. In particular, certain of our officers and directors are employed by TPG, which are the investment managers to various private investment funds, which make investments in securities or other interests of or relating to companies in industries we may target for our initial Business Combination. In addition, certain of our officers and directors serve as an officer or director of TPG Pace Holdings Corp., a blank check company sponsored by TPG focused on a business combination with a target business in any industry, sector or location. Our independent directors also serve as officers and board members for other entities. If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial Business Combination. For a complete discussion of our officers’ and directors’ other business affairs, please see “Item 10. Directors, Executive Officers and Corporate Governance”.

Certain of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us, including TPG Pace Holdings Corp. or another blank check company, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

Until we consummate our initial Business Combination, we intend to engage in the business of identifying and combining with one or more businesses. Our Sponsor and officers and directors are, or may in the future become, affiliated with entities that are engaged in a similar business, including TPG Pace Holdings Corp. or another blank check company that may have acquisition objectives that are similar to ours or that is focused on a particular industry. Moreover, certain of our officers and directors have time and attention requirements for private investment funds of which affiliates of TPG are the investment managers and certain of our officers and directors have time and attention requirements for TPG Pace Holdings Corp., a blank check company Sponsored by TPG focused on a Business Combination with a target business in any industry, sector or location.

Our officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or contractual duties.

Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to other entities prior to its presentation to us. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.

For a complete discussion of our officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Item 10. Directors, Executive Officers and Corporate Governance” and “Item 13. Certain Relationships and Related Transactions, and Director Independence”.

~~Our officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.~~

We have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a Business Combination with a target business that is affiliated with our Sponsor, our directors or officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us, including the formation of, or participation in, one or more other blank check companies. Accordingly, such persons or entities may have a conflict between their interests and ours.

In particular, TPG and affiliates of our Sponsor have invested in industries as diverse as health care, energy, industrials, financial services and retail. As a result, there may be substantial overlap between companies that would be a suitable Business Combination for us and companies that would make an attractive target for such other affiliates.

We may engage in a Business Combination with one or more target businesses that have relationships with entities that may be affiliated with our Sponsor, officers, directors or existing holders which may raise potential conflicts of interest.

In light of the involvement of our Sponsor, officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our Sponsor, officers and directors. Our officers and directors also serve as officers and board members for other entities, including, without limitation, those described under “Item 10. Directors, Executive Officers and Corporate Governance”. Such entities may compete with us for Business Combination opportunities. Our Sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial Business Combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning a Business Combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a Business Combination as set forth in “Item 1. Business - Effecting our Initial Business Combination” and such transaction was approved by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, regarding the fairness to our company from a financial point of view of a Business Combination with one or more domestic or international businesses affiliated with our officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the Business Combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.

Since our Sponsor, officers and directors will lose their entire investment in us if our initial Business Combination is not completed, a conflict of interest may arise in determining whether a particular Business Combination target is appropriate for our initial Business Combination.

In February 2017, our Sponsor purchased an aggregate of 11,500,000 Founder Shares for an aggregate purchase price of $25,000, or approximately $0.002 per share. In April 2017, we effected a stock dividend with respect to our Class F common stock of 5,750,000 shares thereof, resulting in our Initial Stockholders holding an aggregate of 17,250,000 Founder Shares. In April 2017, our Sponsor transferred 40,000 Founder Shares to each of our independent directors at their original per share purchase price. As such, our Initial Stockholders collectively own 20% of our issued and outstanding shares. The Founder Shares will be worthless if we do not complete an initial Business Combination. In addition, our Sponsor has purchased an aggregate of 10,000,000 Private Placement Warrants, each exercisable to purchase one share of our Class A common stock, for a purchase price of approximately $15,000,000, or $1.50 per Warrant, that will also be worthless if we do not complete a Business Combination. Each Private Placement Warrant may be exercised for one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein.

The Founder Shares are identical to the common stock included in the Units except that (i) holders of the Founder Shares have the right to vote on the election of directors prior to our initial Business Combination, (ii) the Founder Shares are subject to certain transfer restrictions, (iii) our Initial Stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of our initial Business Combination, (B) to waive their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with a stockholder vote to amend our amended and restated certificate of incorporation in a manner that would affect the substance or timing of our obligation to redeem 100% of our Public Shares if we have not consummated an initial Business Combination within 24 months from the Close Date and (C) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete our initial Business Combination within 24 months from the Close Date, although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if we fail to complete our initial Business Combination within the prescribed time frame, (iv) the Founder Shares are subject to registration rights and (v) the Founder Shares are automatically convertible into shares of our Class A common stock at the time of our initial Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein.

The personal and financial interests of our officers and directors may influence their motivation in identifying and selecting a target Business Combination, completing an initial Business Combination and influencing the operation of the business following the initial Business Combination.

We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a Business Combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.

Although we have no commitments as of the date of this Annual Report on Form 10-K to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete our initial Business Combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the Trust Account. As such, no issuance of debt will affect the per-share amount available for redemption from the Trust Account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:

~~default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;~~

acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

~~our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;~~

~~our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;~~

~~our inability to pay dividends on our common stock;~~

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions, and other general corporate purposes;

~~limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;~~

~~increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and~~

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

We may only be able to complete one Business Combination with the proceeds of our Public Offering and sale of Private Placement Warrants held in the Trust Account, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.

At December 31, 2017, proceeds of $652,839,151 were held in the Trust Account, of which a portion may be withdrawn to pay income taxes on interest income plus up to $750,000 per year for working capital requirements.

We may effectuate our initial Business Combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial Business Combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial Business Combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several Business Combinations in different industries or different areas of a single industry. In addition, we intend to focus our search for an initial Business Combination in a single industry. Accordingly, the prospects for our success may be:

~~solely dependent upon the performance of a single business, property or asset, or~~

~~dependent upon the development or market acceptance of a single or limited number of products, processes or services.~~

This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial Business Combination.

We may attempt to simultaneously complete Business Combinations with multiple prospective targets, which may hinder our ability to complete our initial Business Combination and give rise to increased costs and risks that could negatively impact our operations and profitability.

If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other Business Combinations, which may make it more difficult for ~~us, and delay our ability,~~a third-party to complete our initial Business Combination. With multiple Business Combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.

We may attempt to complete our initial Business Combination with a private company about which little information is available, which may result in a Business Combination with a company that is not as profitable as we suspected, if at all.

In pursuing our acquisition strategy, we may seek to effectuate our initial Business Combination with a privately held company. Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial Business Combination on the basis of limited information, which may result in a Business Combination with a company that is not as profitable as we suspected, if at all.

Our management may not be able to maintain control of a target business after our initial Business Combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.

We may structure a Business Combination so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires an interest in the target sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post- transaction company owns 50% or more of the voting securities of the target, our stockholders prior to the Business Combination may collectively own a minority interest in the post Business Combination company, depending on valuations ascribed to the target and us in the Business Combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such transaction.Magnolia. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.

We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a Business Combination with which a substantial majority of our stockholders do not agree.

Our amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our Public Shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (such that we are not subject to the SEC’s “penny stock” rules). As a result, we may be able to complete our initial Business Combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial Business Combination and do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our Sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed Business Combination exceed the aggregate amount of cash available to us, we will not complete the Business Combination or redeem any shares, all shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate Business Combination.

~~The exercise price for the public Warrants is higher than in many similar blank check company offerings in the past, and, accordingly, the Warrants are more likely to expire worthless.~~

The exercise price of the public Warrants is higher than is typical in many similar blank check companies in the past. Historically, the exercise price of a Warrant was generally a fraction of the purchase price of the units in the initial public offering. The exercise price for our public Warrants is $11.50 per share, subject to adjustment as provided herein. As a result, the Warrants are less likely to ever be in the money and more likely to expire worthless.

~~In order to effectuate an initial Business Combination, blank check companies have, in the recent past, amended various~~some provisions of their charters and modified governing instruments. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make it easier for us to complete our initial Business Combination but that our stockholders may not support.

In order to effectuate a Business Combination, blank check companies have, in the past, amended various provisions of their charters and modified governing instruments. For example, blank check companies have amended the definition of Business Combination, increased redemption thresholds and changed industry focus. We cannot assure you that we will not seek to amend our charter or governing instruments or change our industry focus in order to effectuate our initial Business Combination.

Certain provisions of our amended and restated certificate of incorporation that relate to our pre-Business Combination activity (and corresponding provisions of the agreement governing the release of funds from the Trust Account) may be amended with the approval of holders of at least 65% of our common stock, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend ourMagnolia’s second amended and restated certificate of incorporation and its

bylaws could make it more difficult for a third-party to acquire control of Magnolia, even if the ~~trust agreement~~change of control would be beneficial to ~~facilitate~~its stockholders, including limitations on the ~~completion~~removal of directors, limitations on the ability of Magnolia’s stockholders to call special meetings, providing that the board of directors is expressly authorized to adopt, or to alter or repeal, Magnolia’s bylaws, and establishing advance notice and certain information requirements for nominations for election to its board of directors and for proposing matters that can be acted upon by stockholders at stockholder meetings.

In addition, certain change of control events may have the effect of accelerating any payments due under Magnolia’s RBL Facility, and could, in certain defined circumstances, require Magnolia to make an ~~initial Business Combination~~offer to repurchase its outstanding notes and/or result in the acceleration of payments required by the indenture governing its outstanding notes, which could be substantial and accordingly serve as a disincentive to a potential acquirer of the Company.

Future sales of Magnolia’s Class A Common Stock in the public market, or the perception that ~~some~~such sales may occur, could reduce Magnolia’s stock price, and any additional capital raised by Magnolia through the sale of ~~our stockholders~~equity or convertible securities may ~~not support.~~

~~Some other blank check companies have a provision~~dilute your ownership in ~~their charter which prohibits~~ the ~~amendment~~Company.

Magnolia may sell additional shares of ~~certain~~Class A Common Stock or securities convertible into shares of its provisions, including those which relate to a company’s pre-Business Combination activity, without approval by a certain percentage of the company’s stockholders. In those companies, amendment of these provisions requires approval by between 90% and 100% of the company’s public stockholders. Our amended and restated certificate of incorporation provides that any of its provisions related to pre-Business Combination activity (including the requirement to deposit proceeds of our Public Offering and sale of the Private Placement Warrants into the Trust Account and not release such amounts exceptClass A Common Stock in specified circumstances, and to provide redemption rights to public stockholders as described herein), but excluding the provisions of the charter relating to the election of directors, may be amended if approved by holders of 65% of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. In all other instances (other than the election of directors), our amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our Initial Stockholders, who collectively beneficially own 20% of our common stock, will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern our pre-Business Combination behavior more easily than some other blank check companies, and this may increase our ability to complete a Business Combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.

We may be unable to obtain additional financing to complete our initial Business Combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular Business Combination.

Although we believe that the proceeds of our Public Offering and sale of Private Placement Warrants held in the Trust Account will be sufficient to allow us to complete our initial Business Combination, wesubsequent offerings. Magnolia cannot ascertain the capital requirements for any particular transaction. If the proceeds of our Public Offering and sale of Private Placement Warrants held in the Trust Account prove to be insufficient, either because ofpredict the size of ~~our initial Business Combination, the depletion~~future issuances of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from stockholders who elect redemption in connection with our initial Business Combinationits Class A Common Stock or securities convertible into Class A Common Stock or the terms of negotiated transactions to purchase shares in connection with our initial Business Combination, we may be required to seek additional financing or to abandon the proposed Business Combination. We cannot assure youeffect, if any, that such ~~financing~~future issuances will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial Business Combination, we would be compelled to either restructure the transaction or abandon that particular Business Combination and seek an alternative target business candidate. In addition, even if we do not need additional financing to complete our initial Business Combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after our initial Business Combination. If we are unable to complete our initial Business Combination, our public stockholders may only receive approximately $10.00 per share on the liquidation of the Trust Account, and our Warrants will expire worthless.

Our Initial Stockholders will control the election of our board of directors until consummation of our initial Business Combination and will hold a substantial interest in us. As a result, they will elect all of our directors and may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.

Our Initial Stockholders own 20% of our issued and outstanding shares of common stock. In addition, the Founder Shares, all of which are held by our Initial Stockholders, entitle the holders to elect all of our directors prior to our initial Business Combination. Holders of our Public Shares will have no right to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of at least 90% of our outstanding common stock entitled to vote thereon. As a result, you will not have any influence over the election of directors prior to our initial Business Combination.

In addition, as a result of their substantial ownership in our company, our Initial Stockholders may exert a substantial influence on other actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation or bylaws and approval of major corporate transactions. If our Initial Stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their influence over these actions. Accordingly, our Initial Stockholders will exert significant influence over actions requiring a stockholder vote at least until the completion of our initial Business Combination.

~~We may amend the terms of the Warrants in a manner that may be adverse to holders of public Warrants with the approval by the holders of at least 50% of the then outstanding public Warrants.~~

Our Warrants were issued in registered form under a Warrant agreement between Continental Stock Transfer & Trust Company, as Warrant agent, and us. The Warrant agreement provides that the terms of the Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public Warrants to make any change that adversely affects the interests of the registered holders of public Warrants. Accordingly, we may amend the terms of the public Warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public Warrants approve of such amendment. Although our ability to amend the terms of the public Warrants with the consent of at least 50% of the then outstanding public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the Warrants, shorten the exercise period or decrease the number of shares of our Class A common stock purchasable upon exercise of a Warrant.

~~We may redeem your unexpired Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your Warrants worthless.~~

We have the ability to redeem outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per Warrant, provided that the last reported sales price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of such redemption to the Warrant holders. If and when the Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding Warrants could force you (i) to exercise your Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your Warrants at the then-current market price when you might otherwise wish to hold your Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding Warrants are called for redemption, is likely to be substantially less than the market value of your Warrants.

~~None of the Private Placement Warrants will be redeemable by us so long as they are held by our Sponsor or its permitted transferees.~~

~~Our Warrants and Founder Shares may have an adverse effect~~ on the market price of ~~our~~its Class A ~~common stock and make it more difficult to effectuate our initial Business Combination.~~

~~We have issued Warrants to purchase 21,666,666 shares~~Common Stock. Sales of ~~our~~substantial amounts of Magnolia’s Class A ~~common stock, at a price of $11.50 per share (subject to adjustment as provided herein), as part of the Units s and Private Placement Warrants to purchase an aggregate of 10,000,000~~Common Stock (including shares of Class A common stock at $11.50 per share. Our Initial Stockholders currently own 16,250,000 Founder Shares. The Founder Shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment as provided herein. In addition, if our Sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into Warrants, at the price of $1.50 per Warrant at the option of the lender. Such Warrants would be identical to the Private Placement Warrants.

To the extent we issue shares of Class A common stock to effectuate a Business Combination, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these Warrants or conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the number of issued and outstanding shares of our Class A common stock and reduce the value of the shares of Class A common stock issued to complete the Business Combination. Therefore, our Warrants and Founder Shares may make it more difficult to effectuate a Business Combination or increase the cost of acquiring the target business.

The Private Placement Warrants are identical to the Warrants sold as part of the Units except that, so long as they are held by our Sponsor or its permitted transferees, (i) they will not be redeemable by us, (ii) they (including the Class A common stock issuable upon exercise of these Warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our Sponsor until 30 days after the completion of our initial Business Combination, (iii) they may be exercised by the holders on a cashless basis, and (iv) they are subject to registration rights.

~~Because each Unit contains one-third of one Warrant and only a whole Warrant may be exercised, the Units may be worth less than units of other blank check companies.~~

Each Unit contains one-third of one Warrant. Because, pursuant to the Warrant agreement, the Warrants may only be exercised for a whole number of shares of Class A common stock, only a whole Warrant may be exercised at any given time. This is different from other offerings similar to ours whose units include one share of common stock and one Warrant to purchase one whole share. We have established the components of the Units in this way in order to reduce the dilutive effect of the Warrants upon completion of a Business Combination since the Warrants will be exercisable in the aggregate for one third of the number of shares compared to units that each contain a Warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our Units to be worth less than if they included a Warrant to purchase one whole share.

Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial Business Combination with some prospective target businesses.

The federal proxy rules require that a proxy statement with respect to a vote on a Business Combination meeting certain financial significance tests include target historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with ~~our tender offer documents, whether~~an acquisition or ~~not they are required under the tender offer rules. These financial statements may be required to be prepared~~ in ~~accordance~~connection with Magnolia’s existing or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financing reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States)future equity compensation plans), or ~~PCAOB. These financial statement requirements~~the perception that such sales could occur, may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial Business Combination within the prescribed time frame.

We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A common stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial Business Combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.

Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2018. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target company with which we seek to complete our initial Business Combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.

Our amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include two-year director terms and the ability of the board of directors to designate the terms of and issue new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium overadversely affect prevailing market prices ~~for our securities.~~

~~We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change~~ of control. Together these provisions may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

If we effect our initial Business Combination with a company with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that may negatively impact our operations.

We may pursue a Business Combination with a target business in any geographic location. If we effect our initial Business Combination with a company with operations or opportunities outside of the United States, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:

~~costs and difficulties inherent in managing cross-border business operations and complying with difficult commercial and legal requirements of the overseas market;~~

its Class A Common Stock.

~~rules and regulations regarding currency redemption;~~

~~complex corporate withholding taxes on individuals;~~

~~laws governing the manner in which future Business Combinations may be effected;~~

~~tariffs and trade barriers;~~

~~regulations related to customs and import/export matters;~~

~~longer payment cycles;~~

~~tax issues, such as tax law changes and variations in tax laws as compared to the United States;~~

~~currency fluctuations and exchange controls;~~

~~rates of inflation;~~

~~challenges in collecting accounts receivable;~~

~~cultural and language differences;~~

~~employment regulations;~~

~~crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;~~

~~deterioration of political relations with the United States; and~~

~~government appropriation of assets.~~

~~We may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may adversely impact our results of operations and financial condition.~~

If our management following our initial Business Combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.

Following our initial Business Combination, any or all of our management could resign from their positions as officers of the Company, and the management of the target business at the time of the Business Combination will remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.

Item 1B. Unresolved Staff ~~Comments.~~

Comments

None.

~~Item 2. Properties.~~

We currently maintain our corporate offices at 301 Commerce St., Suite 3300 Fort Worth, Texas 76102. The cost for this space is included in the $20,000 per month fee that we pay an affiliate of our Sponsor for office space, administrative and support services. We believe, based on fees for similar services in the Fort Worth area, that the fee charged by our Sponsor is at least as favorable as we could have obtained from an unaffiliated party. We consider our current office space, combined with the other office space otherwise available to our executive officers, adequate for our current operations.

Item 3. Legal ~~Proceedings.~~

~~We are~~Proceedings

See Part II, Item 8, Note 10—Commitments and Contingencies to the consolidated financial statements, which is incorporated herein by reference.

From time to time, the Company is party to certain legal actions and claims arising in the ordinary course of business. While the outcome of these events cannot be predicted with certainty, management does not currently ~~subject~~expect these matters to ~~any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us~~have a materially adverse effect on the financial position or ~~any~~results of ~~our officers or directors in their corporate capacity.~~

operations of the Company.

Item 4. Mine Safety ~~Disclosures.~~

~~None.~~

Disclosures

Not applicable.

Information About Magnolia’s Executive Officers and Directors

The following table sets forth, as of February 17, 2022, the names, ages, and positions held by Magnolia’s executive officers and directors:


Name	Age	Position
Stephen I. Chazen	75	Chairman, President and Chief Executive Officer
Christopher G. Stavros	58	Executive Vice President and Chief Financial Officer
Timothy D. Yang	50	Executive Vice President, General Counsel and Corporate Secretary
Steve F. Millican	46	Senior Vice President, Operations
Arcilia C. Acosta	56	Director
Angela M. Busch	55	Director
Edward P. Djerejian	82	Director
James R. Larson	72	Director
Dan F. Smith	75	Director
John B. Walker	76	Director

Stephen “Steve” I. Chazen has served as Magnolia’s Chairman, President and Chief Executive Officer since 2017 and has served as Chairman of the Board since the completion of the Company’s initial public offering in May 2017. Prior to joining

Magnolia, Mr. Chazen was Chief Executive Officer of Occidental Petroleum Corporation (“Occidental”), whose principal businesses consist of oil and gas, chemical and midstream, and marketing segments, a position he held from May 2011 until his retirement in April 2016. Mr. Chazen was a member of Occidental’s board of directors from 2010 to 2017 and from March 2020 has served as Chairman of the Board of Occidental .

Christopher G. Stavros serves as Magnolia’s Executive Vice President and Chief Financial Officer, a position he has held since the closing of the Business Combination. Prior to joining the Company, Mr. Stavros was Chief Financial Officer of Occidental from 2014 to 2017, having previously served in various investor relations and treasury roles at Occidental since 2005.

Timothy D. Yangjoined Magnolia as Executive Vice President, General Counsel and Corporate Secretary in September 2018. Prior to joining Magnolia, Mr. Yang served as General Counsel and Corporate Secretary of Newfield Exploration Company, an independent exploration and production company, from July 2015 through September 2018, and as General Counsel, Chief Compliance Officer, and Secretary of Sabine Oil & Gas Corporation from February 2013 to July 2015.

Steve F. Millican serves as Senior Vice President, Operations for Magnolia, a position he has held since November 2018. Prior to joining the Company, Mr. Millican was Senior Vice President and General Manager of the South Texas Region for EnerVest Operating Company since July 2016, and he held various reservoir engineering positions at EnerVest from 2008 to 2016.

Arcilia C. Acosta is the President and Chief Executive Officer of CARCON Industries & Construction, specializing in commercial, institutional, and transportation construction, and is also the Chief Executive Officer and controlling principal of STL Engineers.

Angela M. Busch currently serves as the Executive Vice President of Corporate and Business Development for Ecolab Inc., a global leader in water, hygiene, and energy technologies and services, where she is responsible for acquisitions, divestitures, and alliances in support of Ecolab’s strategic objectives related to its global portfolio of businesses and activities.

Edward P. Djerejian served in the U.S. Foreign Service for eight presidents, from John F. Kennedy in 1962 to William J. Clinton in 1994. After his retirement from government service in 1994, he became, and currently serves as, the director of Rice University’s Baker Institute for Public Policy, a premier nonpartisan public policy think tank.

James R. Larson has served as an independent director of CSI Compressco GP LLC and its predecessor CSI Compressco GP Inc., general partner of CSI Compressco L.P., a provider of compression services and equipment for natural gas and oil production, gathering, transportation, processing, and storage, and as Chairman of its Audit Committee since July 2011, and served as a member of its Conflicts Committee from April 2012 until January 2021 and as Chairman of its Conflicts Committee since August 2021. Mr. Larson retired in January 2006 from his position as senior vice president of Anadarko Petroleum Corporation (“Anadarko”), an independent exploration and production company, and he held various tax and financial positions within Anadarko upon joining the company in 1981.

Dan F. Smith is a retired Chief Executive Officer of Lyondell Chemical Company, which operated in the chemicals, polymers and fuels business segments, and its wholly owned subsidiaries Millennium Chemicals Inc. and Equistar Chemicals, LP., a position he held from December 1996 until his retirement in December 2007. Mr. Smith is currently a director of Orion Engineered Carbons, S.A., and Kraton Corp.

John B. Walker became Executive Chairman of EnerVest, Ltd. effective December 1, 2020. He had previously served as its Chief Executive Officer since its formation in 1992. Mr. Walker served as Chairman of the Independent Petroleum Association of America from 2003 to 2005 and served on the board of Petrologistics LP from 2012 until 2014. Mr. Walker serves on the Board of Regents of the Texas Tech University System.

PART II

Item 5. Market for the Registrant’s Common Equity, Related ~~Stockholder~~Shareholder Matters and Issuer Purchases of Equity ~~Securities.~~

~~(a)~~ Securities

Market Information

~~Our Units began trading~~

Magnolia’s Class A Common Stock are currently traded on the NYSE under the ticker symbol ~~“TPGE.U” on May 5, 2017. On June 23, 2017, we announced that holders of our Units could elect to separately trade the~~“MGY.” Through July 30, 2018, Magnolia’s Class A ~~common stock~~Common Stock and ~~Warrants included in the Units. On June 26, 2017, our Class A common stock and Warrants began trading on the NYSE~~warrants were listed under the symbols “TPGE” and “TPGE.W,” respectively. Each Unit includes one third of one Warrant, and each whole Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as described in our final prospectus dated May 4, 2017 which was filed with the SEC on May 5, 2017. Only whole Warrants will be issued on separation of Units, and only whole Warrants may be traded and be exercised for Class A common stock. The Warrants will become exercisable on the later of 30 days after the completion of our Business Combination or 12 months after the Close Date. Our Warrants expire five years after the completion of our Business Combination or earlier upon redemption or liquidation as described in “Item 1. Business.”

The following table sets forth, for the calendar quarter indicated, the high and low sales prices per Unit as reported on the NYSE for the period from May 5, 2017 (the first day on which our Units began trading) through DecemberOn July 31, ~~2017, and for our Class A common stock and Warrants for the period from June 26, 2017 (the first day on which our Class A common stock and Warrants were traded separately) through December 31, 2017.~~

Class A common

Units (TPGE.U)

stock (TPGE)

Warrants (TPGE.W)

High

Low

High

Low

High

Low

Year ended December 31, 2017:

Quarter ended June 30, 2017 ⁽¹⁾⁽²⁾

$
10.58

$
10.07

$
10.25

$
10.00

$
1.41

$
1.40

Quarter ended September 30, 2017

$
10.35

$
10.17

$
9.98

$
9.70

$
1.55

$
1.35

Quarter ended December 31, 2017

$
10.37

$
10.05

$
10.07

$
9.67

$
1.40

$
1.10

⁽¹⁾	~~Beginning on May 5, 2017 with respect to TPGE.U.~~

⁽²⁾	~~Beginning on June 26, 2017 with respect to TPGE and TPGE.W.~~

~~(b) Holders~~

~~At February 7,~~ 2018, ~~there was one holder of record of our Units, one holder of record of our separately traded Class A common stock, and one holder of record of our separately traded Warrants.~~

~~(c) Dividends~~

We have not paid any cash dividends on our Class A common stock to date and do not intend to pay cash dividends prior to the completion of our Business Combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our Business Combination. The payment of any cash dividends subsequent to our Business Combination will be within the discretion of our board of directors. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Further, if we incur any indebtedness in connection with our Business Combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

~~d) Securities Authorized for Issuance Under Equity Compensation Plans~~

~~None.~~

~~e) Performance Graph~~

The graph below compares the cumulative total return for our Units from May 5, 2017 through December 31, 2017 with the comparable cumulative return of three indices: the S&P 500 Index (“S&P 500”), the Dow Jones Industrial Average Index (“DJIA”) and NASDAQ. The graph assumes $100 invested on May 5, 2017 in each of our Units and the three indices presented.

~~f) Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings~~

~~Unregistered Sales~~

On February 22, 2017, our Sponsor purchased an aggregate of 11,500,000 Founder Shares for an aggregate purchase price of $25,000, or approximately $0.002 per share. Prior to our Sponsor’s initial investment in us of $25,000, we had no assets. On April 24, 2017, we agreed to effect a stock dividend prior to the closing of the Public Offering of approximately 0.5 shares of Class F common stock for each share of Class F common stock, which resulted in a total of 17,250,000 issued and outstanding Founder Shares. The stock dividend also adjusted the Founder Shares subject to forfeiture from 1,500,000 to 2,250,000 such that the Founder Shares would represent 20.0% of our issued and outstanding common shares after the Public Offering. On April 24, 2017, our Sponsor transferred 40,000 Founder Shares to each of our four independent directors at their original purchase price. On June 24, 2017, our Sponsor forfeited 1,000,000 Founder Shares on the expiration of the underwriters’ over-allotment option. At December 31, 2017, our Sponsor and our four independent directors held, collectively, 16,250,000 Founder Shares.

On the Close Date, we completed the private sale of an aggregate of 10,000,000 Private Placement Warrants, each exercisable to purchase one share of Class A common stock for $11.50, to our Sponsor, at a price of $1.50 per Private Placement Warrant. The Private Placement Warrants are substantially similar to the Warrants underlying the Units issued in the Public Offering, except that if held by our Sponsor or its permitted transferees, they (i) may be exercised for cash or on a cashless basis and (ii) are not subject to being called for redemption. If the Private Placement Warrants are held by holders other than our Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by us and exercisable by the holders on the same basis as the Warrants.

~~The sales of the above securities by~~ the Company ~~were deemed to be exempt from registration under~~delisted the ~~Securities Act,~~units offered in ~~reliance on Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a~~its initial public ~~offering.~~

~~Use of Proceeds~~

~~On May 4, 2017, our registration statement on Form S-1 (File No. 333-217338) was declared effective by the SEC for the Public Offering pursuant to which we sold an aggregate of 65,000,000 Units at an~~ offering, ~~price to the public of $10.00 per Unit for an aggregate offering price of $650,000,000, with~~ each ~~Unit~~ consisting of one share of Class A ~~common stock of the Company at $0.0001 par value~~Common Stock and one-third of ~~one Warrant. Each whole Warrant entitles~~a warrant, which were listed under the ~~holder~~symbol “TPGE.U,” and the units ceased to ~~purchase one~~trade. In July 2019, the Company exchanged all of its public and private warrants, which, in the case of the public warrants, were listed under the symbol “MGY.WS,” for Class A Common Stock, and the warrants ceased to trade.

Holders

As of February 14, 2022, there were 15 holders of record of Magnolia’s Class A Common Stock, and 5 holders of record of the Company’s Class B Common Stock, par value $0.0001 per share.

Issuer Purchases of Equity Securities

The following table sets forth the Company’s share repurchase activities for the year ended December 31, 2021:


Period	Number of Shares of Class A Common Stock Purchased	Average Price Paid per Share		Total Number of Common Shares Purchased as Part of Publicly Announced Program (1)	Maximum Number of Common Shares that May Yet be Purchased Under the Program
January 1, 2021 - September 30, 2021	5,992,545	$	12.32	5,992,545	8,532,455
October 1, 2021 - October 31, 2021	—	—		—	8,532,455
November 1, 2021 - November 30, 2021	1,739,206	19.37		1,739,206	6,793,249
December 1, 2021 - December 31, 2021	960,794	18.85		960,794	5,832,455
Total	8,692,545	$	14.45	8,692,545	5,832,455

(1)As of December 31, 2021, the Company’s board of directors had authorized a share repurchase program of up to 20.0 million shares of Class A ~~common~~

Common Stock. The program does not require purchases to be made within a particular time frame. In February 2022, the Company’s board of directors increased the share repurchase authorization by an additional 10.0 million shares of Class A Common Stock which increases total authorization to 30.0 million shares.

~~stock~~

During the year ended December 31, 2021, outside of the share repurchase program, Magnolia LLC repurchased and subsequently canceled a total of 13.0 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for cash consideration of $171.7 million at aan average price of ~~$11.50~~$13.21 per share. ~~Only whole Warrants may be exercised and~~There is no ~~fractional Warrants will be issued upon separation of~~public market for the Units and only whole Warrants may be traded. Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Tudor, Pickering, Holt & Co. Securities, Inc. acted as underwriters. Our Public Offering did not terminate before all of the securities registered in our registration statement were sold. The Public Offering was consummated on May 10, 2017.

~~Net proceeds of $650,000,000 from the Public Offering and the sale of the Private Placement Warrants, including deferred underwriting discounts of $22,750,000, are held~~Class B Common Stock. For further detail, see Note 12—Stockholders’ Equity in the ~~Trust Account at December 31, 2017. We paid $13,000,000 in underwriting discounts and incurred offering costs of $1,424,561 related~~Notes to the Public Offering. In addition, the Underwriters agreed to defer $22,750,000 in underwriting discounts, which amount will be payable when and if a Business Combination is consummated. We also repaid $300,000 in non-interest bearing loans made to us by our Sponsor to cover expenses related to the Public Offering. No payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates. There has been no material change in the planned use of proceeds from the Public Offering as described in our final prospectus, dated May 4, 2017, which was filed with the SEC on May 5, 2017.

~~Item 6. Selected Financial Data.~~

~~The following table summarizes selected historical financial data and should be read in conjunction with our audited~~Company’s consolidated financial statements ~~and the notes related thereto which are~~ included in ~~“Item 8. Financial Statements and Supplementary Data” of~~ this Annual Report on Form 10-K.

Statement of Operations Data

For the Period

from February 14,

2017 (Inception) to

December 31, 2017

Net income attributable to common stock

$
1,532,195

Per share data:

Basic and diluted net income per share of common stock

$
0.02

Basic and diluted weighted average shares of
common stock outstanding

62,920,561

Balance Sheet Data

December 31, 2017

Total assets

$
653,937,462

Total liabilities

$
24,554,828

Working capital

$
629,382,634

Class A common stock subject to possible redemption

$
624,382,630

Stockholders' equity

$
5,000,004

Comparative Stock Performance

~~At December 31, 2017~~

The performance graph below compares the cumulative total ~~assets included $652,839,151 held~~stockholder return for the Company’s Class A Common Stock to that of the Standard and Poor’s (“S&P”), 500 Index and the S&P 500 Oil & Gas Exploration and Production Index. “Cumulative total return” means the change in share price of the Company’s Class A Common Stock during the measurement period divided by the share price at the beginning of the measurement period. The graph assumes an investment of $100 was made in the ~~Trust Account~~ Company’s Class A Common Stock and in each of the S&P 500 Index and the S&P 500 Oil & Gas Exploration and Production Index on June 26, 2017,

which is ~~available to us for~~when the ~~purposes~~Class A Common Stock and warrants comprising the units offered in Magnolia’s initial public offering began separate trading.

Note: The stock price performance of consummating a Business Combination within the time period described in this Annual Report on Form 10-K, of which $22,750,000 is payable for deferred underwriting fees upon consummation of a Business Combination. If a Business CombinationMagnolia’s Class A Common Stock is not ~~consummated within 24 months from~~necessarily indicative of future performance.

The above information under the ~~Close Date, we will~~caption “Comparative Stock Performance” shall not be ~~dissolved and~~deemed to be “soliciting material” or to be “filed” with the ~~proceeds held in~~SEC, nor shall such information be incorporated by reference into any future filing under the ~~Trust Account will~~Securities Act of 1933 or the Exchange Act except to the extent that Magnolia specifically requests that such information be ~~distributed solely to holders of our Public Shares.~~

treated as “soliciting material” or specifically incorporate such information by reference into such a filing.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations.~~

~~The following discussion~~Operations

Management’s Discussion and ~~analysis~~Analysis of ~~the Company’s financial condition~~Financial Condition and ~~results~~Results of ~~operations~~Operations should be read in conjunction with the ~~audited~~Company’s consolidated financial statements and the related notes ~~related thereto which~~thereto.

This section of this Form 10-K generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020. Discussions of 2019 items and year-to-year comparisons between 2020 and 2019 that are not included in ~~“Item 8.~~this Form 10-K can be found in “Management’s Discussion and Analysis of Financial ~~Statements~~Condition and ~~Supplementary Data”~~Results of ~~this~~Operations” in Part II, Item 7 of the Company’s Annual Report on Form ~~10-K. Certain information contained~~10-K for the fiscal year ended December 31, 2020.

Overview

Magnolia Oil & Gas Corporation (the “Company” or “Magnolia”) is an independent oil and natural gas company engaged in the ~~discussion~~acquisition, development, exploration, and ~~analysis set forth below includes forward-looking statements. Our actual results~~production of oil, natural gas, and natural gas liquid (“NGL”) reserves that operates in one reportable segment located in the United States. The Company's oil and natural gas properties are located primarily in Karnes County and the Giddings area in South Texas, where the Company primarily targets the Eagle Ford Shale and the Austin Chalk formations. Magnolia’s objective is to generate stock market value over the long term through consistent organic production growth, high full cycle operating margins, an efficient capital program with short economic paybacks, significant free cash flow after capital expenditures, and effective reinvestment of free cash flow.

Magnolia’s business model prioritizes free cash flow, financial stability, and prudent capital allocation, and is designed to withstand challenging environments. The Company’s ongoing plan is to spend within cash flow on drilling and completing wells while maintaining low leverage. As of December 31, 2021, Magnolia operated one rig exclusively in the Giddings area, and one rig in both the Karnes and Giddings areas. The Company is well positioned to reduce or increase operations given the significant flexibility within its capital program as the Company has no long-term service obligations.

COVID-19 Pandemic and Market Conditions Update

The COVID-19 pandemic and related economic repercussions have created significant volatility, uncertainty, and turmoil in the oil and natural gas industry. While oil and natural gas prices increased in 2021, demand and pricing may ~~differ materially from those anticipated in these forward-looking statements~~again decline if there is a resurgence of the outbreak across the U.S. or other locations across the world or as a result of ~~many~~any related social distancing guidelines, travel restrictions, vaccination protocols, and stay-at-home orders. The extent of any further impact of the pandemic, including the emergence and spread of variant strains of COVID-19, on Magnolia’s industry and business cannot be reasonably predicted at this time.

To protect the health and safety of its workers, Magnolia and its contractors have implemented protocols to attempt to reduce the risk of an outbreak of COVID-19, or variants of COVID-19, within the Company’s operations. The Company believes these protocols have not reduced production or efficiency in a significant manner. Magnolia’s board of directors is continuing to closely monitor the unfolding COVID-19 pandemic. Magnolia has been able to maintain a consistent level of effectiveness, including maintaining day-to-day operations, financial reporting systems, and internal control over financial reporting.

Business Overview

As of December 31, 2021, Magnolia’s assets in South Texas included 43,511 gross (23,785 net) acres in the Karnes area and 639,634 gross (447,478 net) acres in the Giddings area. As of December 31, 2021, Magnolia held an interest in approximately 2,011 gross (1,292 net) wells, with total production of 66.0 thousand barrels of oil equivalent per day (“Mboe/d”) for the year ended December 31, 2021. As of December 31, 2021, Magnolia was running a two-rig program. One rig drilled multi-well development pads exclusively in the Giddings area. The second rig drilled a mix of wells in both the Karnes and Giddings areas.

Magnolia recognized net income attributable to Class A Common Stock of $417.3 million, or $2.36 per diluted common share, for the year ended December 31, 2021. Magnolia also recognized net income of $559.7 million, which includes noncontrolling interest of $142.4 million for the year ended December 31, 2021.

As of December 31, 2021, the Company’s board of directors had authorized a share repurchase program of up to 20.0 million shares of Class A Common Stock, and, in February 2022, the Company’s board of directors increased the share repurchase authorization by an additional 10.0 million shares of Class A Common Stock which increases total authorization to 30.0 million shares. The program does not require purchases to be made within a particular timeframe. During the year ended December 31, 2021, the Company repurchased 8.7 million shares of Class A Common Stock at a weighted average price of $14.45, for a total cost of approximately $125.6 million.

During the year ended December 31, 2021, outside of the share repurchase program, Magnolia LLC repurchased and subsequently canceled 13.0 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $171.7 million of cash consideration. During the same period, the Magnolia LLC Unit Holders redeemed 23.5 million Magnolia LLC Units (and a corresponding number of shares of Class B Common Stock) for an equivalent number of shares of Class A Common Stock and subsequently sold these shares to the public. Magnolia did not receive any proceeds from the sale of shares of Class A Common Stock by the Magnolia LLC Unit Holders. As of December 31, 2021, Magnolia owned approximately 78.4% of the interest in Magnolia LLC and the noncontrolling interest was 21.6%.

Results of Operations

Factors Affecting the Comparability of the Historical Financial Results

Magnolia’s historical financial condition and results of operations for the periods presented may not be comparable, either from period to period or going forward, as a result of the following factors:

•During the second quarter of 2021, the Company amended the term of the Services Agreement to end on June 30, 2021. As part of the termination and transition of the Services Agreement, the Company incurred $11.2 million for the year ended December 31, 2021, included in “General and administrative expenses” on the Company’s consolidated statements of operations.

•During the second quarter of 2021, the Company amended the Non-Compete (the “Second Non-Compete Amendment”), which modified the term of the Non-Compete to end on June 30, 2021, resulting in the Company accelerating the amortization of the intangible assets by $5.9 million.

•The 2026 Senior Notes issued under the Indenture, dated as of July 31, 2018 (the “Indenture”), were amended on April 5, 2021. This debt modification included approximately $1.1 million of one-time transaction fees which were expensed and $5.0 million in fees paid to holders of the 2026 Senior Notes, which were reflected as deferred financing costs reducing Long-term debt and will be amortized over the remaining term of the 2026 Senior Notes.

As a result of the factors listed above, the combined historical results of operations and period-to-period comparisons of these results and certain financial data may not be comparable or indicative of future results.

Year Ended December 31, 2021 Compared to the Year Ended December 31, 2020

Oil, Natural Gas and NGL Sales Revenues. The following table provides the components of Magnolia’s revenues for the periods indicated, as well as each period’s respective average prices and production volumes. This table shows production on a boe basis in which natural gas is converted to an equivalent barrel of oil based on a ratio of six Mcf to one barrel. This ratio may not be reflective of the current price ratio between the two products.


	Years Ended
(In thousands, except per unit data)	December 31, 2021		December 31, 2020
Production:
Oil (MBbls)	11,190		11,610
Natural gas (MMcf)	43,436		39,429
NGLs (MBbls)	5,669		4,449
Total (Mboe)	24,099		22,631

Average daily production:
Oil (Bbls/d)	30,659		31,722
Natural gas (Mcf/d)	119,003		107,728
NGLs (Bbls/d)	15,532		12,156
Total (boe/d)	66,025		61,833

Revenues:
Oil revenues	$	747,896	$	421,520
Natural gas revenues	172,648		70,416
Natural gas liquids revenues	157,807		49,367
Total revenues	$	1,078,351	$	541,303

Average Price:
Oil (per barrel)	$	66.83	$	36.31
Natural gas (per Mcf)	3.97		1.79
NGLs (per barrel)	27.84		11.10

Oil revenueswere 69% and 78% of the Company’s total revenues for the years ended December 31, 2021 and 2020, respectively. Oil production was 46% and 51% of total production volume for the years ended December 31, 2021 and 2020, respectively. Oil revenues for the year ended December 31, 2021 were $326.4 million higher than the year ended December 31, 2020. An 84% increase in average prices increased revenues for the year ended December 31, 2021 by $354.5 million compared to the same period in the prior year, while a 4% decrease in oil production reduced revenue $28.1 million.

Natural gas revenues were 16% and 13% of the Company’s total revenues for the years ended December 31, 2021 and 2020, respectively. Natural gas production was 30% and 29% of total production volume for the years ended December 31, 2021 and 2020, respectively. Natural gas revenues for the year ended December 31, 2021 were $102.2 million higher than the year ended December 31, 2020. A 122% increase in average prices increased revenues for the year ended December 31, 2021 by $86.3 million compared to the same period in the prior year, and a 10% increase in natural gas production increased revenue $15.9 million.

NGL revenues were 15% and 9% of the Company’s total revenues for the years ended December 31, 2021 and 2020, respectively. NGL production was 24% and 20% of total production volume for the years ended December 31, 2021 and 2020, respectively. NGL revenues for the year ended December 31, 2021 were $108.4 million higher than the year ended December 31, 2020. A 151% increase in average prices increased revenues for the year ended December 31, 2021 by $74.5 million compared to the same period in the prior year, and a 27% increase in NGL production increased revenue $33.9 million.

Operating Expenses and Other Income (Expense). The following table summarizes the Company’s operating expenses and other income (expense) for the periods indicated.


	Years Ended
(In thousands, except per unit data)	December 31, 2021		December 31, 2020
Operating Expenses:
Lease operating expenses	$	93,021	$	79,192
Gathering, transportation, and processing	45,535		35,442
Taxes other than income	55,834		31,250
Exploration expenses	4,125		567,333
Impairment of oil and natural gas properties	—		1,381,258
Asset retirement obligations accretion	4,929		5,718
Depreciation, depletion and amortization	187,688		283,353
Amortization of intangible assets	9,346		14,505
General and administrative expenses	75,279		68,918
Total operating costs and expenses	$	475,757	$	2,466,969

Other Income (Expense):
Income from equity method investee	$	—	$	2,113
Interest expense, net	(31,002)		(28,698)
Gain (loss) on derivatives, net	(3,110)		565
Other income (expense), net	85		3,363
Total other expense	$	(34,027)	$	(22,657)

Average Operating Costs per boe:
Lease operating expenses	$	3.86	$	3.50
Gathering, transportation, and processing	1.89		1.57
Taxes other than income	2.32		1.38
Exploration costs	0.17		25.07
Impairment of oil and natural gas properties	—		61.03
Asset retirement obligations accretion	0.20		0.25
Depreciation, depletion and amortization	7.79		12.52
Amortization of intangible assets	0.39		0.64
General and administrative expenses	3.12		3.05

Lease operating expenses are the costs incurred in the operation of producing properties, including ~~those set forth under “Special~~ expenses for utilities, direct labor, water disposal, workover rigs, workover expenses, materials, and supplies. Lease operating expenses for the year ended December 31, 2021 were $13.8 million, or $0.36 per boe, higher than the year ended December 31, 2020 primarily due to an increase in costs including operating and maintenance costs, workover activities and additional non-operated activities.

Gathering, transportation, and processing costs are costs incurred to deliver oil, natural gas, and NGLs to the market. These expenses can vary based on the volume of oil, natural gas, and NGLs produced as well as the cost of commodity processing. The gathering, transportation, and processing costs for the year ended December 31, 2021 were $10.1 million, or $0.32 per boe, higher than the year ended December 31, 2020 primarily due to increased natural gas production and higher prices.

Taxes other than income include production and ad valorem taxes. These taxes are based on rates primarily established by state and local taxing authorities. Production taxes are based on the market value of production. Ad valorem taxes are based on the fair market value of the mineral interests or business assets. Taxes other than income for the year ended December 31, 2021 were $24.6 million, or $0.94 per boe, higher than the year ended December 31, 2020 primarily due to an increase in oil, natural gas, and NGL revenues.

Exploration costs are geological and geophysical costs that include seismic surveying costs, costs of unsuccessful exploratory dry wells, costs of expired or abandoned leases, and delay rentals. The exploration costs for the year ended December 31, 2021 were $563.2 million, or $24.90 per boe, lower than the year ended December 31, 2020, as a result of an impairment recorded for the quarter ended March 31, 2020 related to Magnolia’s unproved oil and natural gas properties due to the sharp decline in commodity prices. For more information, please see Note ~~Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere~~4—Fair Value Measurements in the Company’s consolidated financial statements included in this Annual Report on Form 10-K.

~~Overview~~

~~We are a blank check company incorporated~~

For the year ended December 31, 2021, the Company did not recognize any impairments. For the year ended December 31, 2020, Magnolia recognized $1.4 billion of impairment included in “Impairment of oil and natural gas properties” in the consolidated statements of operations related to its proved oil and natural gas properties. The impairment was driven by the sharp decline in commodity prices. For more information, please see Note 4—Fair Value Measurements in the Company’s consolidated financial statements included in this Annual Report on Form 10-K.

Depreciation, depletion and amortization (“DD&A”) during the year ended December 31, 2021 was $95.7 million, or $4.73 per boe, lower than the year ended December 31, 2020 primarily as a ~~Delaware corporation on February 14, 2017 (“Inception”) and formed for~~result of lower asset property balances associated with proved property impairments recorded in the ~~purpose~~first quarter of ~~effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization~~2020.

Amortization of intangible assets during the year ended December 31, 2021 was $5.2 million, or ~~similar Business Combination with one or more businesses (“Business Combination”). We have reviewed, and continue~~$0.25 per boe, lower than the year ended December 31, 2020, driven by fewer months of amortization during the year ended December 31, 2021 as compared to review, a number of opportunities to enter into a Business Combination with an operating business, but we are not able to determine at this time whether we will complete a Business Combination with anythe same period in the prior year partially offset by the accelerated amortization of the ~~target businesses that we have reviewed or with any other target business.~~

~~We intend to consummate~~intangible assets in the second quarter of 2021 as a ~~Business Combination using cash from the proceeds~~result of the ~~Public Offering~~termination of the Non-Compete.

General and administrative (“G&A”) expenses during the year ended December 31, 2021 were $6.4 million, or $0.07 per boe, higher than the year ended December 31, 2020, primarily driven by increased corporate payroll expenses related to increased employee headcount offset by decreased service fee costs associated with the termination of the Services Agreement.

Interest expense, net, during the year ended December 31, 2021 was $2.3 million higher than the year ended December 31, 2020, driven by third-party costs associated with the debt modification pursuant to the amendment of the Indenture in the second quarter of 2021.

Gain (loss) on derivatives, net during the year ended December 31, 2021 was a $3.1 million loss as compared to a $0.6 million gain during the corresponding 2020 period. The change from a gain to a loss was primarily driven by the increase in natural gas prices period over period.

Other income (expense), net during the year ended December 31, 2021 was $3.3 million lower than the year ended December 31, 2020. The income in 2020 was a primarily due to a $5.1 million gain on sale of ~~Private Placement Warrants, and from additional issuances of, if any, our capital stock and our debt, or~~the Company’s 35% membership interest in Ironwood Eagle Ford Midstream, LLC, partially offset by a ~~combination of cash, stock and debt.~~

At December 31, 2017, we held cash of $851,466, current liabilities of $1,804,828 and deferred underwriting compensation of $22,750,000. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.

~~Results of Operations~~

For the period from Inception to December 31, 2017, we earned net income of $1,532,195. Our income consists solely of interest earned. Our business activities since our Public Offering have consisted solely of identifying and evaluating prospective acquisition targets for a Business Combination.

$1.4 million inventory write-down.

Liquidity and Capital Resources

Magnolia’s primary sources of liquidity and capital have been cash flows from operations. The Company’s primary uses of cash have been for acquisitions of oil and natural gas properties and related assets, development of the Company’s oil and natural gas properties, share repurchases, dividends, and general working capital needs.

The Company may also utilize borrowings under other various financing sources available to Magnolia, including its RBL Facility and the issuance of equity or debt securities and the timing of these offerings will depend upon various factors, including prevailing market conditions and the Company’s financial condition.

Material cash commitments include $24.0 million in interest payments paid each year through 2026. The Company anticipates its current cash balance, cash flows from operations, and its available sources of liquidity to be sufficient to meet the Company’s cash requirements. However, as the impact of COVID-19 on the economy evolves, the Company will continue to assess its liquidity needs. In the event of a sustained market deterioration, Magnolia may need additional liquidity, which would require the Company to evaluate available alternatives and take appropriate actions.

As of December 31, 2021, the Company had $400.0 million of principal debt related to the 2026 Senior Notes outstanding and no outstanding borrowings related to the RBL Facility. As of December 31, 2021, the Company has $817.0 million of liquidity comprised of the $450.0 million of borrowing base capacity of the RBL Facility, which was reaffirmed on October 15, 2021, and $367.0 million of cash and cash equivalents. As of December 31, 2021, the Company’s Adjusted Consolidated Net Tangible Asset, as calculated in accordance with the Company’s Indenture relating to its 2026 Senior Notes, was approximately $3.0 billion.

Cash and Cash Equivalents

At December 31, 2021, Magnolia had $367.0 million of cash and cash equivalents. The Company’s cash and cash equivalents are maintained with various financial institutions in the United States. Deposits with these institutions may exceed the amount of insurance provided on such deposits. However, the Company regularly monitors the financial stability of its financial institutions and believes that the Company is not exposed to any significant default risk.

Sources and Uses of Cash and Cash Equivalents

The following table presents the sources and uses of the Company’s cash and cash equivalents for the periods presented:


	Years Ended
(In thousands)	December 31, 2021		December 31, 2020
Sources of cash and cash equivalents
Net cash provided by operating activities	$	788,477	$	310,121
Proceeds from sale of equity method investment	—		27,074
	$	788,477	$	337,195
Uses of cash and cash equivalents:
Acquisitions, other	$	(18,345)	$	(73,702)
Additions to oil and natural gas properties	(236,426)		(197,858)
Changes in working capital associated with additions to oil and natural gas properties	13,568		(24,354)
Class A Common Stock repurchases	(125,641)		(28,681)
Class B Common Stock purchases and cancellations	(171,671)		—
Non-compete settlement	(42,073)		—
Dividends paid	(14,131)		—
Distributions to noncontrolling interest holders	(7,207)		(680)
Other	(12,130)		(1,992)
	(614,056)		(327,267)
Increase in cash and cash equivalents	$	174,421	$	9,928

Sources of Cash and Cash Equivalents

Net Cash Provided by Operating Activities

Operating cash flows are the Company’s primary source of liquidity and are impacted, in the short term and long term, by oil and natural gas prices. The factors that determine operating cash flows are largely the same as those that affect net earnings or net losses, with the exception of certain non-cash expenses such as DD&A, the non-cash portion of exploration expenses, impairment of oil and natural gas properties, asset retirement obligations accretion, and deferred income tax expense.

Net cash provided by operating activities totaled $788.5 million and $310.1 million for the years ended December 31, 2021 and 2020,respectively. During the year ended December 31, 2021, cash provided by operating activities was positively impacted by increased oil, natural gas, and NGL prices partially offset primarily by additional costs associated with the termination of the Services Agreement and higher operating expenses.

Uses of Cash and Cash Equivalents

Acquisitions

The Company made individually immaterial bolt-on acquisitions during the year ended December 31, 2021. During the year ended December 31, 2020, the Company completed various leasehold and property acquisitions, primarily comprised of a $69.7 million acquisition of certain non-operated oil and natural gas assets located in Karnes and DeWitt Counties, Texas.

Additions to Oil and Natural Gas Properties

The following table sets forth the Company’s capital expenditures for the years ended December 31, 2021 and 2020.


	Years Ended
(In thousands)	December 31, 2021		December 31, 2020
Drilling and completion	$	231,904	$	194,891
Leasehold acquisition costs	4,522		2,967
Total capital expenditures	$	236,426	$	197,858

As of December 31, 2021, Magnolia was running a two-rig program. One rig drilled multi-well development pads in the Giddings area. The second rig drilled a mix of wells in both the Karnes and Giddings areas. The activity during the year ended December 31, 2021 was largely driven by the number of operated and non-operated drilling rigs. The number of operated drilling rigs is largely dependent on commodity prices and the Company’s strategy of maintaining spending to accommodate the Company’s business model. The Company’s ongoing plan for 2022 is to continue to spend within cash flow on drilling and completing wells while maintaining low leverage.

Capital Requirements

As of December 31, 2021, the Company’s board of directors had authorized a share repurchase program of up to 20.0 million shares of Class A Common Stock, and, in February ~~22, 2017,~~2022, the ~~Sponsor purchased~~Company’s board of directors increased the share repurchase authorization by an additional 10.0 million shares of Class A Common Stock which increases total authorization to 30.0 million shares. The program does not require purchases to be made within a particular timeframe and whether the Company undertakes these additional repurchases is ultimately subject to numerous considerations, market conditions, and other factors. During the years ended December 31, 2021 and 2020, the Company repurchased 8.7 million and 4.5 million shares under this authorization, for a total cost of approximately $125.6 million and $28.7 million, respectively.

During the year ended December 31, 2021, Magnolia LLC repurchased and subsequently canceled 13.0 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $171.7 million of cash consideration. As of December 31, 2021, Magnolia owned approximately 78.4% of the interest in Magnolia LLC and the noncontrolling interest was 21.6%.

In January 2021, the Company amended the Non-Compete such that, rather than delivering an aggregate of ~~11,500,000 Founder Shares for~~4.0 million shares of Class A Common Stock upon the two and one-half year and the four year anniversaries of July 31, 2018 (the “Closing Date”), the Company would deliver (i) the cash value of approximately 2.0 million shares of Class A Common Stock and approximately 0.4 million shares of Class A Common Stock on the two and one-half year anniversary of the Closing Date and (ii) an aggregate ~~purchase price~~ of ~~$25,000, or approximately $0.002 per share. Prior to our Sponsor’s initial investment in us~~1.6 million shares of ~~$25,000, we had no assets. On April 24, 2017, we agreed to effect a stock dividend prior to~~Class A Common Stock on the ~~closing~~four year anniversary of the ~~Public Offering of approximately 0.5 Founder Shares for~~Closing Date, in each Founder Share, which resulted in a total of 17,250,000 issued and outstanding Founder Shares. The stock dividend also adjusted the Founder Shares subject to forfeiture from 1,500,000 to 2,250,000 such that the Founder Shares would represent 20.0% of our issued and outstanding common shares after the Public Offering. On April 24, 2017, our Sponsor transferred 40,000 Founder Shares to each of our four independent directors at their original purchase price. On June 24, 2017, our Sponsor forfeited 1,000,000 Founder Shares on the expiration of the underwriters’ over-allotment option. At December 31, 2017, our Sponsor and our four independent directors held, collectively, 16,250,000 Founder Shares.

~~On May 10, 2017, we consummated the Public Offering of 65,000,000 Units (which included the purchase of 5,000,000 Units~~case subject to the ~~underwriters’ 9,000,000 Unit over-allotment option) at~~terms and conditions of the Non-Compete. On February 1, 2021, as consideration for compliance with the Non-Compete, the Company paid $17.2 million in cash and issued 0.4 million shares of Class A Common Stock. As part of the Second Non-Compete Amendment, the Company paid $24.9 million in cash in lieu of delivering the remaining 1.6 million shares of Class A Common Stock.

On August 2, 2021, the Company’s board of directors declared a ~~price~~semi-annual interim cash dividend of ~~$10.00~~$0.08 per ~~Unit generating gross proceeds of $650,000,000 before underwriting discounts and expenses. Each unit consists of one~~ share of Class A common stock of the Company at $0.0001 par value and one-third of one Warrant (a “Unit”). Each whole Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share (a “Warrant”). Only whole Warrants may be exercised and no fractional Warrants will be issued upon separation of the Units and only whole Warrants may be traded. On the Close Date, we completed the private sale of an aggregate of 10,000,000 private placement Warrants, each exercisable to purchase one share of Class A common stock at $11.50 per share, subject to adjustment (the “Private Placement Warrants”), to our Sponsor, at a price of $1.50 per Private Placement Warrant.

We received gross proceeds from the Public Offering and the sale of the Private Placement Warrants of $650,000,000 and $15,000,000, respectively, for an aggregate of $665,000,000. $650,000,000 of the gross proceeds were deposited in the Trust Account. At the Close Date, the remaining $15,000,000 was held outside of the Trust Account,Common Stock totaling approximately $14.2 million, of which ~~$13,000,000~~$14.1 million was used to pay underwriting discounts and $300,000 was used to repay notes payable to our Sponsor, with the balance reserved to pay accrued offering and formation costs, business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. Interest income on the funds held in the Trust Account of up to $750,000 per year plus sufficient funds to pay tax obligations may be released to us.

On May 10, 2017, we invested the funds held in the Trust Account in a money market account invested in permitted United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity of 180 days or less, or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act (“Permitted Investments”).

During the period from Inception to December 31, 2017, we earned interest income of $3,646,130 on investments held in the Trust Account. On September 15, 2017 and December 15, 2017, we made payments of $400,000 and $407,000, respectively, to the Internal Revenue Service for federal income taxes estimated for 2017 on interest earned in the Trust Account. The funds were paid ~~from the Trust Account. At December 31, 2017, we had accrued federal income taxes of $359,823.~~

~~At December 31, 2017, we had cash held outside of the Trust Account of $851,466, which is available to fund our working capital requirements.~~

At December 31, 2017, we had current liabilities of $1,804,828 and negative working capital of $811,086, largely due to costs associated with the review of potential Business Combination opportunities and accrued federal income taxes on interest income earned in the Trust Account. The identification and evaluation of potential Business Combinations is continuing after December 31, 2017 and we therefore expect to incur additional expenses, which may be significant. We expect some portion of these expenses to be paid upon consummation of a Business Combination. We may, however, need to raise additional funds in order to meet the expenditures required for operating our business prior to a Business Combination. We may request loans from our Sponsor, affiliates of our Sponsor or certain of our executive officers and directors to fund our working capital requirements prior to completing a Business Combination. We may use working capital to repay such loans. Additional funds could also be raised through a private offering of debt or equity. There can be no assurance that we will be able to raise such funds. The uncertainty regarding the need for and ability to obtain such funding raises substantial doubt about our ability to continue as a going concern.

We may also need to obtain additional financing either to complete a Business Combination or because we become obligated to redeem a significant number of shares of our Class A common stock upon completion of a Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.

We have 24 months from the Close Date to complete our Business Combination. If we do not complete a Business Combination within this period, we shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds in the Trust Account and not previously released to us to fund its working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. The Initial Stockholders and our officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete the Business Combination within 24 months from the Close Date. However, if the Initial Stockholders acquire Public Shares after the Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if we fail to complete the Business Combination within the allotted 24-month time period.

We intend to use substantially all of the funds held in the Trust Account, including earned interest (which interest shall be net of taxes payable) to consummate a Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to consummate a Business Combination, the remaining proceeds held in the Trust Account after completion of the Business Combination and redemptions of shares of our Class A common stock, if any, will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategy.

~~Off-Balance Sheet Financing Arrangements~~

~~We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements~~ as of December 31, ~~2017. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred~~2021. In addition, $4.8 million was distributed to ~~as variable interest entities, which would have been established for~~ the ~~purpose~~Magnolia LLC Unit Holders. The amount and frequency of ~~facilitating off-balance sheet arrangements.~~

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial agreements involving assets as of December 31, 2017.

~~Contractual Obligations~~

~~We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities other than an administrative agreement~~future dividends is subject to ~~pay monthly recurring expenses of $20,000 for office space, administrative and support services to an affiliate of our Sponsor. The agreement terminates upon~~ the ~~earlier~~discretion of the ~~completion~~Company’s board of ~~a Business Combination or the liquidation of the Company.~~

We are committed to pay the deferred discount of 3.50% of the gross proceeds of the Public Offering, or $22,750,000 (the “Deferred Discount”), to the underwriters upon the completion of a Business Combination. The underwriters are not entitled to receive any of the interest earneddirectors and primarily depends on ~~Trust Account funds that would be used to pay the Deferred Discount,~~earnings, capital expenditures, debt covenants, and ~~no Deferred Discount is payable to the underwriters if a Business Combination is not completed within 24 months from the Close Date.~~

various other factors.

Critical Accounting Policies

~~The preparation of~~ and Estimates

Magnolia prepares its financial statements and ~~related disclosures~~the accompanying notes in conformity with accounting principles generally accepted in the United States ~~requires our~~of America, which require management to make estimates and assumptions about future events that affect the reported amounts ~~of assets and liabilities, disclosure of contingent assets and liabilities at~~in the ~~date of the condensed~~ financial statements and ~~income~~the accompanying notes. Magnolia identifies certain accounting policies as critical based on, among other things, their impact on the portrayal of Magnolia’s financial condition, results of operations, or liquidity and ~~expenses during~~ the ~~periods reported. Actual results could materially differ from those estimates. We have identified~~degree of difficulty, subjectivity, and complexity in their deployment. Critical accounting policies cover accounting matters that are inherently uncertain because the ~~following as our~~future resolution of such matters is unknown. Management routinely discusses the development, selection, and disclosure of each of the critical accounting ~~policies:~~

~~Offering Costs~~

~~We comply~~policies. The following is a discussion of Magnolia’s most critical accounting policies and estimates.

Reserves Estimates

Proved oil and natural gas reserves are those quantities of oil, natural gas, and NGLs which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the ~~requirements~~time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of ~~Accounting Standards Codification (“ASC”) 340-10-S99-1~~whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced, or the operator must be reasonably certain, that it will commence within a reasonable time. Estimated proved developed oil and ~~SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” We incurred offering costs in connection~~natural gas reserves can be expected to be recovered through existing wells with ~~our Public Offering of $1,424,561, primarily consisting of accounting~~existing equipment and legal services, securities registration expenses and exchange listing fees. These costs, along with paid and deferred underwriter discounts totaling $35,750,000, were charged to additional paid-in capital atoperating methods or where the ~~Close Date.~~

~~Redeemable Common Stock~~

~~All 65,000,000 shares of Class A common stock sold as part~~cost of the ~~Units~~required equipment is relatively minor compared to the cost of a new well.

Proved undeveloped reserves are proved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion. Reserves on undrilled acreage are limited to those that are directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances. Undrilled locations can be classified as undeveloped reserves only if a plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances justify a longer time. All of Magnolia’s proved undeveloped reserves as of December 31, 2021, that are included in this Annual Report, are planned to be developed within one year.

Despite the inherent imprecision in these engineering estimates, Magnolia’s reserves are used throughout the Company’s financial statements. For example, since Magnolia uses the unit-of-production method to amortize its oil and natural gas properties, the quantity of reserves could significantly impact Magnolia’s DD&A expense. A material adverse change in the Public Offering contain a redemption feature as discussed above. In accordance with ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), redemption provisions not solely within our control requireestimated volumes of reserves could result in property impairments. Finally, these reserves are the ~~security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption~~basis for Magnolia’s supplemental oil and ~~liquidation of all of an entity’s equity instruments,~~natural gas disclosures.

Reserves are excluded from the provisions of ASC 480. Although we did not specify a maximum redemption threshold, our charter provides that in no event will we redeem our Class A common stock in an amount that would cause our net tangible assets, or total stockholders’ equity, to fall below $5,000,001. Accordingly, at December 31, 2017, 62,438,263 of our 65,000,000 shares of Class A common stock were classified outside of permanent equity at their redemption value.

~~Net Income Per Share of Common Stock~~

We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income per share of common stock is computed by dividing net income by the weighted average number of common shares outstanding during the period as calculated using ~~the treasury stock method. At December 31, 2017, we had outstanding Warrants to purchase up to 31,666,666 shares of Class A common stock. The weighted~~an unweighted arithmetic average of these shares was excluded from the calculation of diluted net income per share of common stock since the exercise of the Warrants is contingent upon the occurrence of future events. At December 31, 2017, we did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into shares of common stock and then sharecommodity prices in ~~our earnings under the treasury stock method. As a result, diluted net income per share of common stock is the same as basic net income per share of common stock for the period.~~

~~Recent Accounting Pronouncements~~

~~Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material~~ effect on the ~~our financial statements.~~

first day of each of the previous 12 months, held flat for the life of the production, except where prices are defined by contractual arrangements. These historical prices often do not approximate the average price that the Company expects to receive for its oil and natural gas production in the future. Operating costs, production and ad valorem taxes, and future development costs are based on current costs with no escalation. Actual costs may be materially higher or lower than the costs utilized in the estimate.

Magnolia has elected not to disclose probable and possible reserves or reserve estimates in this filing.

Long-lived Asset Impairments

Long-lived assets used in operations are assessed for impairment whenever changes in facts and circumstances indicate a possible significant deterioration in future cash flows expected to be generated by an asset group. Individual assets are grouped for impairment purposes based on a judgmental assessment of the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. If there is an indication that the carrying amount of an asset may not be recovered, the asset is assessed by management through an established process in which changes to significant assumptions such as prices, volumes, and future development plans are reviewed. If, upon review, the sum of the undiscounted pre-tax cash flows is less than the carrying value of the asset group, the carrying value is written down to estimated fair value. Because there usually is a lack of quoted market prices for long-lived assets, the fair value of impaired assets is assessed by management using the income approach.

Under the income approach, the fair value of each asset group is estimated based on the present value of expected future cash flows. The income approach is dependent on a number of factors including estimates of forecasted revenue and operating costs, proved reserves, the success of future exploration for and development of unproved reserves, discount rates, and other variables. Key assumptions used in developing a discounted cash flow model described above include estimated quantities of crude oil and natural gas reserves; estimates of market prices considering forward commodity price curves as of the measurement date; and estimates of operating, administrative, and capital costs adjusted for inflation. The resulting future cash flows are discounted using a discount rate believed to be consistent with those applied by market participants. Although the fair value estimate of each asset group is based on assumptions the Company believes to be reasonable, those assumptions are inherently unpredictable and uncertain, and actual results could differ from the estimate.

calculation of discounted future net cash flows include estimates of future commodity prices based on NYMEX strip pricing adjusted for price differentials, estimates of proved oil and natural gas reserves and risk adjusted probable and possible reserves, estimates of future expected operating and capital costs, and a market participant based weighted average cost of capital of 10% for proved property impairments and 12% for unproved property impairments. Negative revisions of estimated reserves quantities, increases in future cost estimates, or sustained decreases in oil or natural gas prices could lead to a reduction in expected future cash flows and possibly an additional impairment of long-lived assets in future periods.

Item 7A. Quantitative and ~~Qualitative~~Qualitative Disclosures About Market ~~Risk.~~

~~To date, our efforts have been limited~~Risk

Interest Rate Risk

For variable rate debt, interest rate changes generally do not affect the fair market value of such debt, but do impact future earnings and cash flows, assuming other factors are held constant. The Company is subject to ~~organizational activities~~market risk exposure related to changes in interest rates on borrowings under the RBL Facility. Interest on borrowings under the original RBL Facility is based on the LIBOR rate or alternative base rate plus an applicable margin as stated in the agreement. Interest on borrowings under the amended and ~~activities relating to~~restated RBL Facility is based on the ~~Public Offering and~~term Secured Overnight Financing Rate (“SOFR”) or alternative base rate plus an applicable margin as stated in the ~~identification, evaluation and undertaking of a Business Combination. We have neither engaged in any operations nor generated any revenues.~~agreement. At December 31, ~~2017,~~2021, the ~~net proceeds from our Public Offering~~Company had no borrowings outstanding under the RBL Facility.

Commodity Price Risk

Magnolia’s primary market risk exposure is to the prices it receives for its oil, natural gas, and NGL production. The prices the ~~sale~~Company ultimately realizes for its oil, natural gas, and NGLs are based on a number of variables, including prevailing index prices attributable to the ~~Private Placement Warrants held~~Company’s production and certain differentials to those index prices. Prices for oil, natural gas, and NGLs have historically been volatile and unpredictable, and this volatility is expected to continue in the ~~Trust Account were comprised entirely~~future. The prices the Company receives for production depend on factors outside of ~~money market funds meeting certain conditions under Rule 2a-7 under~~its control, including physical markets, supply and demand, financial markets, and national and international policies. A $1.00 per barrel increase (decrease) in the ~~Investment Company Act, which invest solely in United States Treasuries. Due to~~weighted average oil price for the ~~short-term nature of the money market fund’s investments, we do not believe that there will be an associated material exposure to interest rate risk.~~

Atyear ended December 31, ~~2017, $652,839,151 was held~~2021 would have increased (decreased) the Company’s revenues by approximately $11.2 million and a $0.10 per Mcf increase (decrease) in the ~~Trust Account~~weighted average natural gas price for the purposes of consummating a Business Combination. If we complete a Business Combination within 24 months from the Close Date, funds in the Trust Account will be used to pay for the Business Combination, redemptions of Class A common stock, if any, deferred underwriting compensation of $22,750,000 and accrued expenses related to the Business Combination. Any funds remaining will be made available to us to provide working capital to finance our operations.

Weyear ended December 31, 2021 would have ~~not engaged in any hedging activities since our Inception. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.~~

increased (decreased) Magnolia’s revenues by approximately $4.3 million.

Item 8. Financial ~~Statement~~sStatements and Supplementary ~~Data.~~

~~INDEX TO FINANCIAL STATEMENTS~~

Data

~~Report of Independent Registered Public Accounting Firm~~		49

~~Balance Sheet~~		50

~~Statement of Operations~~		51

~~Statement of Shareholders’ Equity~~		52

~~Statement of Cash Flows~~		53

~~Notes to Financial Statements~~		54

Report of Independent ~~Registered~~Registered Public Accounting Firm

~~The stockholders~~

To the Stockholders and ~~board~~Board of ~~directors~~Directors

Magnolia Oil & Gas Corporation:

~~TPG Pace Energy Holdings Corp.:~~

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance ~~sheet~~sheets of ~~TPG Pace Energy Holdings Corp.~~Magnolia Oil & Gas Corporation and subsidiaries (the Company) as of December 31, ~~2017,~~2021 and 2020, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ~~from February 14, 2017 (inception) to~~ended December 31, ~~2017,~~2021, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2017,~~2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year period ~~from February 14, 2017 (inception) to~~ended December 31, ~~2017,~~2021, in conformity with U.S. generally accepted accounting principles.

~~Going Concern~~

~~The accompanying financial statements~~

We also have ~~been prepared assuming that~~audited, in accordance with the standards of the Public Company ~~will continue as a going concern. As discussed in Note 1 to the financial statements,~~Accounting Oversight Board (United States) (PCAOB), the Company’s ~~negative working capital at~~internal control over financial reporting as of December 31, ~~2017~~2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and ~~the limitation~~our report dated February 17, 2022 expressed an unqualified opinion on the ~~amount~~effectiveness of ~~cash available to~~ the Company from interest earned on the Trust Account raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. TheCompany’s internal control over financial ~~statements do not include any adjustments that might result from the outcome of this uncertainty.~~

reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our ~~audit.~~audits. We are a public accounting firm registered with the ~~Public Company Accounting Oversight Board (United States) (PCAOB)~~PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our ~~audit~~audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our ~~audit~~audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of the impact of estimated oil and natural gas reserves on depreciation, depletion, and amortization expense related to proved oil and natural gas properties

As discussed in Note 1 to the consolidated financial statements, the Company depreciates, depletes, and amortizes its proved oil and natural gas properties using the unit-of-production method. For the year ended December 31, 2021, the Company recorded depreciation, depletion and amortization expense of $188 million. The estimation of proved oil and natural gas reserves requires the expertise of reservoir engineering specialists, who take into consideration future production, future operating and capital costs, and historical oil and natural gas prices inclusive of price differentials. The Company engages independent reservoir engineering specialists to estimate proved oil and natural gas reserves, which are an input to the calculation of depreciation, depletion, and amortization.

We identified the assessment of the impact of estimated oil and natural gas reserves on depreciation, depletion, and amortization expense related to proved oil and natural gas properties as a critical audit matter. Complex auditor judgment was required in evaluating the Company’s estimate of proved oil and natural gas reserves. Specifically, auditor judgment was required to evaluate the assumptions used by the Company related to future production and future operating and capital costs.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s depreciation, depletion, and amortization process, including controls over the estimation of proved oil and natural gas reserves. We evaluated (1) the professional qualifications of the independent reservoir engineering specialists engaged by the Company and the external engineering firm, (2) the knowledge, skills, and ability of the independent reservoir engineering specialists, and (3) the relationship of the independent reservoir engineering specialists and external engineering firm to the Company. We analyzed and assessed the determination of depreciation, depletion, and amortization expense for compliance with industry and regulatory standards. We assessed compliance of the methodology used by the Company’s independent reservoir engineering specialists to estimate proved oil and natural gas reserves with industry and regulatory standards. We read and considered the report of the Company’s independent reservoir engineering specialists in connection with our evaluation of the Company’s reserve estimates. We compared future production to historical production rates. We evaluated the future operating and capital costs by comparing them to historical costs.

/s/ KPMG LLP

We have served as the Company’s auditor since 2017.

Houston, Texas

February 17, 2022

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Magnolia Oil & Gas Corporation:

Opinion on Internal Control Over Financial Reporting

We have audited Magnolia Oil & Gas Corporation and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes (collectively, the consolidated financial statements), and our report dated February 17, 2022 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/KPMG LLP

~~We have served as the Company’s auditor since 2017.~~

~~Fort Worth,~~

Houston, Texas

February ~~14, 2018~~

17, 2022

~~TPG Pace Energy Holdings Corp.~~

Magnolia Oil & Gas Corporation

Consolidated Balance ~~Sheet~~

Sheets

December 31, 2017

Assets

Current assets:

Cash

$
851,466

Prepaid expenses

142,276

Total current assets

993,742

Investments held in Trust Account

652,839,151

Deferred tax asset

104,569

Total assets

$
653,937,462

Liabilities and stockholders' equity

Current liabilities:

Accrued professional fees, travel and other expenses

$
1,445,005

Federal income taxes payable

359,823

Total current liabilities

1,804,828

Deferred underwriting compensation

22,750,000

Total liabilities

24,554,828

Commitments and contingencies

Class A common stock subject to possible redemption; 62,438,263 shares at
   December 31, 2017, at a redemption value of $10.00 per share

624,382,630

Stockholders' equity:

Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued or
   outstanding

—

Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 2,561,737
   shares issued and outstanding (excluding 62,438,263 shares subject to possible
   redemption) at December 31, 2017

256

Class F common stock, $0.0001 par value; 20,000,000 shares authorized, 16,250,000
   shares issued and outstanding

1,625

Additional paid-in capital

3,465,928

Retained earnings

1,532,195

Total stockholders' equity

5,000,004

Total liabilities and stockholders' equity

$
653,937,462

(In thousands)


	December 31, 2021		December 31, 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	366,982	$	192,561
Accounts receivable	149,769		81,559
Drilling advances	615		3,805
Other current assets	1,427		3,601
Total current assets	518,793		281,526
PROPERTY, PLANT AND EQUIPMENT
Oil and natural gas properties	2,381,812		2,130,125
Other	7,036		4,412
Accumulated depreciation, depletion and amortization	(1,172,761)		(985,010)
Total property, plant and equipment, net	1,216,087		1,149,527
OTHER ASSETS
Deferred financing costs, net	3,701		6,042
Intangible assets, net	—		9,346
Other long-term assets	8,161		6,979
Total other assets	11,862		22,367
TOTAL ASSETS	$	1,746,742	$	1,453,420
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	127,909	$	62,626
Other current liabilities (Note 6)	90,636		66,323
Total current liabilities	218,545		128,949
LONG-TERM LIABILITIES
Long-term debt, net	388,087		391,115
Asset retirement obligations, net of current	89,715		88,232
Other long-term liabilities	5,146		5,702
Total long-term liabilities	482,948		485,049
COMMITMENTS AND CONTINGENCIES (Note 10)	0		0
EQUITY
Class A Common Stock, $0.0001 par value, 1,300,000 shares authorized, 193,437 shares issued and 179,270 shares outstanding in 2021 and 168,755 shares issued and 163,280 shares outstanding in 2020	19		17
Class B Common Stock, $0.0001 par value, 225,000 shares authorized, 49,293 shares issued and outstanding in 2021 and 85,790 shares issued and outstanding in 2020	5		9
Additional paid-in capital	1,689,500		1,712,544
Treasury Stock, at cost, 14,168 shares and 5,475 shares in 2021 and 2020, respectively	(164,599)		(38,958)
Accumulated deficit	(708,168)		(1,125,450)
Noncontrolling interest	228,492		291,260
Total equity	1,045,249		839,422
TOTAL LIABILITIES AND EQUITY	$	1,746,742	$	1,453,420

The accompanying notes are an integral part to these consolidated financial statements.

Magnolia Oil & Gas Corporation

Consolidated Statements of Operations

(In thousands, except per share data)


	Years Ended
	December 31, 2021		December 31, 2020		December 31, 2019
REVENUES
Oil revenues	$	747,896	$	421,520	$	775,770
Natural gas revenues	172,648		70,416		95,970
Natural gas liquids revenues	157,807		49,367		70,416
Total revenues	1,078,351		541,303		942,156
OPERATING EXPENSES
Lease operating expenses	93,021		79,192		93,788
Gathering, transportation, and processing	45,535		35,442		40,938
Taxes other than income	55,834		31,250		53,728
Exploration expenses	4,125		567,333		12,741
Impairment of oil and natural gas properties	—		1,381,258		—
Asset retirement obligations accretion	4,929		5,718		5,512
Depreciation, depletion and amortization	187,688		283,353		523,572
Amortization of intangible assets	9,346		14,505		14,505
General and administrative expenses	75,279		68,918		69,432
Transaction related costs	—		—		438
Total operating costs and expenses	475,757		2,466,969		814,654

OPERATING INCOME (LOSS)	602,594		(1,925,666)		127,502
OTHER INCOME (EXPENSE)
Income from equity method investee	—		2,113		857
Interest expense, net	(31,002)		(28,698)		(28,356)
Gain (loss) on derivatives, net	(3,110)		565		—
Other income (expense), net	85		3,363		(238)
Total other expense, net	(34,027)		(22,657)		(27,737)

INCOME (LOSS) BEFORE INCOME TAXES	568,567		(1,948,323)		99,765
Income tax expense (benefit)	8,851		(79,340)		14,760
NET INCOME (LOSS)	559,716		(1,868,983)		85,005
LESS: Net income (loss) attributable to noncontrolling interest	142,434		(660,593)		34,809
NET INCOME (LOSS) ATTRIBUTABLE TO MAGNOLIA	417,282		(1,208,390)		50,196
LESS: Non-cash deemed dividend related to warrant exchange	—		—		2,763
NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCK	$	417,282	$	(1,208,390)	$	47,433
NET INCOME (LOSS) PER SHARE OF CLASS A COMMON STOCK
Basic	$	2.38	$	(7.27)	$	0.29
Diluted	$	2.36	$	(7.27)	$	0.28
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic	174,364		166,270		161,886
Diluted	175,360		166,270		167,047

The accompanying notes are an integral part of these consolidated financial statements.

~~TPG Pace Energy Holdings Corp.~~

~~Statement~~

Magnolia Oil & Gas Corporation

Consolidated Statements of ~~Operations~~

Changes in Stockholders’ Equity

For the Period

from February 14,

2017 (Inception) to

December 31, 2017

Revenue

$
—

Professional fees and other expenses

685,940

Travel expenses

213,152

State franchise tax

152,610

Loss from operations

(1,051,702
)
Interest income

3,646,151

Income from continuing operations

2,594,449

Income tax expense

(1,062,254
)
Net income attributable to common stock

$
1,532,195

Net income per share of common stock:

Basic and diluted

$
0.02

Weighted average shares of common stock outstanding:

Basic and diluted

62,920,561

(In thousands)


	Class A Common Stock			Class B Common Stock			Additional Paid In Capital		Treasury Stock			Retained Earnings/ Accumulated Deficit		Total Stockholders’ Equity		Noncontrolling Interest		Total Equity
	Shares	Value		Shares	Value				Shares	Value
Balance, December 31, 2018	156,333	$	16	93,346	$	9	$	1,641,237	—	$	—	$	35,507	$	1,676,769	$	1,031,186	$	2,707,955
Stock based compensation expense, net of forfeitures	—	—		—	—		7,091		—	—		—		7,091		3,998		11,089
Changes in ownership interest adjustment and in deferred tax liability	—	—		—	—		27,405		—	—		—		27,405		(36,385)		(8,980)
Common stock issued in connection with acquisition	3,055	—		—	—		33,693		—	—		—		33,693		—		33,693
Final settlement adjustment related to Business Combination	(496)	—		(1,556)	—		(6,095)		—	—		—		(6,095)		(19,150)		(25,245)
Common stock issued in connection with warrants exchange	9,179	1		—	—		530		—	—		(2,763)		(2,232)		—		(2,232)
Common stock issued related to stock based compensation and other, net	248	—		—	—		(499)		—	—		—		(499)		(272)		(771)
Class A Common Stock repurchases	—	—		—	—		—		1,000	(10,277)		—		(10,277)		—		(10,277)
Class B Common Stock purchase and cancellation	—	—		(6,000)	—		—		—	—		—		—		(69,093)		(69,093)
Contributions from noncontrolling interest owners	—	—		—	—		—		—	—		—		—		8,809		8,809
Distributions to noncontrolling interest owners	—	—		—	—		—		—	—		—		—		(1,424)		(1,424)
Net income	—	—		—	—		—		—	—		50,196		50,196		34,809		85,005
Balance, December 31, 2019	168,319	$	17	85,790	$	9	$	1,703,362	1,000	$	(10,277)	$	82,940	$	1,776,051	$	952,478	$	2,728,529
Stock based compensation expense, net of forfeitures	—	—		—	—		6,616		—	—		—		6,616		3,413		10,029
Changes in ownership interest adjustment	—	—		—	—		3,088		—	—		—		3,088		(3,088)		—
Common stock issued related to stock based compensation and other, net	436	—		—	—		(522)		—	—		—		(522)		(270)		(792)
Class A Common Stock repurchases	—	—		—	—		—		4,475	(28,681)		—		(28,681)		—		(28,681)
Distributions to noncontrolling interest owners	—	—		—	—		—		—	—		—		—		(680)		(680)
Net loss	—	—		—	—		—		—	—		(1,208,390)		(1,208,390)		(660,593)		(1,868,983)
Balance, December 31, 2020	168,755	$	17	85,790	$	9	$	1,712,544	5,475	$	(38,958)	$	(1,125,450)	$	548,162	$	291,260	$	839,422

The accompanying notes are an integral part to these consolidated financial statements.

Magnolia Oil & Gas Corporation

Consolidated Statements of Changes in Stockholders’ Equity

(In thousands)


	Class A Common Stock			Class B Common Stock			Additional Paid In Capital		Treasury Stock			Accumulated Deficit		Total Stockholders’ Equity		Noncontrolling Interest		Total Equity
	Shares	Value		Shares	Value				Shares	Value
Balance, December 31, 2020	168,755	$	17	85,790	$	9	$	1,712,544	5,475	$	(38,958)	$	(1,125,450)	$	548,162	$	291,260	$	839,422
Stock based compensation expense, net of forfeitures	—	—		—	—		8,629		—	—		—		8,629		3,107		11,736
Changes in ownership interest adjustment	—	—		—	—		15,884		—	—		—		15,884		(15,884)		—
Common stock issued related to stock based compensation and other, net	810	—		—	—		(3,571)		—	—		—		(3,571)		(1,231)		(4,802)
Class A Common Stock repurchases	—	—		—	—		—		8,693	(125,641)		—		(125,641)		—		(125,641)
Class B Common Stock purchases and cancellations	—	—		(13,000)	(2)		2		—	—		—		—		(171,671)		(171,671)
Non-compete settlement	375	—		—	—		(29,757)		—	—		—		(29,757)		(12,316)		(42,073)
Conversion of Class B Common Stock to Class A Common Stock	23,497	2		(23,497)	(2)		—		—	—		—		—		—		—
Dividends declared ($0.08 per share)	—	—		—	—		(14,231)		—	—		—		(14,231)		—		(14,231)
Distributions to noncontrolling interest owners	—	—		—	—		—		—	—		—		—		(7,207)		(7,207)
Net income	—	—		—	—		—		—	—		417,282		417,282		142,434		559,716
Balance, December 31, 2021	193,437	$	19	49,293	$	5	$	1,689,500	14,168	$	(164,599)	$	(708,168)	$	816,757	$	228,492	$	1,045,249

The accompanying notes are an integral part to these consolidated financial statements.

Magnolia Oil & Gas Corporation

Consolidated Statements of Cash Flows(In thousands)


	Year Ended
	December 31, 2021		December 31, 2020		December 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME (LOSS)	$	559,716	$	(1,868,983)	$	85,005
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	187,688		283,353		523,572
Amortization of intangible assets	9,346		14,505		14,505
Exploration expenses, non-cash	888		563,999		1,154
Impairment of oil and natural gas properties	—		1,381,258		—
Asset retirement obligations accretion	4,929		5,718		5,512
Amortization of deferred financing costs	4,290		3,628		3,541
Unrealized (gain) loss on derivatives, net	277		(277)		—
(Gain) on sale of equity method investment	—		(5,071)		—
Deferred taxes	—		(77,834)		14,261
Stock based compensation	11,736		10,029		11,089
Other	(84)		(728)		(668)
Changes in operating assets and liabilities:
Accounts receivable	(68,210)		24,216		7,952
Accounts payable	65,283		(16,961)		(6,834)
Accrued liabilities	7,765		(2,457)		(19,181)
Drilling advances	3,190		(3,506)		11,960
Other assets and liabilities, net	1,663		(768)		(4,249)
Net cash provided by operating activities	788,477		310,121		647,619
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of EnerVest properties	—		—		4,250
Acquisitions, other	(18,345)		(73,702)		(93,221)
Proceeds from sale of equity method investment	—		27,074		—
Additions to oil and natural gas properties	(236,426)		(197,858)		(425,124)
Changes in working capital associated with additions to oil and natural gas properties	13,568		(24,354)		(9,911)
Other investing	(2,239)		(1,148)		(242)
Net cash used in investing activities	(243,442)		(269,988)		(524,248)
CASH FLOW FROM FINANCING ACTIVITIES
Class A Common Stock repurchases	(125,641)		(28,681)		(10,277)
Class B Common Stock purchases and cancellations	(171,671)		—		(69,093)
Non-compete settlement	(42,073)		—		—
Dividends paid	(14,131)		—		—
Contributions from noncontrolling interest owners	—		—		7,301
Distributions to noncontrolling interest owners	(7,207)		(680)		(1,424)
Cash paid for debt modification	(4,976)		—		—
Other financing activities	(4,915)		(844)		(3,003)
Net cash used in financing activities	(370,614)		(30,205)		(76,496)

NET CHANGE IN CASH AND CASH EQUIVALENTS	174,421		9,928		46,875
Cash and cash equivalents – Beginning of period	192,561		182,633		135,758
Cash and cash equivalents – End of period	$	366,982	$	192,561	$	182,633

The accompanying notes are an integral part of these consolidated financial statements.

~~TPG Pace Energy Holdings Corp.~~

~~Statement of Stockholders’ Equity~~

Preferred Stock

Class A Common Stock

Class F Common Stock

Additional

Retained

Stockholders'

Shares

Amount

Shares

Amount

Shares

Amount

Paid-In Capital

Earnings

Equity

Balance at February 14, 2017 (Inception)

—

$
—

—

$
—

$
—

$
—

$
—

$
—

$
—

Sale of shares of Class F common stock to Sponsor
   on February 22, 2017 at $0.002 per share

—

—

—

—

11,500,000

1,150

23,850

—

25,000

Class F common stock dividend effected on
   April 24, 2017

—

—

—

—

5,750,000

575

(575
)

—

—

Proceeds from initial public offering of Units on
   May 10, 2017 at $10.00 per Unit

—

—

65,000,000

6,500

—

—

649,993,500

—

650,000,000

Sale of 10,000,000 Private Placement Warrants to
   Sponsor on May 10, 2017 at $1.50 per Private
   Placement Warrant

—

—

—

—

—

—

15,000,000

—

15,000,000

Underwriters' discount

—

—

—

—

—

—

(13,000,000
)

—

(13,000,000
)
Deferred offering costs charged to additional
   paid-in capital

—

—

—

—

—

—

(1,424,561
)

—

(1,424,561
)
Deferred underwriting compensation

—

—

—

—

—

—

(22,750,000
)

—

(22,750,000
)
Class F common stock forfeited by Sponsor
    on June 24, 2017

—

—

—

—

(1,000,000
)

(100
)

100

—

—

Class A common stock subject to possible
   redemption; 62,438,263 shares at a redemption
   value of $10.00 per share

—

—

(62,438,263
)

(6,244
)

—

—

(624,376,386
)

—

(624,382,630
)
Net income attributable to common stock

—

—

—

—

—

—

—

1,532,195

1,532,195

Balance at December 31, 2017

—

$
—

2,561,737

$
256

16,250,000

$
1,625

$
3,465,928

$
1,532,195

$
5,000,004

~~The accompanying notes are an integral part of these financial statements.~~

~~TPG Pace Energy Holdings Corp.~~

~~Statement of Cash Flows~~

For the Period

from February 14,

2017 (Inception) to

December 31, 2017

Cash flows from operating activities:

Net income attributable to common stock

$
1,532,195

Changes in operating assets and liabilities:

Prepaid expenses

(142,276
)
Deferred tax asset

(104,569
)
Accrued professional fees, travel and other expenses

1,430,295

Federal income taxes payable

359,823

Interest on investments held in Trust Account

(3,646,151
)
Withdrawal of interest from Trust Account to pay federal income taxes

807,000

Net cash provided by operating activities

236,317

Cash flows from investing activities:

Proceeds deposited into Trust Account

(650,000,000
)
Net cash used in investing activities

(650,000,000
)
Cash flows from financing activities:

Proceeds from sale of Class F common stock to Sponsor

25,000

Proceeds from sale of Units in initial public offering

650,000,000

Proceeds from sale of Private Placement Warrants to Sponsor

15,000,000

Proceeds of notes payable from Sponsor

300,000

Payment of underwriters discounts

(13,000,000
)
Payment of accrued offering costs

(1,409,851
)
Repayment of notes payable from Sponsor

(300,000
)
Net cash provided by financing activities

650,615,149

Net change in cash

851,466

Cash at beginning of period

—

Cash at end of period

$
851,466

Supplemental disclosure of cash flow information:

Cash paid for federal income taxes

$
807,000

Supplemental disclosure of non-cash financing activities:

Deferred underwriting compensation

$
22,750,000

Accrued offering costs

$
14,710

Magnolia Oil & Gas Corporation

~~The accompanying notes are an integral part of these financial statements.~~

~~TPG Pace Energy Holdings Corp.~~

Notes to Consolidated Financial Statements

1. Organization and ~~Business Operations~~

~~Organization and General~~

TPG Pace Energy Holdings Corp. (the “Company”) was incorporated in the state of Delaware on February 14, 2017 (“Inception”). The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company intends to focus its search for a target business in the energy or energy related industries, but may seek to complete a Business Combination with an operating company in any industry or location in the United States. The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The Company’s sponsor is TPG Pace Energy Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), which is an affiliate of TPG Global, LLC.

All activity for the period from Inception to December 31, 2017 relates to the Company’s formation and the initial public offering of units, each consisting of one of the Company’s shares of Class A common stock (“Public Shares”) and one-third of one warrant to purchase one share of Class A common stock (the “Public Offering”), and the identification and evaluation of prospective acquisition targets for a Business Combination. The Company will not generate operating revenues prior to the completion of the Business Combination and will generate non-operating income in the form of interest income on Permitted Investments (as defined below) from the proceeds derived from the Public Offering. The Company has selected December 31st as its fiscal year end.

~~Financing~~

The registration statement for the Company’s Public Offering was declared effective by the United States Securities and Exchange Commission (the “SEC”) on May 4, 2017. The Public Offering closed on May 10, 2017 (the “Close Date”). The Sponsor purchased an aggregate of 10,000,000 warrants at a purchase price of $1.50 per warrant, or $15,000,000 in the aggregate, in a private placement on the Close Date (the “Private Placement”). The warrants are included in additional paid-in capital at the balance sheet.

The Company intends to finance a Business Combination with proceeds from its $650,000,000 Public Offering (see Note 3) and $15,000,000 Private Placement (see Note 4). At the Close Date, proceeds of $650,000,000, net of underwriting discounts of $13,000,000 and funds designated for operational use of $2,000,000, were deposited in a trust account with Continental Stock Transfer and Trust Company acting as trustee (the “Trust Account”) as described below.

~~The Trust Account~~

On the Close Date, all funds held in the Trust Account were invested in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations (collectively, “Permitted Investments”).

Funds will remain in the Trust Account except for the withdrawal of interest to fund working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes. The proceeds from the Public Offering will not be released from the Trust Account until the earliest of (i) the completion of the Business Combination, (ii) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend the amended and restated certificate of incorporation to modify the substance and timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete the Business Combination within 24 months from the closing of the Public Offering, or (iii) the redemption of all of the Company’s Public Shares if it is unable to complete the Business Combination within 24 months from the Close Date, subject to applicable law. In addition, if the Company is unable to complete the Business Combination within 24 months from the closing of the Public Offering for any reason, compliance with Delaware law may require that the Company submit a plan of dissolution to the then-existing stockholders for approval prior to the distribution of the proceeds held in the Trust Account.

Of the remaining proceeds of $2,000,000 held outside the Trust Account, $300,000 was used to repay the loan from the Sponsor, with the remainder available to pay offering costs, business, legal and accounting due diligence on prospective acquisitions, listing fees and continuing general and administrative expenses.

~~Business Combination~~

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a target business. As used herein, the target business must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (less any deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the Company signing a definitive agreement.

After signing a definitive agreement for a Business Combination, the Company will provide the public stockholders with the opportunity to redeem all or a portion of their Public Shares either (i) in connection with a stockholder meeting to approve the Business Combination or (ii) by means of a tender offer. Each public stockholder may elect to redeem their shares irrespective of whether they vote for or against the Business Combination at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to fund its working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes, divided by the number of then outstanding Public Shares, subject to the limitations described herein. The amount in the Trust Account is initially anticipated to be approximately $10.00 per public share. The per share amount the Company will distribute to investors who properly redeem their shares will not be reduced by any deferred underwriting commissions payable to underwriters. The decision as to whether the Company will seek stockholder approval of the Business Combination or will allow stockholders to sell their shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval under the law or stock exchange listing requirements. If the Company seeks stockholder approval, it will complete its Business Combination only if a majority of the outstanding shares voted are voted in favor of the Business Combination. However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001 after payment of the deferred underwriting commission. In such an instance, the Company would not proceed with the redemption of its Public Shares and the related Business Combination, and instead may search for an alternate Business Combination.

The Company has 24 months from the Close Date to complete its Business Combination. If the Company does not complete a Business Combination within this period, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds in the Trust Account and not previously released to the Company to fund its working capital requirements, subject to an annual limit of $750,000, and/or to pay its taxes (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. The Company’s Sponsor and four independent directors (collectively, “Initial Stockholders”) and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect to their Founder Shares (as defined in Note 4) if the Company fails to complete the Business Combination within 24 months from the Close Date. However, if the Initial Stockholders acquire Public Shares after the Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete the Business Combination within the allotted 24-month time period.

The underwriters have agreed to waive their rights to any deferred underwriting commission (“Deferred Discount”) held in the Trust Account in the event the Company does not complete the Business Combination and those amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Company’s Public Shares.

If the Company fails to complete the Business Combination, the redemption of the Company’s Public Shares will reduce the book value of the shares held by the Initial Stockholders, who will be the only remaining stockholders after such redemptions.

If the Company holds a stockholder vote or there is a tender offer for shares in connection with a Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to fund its working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes. As a result, such shares are recorded at their redemption amount and classified as temporary equity on the balance sheet, in accordance with ASC 480, “Distinguishing Liabilities from Equity.”

~~Going Concern~~

At December 31, 2017, the Company had current liabilities of $1,804,828 and negative working capital of $811,086 largely due to amounts owed to professional fees associated with the offering and operating of the Company. As discussed elsewhere in Note 1, The Company has the ability to use annually up to $750,000 of interest earned from the Trust Account to fund working capital. The Company's ability to continue as a going concern is dependent upon its ability to consummate a Business Combination or have sufficient interest to fund expenses and negative working capital balances. If there is insufficient interest to pay such amounts in full or if a Business Combination does not occur the Company will need to obtain additional funds to meet its liabilities. Management's options for obtaining additional working capital, to the extent needed, include potentially requesting loans from the Sponsor or affiliates of the Sponsor, or certain of the Company’s executive officers or directors. Additional funds could also be raised through a private offering of debt or equity. There can be no assurance that the Company will be able to raise such funds if they are needed. The Company’s negative working capital and it’s limitation on the amount of cash available on interest earned from the Trust Account to fund working capital raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements have been prepared on a going concern basis and do not include any adjustments that might arise as a result of uncertainties about the Company’s ability to continue as a going concern.

2. Summary of Significant Accounting Policies

Organization and Nature of Operations

Magnolia Oil & Gas Corporation (the “Company” or “Magnolia”) is an independent oil and natural gas company engaged in the acquisition, development, exploration, and production of oil, natural gas, and natural gas liquid (“NGL”) reserves. The Company’s oil and natural gas properties are located primarily in Karnes County and the Giddings area in South Texas, where the Company targets the Eagle Ford Shale and Austin Chalk formations. Magnolia’s objective is to generate stock market value over the long-term through consistent organic production growth, high full cycle operating margins, an efficient capital program with short economic paybacks, significant free cash flow after capital expenditures, and effective reinvestment of free cash flow.

Basis of Presentation

and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“~~U.S.~~ GAAP”). Certain reclassifications of prior period financial statements have been made to conform to current reporting practices.

The consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of intercompany transactions and balances. As of December 31, 2021, Magnolia owned approximately 78.4% of the interest in Magnolia Oil & Gas Parent LLC (“Magnolia LLC”) and ~~pursuant to~~ the ~~accounting~~noncontrolling interest was 21.6%. The Company’s interests in oil and ~~disclosure rules~~natural gas exploration and ~~regulations~~production ventures and partnerships are proportionately consolidated. The Company reflects a noncontrolling interest representing the interest owned by the Magnolia LLC Unit Holders through their ownership of ~~the SEC, and reflect all adjustments, consisting only of normal recurring adjustments, which are,~~Magnolia LLC Units in the ~~opinion~~consolidated financial statements. The noncontrolling interest is presented as a component of ~~management, necessary~~ equity. See Note 12—Stockholders’ Equityfor further discussion of noncontrolling interest.

Variable Interest Entities

Magnolia LLC is a ~~fair presentation~~variable interest entity (“VIE”). The Company determined that it is the primary beneficiary of Magnolia LLC as the ~~Company’s financial position at~~Company is the sole managing member and has the power to direct the activities most significant to Magnolia LLC’s economic performance as well as the obligation to absorb losses and receive benefits that are potentially significant. At December 31, ~~2017~~2021, the Company had an approximate 78.4% economic interest in Magnolia LLC and ~~the~~100% of Magnolia LLC’s assets, liabilities, and results of operations are consolidated in the Company’s consolidated financial statements contained herein. At December 31, 2021, the Magnolia LLC Unit Holders had an approximate 21.6% economic interest in Magnolia LLC; however, the Magnolia LLC Unit Holders have disproportionately fewer voting rights, and are shown as noncontrolling interest holders of Magnolia LLC. See Note 12—Stockholders’ Equityfor further discussion of the noncontrolling interest.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and changes in these estimates are recorded when known. Significant estimates with regard to these financial statements include the fair value determination of acquired assets and liabilities, the assessment of asset retirement obligations, the estimate of proved oil and natural gas reserves and related present value estimates of future net cash flows, and the estimates of fair value for ~~the period presented.~~

~~Emerging Growth Company~~

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition periodlong-lived assets.

Cash and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

Cash

Equivalents

Cash and cash equivalents include cash on hand and short-term, highly liquid investments that are readily convertible to cash. Cash and cash equivalents were approximately $367.0 million and $192.6 million at December 31, 2021 and 2020, respectively.

Accounts Receivable and Allowance for Expected Credit Losses

The Company’s receivables consist mainly of trade receivables from commodity sales and joint interest billings due from owners on ~~deposit~~properties the Company operates. The majority of these receivables have payment terms of 30 days or less. For receivables due from joint interest owners, the Company generally has the ability to withhold future revenue disbursements to recover non-payment of joint interest billings. From an evaluation of the Company’s existing credit portfolio, historical credit losses have been de

minimis and are expected to remain so in the future assuming no substantial changes to the business or creditworthiness of Magnolia’s business partners. There was no material impact on the Company’s consolidated financial statements or disclosures upon adoption of this Accounting Standards Update (“ASU”).

Oil and Natural Gas Properties

The Company follows the successful efforts method of accounting for its oil and natural gas properties. Under this method of accounting, exploration costs such as exploratory geological and geophysical costs, delay rentals, and exploration overhead are expensed as incurred. All costs related to production, general corporate overhead, and similar activities are expensed as incurred.

Unproved properties are assessed for impairment at ~~banking institutions~~least annually and are transferred to proved oil and natural gas properties to the extent the costs are associated with successful exploration activities. Unproved properties are assessed for impairment based on the Company’s current exploration plans. Costs of expired or abandoned leases are charged to exploration expense, while costs of productive leases are transferred to proved oil and natural gas properties. Costs of maintaining and retaining unproved properties, as well as impairment of unsuccessful leases, are included in “Exploration expenses” in the consolidated statements of operations.

Costs to develop proved reserves, including the costs of all ~~highly liquid short-term investments~~development wells and related equipment used in the production of crude oil and natural gas, are capitalized. Depreciation, depletion and amortization of the cost of proved oil and natural gas properties is calculated using the unit-of-production method. The reserve base used to calculate depletion for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. The reserve base used to calculate the depreciation for capitalized costs for exploratory and development wells is the sum of proved developed reserves only. Estimated future abandonment costs, net of salvage values, are included in the depreciable cost.

Oil and natural gas properties are grouped for depreciation, depletion and amortization in accordance with ~~original maturities~~the Accounting Standards Codification (“ASC”) ASC 932 “Extractive Activities—Oil and Gas” (“ASC 932”). The basis for grouping is a reasonable aggregation of ~~90 days~~properties with a common geological structural feature or ~~less. The Company did not have cash equivalents at December 31, 2017.~~

~~Concentration of Credit Risk~~

~~Financial instruments~~stratigraphic condition, such as a reservoir or field.

When circumstances indicate that ~~potentially subject~~proved oil and natural gas properties may be impaired, the Company compares unamortized capitalized costs to ~~concentrations of credit risk consist~~the expected undiscounted pre-tax future cash flows for the associated assets grouped at the lowest level for which identifiable cash flows are independent of cash ~~accounts in a financial institution, which at times, may exceed~~flows of other assets. If the ~~Federal depository insurance coverage of $250,000. The Company has not experienced losses~~expected undiscounted pre-tax future cash flows, based on ~~these accounts and management believes the Company is not exposed to significant risks on such accounts.~~

~~Financial Instruments~~

~~The fair value of~~ the Company’s ~~assets~~estimate of future crude oil and ~~liabilities, which qualify as financial instruments under~~natural gas prices, operating costs, anticipated production from proved reserves, and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally estimated using the income approach described in ASC 820, “Fair Value ~~Measurements~~Measurements” (“ASC 820”). If applicable, the Company may utilize prices and ~~Disclosures,” approximates~~other relevant information generated by market transactions involving assets and liabilities that are identical or comparable to the item being measured as the basis for determining fair value. The expected future cash flows used for impairment reviews and related fair value calculations are typically based on judgmental assessments of future production volumes, commodity prices, operating costs, and capital investment plans, considering all available information at the date of review. These assumptions are applied to develop future cash flow projections that are then discounted to estimated fair value, using a discount rate believed to be consistent with those applied by market participants. See Note 4—Fair Value Measurementsfor further discussion.

Asset Retirement Obligations

Asset retirement obligations (“ARO”) represent the present value of the estimated cash flows expected to be incurred to plug, abandon, and remediate producing properties, excluding salvage values, at the end of their productive lives in accordance with applicable laws. The significant unobservable inputs to this fair value measurement include estimates of plugging, abandonment, and remediation costs, well life, inflation, and credit-adjusted risk-free rate. The inputs are calculated based on historical data as well as current estimates. When the liability is initially recorded, the carrying ~~amounts represented~~amount of the related long-lived asset is increased. Over time, accretion of the liability is recognized each period, and the capitalized cost is amortized over the useful life of the related asset using the unit of production method and is included in “Depreciation, depletion and amortization” in the Company’s consolidated statements of operations. If the ARO is settled for an amount other than the recorded amount, a gain or loss is recognized.

To estimate the fair value of an asset retirement obligation, the Company employs a present value technique, which reflects certain assumptions, including its credit‑adjusted risk‑free interest rate, inflation rate, the estimated settlement date of the liability, and the estimated cost to settle the liability. Changes in timing or to the original estimate of cash flows will result in changes to the carrying amount of the liability and related long lived asset.

Intangible Assets

economic life, previously estimated to be two and one-half to four years. On June 30, 2021, the Company amended the Non-Compete Prohibited Period End Date to terminate on June 30, 2021, which resulted in the Company accelerating the amortization of the remaining intangible assets. Magnolia assesses intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment is recognized in the consolidated statements of operations if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its fair value. As the intangible assets were fully amortized on June 30, 2021, no impairment was recorded for the year ended December 31, 2021. For more discussion on the Non-Compete, refer to Note 5—Intangible Assets.

Fair Value ~~Measurement~~

Measurements

Certain assets and liabilities are reported at fair value on a recurring basis on the Company’s consolidated balance sheet. The Company also uses fair value measurements on a nonrecurring basis when a qualitative assessment of its assets indicates a potential impairment. For more discussion on recurring and nonrecurring fair value measurements, refer to Not e 4—Fair Value Measurements.

The valuation techniques that may be used to measure fair value include a market approach, an income approach and a cost approach. A market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. An income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectations, including present value techniques, option-pricing models and the excess earnings method. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).

ASC 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment, characteristics specific to the investment, market conditions, and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I1 measurements) and the lowest priority to unobservable inputs (Level ~~III~~3 measurements).

Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value.

The three levels of the fair value hierarchy under ASC 820 are as follows:

Level I—1—Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used.

Level ~~II—~~2—Pricing inputs are other than quoted prices included within Level I1 that are observable for the investment, either directly or indirectly. Level II2 pricing inputs include quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, inputs other than quoted prices that are observable for the investment, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level ~~III—~~3—Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. The inputs used in determination of fair value require significant judgment and estimation.

In some cases, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the investment is categorized in its entirety is determined based on the lowest level input that is significant to the investment. Assessing the significance of a particular input to the valuation of an investment in its entirety requires judgment and considers factors specific to the investment. The categorization of an investment within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the perceived risk of that investment.

~~The Permitted Investments are Level I at December 31, 2017.~~

~~Redeemable Common Stock~~

All 65,000,000 shares of Class A common stock sold as part of the Units in the Public Offering contain a redemption feature as discussed above. In accordance with ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that in no event will it redeem its Class A common stock in an amount that would cause its net tangible assets, or total stockholders’ equity, to fall below $5,000,001. Accordingly, at December 31, 2017, 62,438,263 of the Company’s 65,000,000 shares of Class A common stock were classified outside of permanent equity at their redemption value.

~~Use of Estimates~~

The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~Offering Costs~~

The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A “Expenses of Offering”. The Company incurred offering costs of $1,424,561 in connection with the Public Offering. These costs, together with the underwriter discount and Deferred Discount, totaling $35,750,000, were charged to additional paid-in capital upon completion of the Public Offering.

~~Net Income Per Share of Common Stock~~

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share. Net income per share of common stock is computed by dividing net income by the weighted average number of common shares outstanding during the period as calculated using the treasury stock method. At December 31, 2017, the Company had outstanding warrants to purchase of up to 31,666,666 shares of Class A common stock. The weighted average of these shares was excluded from the calculation of diluted net income per share of common stock since the exercise of the warrants is contingent upon the occurrence of future events. At December 31, 2017, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company under the treasury stock method. As a result, diluted net income per share of common stock is the same as basic net income per share of common stock for the period.

Income Taxes

Under ASC 740, “Income Taxes,” deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to net operating losses, tax credits, and temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of the enactment date. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized.

~~ASC 740 prescribes~~

The Company reports a ~~recognition threshold and~~liability or a ~~measurement attribute~~reduction of deferred tax assets for ~~the financial statement recognition and measurement of~~unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. ~~For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The~~When applicable, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.

Derivatives

Magnolia utilized natural gas costless collars to reduce its exposure to price volatility for a portion of its natural gas production volumes. The Company’s policies do not permit the use of derivative instruments for speculative purposes. The Company has elected not to designate any of its derivative instruments as hedging instruments. Accordingly, changes in the fair value of the Company’s derivative instruments were recorded immediately to earnings as “Gain (loss) on derivatives, net” on the Company’s consolidated statements of operations. The Company had settled all of its natural gas costless collar derivative contracts by September 30, 2021.

Purchase Price Allocation

Accounting for the acquisition of a business requires the allocation of the purchase price to the various assets and liabilities of the acquired business and recording deferred taxes for any differences between the allocated values and tax basis of assets and liabilities. Any excess of the purchase price over the amounts assigned to assets and liabilities is recorded as goodwill.

The purchase price allocation is accomplished by recording each asset and liability at its estimated fair value. Estimated deferred taxes are based on available information concerning the tax basis of the acquired company’s assets, liabilities, and tax-related carryforwards at the merger date, although such estimates may change in the future as additional information becomes known. The amount of goodwill recorded in any particular business combination can vary significantly depending upon the values attributed to assets acquired and liabilities assumed relative to the total acquisition cost.

When estimating the fair values of assets acquired and liabilities assumed, the Company must apply various assumptions. The most significant assumptions relate to the estimated fair values assigned to proved and unproved crude oil and natural gas properties. To estimate the fair values of these properties, the Company prepares estimates of crude oil and natural gas reserves. Estimated fair values assigned to assets acquired can have a significant effect on results of operations in the future.

Commitments and Contingencies

Accruals for loss contingencies arising from claims, assessments, litigation, environmental, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Refer to Note 10—Commitments and Contingencies for additional information.

Revenue Recognition

Magnolia’s revenues include the sale of crude oil, natural gas, and NGLs. Oil, natural gas, and NGL sales are recognized as revenue when production is sold to a customer in fulfillment of performance obligations under the terms of agreed contracts. Performance obligations are primarily comprised of delivery of oil, natural gas, or NGLs at a delivery point, as negotiated within each contract. Each barrel of oil, million Btu of natural gas, gallon of NGLs, or other unit of measure is separately identifiable and represents a distinct performance obligation to which the transaction price is allocated.

The Company’s oil production is primarily sold under market-sensitive contracts that are typically priced at a differential to the NYMEX price or at purchaser posted prices for the producing area. For oil contracts, the Company generally records sales based on the net amount received.

For natural gas contracts, the Company generally records wet gas sales (which consists of natural gas and NGLs based on end products after processing) at the wellhead or inlet of the natural gas processing plant (i.e., the point of control transfer) as revenues net of gathering, transportation, and processing expenses if the processor is the customer and there is no redelivery of commodities to the Company at the tailgate of the plant. Conversely, the Company generally records residual natural gas and NGL sales at the tailgate of the plant (i.e., the point of control transfer) on a gross basis along with the associated gathering, transportation, and processing expenses if the processor is a service provider and there is redelivery of one or several commodities to the Company at the tailgate of the plant. The facts and circumstances of an arrangement are considered and judgment is often required in making this determination. For processing contracts that require noncash consideration in exchange for processing services, the Company recognizes revenue and an equal gathering, transportation, and processing expense for commodities transferred to the service provider.

Customers are invoiced once the Company’s performance obligations have been satisfied. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days. There are no judgments that significantly affect the amount or timing of revenue from contracts with customers. Additionally, the Company’s product sales contracts do not give rise to material contract assets or contract liabilities.

The Company’s receivables consist mainly of receivables from oil, natural gas, and NGL purchasers and from joint interest owners on properties the Company operates. Receivables from contracts with customers totaled $125.1 million and $72.0 million as of December 31, 2021 and 2020, respectively. Accounts receivable are stated at the historical carrying amount net of write-offs and allowance for doubtful accounts. The Company routinely assesses the collectability of all material trade and other receivables. The Company accrues a reserve on a receivable when, based on the judgment of management, it is probable that a receivable will not be collected and the amount of any reserve may be reasonably estimated. The Company had no allowance for doubtful accounts as of December 31, 2021 or 2020.

The Company has concluded that disaggregating revenue by product type appropriately depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors and has reflected this disaggregation of revenue on the Company’s consolidated statements of operations for all periods presented.

Performance obligations are satisfied at a point in time once control of the product has been transferred to the customer. The Company considers a variety of facts and circumstances in assessing the point of control transfer, including but not limited to: whether the purchaser can direct the use of the hydrocarbons, the transfer of significant risks and rewards, the Company’s right to payment, and transfer of legal title.

The Company does not disclose the value of unsatisfied performance obligations for contracts as all contracts have either an original expected length of one year or less, or the entire future consideration is variable and allocated entirely to a wholly unsatisfied performance obligation.

Net Income or Loss Per Share of Common Stock

The Company’s basic earnings or loss per share (“EPS”) is computed based on the weighted average number of shares of Class A Common Stock outstanding for the period. Diluted EPS includes the effect of the Company’s outstanding restricted stock units (“RSUs”), performance stock units (“PSUs”), performance restricted stock units (“PRSUs”), warrants exchanged for Class A Common Stock and exchanges or repurchases of Class B Common Stock if the inclusion of these items is dilutive. The Company’s unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are deemed participating securities and, therefore, are deducted from earnings in computing basic and diluted net income (loss) per share under the two-class method. Diluted net income (loss) per share attributable to common stockholders is calculated under both the two-class method and the treasury stock method and the more dilutive of the two calculations is presented. Refer to Note 14— Earnings (Loss) Per Share for additional information and the calculation of EPS.

Stock Based Compensation

Magnolia has established a long-term incentive plan for certain employees and directors that allows for granting RSUs, PSUs, and PRSUs. RSUs granted are valued on the date of the grant using the quoted market price of Magnolia's Class A Common Stock. PSUs and PRSUs granted are valued based on the grant date fair value determined using Monte Carlo simulations, which use a probabilistic approach for estimating the fair value of the awards. RSUs, PSUs, and PRSUs are expensed on a straight-line basis over the requisite service period. The Company records expense associated with the fair value of stock based compensation under the fair value recognition provisions of ASC Topic 718, “Compensation-Stock Compensation” and that expense is included within “General and administrative expenses” and “Lease operating expenses” in the accompanying consolidated statements of operations. The Company accounts for forfeitures as they occur. These plans and related accounting policies are defined and described more fully in Note 13—Stock Based Compensation.

Leases

Magnolia recognizes right of use assets and lease liabilities for certain commitments with terms greater than one year primarily related to real estate, vehicles, and field equipment. The Company determines if an arrangement is a lease at inception. Operating leases are included in other long-term assets, other current liabilities, and other long-term liabilities in Magnolia’s consolidated balance sheet as of December 31, 2021. Operating lease right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Magnolia’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expenses for lease payments are recognized on a straight-line basis over the lease term. The Company has also elected a policy to not recognize right of use assets and lease liabilities related to short-term leases. The Company has lease agreements with lease and non-lease components, which are generally accounted for as a single lease component. For more information, refer to Note 9—Leases.

Recent Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12, Income Taxes (Topic 740): “Simplifying the Accounting for Income Taxes,” which reduces the complexity of accounting for income taxes by removing certain exceptions to the general principles and also simplifying areas such as separate entity financial statements and interim recognition of enactment of tax laws or rate changes. This standard is effective for interim and annual periods beginning after December 15, 2020 and shall be applied on either a prospective basis, a retrospective basis for all periods presented, or a modified retrospective basis through a cumulative-effect adjustment to retained earnings depending on which aspects of the new standard are applicable to an entity. The Company adopted this standard on a prospective basis on January 1, 2021. The adoption of this guidance did not have any material impact on the Company’s financial position, cash flows, or results of operations.

2. Acquisitions and Divestitures

Acquisitions

In 2021, the Company completed multiple individually insignificant bolt-on acquisitions.

On February 21, 2020, the Company completed the acquisition of certain non-operated oil and natural gas assets located in Karnes and DeWitt Counties, Texas, for approximately $69.7 million in cash. The transaction was accounted for as an asset acquisition.

On May 31, 2019, the Company completed the acquisition of certain oil and natural gas assets primarily located in Gonzales and Karnes Counties for approximately $36.3 million in cash and approximately 3.1 million shares of the Company’s Class A Common Stock. The transaction was accounted for as an asset acquisition.

On February 5, 2019, Magnolia Operating formed a joint venture, Highlander Oil & Gas Holdings LLC (“Highlander”), to complete the acquisition of a 72% working interest in the Eocene-Tuscaloosa Zone, Ultra Deep Structure natural gas well located in St. Martin Parish, Louisiana and 31.1 million royalty trust units in the Gulf Coast Ultra Deep Royalty Trust from McMoRan Oil & Gas, LLC. Highlander paid cash consideration of $50.9 million, for such interests. MGY Louisiana LLC, a wholly owned subsidiary of Magnolia Operating, holds approximately 85% of the units in Highlander. The transaction was accounted for as an asset acquisition.

Divestitures

On October 23, 2020, the Company sold its 35% membership interest in Ironwood Eagle Ford Midstream, LLC for approximately $27.1 million in cash and recognized a gain on sale of the equity method investment of $5.1 million included within “Other income (expense), net” on the Company’s consolidated statements of operations.

3. Derivative Instruments

The Company had settled all of its natural gas costless collar derivative contracts by September 30, 2021. From September 30, 2020 to September 30, 2021, Magnolia utilized natural gas costless collars to reduce its exposure to price volatility for a portion of its natural gas production volumes. The Company’s policies do not permit the use of derivative instruments for speculative purposes. Under the Company’s costless collar contracts, each collar had an established floor price and ceiling price. When the settlement price was below the floor price, the counterparty was required to make a payment to the Company and when the settlement price was above the ceiling price, the Company was required to make a payment to the counterparty.

The Company has elected not to designate any of its derivative instruments as hedging instruments. Accordingly, changes in the fair value of the Company’s derivative instruments were recorded immediately to earnings as “Gain (loss) on derivatives, net” on the Company’s consolidated statements of operations.

The following table summarizes the effect of derivative instruments on the Company’s consolidated statements of operations:


	Years Ended
(In thousands)	December 31, 2021		December 31, 2020		December 31, 2019
Derivative settlements, realized gain (loss)	$	(2,833)	$	288	$	—
Unrealized gain (loss) on derivatives	(277)		277		—
Gain (loss) on derivatives, net	$	(3,110)	$	565	$	—

The Company had no outstanding derivative contracts in place as of December 31, 2021.

See Note 4—Fair Value Measurements for the fair value hierarchy of the Company’s derivative contracts.

4. Fair Value Measurements

Certain of the Company’s assets and liabilities are carried at fair value and measured either on a recurring or nonrecurring basis. The Company’s fair value measurements are based either on actual market data or assumptions that other market participants would use in pricing an asset or liability in an orderly transaction, using the valuation hierarchy prescribed by GAAP under ASC 820.

The three levels of the fair value hierarchy under ASC 820 are as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used.

Level 2 - Pricing inputs are other than quoted prices included within Level 1 that are observable for the investment, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, inputs other than quoted prices that are observable for the investment, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 - Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. The inputs used in determination of fair value require significant judgment and estimation.

Recurring Fair Value Measurements

Debt Obligations

The carrying value and fair value of the financial instrument that is not carried at fair value in the accompanying consolidated balance sheet as of December 31, 2021 and 2020 is as follows:


	December 31, 2021				December 31, 2020
(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt	$	388,087	$	411,500	$	391,115	$	407,500

The fair value of the 2026 Senior Notes as of December 31, 2021 and 2020 is based on unadjusted quoted prices in an active market, which are considered a Level 1 input in the fair value hierarchy.

The Company has other financial instruments consisting primarily of receivables, payables, and other current assets and liabilities that approximate fair value due to the nature of the instrument and their relatively short maturities. Non-financial assets and liabilities initially measured at fair value include assets acquired and liabilities assumed in business combinations and asset retirement obligations.

Derivative Instruments

The Company had no outstanding derivative instruments as of December 31, 2021. The fair values of the Company’s outstanding natural gas costless collar derivative instruments prior to December 31, 2021 were measured using an industry-standard pricing model and were provided by a third party. The inputs used in the third-party pricing model included quoted forward prices for natural gas, the contracted volumes, volatility factors, and time to maturity, which are considered Level 2 inputs.

The Company’s derivative instruments outstanding as of December 31, 2020 were recorded at fair value within “Other current assets” on the Company’s consolidated balance sheet. These fair values are recorded by netting asset and liability positions with the same counterparty and are subject to contractual terms, which provide for net settlement.

The following table presents the classification of the outstanding derivative instruments and the fair value hierarchy table for the Company’s derivative assets and liabilities that are required to be measured at fair value on a recurring basis:


	Fair Value Measurements Using
(In thousands)	Level 1		Level 2		Level 3		Total Fair Value		Netting		Carrying Amount
December 31, 2020
Current assets:
Natural gas derivative instruments	$	—	$	1,375	$	—	$	1,375	$	(1,098)	$	277
Current liabilities:
Natural gas derivative instruments	$	—	$	1,098	$	—	$	1,098	$	(1,098)	$	—

See Note 3—Derivative Instrumentsfor notional volumes and terms with the Company’s derivative contracts.

Nonrecurring Fair Value Measurements

The Company applies the provisions of the fair value measurement standard on a nonrecurring basis to its non-financial assets and liabilities, including oil and natural gas properties. These assets and liabilities are not measured at fair value on a recurring basis but are subject to fair value adjustments when facts and circumstances arise that indicate a need for remeasurement.

The fair value measurements of assets acquired and liabilities assumed in a business combination are measured on a nonrecurring basis on the acquisition date using an income valuation technique based on inputs that are not observable in the market, and therefore, represent Level 3 inputs. Significant inputs to the valuation of acquired oil and natural gas properties includes estimates of: (i) reserves; (ii) production rates; (iii) future operating and development costs; (iv) future commodity prices, including price differentials; (v) future cash flows; and (vi) a market participant-based weighted average cost of capital rate. These inputs require significant judgments and estimates by the Company’s management at the time of the valuation. Refer to Note 2—Acquisitions and Divestitures for additional information.

During the first quarter of 2020, Magnolia recorded impairments of $1.9 billion related to proved and unproved properties as a result of a sharp decline in commodity prices. Proved property impairment of $1.4 billion is included in “Impairment of oil and natural gas properties” and unproved property impairment of $0.6 billion is included in “Exploration expenses” on the Company’s consolidated statements of operations. Proved and unproved properties that were impaired had aggregate fair values of $0.8 billion and $0.3 billion, respectively. The fair values of these oil and natural gas properties were measured using the income approach based on inputs that are not observable in the market, and therefore, represent Level 3 inputs. The Company calculated the estimated fair values of its oil and natural gas properties using a discounted future cash flow model. Significant inputs associated with the calculation of discounted future net cash flows include estimates of future commodity prices based on NYMEX strip pricing adjusted for price differentials, estimates of proved oil and natural gas reserves and risk adjusted probable and possible reserves, estimates of future expected operating and capital costs, and a market participant based weighted average cost of capital of 10% for proved property impairments and 12% for unproved property impairments. No impairments were recorded for the year ended December 31, 2021.

Deemed Dividend

In July 2019, the Company issued an aggregate of 9.2 million shares of Class A Common Stock in exchange for all of its warrants. The difference in fair value between the Class A Common Stock issued and the warrants exchanged was recorded as a non-cash deemed dividend for the incremental value provided to the holders of the warrants. The fair value of the non-cash deemed

dividend related to the warrant exchange was determined based on unadjusted quoted prices in an active market, which are considered a Level 1 input in the fair value hierarchy. Refer to Note 12—Stockholders’ Equityfor additional information.

5. Intangible Assets

Non-Compete Agreement

On the Closing Date, the Company and EnerVest, separate and apart from the Business Combination, entered into the Non-Compete, which prohibited EnerVest and certain of its affiliates from competing with the Company in the Eagle Ford Shale (the “Market Area”) until July 31, 2022 (the “Prohibited Period End Date”). In January 2021, the Company amended the Non-Compete such that, rather than delivering an aggregate of 4.0 million shares of Class A Common Stock upon the two and one-half year and the four year anniversaries of the Closing Date, the Company would deliver (i) the cash value of approximately 2.0 million shares of Class A Common Stock and approximately 0.4 million shares of Class A Common Stock on the two and one-half year anniversary of the Closing Date and (ii) an aggregate of 1.6 million shares of Class A Common Stock on the four year anniversary of the Closing Date, in each case subject to the terms and conditions of the Non-Compete. On February 1, 2021, as consideration for compliance with the Non-Compete, the Company paid $17.2 million in cash and issued 0.4 million shares of Class A Common Stock.

On June 30, 2021, the Company amended the Non-Compete Prohibited Period End Date to terminate on June 30, 2021 and paid $24.9 million in cash in lieu of delivering the remaining 1.6 million shares of Class A Common Stock (the “Second Non-Compete Amendment”).

On the Closing Date, the Company recorded an estimated cost of $44.4 million for the Non-Compete as intangible assets on the consolidated balance sheet. These intangible assets had a definite life and were subject to amortization utilizing the straight-line method over their economic life, previously estimated to be two and one half to four years. The Second Non-Compete Amendment resulted in the Company accelerating the amortization of the remaining intangible assets. The Company included the amortization in “Amortization of intangible assets” on the Company’s consolidated statements of operations.


(In thousands)	December 31, 2021		December 31, 2020
Non-compete intangible assets	$	44,400	$	44,400
Accumulated amortization	(44,400)		(35,054)
Intangible assets, net	$	—	$	9,346
Weighted average amortization period (in years)	2.70		3.25

6. Other Current Liabilities

The following table provides detail of the Company’s other current liabilities for the periods presented:


(In thousands)	December 31, 2021		December 31, 2020
Accrued capital expenditures	$	29,936	$	16,368
Other	60,700		49,955
Total other current liabilities	$	90,636	$	66,323

7.Asset Retirement Obligations

The following table summarizes the changes in the Company’s asset retirement obligations for the periods presented:


	Years Ended
(In thousands)	December 31, 2021		December 31, 2020		December 31, 2019
Asset retirement obligations, beginning of period	$	88,404	$	95,542	$	85,983
Revisions to estimates	(7,128)		(14,883)		69
Liabilities incurred and assumed	5,293		3,484		7,082
Liabilities settled	(848)		(1,457)		(3,104)
Accretion expense	4,929		5,718		5,512
Asset retirement obligations, end of period	$	90,650	$	88,404	$	95,542

Asset retirement obligations reflect the present value of the estimated future costs associated with the plugging and abandonment of oil and natural gas wells, removal of equipment and facilities from leased acreage, and land restoration in accordance with applicable local, state, and federal laws. Inherent in the fair value calculation of ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, and timing of settlement. To the extent future revisions to these assumptions impact the value of the existing ARO liability, a corresponding offsetting adjustment is made to the oil and natural gas property balance.

8. Long-term Debt

The Company’s debt is comprised of the following:


(In thousands)	December 31, 2021		December 31, 2020
RBL Facility	$	—	$	—
2026 Senior Notes	400,000		400,000
Total long-term debt	400,000		400,000

Less: Unamortized deferred financing cost	(11,913)		(8,885)
Total debt, net	$	388,087	$	391,115

Credit Facility

In connection with the consummation of the Business Combination, Magnolia Operating entered into the RBL Facility among Magnolia Operating, as borrower, Magnolia Intermediate, as its holding company, the banks, financial institutions, and other lending institutions from time to time party thereto, as lenders, the other parties from time to time party thereto and Citibank, N.A., as administrative agent, collateral agent, issuing bank, and swingline lender, providing for maximum commitments in an aggregate principal amount of $1.0 billion with a letter of credit facility with a $100.0 million sublimit. The borrowing base as of December 31, 2021 was $450.0 million, which was reaffirmed in the semi-annual redetermination on October 15, 2021. The RBL Facility is guaranteed by certain parent companies and subsidiaries of Magnolia LLC and is collateralized by certain of Magnolia Operating’s oil and natural gas properties and has a borrowing base subject to semi-annual redetermination.

Borrowings under the RBL Facility bear interest, at Magnolia Operating’s option, at a rate per annum equal to either the LIBOR rate or the alternative base rate plus the applicable margin. Additionally, Magnolia Operating is required to pay a commitment fee quarterly in arrears in respect of unused commitments under the RBL Facility. The applicable margin and the commitment fee rate are calculated based upon the utilization levels of the RBL Facility as a percentage of the borrowing base then in effect.

The RBL Facility contains certain affirmative and negative covenants customary for financings of this type, including compliance with a leverage ratio of less than 4.00 to 1.00 and, if the leverage ratio is in excess of 3.00 to 1.00, a current ratio of greater than 1.00 to 1.00. As of December 31, 2021, the Company was in compliance with all covenants under the RBL Facility.

On February 16, 2022, Magnolia Operating, as borrower, amended and restated the RBL Facility (“Amended and Restated RBL Facility”) in its entirety, providing for maximum commitments in an aggregate principal amount of $1.0 billion with a letter of credit facility with a $50.0 million sublimit, with an initial borrowing base of $450.0 million. The Amended and Restated RBL Facility matures in February 2026. See Item 9B - Other Information for additional discussion of the Amended and Restated RBL Facility.

Deferred financing costs incurred in connection with securing the RBL Facility were $11.7 million, as of December 31, 2021, which are amortized on a straight-line basis over a period of five years and included in “Interest expense, net” in the Company’s consolidated statements of operations. The Company recognized interest expense related to the RBL Facility of $4.1 million, $4.2 million, and $4.5 million during the years ended December 31, 2021, 2020, and 2019, respectively. The unamortized portion of the deferred financing costs are included in “Deferred financing costs, net” on the accompanying consolidated balance sheet as of December 31, 2021.

The Company did not have any outstanding borrowings under its RBL Facility as of December 31, 2021.

2026 Senior Notes

On July 31, 2018, the Issuers issued and sold $400.0 million aggregate principal amount of 2026 Senior Notes in a private placement under Rule 144A and Regulation S under the Securities Act of 1933. The 2026 Senior Notes were issued under the Indenture, dated as of July 31, 2018, by and among the Issuers and Deutsche Bank Trust Company Americas, as trustee. The 2026 Senior Notes are guaranteed on a senior unsecured basis by the Company, Magnolia Operating, and Magnolia Intermediate and may be guaranteed by certain future subsidiaries of the Company. The 2026 Senior Notes will mature on August 1, 2026 and bear interest at the rate of 6.0% per annum.

On April 5, 2021, the terms of the Indenture were amended to modify, among other things, the criteria used by the Company to make Restricted Payments (as defined in the Indenture). The amendment to the Indenture was accounted for as a debt modification. Costs incurred with third parties directly related to the modification were expensed as incurred. The Company incurred approximately $1.1 million of transaction fees related to the modification which were expensed and are reflected in “Interest expense, net” on the Company’s consolidated statements of operations for the year ended December 31, 2021. The Company also paid $5.0 million in fees to holders of the 2026 Senior Notes, which fees are recorded as deferred financing costs and amortized using the new effective interest rate applied prospectively over the remaining term of the 2026 Senior Notes.

As of December 31, 2021, the Company had incurred and capitalized a total of $16.8 million of deferred financing costs related to the issuance of, and the amendment to the Indenture governing, the 2026 Senior Notes. These costs are amortized using the effective interest method over the term of the 2026 Senior Notes and are included in “Interest expense, net” in the Company’s consolidated statements of operations. The unamortized portion of the deferred financing costs is included as a reduction to the carrying value of the 2026 Senior Notes, which have been recorded as “Long-term debt, net” on the consolidated balance sheet as of December 31, 2021. The Company recognized interest expense related to the 2026 Senior Notes of $27.1 million, $25.3 million, and $25.2 million for the years ended December 31, 2021, 2020, and 2019, respectively.

At any time prior to August 1, 2022, the Issuers may, on any one or more occasions, redeem all or a part of the 2026 Senior Notes at a redemption price equal to 100% of the principal amount of the 2026 Senior Notes redeemed, plus a “make whole” premium on accrued and unpaid interest, if any, to, but excluding, the date of redemption. After August 1, 2022, the Issuers may redeem all or a part of the 2026 Senior Notes based on principal plus a set premium, as set forth in the Indenture, including any accrued and unpaid interest.

9. Leases

Magnolia’s leases primarily consist of real estate, vehicles, and field equipment. The Company’s leases have remaining lease terms of up to 6 years, some of which include options to renew or terminate the lease. The exercise of lease renewal options is at the Company’s sole discretion. Magnolia’s lease agreements do not contain any restrictive covenants or material residual value guarantees.

As most of Magnolia’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company used the incremental borrowing rate on January 1, 2019, for operating leases that commenced prior to that date.


(In thousands)	December 31, 2021			December 31, 2020
Operating Leases
Operating lease assets	$	7,737		$	6,470

Operating lease liabilities - current	$	4,031		$	1,801
Operating lease liabilities - long-term	5,146			5,703
Total operating lease liabilities	$	9,177		$	7,504

Weighted average remaining lease term (in years)	3.0			4.2
Weighted average discount rate	3.4		%	4.0		%

For the years ended December 31, 2021 and 2020, the Company incurred $3.7 million and $3.4 million, respectively, of lease costs for operating leases included on the Company’s consolidated balance sheet, and $22.9 million and $22.8 million, respectively, for short-term lease costs. For the years ended December 31, 2021 and 2020, the Company did not incur any expenses for variable lease costs. Cash paid for amounts included in the measurement of lease liabilities in operating cash flows from operating leases for the years ended December 31, 2021 and 2020 are $2.9 million and $3.0 million, respectively.

Maturities of lease liabilities as of December 31, 2021 under the scope of ASC 842 are as follows:


(In thousands)
Maturity of Lease Liabilities	Operating Leases
2022	$	4,266
2023	2,409
2024	1,241
2025	1,135
2026	583
After 2026	17
Total lease payments	$	9,651
Less: Interest	(474)
Present value of lease liabilities	$	9,177

10. Commitments and Contingencies

Legal Matters

From time to time, the Company is or may become involved in litigation in the ordinary course of business.

Certain of the Magnolia LLC Unit Holders and EnerVest Energy Institutional Fund XIV-C, L.P. (collectively the “Co-Defendants”) and the Company have been named as defendants in a lawsuit where the plaintiffs claim to be entitled to a minority working interest in certain Karnes County Assets. The litigation is in the pre-trial stage. The exposure related to this litigation is currently not reasonably estimable. The Co-Defendants retained all such liability in connection with the Business Combination.

A mineral owner in a Magnolia operated well in Karnes County, Texas filed a complaint with the Texas Railroad Commission (the “Commission”) challenging the validity of the permit to drill such well by questioning the long-standing process by which the Commission granted the permit. After the Commission affirmed the granting of the permit, and after judicial review of the Commission’s order by the 53rd Judicial District Court Travis County, Texas (the “District Court”), the District Court reversed and remanded the Commission’s order. The Commission and Magnolia have appealed the District Court’s judgment to the Third Court of Appeals in Austin, Texas, and the appeal is in the preliminary stage.

At December 31, 2021, the Company does not believe the outcome of any such disputes or legal actions will have a material effect on its consolidated statements of operations, balance sheet, or cash flows. No amounts were accrued ~~for the payment of interest and penalties~~with respect to outstanding litigation at December 31, ~~2017.~~2021 or December 31, 2020.

Environmental Matters

The Company, as an owner or lessee and operator of oil and natural gas properties, is subject to various federal, state, local laws, and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the lessee under an oil and natural gas lease for the cost of pollution clean-up resulting from operations and subject the lessee to liability for pollution damages. In some instances, the Company may be directed to suspend or cease operations in the affected area. The Company maintains insurance coverage, which it believes is customary in the industry, although the Company is not fully insured against all environmental risks.

Commitments

At December 31, 2021, contractual obligations for long-term operating leases and purchase obligations are as follows:


Net Minimum Commitments (In thousands)	Total		2022		2023-2024		2025-2026		2027 & Beyond
Purchase obligations (1)	$	3,059	$	1,196	$	1,863	$	—	$	—
Operating lease obligations (2)	9,651		4,266		3,650		1,718		17
Total net minimum commitments	$	12,710	$	5,462	$	5,513	$	1,718	$	17

(1)Amounts represent any agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms. These include minimum commitments associated with firm transportation contracts and IT-related service commitments. The costs incurred under these obligations were $1.4 million, $1.2 million, and $1.5 million for the years ended December 31, 2021, 2020 and 2019, respectively.

(2)Amounts include long-term lease payments for office space, vehicles, and equipment related to exploration, development, and production activities.

Risks and Uncertainties

The Company’s revenue, profitability, and future growth are substantially dependent upon the prevailing and future prices for oil and natural gas, which depend on numerous factors beyond the Company’s control such as overall oil and natural gas production and inventories in relevant markets, economic conditions, the global political environment, regulatory developments, and competition from other energy sources. Oil and natural gas prices historically have been volatile and may be subject to significant fluctuations in the future.

The coronavirus disease 2019 (“COVID-19”) pandemic and related economic repercussions have created significant volatility, uncertainty, and turmoil in the oil and natural gas industry. While oil and natural gas prices increased in 2021, demand and pricing may again decline if there is a resurgence of the outbreak across the U.S. or other locations across the world or as a result of any related social distancing guidelines, travel restrictions, and stay-at-home orders. The extent of any further impact of the pandemic, including the emergence and spread of variant strains of COVID-19, on the Company’s industry and business cannot be reasonably predicted at this time.

11. Income Taxes

The Company’s income tax provision consists of the following components:


	Years Ended
(In thousands)	December 31, 2021		December 31, 2020		December 31, 2019
Current:
Federal	$	5,452	$	(1,167)	$	—
State	3,399		(339)		499
Total current	8,851		(1,506)		499
Deferred:
Federal	—		(71,792)		13,817
State	—		(6,042)		444
Total deferred	—		(77,834)		14,261
Income tax expense (benefit)	$	8,851	$	(79,340)	$	14,760

The Company is subject to U.S. federal income tax, the margin tax in the state of Texas, and Louisiana corporate income tax. The Company’s annual effective tax rate as of December 31, 2021, 2020, and 2019, were 1.6%, 4.1%, and 14.8%, respectively. The primary differences between the annual effective tax rate and the statutory rate of 21.0% are income attributable to noncontrolling interest, state taxes, and valuation allowances. As a result of impairments in the first quarter of 2020, the Company established full valuation allowances on the federal and state deferred tax assets which resulted in additional differences between the effective tax rate and the statutory rate as of December 31, 2021.

As of December 31, 2021, the Company did not have an accrued liability for uncertain tax positions and does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. For the year ended December 31, 2021, no amounts were incurred for income tax uncertainties or interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or a material deviation from its position. The ~~Company is~~Company’s tax years since its formation remain subject to possible income tax examinations by its major taxing authorities ~~since Inception.~~

~~State Franchise Tax~~

Asfor all periods.

During the ~~Company is incorporated in the state of Delaware, it is subject to Delaware state franchise tax which is computed based on an analysis of both authorized shares and total gross assets. At~~year ended December 31, ~~2017,~~2021, the ~~Company had accrued Delaware state franchise taxes~~Magnolia LLC Unit Holders redeemed 23.5 million Magnolia LLC Units (and a corresponding number of ~~$152,610 included in accrued professional fees, travel and other expenses on the balance sheet.~~

~~Recent Accounting Pronouncements~~

~~Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.~~

~~3. Public Offering~~

In its Public Offering, the Company sold 65,000,000 units at a price of $10.00 per unit. Each unit consists of one share of Class A common stock of the Company at $0.0001 par value and one-third of one warrant (a “Unit”). Each whole warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share (a “Warrant”). Only whole Warrants may be exercised and no fractional Warrants will be issued upon separation of the Units and only whole Warrants may be traded. The Warrants will become exercisable on the later of 30 days after the completion of the Business Combination or 12 months from the Close Date, and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Alternatively, if the Company does not complete a Business Combination within 24 months after the Close Date, the Warrants will expire at the end of such period. If the Company is unable to deliver registered shares of Class A common stock to the holder upon exercise of Warrants issued in connection with the 65,000,000 Units during the exercise period, the Warrants will expire worthless, except to the extent that they may be exercised on a cashless basis in the circumstances described in the agreement governing the Warrants.

Once the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole, but not in part, at a price of $0.01 per Warrant upon a minimum of 30 days’ prior written notice of redemption, and only in the event that the last sale price of the Company’s Public Shares equals or exceeds $18.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Warrant holders. The Company has agreed to use its best efforts to file a registration statement for the shares of Class A common stock issuable upon exercise of the Warrants under the Securities Act as soon as practicable, but in no event later than 15 business days following the completion of a Business Combination.

The Company paid an underwriting discount of 2.00% of the gross proceeds of the Public Offering, or $13,000,000, to the underwriters at the Close Date, with an additional fee (the “Deferred Discount”) of 3.50% of the gross proceeds of the Public Offering, or $22,750,000, payable upon the Company’s completion of a Business Combination. The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes a Business Combination. The underwriters are not entitled to receive any of the interest earned on Trust Account funds that would be used to pay the Deferred Discount. The Deferred Discount has been recorded as a deferred liability on the balance sheet at December 31, 2017 as management deemed the consummation of a Business Combination to be probable.

~~4. Related Party Transactions~~

~~Founder Shares~~

~~On February 22, 2017, the Sponsor purchased an aggregate of 11,500,000 shares of the Company’s Class F common stock (the “Founder Shares”)~~B Common Stock) for an aggregate purchase price of $25,000, or approximately $0.002 per share. Prior to the Sponsor’s initial investment in the Company of $25,000, the Company had no assets. The purchase price of the Founder Shares was determined by dividing the amount of cash contributed to the Company by theequivalent number of ~~Founder Shares issued by the Company.~~

On April 24, 2017, the Company agreed to effect a stock dividend prior to the closing of the Public Offering of approximately 0.5 shares of Class F common stock for each share of Class F common stock, which resulted in a total of 17,250,000 issued and outstanding Founder Shares. The stock dividend also adjusted the Founder Shares subject to forfeiture from 1,500,000 to 2,250,000 such that the Founder Shares would represent 20.0% of the Company’s issued and outstanding common shares after the Public Offering. The stock dividend was accounted for with a transfer from additional paid in capital to Class F common stock as there is a legal requirement to maintain par value per share. On April 24, 2017, the Sponsor transferred 40,000 Founder Shares to each of the Company’s four independent directors at their original purchase price. On June 24, 2017, the Sponsor forfeited 1,000,000 Founder Shares on the expiration of the underwriters’ over-allotment option. At December 31, 2017, the Sponsor and the Company’s four independent directors (the “Initial Stockholders”) held, collectively, 16,250,000 Founder Shares.

~~The Founder Shares are identical to the Class A common stock included in the Units sold in the Public Offering except that:~~

~~only holders of the Founder Shares have the right to vote on the election of directors prior to the Business Combination;~~

~~the Founder Shares are subject to certain transfer restrictions, as described in more detail below;~~

the Initial Stockholders and the Company’s officers and directors entered into a letter agreement with the Company, pursuant to which they have agreed (i) to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of the Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete the Business Combination within 24 months from the Public Offering. If the Company submits the Business Combination to the public stockholders for a vote, the Initial Stockholders have agreed, pursuant to such letter agreement, to vote their Founder Shares and any Public Shares purchased during or after the Public Offering in favor of the Business Combination; and

the Founder Shares are automatically convertible into Class A common stock at the time of the Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights.

Additionally, the Initial Stockholders agreed not to transfer, assign or sell any of their respective Founder Shares until the earlier of (i) one year after the completion of the Business Combination or (ii) subsequent to the Business Combination, if the last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination and (iii) the date following the completion of the Business Combination on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s public stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property (the “Lock Up Period”).

~~Private Placement Warrants~~

On the Close Date, the Sponsor purchased from the Company an aggregate of 10,000,000 private placement warrants at a price of $1.50 per warrant, or approximately $15,000,000, in a private placement that occurred in conjunction with the completion of the Public Offering (the “Private Placement Warrants”). Each Private Placement Warrant entitles the holder to purchase one share of Class A common stock at $11.50 per share, subject to adjustment. A portion of the purchase price of the Private Placement Warrants was placed in the Trust Account. The Private Placement Warrants will not be redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the Units sold in the Public Offering. The Sponsor, or its permitted transferees, will have the option to exercise the Private Placement Warrants on a cashless basis. The Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of the Business Combination.

If the Company does not complete the Business Combination within 24 months from the Close Date, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Company’s Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.

~~Units~~

The Company’s Chief Executive Officer purchased 100,000 Units in the Public Offering at the offering price of $10.00 per share. Rights and obligations under these Units are identical to those offered in the Public Offering.

During the period from August 18, 2017 to August 23, 2017, the Company’s Chief Executive Officer purchased a total of 27,900 Units in a series of open market transactions at a weighted average price of $10.24 per Unit. The actual price paid for each Unit ranged from a low of $10.23 to a high of $10.30.

~~Class A Common Stock~~

~~During the period from August 18, 2017 to August 24, 2017, the Company’s Chief Executive Officer purchased a total of 32,000~~ shares of Class A Common Stock ~~in a series~~and subsequently sold these shares to the public. Magnolia did not receive any proceeds from the sale of ~~open market transactions at a price~~shares of ~~$9.80 per share.~~

~~Registration Rights~~

~~Holders of~~Class A Common Stock by the ~~Founder Shares~~Magnolia LLC Unit Holders. The redemption and ~~Private Placement Warrants are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the Public Offering. The holders~~exchange of these securities are entitled to make up to three demands that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to other registration statements filed by the Company subsequent to its completion of the Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that that Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable Lock Up Period. The Company will bear the expenses incurredMagnolia LLC Units created additional tax basis in ~~connection with the filing of any such registration statements.~~

~~Indemnity~~

The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a vendor (other than the Company’s independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company discussed entering into a transaction agreement, reduces the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each caseMagnolia LLC. There was no net of the interest which may be withdrawn to fund the Company’s working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations. The Company has not asked the Sponsor to reserve for such eventualitytax impact as the Company ~~believes the likelihood~~recorded a full valuation allowance.

A reconciliation of the Sponsor having to indemnify the Trust Account is limited because the Company will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

~~Related Party Note Payable~~

Between Inception and the Close Date, the Company’s Sponsor loaned the Company $300,000 in unsecured promissory notes. The funds were used to pay up front expenses associated with the Public Offering. These notes were non-interest bearing and were repaid in full to the Sponsor at the Close Date.

~~Administrative Services Agreement~~

On May 10, 2017, the Company entered into an agreement to pay $20,000 a month for office space, administrative and support services to an affiliate of the Sponsor, and will terminate the agreement upon the earlier of a Business Combination or the liquidation of the Company. For the period from Inception to December 31, 2017, the Company incurred expenses of $153,333 under this agreement.

~~Private Aircraft Travel~~

The Company reimburses affiliates for reasonable travel related expenses incurred while conducting business on behalf of the Company, including the use of private aircraft. For the period from Inception to December 31, 2017, travel related reimbursements for private aircraft use were $125,681. Private aircraft services are provided by independent third parties, coordinated by an affiliate of the Company and billed to the Company at cost.

~~5. Investments Held in Trust Account~~

Gross proceeds of $650,000,000 and $15,000,000 from the Public Offering and the sale of the Private Placement Warrants, respectively, less underwriting discounts of $13,000,000; and funds of $2,000,000 designated to pay the Company’s accrued formation and offering costs, ongoing administrative and acquisition search costs, plus repay notes payable of $300,000 to the Sponsor at the Close Date were placed in the Trust Account at the Close Date.

On the Close Date, all funds held in the Trust Account were invested in Permitted Investments, which are considered Level 1 investments under ASC 820. For the period from Inception to December 31, 2017, the investments held in the Trust Account generated interest income of $3,646,151, of which $807,000 was withdrawn to make estimated federal income tax payments to the IRS with the remainder reinvested in Permitted Investments.

On September 15, 2017 and December 15, 2017, the Company made payments of $400,000 and $407,000, respectively, with funds from the Trust Account, to the IRS for estimated federal income taxes on interest earned in the Trust Account. At December 31, 2017, the balance of funds held in the Trust Account was $652,839,151.

~~6. Income Tax~~

~~The Company incurred United States~~statutory federal income tax expense to the income tax expense (benefit) from continuing operations is as follows:


	Year Ended
(In thousands)	December 31, 2021		December 31, 2020		December 31, 2019
Income tax expense at the federal statutory rate	$	119,392	$	(409,148)	$	20,966
State income tax expense, net of federal income tax benefits	2,763		(12,759)		847
Noncontrolling interest in partnerships	(30,615)		141,027		(7,309)
Valuation allowances	(82,696)		201,786		—
Other	7		(246)		256
Income tax expense (benefit)	$	8,851	$	(79,340)	$	14,760

The tax effects of ~~approximately $1,062,254 for~~temporary differences that give rise to significant positions of the ~~period from Inception to~~ deferred income tax assets and liabilities are presented below:


(In thousands)	December 31, 2021		December 31, 2020
Deferred tax assets:
Investment in partnership	$	161,910	$	162,437
Net operating loss carryforwards	11,855		28,461
Capital loss carryforward	1,522		1,727
Oil and natural gas properties	6,337		6,224
Capitalized transaction costs	2,690		2,937
Total deferred tax assets	184,314		201,786
Deferred tax liabilities:
Total deferred tax liabilities	—		—

Net deferred tax assets	184,314		201,786
Valuation allowances	(184,314)		(201,786)
Net deferred tax assets, net of valuation allowances	$	—	$	—

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Applying the net operating loss (“NOL”) carryback provision resulted in an income tax benefit of $1.2 million during the year ended

December 31, ~~2017.~~

~~On September 15, 2017 and December 15, 2017, the Company made estimated quarterly tax payments~~2020. As of $400,000 and $407,000, respectively, to the Internal Revenue Service (“IRS”) for federal income taxes estimated for 2017 on interest earned in the Trust Account. The funds were paid from the Trust Account. At December 31, ~~2017,~~2021, the Company had ~~accrued~~$56.4 million of U.S. federal ~~income taxes of $359,823 included~~net operating loss, which has an indefinite carryforward, and a $7.2 million capital loss carryforward which will expire in ~~federal income taxes payable on the balance sheet.~~

~~The Company’s provision for income tax consists of the following:~~

4 years.

For the Period

from February 14,

2017 (Inception) to

December 31, 2017

Federal

Current

$
1,166,823

Deferred

(104,569
)
State

Current

—

Deferred

—

Change in valuation allowance

—

Income tax provision

$
1,062,254

The Company incurred costs related to its search to complete a business combination which are deductible for federal income tax purposes and resulted in the generation of a deferred tax asset of $104,569 which is available to offset future taxable income.

~~In assessing the realization of deferred tax assets, the Company considers~~periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets, including NOL carryforwards. Valuation allowances for deferred tax assets are recognized when it is more likely than not that some ~~portion~~ or all of the benefit from the deferred tax assets will not be realized. ~~The ultimate realization of~~During 2020, the Company moved from a net deferred tax ~~assets is dependent upon~~liability position to a net deferred tax asset position resulting primarily from oil and natural gas impairments. As of December 31, 2021, the ~~generation of future taxable income during~~Company’s deferred tax asset was $184.3 million. In making this determination, the ~~periods in which temporary differences representing net future deductible amounts become deductible.~~Company considered all available positive and negative evidence and made certain assumptions. The Company ~~considers~~considered, among other things, the ~~scheduled reversal~~overall business environment, its historical earnings and losses, current industry trends, and its outlook for future years. As of ~~deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available,~~December 31, 2021, the Company ~~believes that no uncertainty exists with respect to future realization~~assessed the realizability of the deferred tax assets and recorded full valuation allowances of $184.3 million.

As commodity prices have improved during the year, Magnolia has ~~not established~~begun to sustain a ~~valuation allowance at December 31, 2017.~~

~~The following table reconciles the U.S. federal statutory tax rate~~level of increased profitability such that, net of its net operating loss, Magnolia is beginning to ~~the effective rate~~project modest taxable income. Should this continue, increased weight will be given to positive operating results, along with projections of future taxable income, in determining whether future taxable income will be sufficient to provide for realization of the Company’s ~~provision for income taxes:~~

	~~December 31, 2017~~
~~Provision for income taxes at U.S. federal statutory rate~~		~~34.0~~	%
~~Permanent differences~~		~~4.4~~	%
~~Rate change from tax reform~~		~~2.5~~	%
~~Effective tax rate~~		~~40.9~~	%

~~The guidance for the accounting~~deferred tax assets, and ~~reporting for income taxes requires the Company to assess tax positions~~if so, this new evidence may result in ~~cases where the interpretation~~a change in estimate of the tax law may be uncertain. The Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record significant amounts of unrecognized tax benefits withinCompany’s valuation allowance in the next twelve months.

~~7. Deferred Underwriting Compensation~~

The Company is committed to pay the Deferred Discount of 3.50% of the gross proceeds of the Public Offering, or $22,750,000, to the underwriters upon the Company’s completion of a Business Combination. The underwriters are not entitled to receive any of the interest earned on Trust Account funds that would be used to pay the Deferred Discount, and no Deferred Discount is payable to the underwriters if a Business Combination is not completed within 24 months after the Close Date.

12. Stockholders’ Equity

Class A Common Stock

~~The Company is currently authorized to issue 200,000,000~~

At December 31, 2021, there were 193.4 million shares issued and 179.3 million shares outstanding of Class A ~~common stock. Depending on the terms of a potential Business Combination, the Company may be required to increase the number of authorized shares~~Common Stock. The holders of Class A Common Stock and Class B Common Stock vote together as a single class on all matters and are entitled 1 vote for each share held.

There is no cumulative voting with respect to the election of directors, which results in the holders of more than 50% of the shares being able to elect all of the directors, subject to voting obligations under the Stockholder Agreement. In the event of a liquidation, dissolution, or winding up of Magnolia Oil & Gas Corporation, the holders of the Class A Common Stock are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common ~~stock at~~stock. The holders of the Class A Common Stock have no preemptive or other subscription rights, and there are no sinking fund provisions applicable to such shares.

Class B Common Stock

At December 31, 2021, there were 49.3 million shares issued and outstanding of Class B Common Stock. Holders of Class B Common Stock vote together as a single class with holders of Class A Common Stock on all matters properly submitted to a vote of the stockholders. The holders of Class B Common Stock generally have the right to exchange all or a portion of their Class B Common Stock, together with an equal number of Magnolia LLC Units, for the same ~~time as its stockholders vote on the Business Combination to the extent the Company seeks stockholder approval in connection with its Business Combination. Holders~~number of shares of Class A ~~common stock are entitled to one vote for each share with~~Common Stock or, at Magnolia LLC’s option, an equivalent amount of cash. Upon the ~~exception that only holders~~future redemption or exchange of Magnolia LLC Units held by any holder of Class B Common Stock, a corresponding number of shares of Class ~~F common stock have~~B Common Stock held by such holder of Class B Common Stock will be canceled. In the ~~right to vote on the election of directors prior to the completion~~event of a ~~Business Combination, subject~~liquidation, dissolution, or winding up of Magnolia LLC, the holders of the Class B Common Stock, through their ownership of Magnolia LLC Units, are entitled to ~~adjustment as provided~~share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of units of Magnolia LLC, if any, having preference over the ~~Company’s amended~~common units. The holders of the Class B Common Stock have no preemptive or other subscription rights, and ~~restated memorandum~~there are no sinking fund provisions applicable to such shares.

Warrants

On June 7, 2019, the Company commenced an exchange offer (the “Offer”) and ~~articles~~consent solicitation (the “Consent Solicitation”), pursuant to which the Company (1) offered to holders of ~~association. At December 31, 2017, there were 65,000,000~~its warrants the opportunity to receive 0.29 shares of Class A ~~common stock issued~~Common Stock in exchange for each warrant validly tendered and ~~outstanding,~~(2) solicited the consent from the holders of ~~which 62,438,263 shares were subject~~its warrants to ~~possible redemption~~approve an amendment to the Company’s existing warrant agreement, by and ~~are classified outside~~between the Company and Continental Stock Transfer & Trust Company, to amend the agreement to provide the Company with the right to require any holder of ~~stockholders’ equity~~the Company’s warrants to exchange their warrants for Class A Common Stock at ~~the balance sheet.~~

~~Class F Common Stock~~

~~The Company is currently authorized to issue 20,000,000~~an exchange ratio of 0.261 shares of Class ~~F common stock. At December 31, 2017, there were 16,250,000~~A Common Stock for each whole warrant (the “Warrant Amendment”). Pursuant to the Offer, certain of the Company’s warrant holders, including directors and executive officers, agreed to tender their warrants and provide the corresponding consent to the Warrants Amendment in the Consent Solicitation by entering into a tender and support agreement with the Company on June 7, 2019.

The Offer and Consent Solicitation expired on July 5, 2019.In connection with the closing of the Offer on July 10, 2019 and the subsequent exercise of the Company’s right to exchange all remaining warrants on July 25, 2019, the Company issued an aggregate of 9.2 million shares of Class ~~F common stock (Founder Shares)~~A Common Stock in exchange for all of its 31.7 million warrants outstanding, which consisted of 21.7 million public warrants and 10.0 million private placement warrants.

As the fair value of the warrants exchanged in the Offer was less than the fair value of the Class A Common Stock issued, the Company recorded a non-cash deemed dividend of $2.8 million for the incremental value provided to the warrant holders. The fair value of warrants and ~~outstanding.~~

~~Preferred~~the Class A Common Stock

was determined using unadjusted quoted prices in an active market, a Level 1 fair value input. The Company capitalized $2.2 million of expenses related to the Offer within “Additional paid-in capital” on the Company’s consolidated balance sheet.

Share Repurchase Program

As of December 31, 2021, the Company’s board of directors had authorized a share repurchase program of up to 20.0 million shares of Class A Common Stock, and, in February 2022, the Company’s board of directors increased the share repurchase authorization by an additional 10.0 million shares of Class A Common Stock which increases total authorization to 30.0 million shares. In addition, the Company may repurchase shares pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Act of 1934, which would permit the Company to repurchase shares at times that may otherwise be prohibited under the Company's insider trading policy. The share repurchase program does not require purchases to be made within a particular timeframe. As of December 31, 2021, the Company had repurchased 14.2 million shares under the plan at a total cost of $164.6 million.

Dividends and Distributions

Distribution

On August 2, 2021, Magnolia LLC declared a cash distribution of $0.08 per Magnolia LLC Unit totaling $19.0 million, of which $14.2 million was distributed to the Company and $4.8 million was distributed to the Magnolia LLC Unit Holders. The distribution to the Magnolia LLC Unit Holders was recorded as a reduction of noncontrolling interest on the Company’s consolidated balance sheet as of December 31, 2021.

Cash Dividend

On August 2, 2021, the Company’s board of directors declared a semi-annual interim cash dividend of $0.08 per share of Class A Common Stock totaling approximately $14.2 million. The dividend was paid on September 1, 2021 to shareholders of record as of the close of business on August 12, 2021. Dividends in excess of retained earnings are recorded as a reduction of additional paid-in capital. The $14.2 million dividend declared during the third quarter of 2021 was recorded as a reduction of additional paid-in capital on the Company’s consolidated balance sheet as of December 31, 2021.

Noncontrolling Interest

Noncontrolling interest in Magnolia’s consolidated subsidiaries includes amounts attributable to Magnolia LLC Units that were issued to the Magnolia LLC Unit Holders in connection with the Business Combination. The noncontrolling interest percentage is ~~authorized~~affected by various equity transactions such as issuances of Class A Common Stock, the exchange of Class B Common Stock (and corresponding Magnolia LLC Units) for Class A Common Stock, or the cancellation of Class B Common Stock (and corresponding Magnolia LLC Units).

During the year ended December 31, 2021, outside of the share repurchase program, Magnolia LLC repurchased and subsequently canceled 13.0 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $171.7 million of cash consideration. During the year ended December 31, 2019, Magnolia LLC repurchased and subsequently canceled 6.0 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $69.1 million of cash consideration. Magnolia funded these repurchases of Class B Common Stock with cash on hand.

During the year ended December 31, 2021, the Magnolia LLC Unit Holders also redeemed 23.5 million Magnolia LLC Units (and a corresponding number of shares of Class B Common Stock) for an equivalent number of shares of Class A Common Stock and subsequently sold these shares to ~~issue 1,000,000 preferred shares.~~ the public. Magnolia did not receive any proceeds from the sale of shares of Class A Common Stock by the Magnolia LLC Unit Holders. As of December 31, 2021, Magnolia owned approximately 78.4% of the interest in Magnolia LLC and the noncontrolling interest was 21.6%.

In the first quarter of 2019, Magnolia Operating formed Highlander as a joint venture, where MGY Louisiana LLC, a wholly owned subsidiary of Magnolia Operating, holds approximately 84.7% of the units in Highlander, with the remaining 15.3% attributable to noncontrolling interest.

13. Stock Based Compensation

The Company’s board of directors adopted the “Magnolia Oil & Gas Corporation Long Term Incentive Plan” (the “Plan”), effective as of July 17, 2018. A total of 16.8 million shares of Class A Common Stock have been authorized for issuance under the Plan as of December 31, 2021. The Company grants stock based compensation awards in the form of RSUs, PSUs, and PRSUs to eligible employees and directors to enhance the Company and its affiliates’ ability to attract, retain, and motivate persons who make important contributions to the Company and its affiliates by providing these individuals with equity ownership opportunities. Shares issued as a result of awards granted under the Plan are generally new shares of Class A Common Stock.

Stock based compensation expense is recognized net of forfeitures within “General and administrative expenses” and “Lease operating expenses” on the consolidated statements of operations and was $11.7 million, $10.0 million, and $11.1 million for the years ended December 31, 2021, 2020, and 2019. The Company has elected to account for forfeitures of awards granted under the Plan as they occur in determining compensation expense.

The following table presents a summary of Magnolia’s unvested RSU, PSU, and PRSU activity for the year ended December 31, 2021.


	Restricted Stock Units			Performance Stock Units			Performance Restricted Stock Units
	Units	Weighted Average Grant Date Fair Value		Units	Weighted Average Grant Date Fair Value		Units	Weighted Average Grant Date Fair Value
Unvested, beginning of period	1,686,637	$	8.51	841,425	$	10.95	—	$	—
Granted	499,278	10.98		—	—		1,012,330	9.36
Vested	(874,794)	9.27		(277,500)	14.58		—	—
Forfeited	(123,612)	8.95		(103,511)	9.04		(43,676)	9.33
Unvested, end of period	1,187,509	$	8.94	460,414	$	9.20	968,654	$	9.36

Restricted Stock Units

The Company grants service-based RSU awards to employees and non-employee directors, which generally vest ratably over a three-year service period, in the case of awards to employees, and vest in full after one year, in the case of awards to directors. RSUs represent the right to receive shares of Class A Common Stock at the end of the vesting period equal to the number of RSUs that vest. RSUs are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient ceases to be an employee or director of the Company prior to vesting of the award. Compensation expense for the service-based RSU awards is based upon the grant date market value of the award and such costs are recorded on a straight-line basis over the requisite service period for each separately vesting portion of the award, as if the award was, in-substance, multiple awards. Unrecognized compensation expense related to unvested RSUs as of December 31, 2021 was $6.6 million, which the Company expects to recognize over a weighted average period of 1.8 years.

Performance Restricted Stock Units and Performance Stock Units

The Company grants PRSUs to certain employees. Each PRSU represents the contingent right to receive 1 share of Class A Common Stock once the PRSU is both vested and earned. PRSUs generally vest either ratably over a three-year service period or at the end of a three-year service period, in each case, subject to the recipient’s continued employment or service through each applicable vesting date. Each PRSU is earned based on whether Magnolia’s stock price achieves a target average stock price for any 20 consecutive trading days during the five-year performance period. If PRSUs are not earned by the end of the five-year performance period (“Performance Condition”), the PRSUs will be ~~authorized~~forfeited and no shares of Class A Common Stock will be issued, even if the vesting conditions have been met. Compensation expense for the PRSU awards is based upon grant date fair market value of the award, calculated using a Monte Carlo simulation, as presented below, and such costs are recorded on a straight-line basis over the requisite service period for each separately vesting portion of the award, as if the award was, in-substance, multiple awards, as applicable. Unrecognized compensation expense related to ~~fix~~unvested PRSUs as of December 31, 2021 was $6.5 million, which the ~~voting~~Company expects to recognize over a weighted average period of 2.3 years.

The Company grants PSUs to certain employees. Each PSU, to the extent earned, represents the contingent right to receive 1 share of Class A Common Stock and the awardee may earn between zero and 150% of the target number of PSUs granted based

on the total shareholder return (“TSR”) of the Class A Common Stock relative to the TSR achieved by a specific industry peer group over a three-year performance period. In addition to the TSR conditions, vesting of the PSUs is subject to the awardee’s continued employment through the date of settlement of the PSUs, which will occur within 60 days following the end of the performance period. Unrecognized compensation expense related to unvested PSUs as of December 31, 2021 was $0.6 million, which the Company expects to recognize over a weighted average period of 1.1 years.

The grant date fair values of the PRSUs granted during the year ended December 31, 2021 were $9.5 million. The grant date fair values of the PSUs granted during the years ended December 31, 2020 and 2019 were $2.5 million and $3.7 million, respectively. Since the Performance Condition was met on March 17, 2021, the fair value of the PRSUs granted after this date was based upon the grant date market value of the award. The fair values of the awards granted prior to March 17, 2021 were determined using a Monte Carlo simulation. The following table summarizes the Monte Carlo simulation assumptions used to calculate the grant date fair value of the PRSUs in 2021 and the PSUs in 2020 and 2019.


	Years Ended
PRSU and PSU Grant Date Fair Value Assumptions	December 31, 2021	December 31, 2020	December 31, 2019
Expected term (in years)	3.64	2.85	2.67 - 2.85
Expected volatility	55.18%	33.50%	31.58% - 33.61%
Risk-free interest rate	0.56%	1.16%	2.29% - 2.48%

14. Earnings (Loss) Per Share

The Company’s unvested share-based payment awards that contain nonforfeitable rights ~~if any, designations, powers, preferences,~~to dividends or dividend equivalents (whether paid or unpaid) are deemed participating securities and, therefore, have been deducted from earnings in computing basic and diluted net income (loss) per share under the ~~relative, participating, optional or~~two-class method. Diluted net income (loss) per share attributable to common stockholders is calculated under both the two-class method and the treasury stock method and the more dilutive of the two calculations is presented.

The components of basic and diluted net income (loss) per share attributable to common stockholders are as follows:


	Years Ended
(In thousands, except per share data)	December 31, 2021		December 31, 2020		December 31, 2019
Basic:
Net income (loss) attributable to Class A Common Stock	$	417,282	$	(1,208,390)	$	47,433
Less: Dividends and net income allocated to participating securities	2,789		—		—
Net income (loss), net of participating securities	$	414,493	$	(1,208,390)	$	47,433
Weighted average number of common shares outstanding during the period - basic	174,364		166,270		161,886
Net income (loss) per share of Class A Common Stock - basic	$	2.38	$	(7.27)	$	0.29

Diluted:
Net income (loss) attributable to Class A Common Stock	$	417,282	$	(1,208,390)	$	47,433
Less: Dividends and net income allocated to participating securities	2,775		—		—
Net income (loss), net of participating securities	$	414,507	$	(1,208,390)	$	47,433
Weighted average number of common shares outstanding during the period - basic	174,364		166,270		161,886
Add: Dilutive effect warrants, stock based compensation, and other	996		—		5,161
Weighted average number of common shares outstanding during the period - diluted	175,360		166,270		167,047
Net income (loss) per share of Class A Common Stock - diluted	$	2.36	$	(7.27)	$	0.28

The Company excluded 64.0 million, 85.8 million, and 92.0 million of weighted average shares of Class A Common Stock issuable upon the exchange of the Class B Common Stock (and the corresponding Magnolia LLC Units) for the years ended December 31, 2021, 2020, and 2019, respectively, as the effect was anti-dilutive. In addition, for the year ended December 31, 2020, the Company excluded 4.0 million contingent shares of Class A Common Stock issuable to an affiliate of EnerVest, provided EnerVest does not compete in the Market Area, and 0.3 million RSUs and PSUs because the effect was anti-dilutive.

15. Related Party Transactions

As of December 31, 2021, EnerVest Energy Institutional Fund XIV-A, L.P., which is part of the Magnolia LLC Unit Holders, held more than 10% of the Company’s common stock and qualified as a principal owner of the Company, as defined in ASC 850, “Related Party Disclosures.”

Amended and Restated Limited Liability Company Agreement of Magnolia LLC

On July 31, 2018, the Company, Magnolia LLC, and the Magnolia LLC Unit Holders entered into Magnolia LLC’s amended and restated limited liability company agreement, which sets forth, among other ~~special~~things, the rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The board of directors will be able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rightsobligations of the holders of units in Magnolia LLC. Under the Magnolia LLC Agreement, the Company is the sole managing member of Magnolia LLC.

Registration Rights Agreement

At the closing of the Business Combination, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with TPG Pace Energy Sponsor LLC, a Delaware limited liability company (“TPG Pace”), the Magnolia LLC Unit Holders, EnerVest Energy Institutional Fund XIV-C, L.P., a Delaware limited partnership, and the Company’s 4 independent directors prior to the Business Combination (collectively, the “Holders”), pursuant to which the Company is obligated, subject to the terms thereof and in the manner contemplated thereby, to register for resale under the Securities Act of 1933 all or any portion of the shares of Class A Common Stock that the Holders held as of July 31, 2018 and that they may have acquired or might acquire thereafter, including upon conversion, exchange, or redemption of any other security therefor. Under the Registration Rights Agreement, Holders also have “piggyback” registration rights exercisable at any time that allow them to include the shares of Class A Common Stock that they own in certain registrations initiated by the Company.

Pursuant to the Registration Rights Agreement, the Company has filed and taken effective 2 registration statements on Form S-3, each of which registered, among others, the offering by the Holders of the shares of Class A Common Stock included therein.

Stockholder Agreement

On the Closing Date, the Company, TPG Pace, the Magnolia LLC Unit Holders, and EnerVest Energy Institutional Fund XIV-C, L.P., a Delaware limited partnership, entered into the Stockholder Agreement, under which the Magnolia LLC Unit Holders are entitled to nominate 2 directors, one of whom shall be independent under the listing rules of the New York Stock Exchange, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Sarbanes-Oxley Act of 2002, for appointment to the board of directors of the Company (the “Board”) so long as they collectively own at least 15% of the outstanding shares of Class A Common Stock and Class B Common Stock, (on a fully diluted basis, including equity securities exercisable into common stock, and ~~could have anti-takeover effects. At~~on a combined basis), and 1 director so long as they collectively own at least 2% of the outstanding shares of Class A Common Stock and Class B Common Stock (on a fully diluted basis, including equity securities exercisable into common stock, and on a combined basis). The Magnolia LLC Unit Holders are collectively entitled to appoint 1 director to each committee of the Board (subject to applicable laws and stock exchange rules). Furthermore, TPG Pace was entitled to certain director nomination rights under the Stockholder Agreement, but those rights ceased following a distribution by TPG Pace of its shares in August 2019.

Distributions

On August 2, 2021, Magnolia LLC declared a cash distribution of $0.08 per Magnolia LLC Unit totaling $19.0 million, of which $3.2 million was distributed to EnerVest Energy Institutional Fund XIV-A, L.P.

Class B Common Stock Repurchase

During the year ended December 31, ~~2017, there were no~~2021, EnerVest Energy Institutional Fund XIV-A, L.P. received $113.6 million in cash and surrendered 8.6 million Magnolia LLC Units with an equal number of shares of ~~preferred stock issued or outstanding.~~

~~Dividend Policy~~

corresponding Class B Common Stock, respectively. EnerVest Energy Institutional Fund XIV-A, L.P. also redeemed 15.6 million Magnolia LLC Units (and a corresponding number of shares of Class B Common Stock) for an equivalent number of shares of Class A Common Stock, which were subsequently sold to the public. Magnolia did not receive any proceeds from the sale of shares of Class A Common Stock by EnerVest Energy Institutional Fund XIV-A, L.P. During the year ended December 31, 2019, EnerVest Energy Institutional Fund XIV-A, L.P. received $45.7 million in cash and surrendered 4.0 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock, respectively. In both 2021 and 2019, Magnolia LLC subsequently canceled the surrendered Magnolia LLC Units and a corresponding number of shares of Class B Common Stock.

Tender and Support Agreement

Pursuant to the Offer, certain of the Company’s warrant holders, including directors and executive officers, agreed to tender their warrants by entering into the tender and support agreement, dated as of June 7, 2019, by and between the Company and such holders (the “Tender and Support Agreement”). See Note 12—Stockholders’ Equity for more information.

16. Major Customers

For the year ended December 31, 2021, four customers, including their subsidiaries, accounted for 22%, 15%, 15%, and 11%, respectively, of the Company’s combined oil, natural gas, and NGL revenue. For the year ended December 31, 2020, three customers, including their subsidiaries, accounted for 40%, 17%, and 12%, respectively, of the Company’s combined oil, natural gas, and NGL revenue. For the year ended December 31, 2019, three customers, including their subsidiaries, accounted for 43%, 19%, and 10%, respectively, of the Company’s combined oil, natural gas, and NGL revenue. The Company ~~has not paid~~is exposed to credit risk in the event of nonpayment by counterparties. The creditworthiness of customers and ~~does not intend~~other counterparties is subject to ~~pay any~~continuing review, including the use of master netting agreements, where appropriate.

17. Supplemental Cash Flow Information

Supplemental cash ~~dividends on its common stock prior to the completion of the Business Combination. Additionally,~~flow disclosures are presented below:


	Years Ended
(In thousands)	December 31, 2021		December 31, 2020		December 31, 2019
Supplemental cash items:
Cash paid (received) for income taxes	$	3,157	$	(724)	$	390
Cash paid for interest	26,933		25,895		26,226
Supplemental non-cash investing and financing activity:
Accruals or liabilities for capital expenditures	$	29,936	$	16,368	$	40,722
Equity issuances in connection with acquisitions	—		—		33,693
Non-cash deemed dividend related to warrant exchange	—		—		2,763
Supplemental non-cash lease operating activity:
Right-of-use assets obtained in exchange for operating lease obligations	$	4,668	$	5,923	$	6,720

18. Subsequent Events

On February 3, 2022, the Company’s board of directors ~~does~~declared a semi-annual cash dividend of $0.20 per share of Class A Common Stock, and Magnolia LLC declared a cash distribution of $0.20 per Magnolia LLC Unit to each holder of Magnolia LLC Units, each payable on March 1, 2022 to shareholders or members of record, as applicable, as of February 14, 2022.

In February 2022, the Magnolia LLC Unit Holders redeemed 5.0 million Magnolia LLC Units (and a corresponding number of shares of Class B Common Stock) for an equivalent number of shares of Class A Common Stock and subsequently sold these shares to the public. Magnolia did not ~~contemplate or anticipate declaring~~receive any ~~stock dividends~~proceeds from the sale of shares of Class A Common Stock by the Magnolia LLC Unit Holders. Concurrently, outside of the share repurchase program, Magnolia LLC repurchased 0.6 million shares of Class A Common Stock for $11.6 million of cash consideration from EnerVest Energy Institutional Fund XIV-C, L.P. Magnolia LLC also repurchased and subsequently canceled 1.4 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $30.4 million of cash consideration from the Magnolia LLC Unit Holders.

Supplemental Information About Oil & Natural Gas Producing Activities (Unaudited)

The Company operates in one reportable segment engaged in the ~~foreseeable future.~~

~~9. Quarterly Financial Information (Unaudited)~~

~~Following~~acquisition, development, exploration, and production of oil and natural gas properties located in the United States.

Capitalized Costs

The aggregate amounts of costs capitalized for oil and natural gas exploration and development activities and the related amounts of accumulated depreciation, depletion and amortization are shown below:


(In thousands)	December 31, 2021		December 31, 2020
Proved properties	$	2,142,262	$	1,790,492
Unproved properties	239,550		339,633
Total proved and unproved properties	2,381,812		2,130,125
Accumulated depreciation, depletion and amortization	(1,170,163)		(983,647)
Net capitalized costs	$	1,211,649	$	1,146,478

Costs Incurred For Oil and Natural Gas Producing Activities

The following table sets forth the costs incurred in the Company’s ~~unaudited quarterly statements of operations for the period from Inception to March 31, 2017~~oil and ~~the quarters ended June 30, 2017 through December 31, 2017.~~ natural gas production, exploration, and development activities:


	Years Ended
(In thousands)	December 31, 2021		December 31, 2020		December 31, 2019
Acquisition costs:
Proved properties	$	12,354	$	49,246	$	106,489
Unproved properties	10,483		25,966		29,208
Exploration and development costs	240,815		188,352		441,482
Total	$	263,652	$	263,564	$	577,179

Oil and Natural Gas Reserve Quantities

The ~~Company has prepared the quarterly data on a consistent basis with the audited financial statements included elsewhere in this Annual Report on Form 10-K and, in the opinion of management, the~~

financial information reflects all necessary adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of operations for these periods. This information should be read in conjunction with the audited financial statements and related notes included elsewhere in this Annual Report on Form 10-K. These quarterly operating results are not necessarily indicativemajority of the Company’s ~~operating results for~~proved reserves volumes as of December 31, 2021, approximately 98%, are based on evaluations prepared by the independent petroleum engineering firm of Miller and Lents, in accordance with Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers and definitions and guidelines established by the SEC. Miller and Lents employed all methods, procedures and assumptions considered necessary in utilizing the data provided to prepare the December 31, 2021 reserve report, which was completed on January 18, 2022. There are numerous uncertainties inherent in estimating quantities of proved oil and natural gas reserves. Oil and natural gas reserve engineering is a subjective process of estimating underground accumulations of oil and natural gas that cannot be precisely measured and the accuracy of any ~~future period.~~

For the Period

For the

For the

For the

from February 14,

Three Months

Three Months

Three Months

2017 (Inception) to

Ended

Ended

Ended

March 31, 2017

June 30, 2017

September 30, 2017

December 31, 2017

Operating expenses:

Professional fees and other expenses

$
63,223

$
108,118

$
250,286

$
264,313

Travel expenses

—

98,625

77,363

37,164

State franchise tax

—

—

—

152,610

Interest income

21

652,720

1,357,208

1,636,202

Income tax benefit (expense)

22,121

(156,092
)

(360,346
)

(567,937
)
Net income attributable to common stock

$
(41,081
)

$
289,885

$
669,213

$
614,178

Net income per share of common stock:

Basic and diluted

$
—

$
0.01

$
0.01

$
0.01

Weighted average shares of common stock outstanding:

Basic and diluted

9,500,000

52,862,637

81,250,000

81,250,000

~~10. Subsequent Events~~

~~Management has performed an evaluation~~reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Results of drilling, testing, and production subsequent ~~events through February 14, 2018,~~to the date of the ~~financial statements~~estimate may justify revision of such estimate. Accordingly, reserve estimates are often different from the quantities of oil and natural gas that are ultimately recovered.

The following table summarizes the average price during the 12-month period, determined as the unweighted arithmetic average of the first-day-of-the-month price for the years ended December 31, 2021, 2020 and 2019. The following prices, as adjusted for transportation, quality, and basis differentials, were ~~issued, noting~~used in the calculation of the Standardized Measure of discounted future net cash flows:


	Years Ended
	December 31, 2021		December 31, 2020		December 31, 2019

Oil (per Bbl)	$	64.93	$	38.55	$	59.99
Natural gas (per Mcf)	3.28		1.64		2.25
NGLs (per Bbl)	27.45		11.62		15.73

The table below presents a summary of changes in the Company’s proved reserves. Magnolia’s proved undeveloped reserves are planned to be developed within one year.


	Crude Oil (MMBbls)	Natural Gas (Bcf)	Natural Gas Liquids (MMBbls)	Total (MMboe)
Total proved reserves:
Balance, December 31, 2018	50.6	176.1	20.6	100.5
Extensions	12.6	40.4	6.9	26.3
Revisions of previous estimates	(1.9)	(0.3)	0.3	(1.7)
Purchases of reserves in place	4.2	22.3	0.7	8.6
Production	(12.9)	(41.3)	(4.6)	(24.4)
Balance December 31, 2019	52.6	197.2	23.9	109.3
Extensions	10.7	39.6	8.8	26.1
Revisions of previous estimates	(3.8)	7.8	(0.2)	(2.7)
Purchases of reserves in place	1.4	2.4	0.4	2.2
Production	(11.6)	(39.4)	(4.4)	(22.6)
Balance December 31, 2020	49.3	207.6	28.5	112.3
Extensions	15.6	61.7	11.3	37.2
Revisions of previous estimates	4.8	29.0	(0.1)	9.6
Purchases of reserves in place	0.2	0.5	0.1	0.4
Production	(11.2)	(43.4)	(5.7)	(24.1)
Balance December 31, 2021	58.7	255.4	34.1	135.4

Proved developed reserves:
Balance, December 31, 2018	35.2	149.0	16.5	76.5
Balance, December 31, 2019	40.3	165.8	18.9	86.8
Balance, December 31, 2020	38.1	165.5	20.2	85.8
Balance, December 31, 2021	46.7	216.3	27.1	109.8

Proved undeveloped reserves:
Balance, December 31, 2018	15.4	27.1	4.1	24.0
Balance, December 31, 2019	12.3	31.4	5.0	22.5
Balance, December 31, 2020	11.2	42.1	8.3	26.5
Balance, December 31, 2021	12.0	39.1	7.0	25.6

For the year ended December 31, 2021, extensions contributed approximately 37.2 MMboe to proved reserves. This was primarily related to developing new well locations at the Company’s Karnes and Giddings operations that extended the proved areas. This was comprised of 22.4 MMboe from adding new proved undeveloped reserves and 14.8 MMboe resulting from adding new proved developed reserves attributed to drilling wells in areas that did not meet the requirements for proved reserves prior to

evaluating the drilling results. Additionally, the Company had positive revisions of 9.6 MMboe. Revisions were comprised of an increase of 17.1 MMboe due to the impact of higher year-end 2021 SEC-based prices and an increase of 2.8 MMboe related to infill drilling in the Karnes County area. This was partially offset by downward revisions of approximately 6.3 MMboe for optimizing development activity, 3.2 MMboe for cost updates and 0.8 MMboe for performance adjustments for wells in the Karnes and Giddings areas. Acquisitions of approximately 0.4 MMboe during 2021 were related to acquisitions primarily in the Giddings area.

For the year ended December 31, 2020, extensions contributed approximately 26.1 MMboe to proved reserves. This was primarily related to developing new well locations at the Company’s Karnes and Giddings operations that extended the proved areas. This was comprised of 17.7 MMboe from adding new proved undeveloped reserves and 8.4 MMboe resulting from adding new proved developed reserves attributed to drilling wells in areas that did not meet the requirements for proved reserves prior to evaluating the drilling results. Additionally, the Company had downward revisions of 2.7 MMboe. Revisions were comprised of downward adjustments of 11.0 MMboe due to the impact of lower year-end 2020 SEC-based prices and 3.4 MMboe related to optimizing development activity. These were partially offset by upward revisions of approximately 7.4 MMboe for cost updates, 3.8 MMboe for performance improvements in the Giddings area and the addition of 0.5 MMboe related to infill drilling in the Karnes area. Acquisitions of approximately 2.2 MMboe during 2020 were related to acquisitions in the Karnes and Giddings areas.

For the year ended December 31, 2019, extensions contributed approximately 26.3 MMboe to proved reserves. This was primarily driven by the addition of 15.7 MMboe resulting from adding new proved undeveloped reserves and the addition of 10.6 MMboe resulting from adding new proved developed reserves attributed to drilling wells in areas that did not meet the requirements for proved reserves prior to evaluating the drilling results. These extensions were primarily related to developing new well locations at the Company’s Karnes and Giddings operations that extended the proved areas. Additionally, the Company had downward revisions of 1.7 MMboe. The impact of lower year-end 2019 SEC-based prices, compared to year-end 2018, resulted in approximately a 5.5 MMboe downward revision. This was partially offset by an upward technical revision of approximately 0.7 MMboe due to improved well performance for the Giddings and Highlander areas and the addition of 3.1 MMboe related to infill drilling in the Karnes areas. Acquisitions of approximately 8.6 MMboe during 2019 were related to the purchase of the Highlander asset and other purchases in the Karnes area.

Standardized Measure of Discounted Future Net Cash Flows

The standardized measure of discounted future net cash flows does not purport to be, nor should it be interpreted to present, the fair value of the oil and natural gas reserves of the property. An estimate of fair value would take into account, among other things, the recovery of reserves not presently classified as proved, the value of unproved properties, and consideration of expected future economic and operating conditions. Estimated future production of proved reserves, estimated future production costs of proved reserves, and estimated future development costs of proved reserves, which include estimated future abandonment costs, are based on current costs and economic conditions. The estimated future net cash flows are then discounted at a rate of 10%.

It is not intended that the FASB’s standardized measure of discounted future net cash flows represent the fair market value of the proved reserves. The Company cautions that the disclosures shown are based on estimates of proved reserve quantities and future production schedules which are inherently imprecise and subject to revision, and the 10% discount rate is arbitrary. Proved undeveloped reserves volumes are expected to be converted to proved developed reserves within one year, which may not be comparable to other oil and gas companies. In addition, costs and prices as of the measurement date are used in the determinations and no ~~subsequent events which require adjustment~~value may be assigned to probable or ~~disclosure.~~

possible reserves.

The following table presents the Company’s standardized measure of discounted future net cash flows:


	Years Ended
(In thousands)	December 31, 2021		December 31, 2020		December 31, 2019
Future cash inflows	$	5,592,621	$	2,576,789	$	3,983,118
Future production costs	(1,769,004)		(961,116)		(1,365,745)
Future development costs	(273,480)		(148,740)		(254,211)
Future income tax expenses	(452,020)		(31,310)		(88,566)
Future net cash flows	3,098,117		1,435,623		2,274,596
10% discount to reflect timing of cash flows	(1,025,855)		(430,671)		(649,128)
Standardized measure of discounted future net cash flows	$	2,072,262	$	1,004,952	$	1,625,468

The following table summarizes the principal sources of change in the standardized measure of discounted future net cash flows:


	Years Ended
(In thousands)	December 31, 2021		December 31, 2020		December 31, 2019
Standardized measure of discounted future net cash flows, beginning of period	$	1,004,952	$	1,625,468	$	1,877,528
Sales of oil, natural gas, and NGLs produced during the period, net of production costs	(883,958)		(395,416)		(753,740)
Purchases of minerals in place	2,874		26,110		145,076
Extensions	792,602		285,591		463,101
Changes in estimated future development costs	(9,172)		22,838		14,749
Net change in prices and production costs	1,184,351		(727,125)		(356,055)
Previously estimated development costs incurred during the period	81,918		92,913		162,350
Revisions in quantity estimates	256,470		(66,059)		(21,157)
Accretion of discount	102,725		169,659		195,457
Net change in income taxes	(286,028)		48,837		21,547
Net change in timing of production and other	(174,472)		(77,864)		(123,388)
Standardized measure of discounted future net cash flows, end of period	$	2,072,262	$	1,004,952	$	1,625,468

Item 9. Changes in and Disagreements ~~With~~with Accountants on Accounting and Financial ~~Disclosure.~~

Disclosure

None.

Item 9A. Controls and ~~Procedures.~~

Procedures

Evaluation of Disclosure Controls and Procedures

~~Disclosure~~

As required by Rule 13a-15(b) under the Exchange Act, Magnolia has evaluated, under the supervision and with the participation of the Company’s management, including Magnolia’s principal executive officer and principal financial officer, the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the fiscal year covered by this Annual Report on Form 10-K. Based on such evaluation, Magnolia’s principal executive officer and principal financial officer have concluded that as of such date, its disclosure controls and procedures were effective. The Company’s disclosure controls and procedures are ~~controls and other procedures that are~~ designed to ~~ensure~~provide reasonable assurance that the information required to be disclosed by it in ~~our~~ reports ~~filed or submitted~~that it files under the ~~Securities~~ Exchange Act ~~of 1934,~~is accumulated and communicated to management, including the Company’s principal executive officer and principal financial officer, as ~~amended (the “Exchange Act”)~~appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized, and reported within the time periods specified in the ~~SEC’s~~ rules and ~~forms. Disclosure controls~~forms of the SEC.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for designing, implementing, and ~~procedures include, without limitation, controls~~maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a- 15(f) and ~~procedures designed to ensure that information required to be disclosed in company reports filed or submitted~~15d-15(f) under the Exchange ~~Act is accumulated~~Act. Internal control over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and ~~communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.~~

~~As required by Rules 13a-15 and 15d-15 under~~presentation. Further, because of changes in conditions, the ~~Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation~~effectiveness of internal control over financial reporting may vary over time.

Management assessed the effectiveness of the ~~design and operation of our disclosure controls and procedures~~Company’s internal control over financial reporting as of December 31, ~~2017.~~2021, using the criteria in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based ~~upon their~~on this evaluation, ~~our Chief Executive Officer and Chief Financial Officer concluded~~management believes that ~~our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under~~ the ~~Exchange Act) were effective.~~

~~Internal Control~~Company’s internal control over ~~Financial Reporting~~

financial reporting was effective as of December 31, 2021.

This Annual Report on Form 10-K ~~does not include a~~includes an attestation report of ~~management’s assessment regarding~~KPMG LLP, the Company’s independent registered public accounting firm, on the Company’s internal control over financial reporting ~~or an attestation report~~as of ~~our registered public accounting firm due to a transition period established by rules~~December 31, 2021, which is included in this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

There were no changes in the system of ~~the SEC for newly public companies.~~

~~During the most recently completed fiscal year, there has been no change in our~~ internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2021 that ~~has~~have materially affected, or isare reasonably likely to materially affect, ~~our~~the Company’s internal control over financial reporting.

Item 9B. Other ~~Information.~~

~~None.~~

Information

On February 16, 2022, Magnolia Operating amended and restated the RBL Facility (“Amended and Restated RBL Facility”) in its entirety, providing for maximum commitments in an aggregate principal amount of $1.0 billion with a letter of credit facility with a $50.0 million sublimit, with an initial borrowing base of $450.0 million. The Amended and Restated RBL Facility matures in February 2026. The Amended and Restated RBL Facility is guaranteed by certain parent companies and subsidiaries of Magnolia LLC and is collateralized by certain of Magnolia Operating’s oil and natural gas properties and has a borrowing base subject to semi-annual redetermination.

Borrowings under the Amended and Restated RBL Facility bear interest, at Magnolia Operating’s option, at a rate per annum equal to either the term SOFR rate or the alternative base rate plus the applicable margin. Additionally, Magnolia Operating is required to pay a commitment fee quarterly in arrears in respect of unused commitments under the Amended and Restated RBL Facility. The applicable margin and the commitment fee rate are calculated based upon the utilization levels of the Amended and Restated RBL Facility as a percentage of unused lender commitments then in effect.

The Amended and Restated RBL Facility contains certain affirmative and negative covenants customary for financings of this type, including compliance with a leverage ratio of less than 3.50 to 1.00 and a current ratio of greater than 1.00 to 1.00.

The foregoing summary of the Amended and Restated RBL Facility does not purport to be complete and is subject to, and qualified in its entirety by reference to the full text of the Amended and Restated RBL Facility, which is filed as Exhibit 10.4 to this Annual Report on Form 10-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate ~~Governance.~~

~~Our current directors and executive officers are as follows:~~

Governance

~~Name~~	~~Age~~	~~Title~~
~~Stephen Chazen~~	71	~~President, Chief Executive Officer and Chairman~~
~~Arcilia Acosta~~	52	~~Director~~
~~David Bonderman~~	75	~~Director~~
~~Edward Djerejian~~	78	~~Director~~
~~Chad Leat~~	61	~~Director~~
~~Michael MacDougall~~	47	~~Director~~
~~Dan F. Smith~~	71	~~Director~~
~~Martin Davidson~~	41	~~Chief Financial Officer~~
~~Eduardo Tamraz~~	33	~~Executive Vice President of Corporate Development, Secretary~~

~~Stephen Chazen~~ ~~has served as our Chairman, Chief Executive Officer and President since February 2017. Mr. Chazen retired as Chief Executive Officer of Occidental~~

The information required in April 2016 and remains a member of the company’s board of directors. Mr. Chazen began his career at Occidental in 1994 as Executive Vice President—Corporate Development. He was named Chief Financial Officer in 1999 and served as Chief Financial Officer until 2010. Mr. Chazen was appointed President of Occidental in 2007. He was then named Chief Operating Officer in 2010 before being appointed Chief Executive Officer in May 2011. Mr. Chazen was electedresponse to ~~the Board of Directors in 2010.~~

Prior to joining Occidental, Mr. Chazen was Managing Director in Corporate Finance and Mergers and Acquisitions at Merrill Lynch. He worked as Director of Project Evaluation and Reservoir Engineering at Columbia Gas Development Corporation from 1977 to 1982. Mr. Chazen began his career at Northrop Corporation in 1973 as Laboratory Manager at the Johnson Space Center, where he worked until 1977.

Mr. Chazen is a former Chairman of the American Petroleum Institute. He also serves on the Board of Advisors of Rice University’s Baker Institute for Public Policy and is a member of the Senior Cabinet of the President’s Leadership Council at Houston Methodist Hospital. Mr. Chazen is a Director of Ecolab Inc. and The Williams Companies, Inc., and Chairman of the Board of the Catalina Island Conservancy.

Mr. Chazen holds a Ph.D. in Geology from Michigan State University, a master’s degree in Finance from the University of Houston and a bachelor’s degree in Geology from Rutgers College. Mr. Chazen is well-qualified to serve as a director because of his significant directorship experience, as well as his substantial and broad experience in the energy sector, as an executive, advisor and director.

~~Arcilia Acosta~~ has served as a director since May 10, 2017. Ms. Acosta is the President and Chief Executive Officer of CARCON Industries & Construction, specializing in commercial, institutional and transportation construction, and is also the Chief Executive Officer and controlling principal of STL Engineers. Ms. Acosta serves on the Board of Directors of Legacy Texas Financial Group, Inc., Energy Future Holdings Corp., the Texas Higher Education Coordinating Board, and the Dallas Citizens Council. Ms. Acosta previously served on the national advisory board for BBVA Compass Bank and the Texas Tech National Alumni Association.

Ms. Acosta received a Bachelor of Arts from Texas Tech University and Board Director Certification from Southern Methodist University Southwest School of Banking and is a Graduate of the Harvard University Business School Corporate Governance Program. Ms. Acosta is well-qualified to serve as a director because of her broad range of experience and directorships.

~~David Bonderman~~ has served as a director since May 10, 2017. Mr. Bonderman is a Founding Partner of TPG, one of the world’s largest private equity investment firms. He was also a co-founder of both Hotwire.com and CoStar Group, Inc., a leading data company for commercial real estate. From 1993 to 1996, Mr. Bonderman served as the chairman of Continental Airlines, Inc. in order to lead its emergence from bankruptcy. In addition, he has also played a leading role in many of TPG’s turnaround investments including Ducati Motor Holdings, S.p.A., Armstrong World Industries, Inc., Burger King Holdings, Inc. and Seagate Technology plc, among others.

Prior to forming TPG in 1992, Mr. Bonderman was Chief Operating Officer of the Robert M. Bass Group, Inc. (RMBG), now doing business as Keystone Group, L.P. in Fort Worth, Texas. Prior to joining RMBG in 1983, he was a partner in the law firm of Arnold & Porter in Washington, D.C., where he specialized in corporate, securities, bankruptcy and antitrust litigation. From 1969 to 1970, he was a Fellow in Foreign and Comparative Law in conjunction with Harvard University and from 1968 to 1969, he was Special Assistant to the U.S. Attorney General in the Civil Rights Division. From 1967 to 1968, he was Assistant Professor at Tulane University School of Law in New Orleans, Louisiana. Mr. Bonderman graduated magna cum laude from Harvard Law School where he was a member of the Harvard Law Review and a Sheldon Fellow. He is a graduate of the University of Washington in Seattle, Washington.

~~Edward Djerejian~~ has served as a director since May 10, 2017. Ambassador Djerejian served in the U.S. Foreign Service for eight presidents, from John F. Kennedy in 1962 to William J. Clinton in 1994. Prior to his nomination by President Clinton as U.S. ambassador to Israel in which he served from 1993-1994, he was assistant secretary of state for Near Eastern affairs in both the George H.W. Bush and the Clinton administrations from 1991 to 1993. He was the U.S. ambassador to the Syrian Arab Republic from 1988 to 1991. He also served as special assistant to President Ronald Reagan and deputy press secretary for foreign affairs in the White House from 1985 to 1986.

After his retirement from government service in 1994, he became, and currently serves as, the director of the James A. Baker III Institute for Public Policy at Rice University. He has been awarded the Presidential Distinguished Service Award, the Department of State’s Distinguished Honor Award and numerous other honors, including the Ellis Island Medal of Honor and the Anti-Defamation League’s Moral Statesman Award. He is also a recipient of the Association of Rice Alumni’s Gold Medal. In 2011, Ambassador Djerejian was elected a fellow of the American Academy of Arts and Sciences. He is also a member of the Board of Trustees of the Carnegie Corporation of New York.

Ambassador Djerejian previously served as Chairman of the Board and a director of Occidental until 2015, and as a director of Baker Hughes Incorporated and Global Industries, Ltd., where he was Chairman of the Governance Committee. He currently serves on the board of directors of The Mexico Fund, Inc. He holds a Bachelor of Science and a Doctor of Humane Letters, honoris causa, from Georgetown University, as well as a Doctor of Laws, honoris causa, from Middlebury College. Ambassador Djerejian is well-qualified to serve as a director because of his significant directorship experience.

~~Chad Leat~~ has served as a director since May 10, 2017. Mr. Leat is a retired Vice Chairman of Global Banking at Citigroup Inc., and has nearly thirty years of markets and banking experience on Wall Street. He is a leader and innovator in corporate credit and M&A finance. Mr. Leat joined Salomon Brothers in 1997 as a partner in High Yield Capital Markets and then joined Citigroup in 1998 from where he retired in 2013 as Vice Chairman of Global Investment Banking. Over the years he served on the firm’s Investment Banking Management Committee, the Fixed Income Management Committee and the Capital Markets Origination Committee. From 1998 until 2005 he served as the Global Head of Loans and Leveraged Finance. He grew this business from a small second-tier position to one of the largest loan and high-yield businesses on Wall Street. During the financial crisis, Mr. Leat helped Citigroup work through many challenging risk, regulatory and client issues.

Mr. Leat began his career on Wall Street at The Chase Manhattan Corporation in their Capital Markets Group in 1985 where he ultimately became the head of their highly successful Syndications, Structured Sales and Loan Trading businesses. This group was on the cutting edge of the fast-developing loan market and Mr. Leat was one of a handful of market professionals associated with the development and creation of this now vibrant capital market.

Mr. Leat serves on the board of directors of Norwegian Cruise Lines Ltd and is the Chairman of the Audit Committee and also serves on the Compensation Committee. He is Chairman of the board of directors of MidCap Financial, PLC, a middle-market direct commercial lending business and he serves on the Board of Directors of J. Crew Group, Inc. He has previously served as Chairman of the board of directors of HealthEngine PLC, a healthcare technology company, a member of the board of directors of Global Indemnity PLC, a Cayman based provider of property and casualty insurance, Pace Holdings Corp., a special purpose acquisition vehicle associated with TPG where he was Chairman of the Audit Committee and BAWAG P.S.K., the third largest bank in Austria.

Mr. Leat is dedicated to many civic and philanthropic organizations. He is a member of the Economic Club of New York and has served on the boards of several charitable organizations. Currently, he is a member of the Board of Directors of The Hampton Classic Horse Show and is a Trustee of the Parrish Museum of Art. Mr. Leat is a graduate of the University of Kansas, where he received his Bachelors of Science degree. Mr. Leat is well-qualified to serve as a director because of his significant directorship experience and his previous role as a director of Pace Holdings Corp..

~~Michael MacDougall~~ has served as a director since May 10, 2017. Mr. MacDougall is a partner of TPG and co-heads the firm’s global energy and natural resources private equity investing efforts. Prior to joining TPG in 2002, Mr. MacDougall was a vice president in the Principal Investment Area of the Merchant Banking Division of Goldman, Sachs & Co., where he focused on private equity and mezzanine investments.

He is a director of Energy Future Holdings Corp., Harvester Holdings, LLC, Jonah Energy Holdings LLC, and is a director of the general partner of Valerus Compression Services, L.P. (doing business as Axip Energy Services, L.P.). He is also a member of the board of directors of the Baylor College of Medicine Board of Trustees and The University of Texas Development Board. Over the last five years, Mr. MacDougall previously served on the board of directors for Copano Energy, L.L.C., Graphic Packaging Holding Company and Northern Tier Energy GP LLC.

Mr. MacDougall received his BBA, with highest honors, from The University of Texas at Austin and received his MBA, with distinction, from Harvard Business School. Mr. MacDougall is well-qualified to serve as a director because of his significant directorship experience, his experience in the global energy and natural resources sector, his transactional experience with a number of different companies at TPG and his investment banking experience at Goldman, Sachs & Co.

~~Dan F. Smith~~ has served as a director since May 10, 2017. Mr. Smith is a retired Chief Executive Officer of Lyondell Chemical Company, or “Lyondell,” and its wholly owned subsidiaries Millennium Chemicals Inc. and Equistar Chemicals, LP. Mr. Smith began his career as an engineer with Atlantic Richfield Company in 1968. He was elected President of Lyondell in August 1994 and Chief Executive Officer in December 1996.

Mr. Smith is a director of Orion Engineered Carbons, S.A., Kraton Corp., the general partner of Valerus Compression Services, L.P. (doing business as Axip Energy Services, L.P.) and Nexeo Solutions, Inc. During the past five years, Mr. Smith served on the board of directors of Northern Tier Energy GP LLC and Cooper Industries plc. He also serves as a member of the College of Engineering Advisory Council at Lamar University.

Mr. Smith is a graduate of Lamar University with a B.S. degree in chemical engineering. Mr. Smith is well-qualified to serve as a director because of his significant directorship experience and broad experience in energy and energy-related sectors.

~~Martin Davidson~~ has been our Chief Financial Officer since February 2017. Mr. Davidson is a Partner and Chief Accounting Officer of TPG. Mr. Davidson is responsible for all financial operations and reporting related to TPG Holdings, TPG’s parent company, accounting and operations for TPG’s private equity and real estate funds, as well as TPG’s firm-wide accounting policies. In addition, he has held the position of Chief Financial Officer and Financial Operations Principal of TPG’s broker/dealers and served on the board of multiple special purpose investment vehicles of TPG’s investment funds.

Prior to joining TPG in 2005, Mr. Davidson was an audit manager at KPMG where he primarily served clients in the financial services industry including private equity funds and hedge funds. Mr. Davidson received a BBA in accounting from Texas Christian University and a Masters of Professional Accounting from The University of Texas at Austin. Mr. Davidson is a Certified Public Accountant.

~~Eduardo Tamraz~~ has been our Executive Vice President of Corporate Development and Secretary since February 2017. Mr. Tamraz is a senior executive on the investment team for TPG Pace Group, a TPG initiative dedicated to providing permanent capital solutions for companies. Previously, he was a Vice President of TPG Capital in Europe from 2014 to early 2017. Since joining TPG he has spent the majority of his time on Pace Holdings Corp. Mr. Tamraz was responsible for leading the evaluation of several opportunities for Pace Holdings Corp. with the ultimate execution of the Playa transaction. From 2008 until 2014, Mr. Tamraz was a senior member of the private equity team at Eton Park, a global alternative investment firm. He previously worked at BC Partners and Merrill Lynch. Mr. Tamraz received an MA in economics from the University of Cambridge. He is a member of the Lincoln Center YP Steering Committee.

~~Number, Terms of Office and Election of Officers and Directors~~

Our board of directors consists of seven members. Holders of our Founder Shares have the right to elect all of our directors prior to consummation of our Business Combination and holders of our Public Shares do not have the right to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may onlyitem will be amended if approved by holders of at least 90% of our outstanding common stock entitled to vote thereon. Each of our directors will hold office for a two-year term. Subject to any other special rights applicable to the stockholders, any vacancies on our board of directors may be filled by the affirmative vote of a majority of the directors present and voting at the meeting of our board or by a majority of the holders of our Founder Shares.

Our officers are elected by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a Chairman, Chief Executive Officer, President, Chief Financial Officer, Vice Presidents, Secretary, Assistant Secretaries, Treasurer and such other offices as mayMagnolia's Definitive Proxy Statement, to be ~~determined by~~filed within 120 days after the ~~board of directors.~~

~~Director Independence~~

The NYSE listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person who has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). We have four “independent directors” as defined in the NYSE listing standards and applicable SEC rules. Our board of directors has determined that each of Ms. Acosta, Ambassador Djerejian and Messrs. Leat and Smith is independent under applicable SEC and NYSE rules. Our independent directors have regularly scheduled meetings at which only independent directors are present.

~~Executive Officer and Director Compensation~~

None of our officers or directors have received any cash compensation for services rendered to us. Commencing on the Close Date through the earlier of consummation of our initial Business Combination or our liquidation, we pay an affiliate of our Sponsor a total of $20,000 per month for office space, administrative and support services. Our Sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any reasonable out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our audit committee will review on a quarterly basis all payments that were made to our Sponsor, officers, directors or our or their affiliates.

After the completion of our initial Business Combination, directors or members of our management team who remain with us may be paid consulting, management or other fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed Business Combination. It is unlikely the amount of such compensation will be known at the time such materials are distributed, because the directorsend of the ~~post-combination business will be responsible for determining officer~~fiscal year covered by this Annual Report on Form 10-K and ~~director compensation. Any compensation~~is incorporated herein by reference.

Code of Ethics

The Company intends to ~~be paid to our officers will be determined by a compensation committee constituted solely by independent directors.~~

~~We do not intend to take any action to ensure that members~~satisfy the disclosure requirement under Item 5.05 of our management team maintain their positions with us after the consummation of our initial Business Combination, although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with us after the initial Business Combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial Business Combination will be a determining factor in our decision to proceed with any potential Business Combination. We are not party to any agreements with our officers and directors that provide for benefits upon termination of employment.

~~Committees of the Board of Directors~~

Our board of directors has three standing committees: an audit committee and a compensation committee and a nominating and corporate governance committee. Each committee operates under a charter that has been approved by our board and has the composition and responsibilities described below. The charter of each committee is available on our website at www.tpg.com/pace-energy

~~Audit Committee~~

~~Our board has established an audit committee of the board of directors. Audit committee members include Ms. Acosta and Messrs. Leat and Smith. Mr. Leat serves as chairman of the audit committee.~~

Each member of the audit committee meets the financial literacy requirements of the NYSE and our board of directors has determined that Mr. Leat qualifies as an “audit committee financial expert” as defined in applicable SEC rules.

~~The primary purposes of our audit committee are to assist the board’s oversight of:~~

~~audits of our financial statements;~~

~~the integrity of our financial statements;~~

~~our process~~Form 8-K relating to ~~risk management and the conduct and systems of internal control over financial reporting and disclosure controls and procedures;~~

~~the qualifications, engagement, compensation, independence and performance of our independent auditor; and~~

~~the performance of our internal audit function.~~

~~The audit committee is governed by a charter that complies with the rules~~amendments to or waivers from any provision of the ~~NYSE.~~

~~Compensation Committee~~

Our board has established a compensation committee of the board of directors. Compensation committee members include Ms. Acosta, Ambassador Djerejian and Mr. Smith. Ms. Acosta serves as chairperson of the compensation committee.

~~The primary purposes of our compensation committee are to assist the board in overseeing our management compensation policies and practices, including:~~

~~determining and approving the compensation of our executive officers; and~~

~~reviewing and approving incentive compensation and equity compensation policies and programs.~~

~~The compensation committee is governed by a charter that complies with the rules of the NYSE.~~

~~Nominating and Corporate Governance Committee~~

Our board has established a nominating and corporate governance committee. Nominating and corporate governance committee members include Ambassador Djerejian and Messrs. Smith and Leat. Mr. Smith serves as chair of the nominating and corporate governance committee.

~~The primary purposes of our nominating and corporate governance committee are to assist the board in:~~

identifying, screening and reviewing individuals qualified to serve as directors and recommending to the board of directors candidates for nomination for election at the annual meeting of stockholders or to fill vacancies on the board of directors;

~~developing, recommending to the board of directors and overseeing implementation of our corporate governance guidelines;~~

~~coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the company; and~~

~~reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.~~

~~The nominating and corporate governance committee is governed by a charter that complies with the rules of the NYSE.~~

~~Director Nominations~~

Our nominating and corporate governance committee will recommend to the board of directors candidates for nomination for election at the annual meeting of the stockholders. Prior to our Business Combination, the board of directors will also consider director candidates recommended for nomination by holders of our Founder Shares during such times as they are seeking proposed nominees to stand for election at an annual meeting of stockholders (or, if applicable, a special meeting of stockholders).

~~Prior to our Business Combination, holders of our Public Shares will not have the right to recommend director candidates for nomination to our board.~~

We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.

~~Compensation Committee Interlocks and Insider Participation~~

None of our officers currently serves, and in the past year has not served, (i) as a member of the compensation committee or board of directors of another entity, one of whose executive officers served on our compensation committee, or (ii) as a member of the compensation committee of another entity, one of whose executive officers served on our board of directors.

~~Section 16 (a) Beneficial Ownership Reporting Compliance~~

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, directors and persons who beneficially own more than ten percent of our common stock to file reports of ownership and changes in ownership with the SEC. These reporting persons are also required to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of such Forms, we believe that during the year ended December 31, 2017 there were no delinquent filers.

~~Code of Business Conduct and Ethics~~

~~We have adopted a~~ Code of Business Conduct and Ethics applicable to ~~our directors, officers~~the principal executive officer, principal financial officer, principal accounting officer and ~~employees. A copy~~other persons performing similar functions by posting such information in the “Corporate Governance” subsection of the ~~Code of Business Conduct and Ethics is available on our~~Company’s website at www.tpg.com/paceenergy. Any amendments to or waivers of certain provisions of our Code of Business Conduct and Ethics will be disclosed on such website promptly following the date of such amendment or waiver. Copies of our form of Code of Business Conduct and Ethics, our form of Audit Committee Charter, our form of Compensation Committee Charter and our Nominating and Corporate Governance Committee Charter are also available on our website. In addition, a copy of the Code of Business Conduct and Ethics will be provided without charge upon request to us in writing at 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102 or by telephone at (817) 871-4000.

~~Corporate Governance Guidelines~~

Our board of directors has adopted corporate governance guidelines in accordance with the corporate governance rules of the NYSE that serve as a flexible framework within which our board of directors and its committees operate. These guidelines cover a number of areas including board membership criteria and director qualifications, director responsibilities, board agenda, roles of the chairman of the board, chief executive officer and presiding director, meetings of independent directors, committee responsibilities and assignments, board member access to management and independent advisors, director communications with third parties, director compensation, director orientation and continuing education, evaluation of senior management and management succession planning. A copy of our corporate governance guidelines is posted on our website at www. tpg.com/pace-energy.

~~Conflicts of Interest~~

~~In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:~~

~~the corporation could financially undertake the opportunity;~~

www.magnoliaoilgas.com.

~~the opportunity is within the corporation’s line of business; and~~

~~it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation.~~

~~Potential investors should also be aware of the following other potential conflicts of interest:~~

None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities.

In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. For a complete description of our management’s other affiliations, see “—Directors and Executive Officers.”

Our Initial Stockholders, officers and directors have agreed to waive their redemption rights with respect to our Founder Shares and Public Shares in connection with the consummation of our Business Combination. Additionally, our Initial Stockholders, officers and directors have agreed to waive their redemption rights with respect to their Founder Shares if we fail to consummate our Business Combination within 24 months after the Close Date. If we do not complete our Business Combination within such applicable time period, the proceeds of the sale of the private placement Warrants held in the Trust Account will be used to fund the redemption of our Public Shares, and the private placement Warrants will expire worthless. With certain limited exceptions, the Founder Shares will not be transferable, assignable or salable by our Initial

Stockholders until the earlier of: (1) one year after the completion of our Business Combination and (2) the date on which we consummate a liquidation, merger, share exchange, reorganization, or other similar transaction after our Business Combination, that results in all of our stockholders having the right to exchange their common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our Business Combination the Founder Shares will be released from the lock-up. With certain limited exceptions, the private placement Warrants and the Class A common stock underlying such Warrants, will not be transferable, assignable or salable by our Sponsor or its permitted transferees until 30 days after the completion of our Business Combination. Since our Sponsor and officers and directors may directly or indirectly own common stock and Warrants, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our Business Combination.

Our officers and directors may have a conflict of interest with respect to evaluating a particular Business Combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our Business Combination.

~~The conflicts described above may not be resolved in our favor.~~

Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Below is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties or contractual obligations:

~~Individual~~	~~Entity~~	~~Entity’s Business~~	~~Affiliation~~
~~Stephen Chazen~~	~~Occidental~~	~~Energy~~	~~Director~~
	~~Ecolab Inc.~~	~~Water, Hygiene, Energy~~	~~Director~~
	~~The Williams Companies Inc.~~	~~Energy~~	~~Director~~

~~Arcilia Acosta~~	~~CARCON Industries & Construction~~	~~Construction~~	~~Officer~~
	~~STL Engineers~~	~~Engineering and~~	~~Officer and Controlling~~
		~~Construction~~	~~Principal~~
	~~LegacyTexas Financial Group, Inc.~~	~~Financial~~	~~Director~~
	~~Energy Future Holdings Corp.~~	~~Energy~~	~~Director~~

~~David Bonderman~~	~~TPG Global, LLC (and affiliated entities)~~	~~Alternative Investment Manager~~	~~Co-Founder~~
	~~RyanAir Holdings PLC~~	~~Travel~~	~~Director~~
	~~Energy Future Holdings Corp.~~	~~Energy~~	~~Director~~
	~~TPG Pace Holdings Corp.~~	~~Special Purpose Acquisition Corporation~~	~~Director~~
	~~STX Filmworks, LLC~~	~~Entertainment~~	~~Director~~
	~~XOJET, Inc.~~	~~Travel~~	~~Director~~

~~Edward Djerejian~~	~~The Mexico Fund~~	~~Financial~~	~~Director~~
	~~Siluria Technologies~~	~~Fuels and Chemicals~~	~~Advisory Board~~
	~~Occidental~~	~~Energy~~	~~Consultant~~

~~Chad Leat~~	~~MidCap Financial, PLC~~	~~Financial~~	~~Director~~
	~~J. Crew Group Inc.~~	~~Retail~~	~~Director~~
	~~TPG Pace Holdings Corp.~~	~~Special Purpose Acquisition Corporation~~	~~Director~~
	~~Norwegian Cruise Line Holdings Ltd.~~	~~Travel~~	~~Director~~

~~Michael MacDougall~~	~~TPG Global, LLC (and affiliated entities)~~	~~Alternative Investment Manager~~	~~Partner~~
	~~Energy Future Holdings Corp.~~	~~Energy~~	~~Officer and/or~~ ~~Director~~
	~~Harvester Holdings, LLC~~	~~Energy~~	~~Director~~
	~~Jonah Energy Holdings LLC~~	~~Energy~~	~~Director~~
	~~Valerus Compression Services, L.P. (doing~~ ~~business as Axip Energy Services, L.P.)~~	~~Energy~~	~~General Partner~~ ~~and Director~~

~~Dan F. Smith~~	~~Orion Engineered Carbons, S.A.~~	~~Carbon Black~~	~~Chairman~~
	~~Kraton Corp.~~	~~Minerals and Polymers~~	~~Chairman~~
	~~Valerus Compression Services, L.P. (doing~~ ~~business as Axip Energy Services, L.P.)~~	~~Energy~~	~~Chairman~~
	~~Nexeo Solutions, Inc.~~	~~Chemicals and Plastics~~	~~Chairman~~

~~Martin Davidson~~	~~TPG Global, LLC (and affiliated entities)~~	~~Alternative Investment Manager~~	~~Partner and Chief~~ ~~Accounting Officer~~
	~~TPG Pace Holdings Corp.~~	~~Special Purpose Acquisition Corporation~~	~~Chief Financial Officer~~

~~Eduardo Tamraz~~	~~TPG Global, LLC (and affiliated entities)~~	~~Alternative Investment Manager~~	~~Principal, TPG Pace~~
	~~TPG Pace Holdings Corp.~~	~~Special Purpose Acquisition Corporation~~	~~Executive Vice President and Secretary~~

Furthermore, our amended and restated certificate of incorporation provides that the doctrine of corporate opportunity will not apply with respect to any of our officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have.

We are not prohibited from pursuing a Business Combination with a company that is affiliated with our Sponsor, officers or directors. In the event we seek to complete our Business Combination with such a company, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, that such a Business Combination is fair to our Company from a financial point of view.

In the event that we submit our Business Combination to our public stockholders for a vote, our Initial Shareholders, officers and directors have agreed, pursuant to the terms of a letter agreement entered into with us, to vote any Founder Shares held by them, and their permitted transferees will agree, and any Public Shares held by them in favor of our Business Combination.

~~Limitation on Liability and Indemnification of Officers and Directors~~

Our amended and restated certificate of incorporation provides that our officers and directors are indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation provides that our directors will not be personally liable for monetary damages to us or our stockholders for breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as directors.

Our bylaws permit us to secure insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We have purchased a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Item 11. Executive ~~Compensation.~~

~~None of our executive officers or directors have received any cash compensation for services rendered~~Compensation

The information required in response to ~~us. Commencing on May 10, 2017, through~~this item will be set forth in Magnolia's Definitive Proxy Statement, to be filed within 120 days after the ~~earlier~~end of the ~~consummation of a Business Combination or our liquidation, we pay monthly recurring expenses of $20,000 to an affiliate of our Sponsor for office space, administrative~~fiscal year covered by this Annual Report on Form 10-K and support services. Our Sponsor, executive officers, directors, or any of their respective affiliates, are reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our audit committee will review on a quarterly basis all payments that were made to our Sponsor, executive officers, directors and our or their affiliates.

After the completion of our Business Combination, directors or members of our management team who remain with us may be paid consulting, management or other fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed Business Combination. It is unlikely the amount of such compensation will be known at the time, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determinedincorporated herein by ~~a compensation committee constituted solely by independent directors.~~

We do not intend to take any action to ensure that members of our management team maintain their positions with us after the Business Combination although it is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with us after a Business Combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management team to remain with us after the consummation of our Business Combination will be a determining factor in our decision to proceed with any potential Business Combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment.

reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder ~~Matters.~~

~~We have no compensation plans under which equity securities are authorized for issuance.~~

Matters

The ~~following table sets~~information required in response to this item will be set forth ~~information available to us at February 7, 2018, with respect to our outstanding common stock held by:~~

~~each person known by us~~in Magnolia's Definitive Proxy Statement, to be filed within 120 days after the ~~beneficial owner of more than 5% of our outstanding shares of common stock;~~

~~each of our executive officers and directors that beneficially owns shares of common stock; and~~

~~all our executive officers and directors as a group.~~

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. The following table does not reflect record or beneficial ownershipend of the ~~Private Placement Warrants as these Warrants are not exercisable within 60 days of the date of February 7, 2018.~~

Number of
Shares

Percentage of
Outstanding

Name and Address of Beneficial Owner⁽¹⁾

Beneficially
Owned⁽²⁾

Common
Stock

TPG Pace Energy Sponsor, LLC⁽³⁾

16,090,000

19.8

%
TPG Group Holdings (SBS) Advisors, Inc.⁽³⁾

16,090,000

19.8

%
David Bonderman⁽³⁾

16,090,000

19.8

%
James Coulter⁽³⁾

16,090,000

19.8

%
Adage Capital Partners, L.P.⁽⁴⁾

4,250,000

5.2

%
Stephen Chazen

202,533

0.2

%
Arcilia Acosta

40,000

*

Edward Djerejian

40,000

*

Chad Leat

40,000

*

Dan F. Smith

40,000

*

Martin Davidson

-

*

Michael MacDougall

-

*

Eduardo Tamraz

-

*

All directors and executive officers as a group
(9 individuals)⁽³⁾

16,452,533

20.2

%

^*	~~Less than 1%.~~

fiscal year covered by this Annual Report on Form 10-K and is incorporated herein by reference.

⁽¹⁾

This table is based on 81,250,000 shares of common stock outstanding at February 14, 2018, of which 65,000,000 were Class A common stock and 16,250,000 were Class F common stock. Except as described in the footnotes below and subject to applicable community property laws and similar laws, we believe that each person listed above has sole voting and investment power with respect to such shares. Unless otherwise indicated, the business address of each of the entities, directors and executives in this table is 301 Commerce Street, Suite 3300, Fort Worth, Texas, 76102.

⁽²⁾	~~This table does not reflect record or beneficial ownership of the 22,000,000 Private Placement Warrants as they are not exercisable within 60 days of February 14, 2018.~~

⁽³⁾

TPG Pace Energy Sponsor, LLC holds an aggregate of 16,090,000 shares of Class F common stock. The managing member of TPG Pace Energy Sponsor, LLC is TPG Pace Governance, LLC, a Cayman Islands limited liability company, whose sole member is TPG Holdings III, L.P., a Delaware limited partnership, whose general partner is TPG Holdings III-A, L.P., a Cayman Islands limited partnership, whose general partner is TPG Holdings III-A, Inc., a Cayman Islands corporation, whose sole shareholder is TPG Group Holdings (SBS), L.P., a Delaware limited partnership, whose general partner is TPG Group Holdings (SBS) Advisors, LLC, a Delaware limited liability company, whose sole member is TPG Group Holdings (SBS) Advisors, Inc., a Delaware corporation. David Bonderman and James Coulter are sole shareholders of TPG Group Holdings (SBS) Advisors, Inc. and may therefore be deemed to be the beneficial owners of the shares held by TPG Pace Energy Sponsor, LLC. Messrs. Bonderman and Coulter disclaim beneficial ownership of the shares held by TPG Pace Energy Sponsor, LLC except to the extent of their pecuniary interest therein.

⁽⁴⁾	~~According to Schedule 13G filed on May 15, 2017, the business address of Adage Capital Partners L.P. is 200 Clarendon Street, 52~~^nd ~~floor, Boston, Massachusetts 02116. Adage Capital Partners L.P. and Schedule 13G’s other reporting persons each report shared voting and dispositive power.~~

⁽⁵⁾	Mr. Chazen directly purchased an aggregate of 159,900 shares of common stock of which 127,900 were Units, which included 127,900 shares of Class A common stock plus Warrants to purchase 42,633 shares of Class A common stock, and 32,000 shares of Class A common stock.

Our Initial Stockholders beneficially own 20% of the shares of our issued and outstanding common stock and have the right to elect all of our directors prior to our Business Combination as a result of holding all of the Founder Shares. Holders of our Public Shares will not have the right to elect any directors to our board of directors prior to our Business Combination. In addition, because of their ownership block, our Initial Stockholders may be able to effectively influence the outcome of all other matters requiring approval by our stockholders, including amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions.

~~Prior to the Close Date, our Sponsor purchased an aggregate of 11,500,000 shares of the Company’s Class F common stock for an aggregate purchase price of $25,000, or approximately $0.002 per share.~~

On April 24, 2017, the Company effected a stock dividend of approximately 0.5 shares of Class F common stock for each share of Class F common stock, which resulted in a total of 17,250,000 issued and outstanding Founder Shares. On April 24, 2017, the Sponsor transferred 40,000 Founder Shares to each of the Company’s four independent directors at their original purchase price. On June 24, 2017, the Sponsor forfeited 1,000,000 Founder Shares on the expiration of the unexercised portion of the underwriter’s over-allotment option so that the Founder Shares would represent 20% of the common stock outstanding. Following the capitalization and forfeiture, our Sponsor held $16,090,000 Founder Shares and each of four independent directors held 40,000 Founder Shares.

On the Close Date, we consummated our Public Offering of 65,000,000 Units (which included the purchase of 5,000,000 Units subject to the Underwriters’ 6,000,000 Unit over-allotment option) at a price of $10.00 per Unit generating gross proceeds of $650,000,000 before underwriting discounts and expenses. Each Unit consists of one share of Class A common stock (the “Public Shares”), par value $0.0001 per share, and one Warrant. Prior to the Close Date, we completed the sale of the Private Placement Warrants.

Our Sponsor and our executive officers and directors are deemed to be our “promoters” as such term is defined under the federal securities laws. See “Item 13. Certain Relationships and Related Transactions, and Director Independence” below for additional information regarding our relationships with our promoters.

Item 13. Certain Relationships and Related Transactions, and Director ~~Independence.~~

~~Founder Shares~~

~~Prior~~Independence

The information required in response to our Public Offering, on May 10, 2017, our Sponsor purchased 11,500,000 Founder Shares for an aggregate purchase price of $25,000, or approximately $0.002 per share. In April 2017, we effected a stock dividend with respectthis item will be set forth in Magnolia's Definitive Proxy Statement, to our Class F common stock of 5,750,000 shares, resulting in our Initial Stockholders holding an aggregate of 17,250,000 Founder Shares. In April 2017, our Sponsor transferred 40,000 Founder Shares to each of our four independent director nominees at their original purchase price.

~~On June 24, 2017, our Sponsor forfeited 1,000,000 Founder Shares on~~be filed within 120 days after the ~~expiration~~end of the ~~underwriters’ over-allotment option. Following the capitalization~~fiscal year covered by this Annual Report on Form 10-K and ~~forfeiture, our Sponsor held 16,090,000 Founder Shares and each of our four independent directors held 40,000 Founder Shares.~~

The Founder Shares are identical to the shares of Class A common stock included in the units sold in the initial public offering except that the Founder Shares are subject to certain rights and transfer restrictions, as described in further detail below, and are automatically converted into shares of Class A common stock at the time of a Business Combination on a one-for-one basis, subject to adjustment pursuant to the anti-dilution provisions contained in the Company’s amended and restated certificate of incorporation.

~~Our Initial Stockholders have agreed not to transfer, assign or sell any Founder Shares during the Lock Up Period.~~

~~Preferred Stock~~

Our amended and restated certificate of incorporation provides that shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our board of directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preferred stock outstanding at the date hereof. Although we do not currently intend to issue any shares of preferred stock, there is ~~no assurance that we will not do so in the future.~~

~~Private Placement Warrants~~

Prior to the Close Date, our Sponsor purchased 10,000,000 Private Placement Warrants at a price of $1.50 per Warrant, or $15,000,000. Each Private Placement Warrant entitles the holder to purchase one share of Class A common stock for $11.50 per share, subject to adjustment. The Private Placement Warrants may not be redeemedincorporated herein by the Company so long as they are held by our Sponsor or its permitted transferees. If any Private Placement Warrants are transferred to holders other than our Sponsor or its permitted transferees, such Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Warrants included in the Units sold in the Public Offering. Our Sponsor has the option to exercise the Private Placement Warrants on a cashless basis.

If the Company does not complete a Business Combination within 24 months after the Close Date, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the Company’s Class A common stock, subject to the requirements of applicable law, and the Private Placement Warrants will expire worthless.

~~Registration Rights~~

Holders of the Founder Shares and Private Placement Warrants hold registration rights pursuant to a registration rights agreement. The holders of these securities are entitled to make up to three demands that the Company register under the Securities Act the Private Placement Warrants, and the Class A common stock underlying the Private Placement Warrants and Class F common stock. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed by the Company subsequent to its completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that that Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable Lock Up Period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

~~Related Party Note~~

Between Inception and the Close Date, our Sponsor loaned the Company $300,000 in unsecured promissory notes. The funds were used to pay up-front expenses associated with our Public Offering. These notes were non-interest bearing and were repaid in full to our Sponsor at the Close Date..

Our Sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combination opportunities. Our audit committee will review on a quarterly basis all payments that were made to our Sponsor, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

In addition, in order to finance transaction costs in connection with an intended Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our Business Combination, we would repay such loaned amounts. In the event that our Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be converted into Warrants of the post-Business Combination entity, at a price of $1.50 per Warrant at the option of the lender. The Warrants would be identical to the Private Placement Warrants issued to our Sponsor. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the Trust Account.

After our Business Combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our Business Combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.

~~Administrative Services Agreement~~

On May 4, 2017, we entered into an agreement to pay $20,000 a month for office space, administrative and support services to an affiliate of our Sponsor, and will terminate the agreement upon the earlier of a Business Combination or our liquidation.

reference.

~~Director Independence~~

NYSE listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that each of Messrs. Leat and Smith, Ms. Acosta and Ambassador Djerejian is independent under applicable SEC and NYSE rules. Our independent directors have regularly scheduled meetings at which only independent directors are present.

Item 14. Principal ~~Accounting~~Accountant Fees and ~~Services.~~

~~Fees for professional services provided by our~~Services

The Company’s independent registered public accounting firm ~~since inception include:~~

For the Period

from February 14,

2017 (Inception) to

December 31, 2017

Audit Fees ⁽¹⁾

$
145,000

Audit-Related Fees ⁽²⁾

—

Tax Fees ⁽³⁾

25,000

All Other Fees ⁽⁴⁾

—

Total

$
170,000

⁽¹⁾	Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end consolidated financial statements and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings.

is KPMG LLP, Houston, TX, Auditor Firm ID: 185.

⁽²⁾

Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our year-end consolidated financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards.

⁽³⁾	~~Tax Fees. Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice.~~

⁽⁴⁾	~~All Other Fees. All other fees consist of fees billed for all other services including permitted due diligence services related to a potential Business Combination.~~

~~Policy on Board Pre-Approval of Audit and Permissible Non-Audit Services~~The information required in response to this item will be set forth in Magnolia's Definitive Proxy Statement, to be filed within 120 days after the end of the ~~Independent Auditors~~

~~The audit committee~~fiscal year covered by this Annual Report on Form 10-K and is responsible for appointing, setting compensation and overseeing the work of the independent auditors. In recognition of this responsibility, the audit committee shall review and, in its sole discretion, pre-approve all audit and permitted non-audit services to be providedincorporated herein by ~~the independent auditors as provided under the audit committee charter.~~

reference.

PART IV

Item 15. Exhibits and Financial ~~Statement Schedules.~~

Statements Schedules

	~~(a)~~
(a)(1) The following ~~documents~~financial statements are ~~filed as part~~included in Part II, Item 8 of this Annual Report on Form 10-K:		Page

Consolidated Balance Sheets as of December 31, 2021 and 2020.		44
Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019.		45
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2021, 2020 and 2019.		46
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019.		48
Notes to Consolidated Financial Statements for the years ended December 31, 2021, 2020 and 2019.		49

(2) Financial Statement Schedules
Financial statement schedules have been omitted because they either are not required, not applicable, or the information required to be presented is including in the Company’s financial statements and related notes.
(3) Exhibits

~~Financial Statements: See “Index to Financial Statements” at “Item 8. Financial Statements and Supplementary Data” herein.~~

	~~(b)~~	~~Exhibits: The exhibits listed in the accompanying index to exhibits are filed or incorporated~~
Exhibit Number			Description

2.1*†			Contribution and Merger Agreement, dated as of March 20, 2018, by and among TPG Pace Energy Holdings Corp., TPG Pace Energy Parent LLC, EnerVest Energy Institutional Fund XIV-A, L.P., EnerVest Energy Institutional Fund XIV-WIC, L.P., EnerVest Energy Institutional Fund XIV-2A, L.P., and EnerVest Energy Institutional Fund XIV-3A, L.P. and EnerVest Energy Institutional Fund XIV-C, L.P. (incorporated herein by reference ~~as part of this Annual~~to Exhibit 2.1 filed with the Current Report on Form ~~10-K.~~

8-K, as amended, filed on March 20, 2018 (File No. 001-38083)).

~~Exhibit~~ ~~Number~~	~~Description~~

~~3.1~~ 2.2*†		Amendment No. 1 to the Contribution and Merger Agreement, dated May 10, 2018, by and among TPG Pace Energy Holdings Corp., TPG Pace Energy Parent, LLC, EnerVest Energy Institutional Fund XIV-A, L.P., EnerVest Energy Institutional Fund XIV-WIC, L.P., EnerVest Energy Institutional Fund XIV-2A, L.P., EnerVest Energy Institutional Fund XIV-3A, L.P. and EnerVest Energy Institutional Fund XIV-C, L.P. (incorporated herein by reference to Exhibit 2.2 filed with the Quarterly Report on Form 10-Q filed on May 14, 2018 (File No. 001-38083)).

2.3*†		Amendment No. 2 to the Contribution and Merger Agreement, dated June 27, 2018, by and among TPG Pace Energy Holdings Corp., TPG Pace Energy Parent, LLC, EnerVest Energy Institutional Fund XIV-A, L.P., EnerVest Energy Institutional Fund XIV-WIC, L.P., EnerVest Energy Institutional Fund XIV-2A, L.P., EnerVest Energy Institutional Fund XIV-3A, L.P. and EnerVest Energy Institutional Fund XIV-C, L.P. (incorporated by reference to Exhibit 2.3 filed with the Quarterly Report on Form 10-Q filed on August 14, 2018 (File No. 001-38083)).

2.4*†		Purchase and Sale Agreement, dated as of March 20, 2018, by and among TPG Pace Energy Parent LLC, EnerVest Energy Institutional Fund XI-A, L.P., EnerVest Energy Institutional Fund XI-WI, L.P., EnerVest Holding, L.P., and EnerVest Wachovia Co-Investment Partnership, L.P. (incorporated herein by reference to Exhibit 2.2 filed with the Current Report on Form 8-K, as amended, filed on March 20, 2018 (File No. 001-38083)).

2.5*†		Membership Interest Purchase Agreement, dated as of March 20, 2018, by and among TPG Pace Energy Parent LLC, EnerVest Energy Institutional Fund XIV-A, L.P., EnerVest Energy Institutional Fund XIV-WIC, L.P. and EnerVest Energy Institutional Fund XIV-C, L.P. (incorporated herein by reference to Exhibit 2.3 filed with the Current Report on Form 8-K, as amended, filed on March 20, 2018 (File No. 001-38083)).

2.6*†		Amendment No. 1 to the Purchase and Sale Agreement, dated September 28, 2018, by and among EnerVest Energy Institutional Fund XI-A, L.P., EnerVest Energy Institutional Fund XI-WI, LP., EnerVest Holding, L.P., EnerVest Wachovia Co-Investment Partnership, L.P. (incorporated herein by reference to Exhibit 2.6 filed with the Quarterly Report on Form 10-Q filed on November 13, 2018 (File No. 001-38083)).

3.1*		Second Amended and Restated Certificate of Incorporation of the Company, dated as of ~~May 4, 2017~~July 31, 2018 (incorporated herein by reference to Exhibit 3.1 filed with the ~~Registrant’s Quarterly~~Current Report on Form ~~10-Q~~8-K filed ~~by the Registrant~~ on August ~~10, 2017~~6, 2018 (File No. 001-38083)).

~~3.2~~ 3.2*		Bylaws of the Company (incorporated herein by reference to Exhibit 3.3 filed with the ~~Registrant’s~~Registration Statement on Form S-1 filed ~~by the Registrant~~ on April 17, 2017 (File No. 333-217338)).

~~4.2~~ 4.1*		Specimen Class A Common Stock Certificate (incorporated herein by reference to Exhibit 4.2 filed with the ~~Registrant’s~~Registration Statement on Form S-1 filed ~~by the Registrant~~ on April 17, 2017 (File No. 333-217338)).


~~4.3~~ Exhibit Number						Description
4.2*						~~Specimen Warrants Certificate~~Indenture, dated as of July 31, 2018, by and among Magnolia Oil & Gas Operating LLC, Magnolia Oil & Gas Finance Corp. and Deutsche Bank Trust Company Americas, as trustee (incorporated herein by reference to Exhibit ~~4.3~~4.1 filed with the ~~Registrant’s~~Current Report on Form ~~S-1~~8-K, filed ~~by the Registrant~~ on ~~April 17, 2017~~August 6, 2018 (File No. ~~333-217338)~~001-38083)).

~~10.1~~ 4.3*						~~Warrant Agreement,~~First Supplemental Indenture, dated as of ~~May 4, 2017, between the Company~~April 5, 2021 by and ~~Continental Stock Transfer~~among Magnolia Oil & Gas Corporation, Magnolia Oil & Gas Finance Corp. and Deutsche Bank Trust Company Americas, as ~~Warrant agent~~trustee (incorporated herein by reference to Exhibit ~~4.4~~4.1 filed with the ~~Registrant’s~~Quarterly Report on Form 10-Q, filed on August 3, 2021 (File No. 001-38083)).

4.4*						Registration Rights Agreement, dated as of July 31, 2018, by and among Magnolia Oil & Gas Corporation, EnerVest Energy Institutional Fund XIV-A, L.P., EnerVest Energy Institutional Fund XIV-WIC, L.P., EnerVest Energy Institutional Fund XIV-2A,L.P., EnerVest Energy Institutional Fund XIV-3A, L.P., EnerVest Energy Institutional Fund XIV-C, L.P., TPG Pace Energy Sponsor, LLC, Arcilia Acosta, Edward Djerejian, Chad Leat and Dan F. Smith (incorporated herein by reference to Exhibit 4.2 filed with the Current Report on Form 8-K, filed ~~by the Registrant~~ on ~~May 10, 2017~~August 6, 2018 (File No. 001-38083)).

~~10.2~~ 4.5*						~~Letter~~First Amendment to Registration Rights Agreement, dated ~~May 4, 2017,~~as of February 25, 2019, by and among Magnolia Oil & Gas Corporation, EnerVest Energy Institutional Fund XIV-A, L.P., EnerVest Energy Institutional Fund XIV-WIC, L.P., EnerVest Energy Institutional Fund XIV-2A,L.P., EnerVest Energy Institutional Fund XIV-3A, L.P., EnerVest Energy Institutional Fund XIV-C, L.P., EnerVest Energy Institutional Fund XIV-C-AIV, L.P. TPG Pace Energy Sponsor Successor, LLC, Peterson Capital Partners, L.P., Miller Creek Investments, LLC and Stephen Chazen(incorporated herein by reference to Exhibit 4.6 filed with the ~~Company, its officers~~Annual Report on Form 10-K, filed on February 27, 2019 (File No. 001-38083)).

4.6*						Stockholder Agreement, dated as of July 31, 2018, by and ~~directors~~among Magnolia Oil & Gas Corporation, EnerVest Energy Institutional Fund XIV-A, L.P., EnerVest Energy Institutional Fund XIV-WIC, L.P., EnerVest Energy Institutional Fund XIV-2A,L.P., EnerVest Energy Institutional Fund XIV-3A, L.P., EnerVest Energy Institutional Fund XIV-C, L.P. and TPG Pace Energy Sponsor, LLC (incorporated herein by reference to Exhibit ~~10.1~~4.3 filed with the ~~Registrant’s~~ Current Report on Form 8-K, filed ~~by the Registrant~~ on ~~May 10, 2017~~August 6, 2018 (File No. 001-38083)).

~~10.3~~ 4.7*						~~Investment Management Trust~~Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934, as amended (incorporated herein by reference to Exhibit 4.6 filed with the Annual Report on Form 10-K, filed on February 26, 2020 (File No. 001-38083)).

10.1*						Credit Agreement, ~~effective~~dated as of ~~May 4, 2017, between~~July 31, 2018, by and among Magnolia Oil & Gas Intermediate LLC (f/k/a TPG Pace Energy Intermediate LLC), Magnolia Oil & Gas Operating LLC, the lenders from time to time party thereto, Citibank, N.A., as administrative agent and collateral agent, as the swingline lender and an issuing bank and each other issuing bank from time to time party thereto (incorporated herein by reference to Exhibit 10.1 filed with the Current Report on Form 8-K/A, filed on August 6, 2018 (File No. 001-38083)).

10.2*						Borrowing Base Redetermination Agreement and Amendment No. 1 to Credit Agreement, dated as of November 30, 2018, by and among Magnolia Oil & Gas Operating LLC, Magnolia Oil & Gas Intermediate LLC, the lenders from time to time party thereto, Citibank, N.A., as administrative agent and collateral agent as the swingline lender and an issuing bank and each other issuing bank from time to time party thereto (incorporated herein by reference to Exhibit 10.2 filed with the Annu al Report on Form 10-K , filed on Feb r uary 2 3 , 2021 (File No. 001-38083)).

10.3*						Borrowing Base Redetermination Agreement and Amendment No. 2 to Credit Agreement, dated as of October 15, 2020, by and among Magnolia Oil & Gas Operating LLC, Magnolia Oil & Gas Intermediate LLC, the lenders from time to time party thereto, Citibank, N.A., as administrative agent and collateral agent as the swingline lender and an issuing bank and each other issuing bank from time to time party thereto (incorporated herein by reference to Exhibit 10.1 filed with the Quarterly Report on Form 10-Q, filed on November 6, 2020 (File No. 001-38083)).

10.4**						Amended and Restated Credit Agreement, dated as of February 16 , 2022, by and among Magnolia Oil & Gas Operating LLC, Magnolia Oil & Gas Intermediate LLC, the lenders from time to time party thereto, Citibank, N.A., as administrative agent and collateral agent as the swingline lender and an issuing bank and each other issuing bank from time to time party thereto.

10.5*						Amended and Restated Limited Liability Company ~~and Continental Stock Transfer~~Agreement of Magnolia Oil & ~~Trust Company,~~Gas Parent LLC, dated as ~~trustee~~of July 31, 2018 (incorporated herein by reference to Exhibit 10.2 filed with the ~~Registrant’s~~ Current Report on Form ~~8-K~~8-K/A, filed ~~by the Registrant~~ on ~~May 10, 2017~~August 6, 2018 (File No. 001-38083)).

~~10.4~~ 10.6*						~~Registration Rights~~Services Agreement, by and between Magnolia Oil & Gas Corporation and EnerVest Operating L.L.C., dated as of July 31, 2018 (incorporated herein by reference to Exhibit 10.5 filed with the Current Report on Form 8-K/A, filed on August 6, 2018 (File No. 001-38083)).

10.7*						First Amendment to Services Agreement, by and between Magnolia Oil & Gas Corporation and EnerVest Operating LLC, dated as of May ~~4, 2017, among the Company, TPG Pace Energy Sponsor, LLC and certain other security holders named therein~~1, 2020 (incorporated herein by reference to Exhibit 10.3 filed with the ~~Registrant’s~~Quarterly Report on Form 10-Q, filed on May 11, 2020 (File No. 001-38083)).


Exhibit Number		Description
10.8*		Second Amendment to the Services Agreement, by and between Magnolia Oil & Gas Corporation and EnerVest Operating, L.L.C., dated as of June 14, 2021 (incorporated herein by reference to Exhibit 10.2 filed with the Quarterly Report on Form 10-Q, filed on August 3 , 2021 (File No. 001-38083)).

10.9*		Non-Competition Agreement, by and between Magnolia Oil & Gas Corporation and EnerVest, Ltd., dated as of July 31, 2018 (incorporated herein by reference to Exhibit 10.3 filed with the Current Report on Form ~~8-K~~8-K/A, filed ~~by the Registrant~~ on ~~May 10, 2017~~August 6, 2018 (File No. 001-38083)).

~~10.5~~ 10.10*		~~Administrative Services~~Amendment No. 1 to Non-Competition Agreement, by and between Magnolia Oil & Gas Corporation and EnerVest, Ltd., dated ~~May 4, 2017,~~as of January 29, 2021 (incorporated herein by reference to Exhibit 10.8 filed with the Annual Report on Form 10-K, filed on February 23, 2021 (File No. 001-38083)).

10.11*		Amendment No. 2 to Non-Competition Agreement, by and between Magnolia Oil & Gas Corporation and EnerVest, Ltd., dated as of June 3 0, 2021 (incorporated herein by reference to Exhibit 10.3 filed with the ~~Company and TPG Global, LLC~~Quarterly Report on Form 10-Q , filed on August 3 , 2021 (File No. 001-38083)).

10.12*††		Form of Indemnity Agreement (incorporated herein by reference to Exhibit 10.4 filed with the ~~Registrant’s~~ Current Report on Form ~~8-K~~8-K/A, filed ~~by the Registrant~~ on ~~May 10, 2017~~August 6, 2018 (File No. 001-38083)).

~~10.6~~ 10.13*††		~~Form of Indemnity Agreement~~Magnolia Oil & Gas Corporation Long Term Incentive Plan (incorporated herein by reference to Exhibit ~~10.7~~10.6 filed with the Current Report on Form ~~S-1~~8-K/A, filed ~~by the Registrant~~ on ~~April 17, 2017)~~August 6, 2018 (File No. 001-38083)).

~~10.7~~ 10.14*††		~~Promissory Note, dated~~Form of Non-Employee Director Restricted Stock Unit Agreement under the Magnolia Oil & Gas Corporation Long Term Incentive Plan (incorporated herein by reference to Exhibit 4.10 filed with the Registration Statement on Form S-8, filed on October 5, 2018 (File No. 333-227722)).

10.15*††		Director Compensation Program (incorporated herein by reference to Exhibit 10.10 filed with the Current Report on Form 8-K/A, filed on August 6, 2018 (File No. 001-38083)).

10.16*††		Form of 2019 Restricted Stock Unit Grant Notice and attached Restricted Stock Unit Agreement under the Magnolia Oil & Gas Corporation Long Term Incentive Plan, Standard Employee (incorporated herein by reference to Exhibit 4.2 filed with the Quarterly Report on Form 10-Q, filed on May 7, 2019 (File No. 001-38083)).

10.17*††		Form of Performance Share Unit Grant Notice and attached Performance Share Unit Agreement under the Magnolia Oil & Gas Corporation Long Term Incentive Plan (incorporated herein by reference to Exhibit 4.4 filed with the Quarterly Report on Form 10-Q, filed on May 7, 2019 (File No. 001-38083)).

10.18*††		Form of 2020 Restricted Stock Unit Grant Notice and attached Restricted Stock Unit Agreement under the Magnolia Oil & Gas Corporation Long Term Incentive Plan (incorporated herein by reference to Exhibit 10.17 filed with the Annual Report on Form 10-K, filed on February ~~22, 2017, issued~~26, 2020 (File No. 001-38083)).

10.19*††		Form of 2020 Performance Share Unit Grant Notice and attached Performance Share Unit Agreement under Magnolia Oil & Gas Corporation Long Term Incentive Plan (incorporated herein by reference to ~~TPG Pace Energy Sponsor, LLC~~Exhibit 10.18 filed with the Annual Report on Form 10-K, filed on February 26, 2020 (File No. 001-38083)).

10.20*††		Form of 2020 Non-Employee Director Restricted Stock Unit Grant Notice and attached Restricted Stock Unit Agreement under the Magnolia Oil & Gas Corporation Long Term Incentive Plan (incorporated herein by reference to Exhibit 10.1 filed with the Quarterly Report on Form ~~S-1~~10-Q, filed ~~by the Registrant~~ on ~~April 17, 2017)~~May 11, 2020 (File No. 001-38083)).

~~10.8~~ 10.21*††		Securities Subscription Agreement, dated February 22, 2015, between the Registrant and TPG Pace Energy Sponsor, LLC (incorporated by reference to Exhibit 10.5 filed with the Form S-1 filed by the Registrant on April 17, 2017).

~~10.9~~	~~Private Placement Warrants~~Magnolia Oil & Gas Corporation Stock Purchase ~~Agreement, effective as of May 4, 2017, between the Company and TPG Pace Energy Sponsor, LLC~~Program (incorporated herein by reference to Exhibit ~~10.5~~10.2 filed with the ~~Registrant’s Current~~Quarterly Report on Form ~~8-K~~10-Q, filed ~~by the Registrant~~ on May ~~10, 2017~~11, 2020 (File No. 001-38083)).

10.22*††		First Amendment to Magnolia Oil & Gas Corporation Long Term Incentive Plan (incorporated herein by reference to Exhibit 10.25 filed with the Annual Report on Form 10-K, filed on February 23, 2021 (File No. 001-38083)).

10.23*††		Second Amendment to Magnolia Oil & Gas Corporation Long Term Incentive Plan (incorporated herein by reference to Exhibit 10.4 filed with the Quarterly Report on Form 10-Q, filed on August 3, 2021 (File No. 001-38083)).

10.24*††		Form of 2021 Restricted Stock Unit Grant Notice and attached Restricted Stock Unit Agreement under the Magnolia Oil & Gas Corporation Long Term Incentive Plan (incorporated herein by reference to Exhibit 10.26 filed with the Annual Report on Form 10-K, filed on February 23, 2021 (File No. 001-38083)).

10.25*††		Form of 2021 Performance Restricted Stock Unit (Ratable Vesting) Grant Notice and attached Performance Res tricted Stock Unit Agreement under Magnolia Oil & Gas Corporation Long Term Incentive Plan (incorporated herein by reference to Exhibit 10.27 filed with the Annual Report on Form 10-K, filed on February 23, 2021 (File No. 001-38083)).

10.26*††		Form of 2021 Performance Restricted Stock Unit (Cliff Vesting) Grant Notice and attached Performance Restricted Stock Unit Agreement under Magnolia Oil & Gas Corporation Long Term Incentive Plan (incorporated herein by reference to Exhibit 10.28 filed with the Annual Report on Form 10-K, filed on February 23, 2021 (File No. 001-38083)).

~~Exhibit~~ ~~Number~~	~~Description~~
24.1* Exhibit Number		Description

10.27*††		Form of 2021 Non-Employee Director Restricted Stock Unit Grant Notice and attached Form of Restricted Stock Unit Agreement under the Magnolia Oil & Gas Corporation Long Term Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.1 filed with the Quarterly Report on Form 10-Q, filed on August 3, 2021 (File No. 001-38083)).

10.28**††		Form of 202 2 Restricted Stock Unit Grant Notice and attached Restricted Stock Unit Agreement under the Magnolia Oil & Gas Corporation Long Term Incentive Plan .

10.29**††		Form of 202 2 Performance R estricted S toc k Unit (R atable Vesting) Grant Notice and attached Performance R estricted Stock Unit Agreement under Magnolia Oil & Gas Corporation Long Term Incentive Plan .

10.30**††		Form of 202 2 Performance Restricted Stock Unit (Cliff Vesting) Grant Notice and attached Performance Restricted Stock Unit Agreement under Magnolia Oil & Gas Corporation Long Term Incentive Plan .

21.1**		Subsidiaries of Magnolia Oil and Gas Corporation.

23.1**		Consent of KPMG LLP.

23.2**		Consent of Miller and Lents, Ltd.

24.1**		Power of ~~Attorney (included on the signature pages herein).~~Attorney.

31.1* *		Certification of ~~Principal~~Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2* *		Certification of ~~Principal~~Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1* **		~~Certification of Principal Executive Officer~~Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2* 99.1**		~~Certification~~Summary Report of ~~Principal Financial Officer Pursuant to 18 U.S.C. Section 1350,~~Miller and Lents, Ltd., dated as ~~Adopted Pursuant to Section 906~~ of ~~the Sarbanes-Oxley Act~~January 1 8 , 2022, for proved reserves as of ~~2002.~~December 31, 2021.

101.INS* *		XBRL Instance ~~Document~~ Document.

101.SCH* *		XBRL Taxonomy Extension Schema ~~Document~~ Document.

101.CAL* *		XBRL Taxonomy Extension Calculation Linkbase ~~Document~~ Document.

101.DEF* *		XBRL Taxonomy Extension Definition Linkbase ~~Document~~ Document.

101.LAB* *		XBRL Taxonomy Extension Label Linkbase ~~Document~~ Document.

101.PRE* *		XBRL Taxonomy Extension Presentation Linkbase ~~Document~~ Document.

*			~~Filed herewith.~~
104**						Cover Page Interactive Data File (embedded within the Inline XBRL document).

~~SIGNATURES~~

* Incorporated herein by reference as indicated.

** Filed herewith.

*** Furnished herewith.

† Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplemental to the SEC upon request.

†† Management contract of compensatory plan or agreement.

Item 16. Form 10-K Summary

None.

SIGNATURES

Pursuant to the requirements ~~of Section 13 or 15(d)~~ of the Securities Exchange Act of 1934, ~~as amended,~~ the ~~Registrant~~registrant has duly caused this ~~Report~~report to be signed on its behalf by the undersigned thereunto duly authorized.

~~TPG PACE ENERGY HOLDINGS CORP.~~

MAGNOLIA OIL & GAS CORPORATION

Date: February ~~14, 2018~~

17, 2022

By:

/s/ Stephen Chazen

Stephen Chazen

~~President and~~ Chief Executive Officer

~~(Principal~~ (Principal Executive Officer)

~~POWER OF ATTORNEY~~

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Stephen Chazen and Martin Davidson and each or any one of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the United States Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities ~~Exchange~~ Act of 1934, ~~as amended,~~ this ~~Annual Report on Form 10-K~~registration statement has been signed below by the following persons on behalf of the ~~Registrant~~registrant and in the capacities and on the ~~dates~~date indicated.

~~Name~~

~~Title~~

~~Date~~

Name

Title

Date

/s/ Stephen Chazen

Stephen Chazen

President, Chief Executive Officer
and Chairman

~~February 14, 2018~~

~~Stephen Chazen~~

(Principal Executive Officer)

February 17, 2022

/s/ ~~Martin Davidson~~

Christopher Stavros

Executive Vice President and Chief Financial Officer

~~February 14, 2018~~

~~Martin Davidson~~

~~(Principal~~ (Principal Financial and Accounting Officer)

February 17, 2022

/s/ Arcilia C. Acosta*

Arcilia C. Acosta

Director

February ~~14, 2018~~

17, 2022

~~Arcilia Acosta~~

/s/ Angela M. Busch*

Angela M. Busch

Director

February 17, 2022

~~/s/ David Bonderman~~

~~Director~~

~~February 14, 2018~~

~~David Bonderman~~

/s/ Edward P. Djerejian*

Edward P. Djerejian

Director

February ~~14, 2018~~

17, 2022

~~Edward Djerejian~~

/s/ James R. Larson*

James R. Larson

Director

February 17, 2022

~~/s/ Chad Leat~~

~~Director~~

~~February 14, 2018~~

~~Chad Leat~~

~~/s/ Michael MacDougall~~

~~Director~~

~~February 14, 2018~~

~~Michael MacDougall~~

/s/ Dan F. ~~Smith~~

~~Director~~

~~February 14, 2018~~

Smith*

Dan F. Smith

Director

February 17, 2022

/s/ John B. Walker*

John B. Walker

Director

February 17, 2022

By* /s/ Marina Kitikar

Marina Kitikar

as Attorney-in-fact


Delaware		81-5365682
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
~~301 Commerce Street, Suite 3300~~ ~~Fort Worth, TX~~	~~76102~~
Nine Greenway Plaza, Suite 1300		77046
Houston,	Texas
(Address of principal executive offices)		(Zip Code)


Securities registered pursuant to section 12(b) of the Act:

Title of each class		Trading Symbol(s)	Name of each exchange on which registered
~~Units, each consisting of one share of~~ Class A ~~common~~ ~~stock, $0.0001~~Common Stock, par value ~~and one third of one Warrant~~ ~~to purchase one share of Class A common stock~~ $0.0001		MGY	New York Stock Exchange
~~Class A common stock, par value $0.0001 per share~~	~~New York Stock Exchange~~
~~Warrants to purchase Class A common stock~~	~~New York Stock Exchange~~


	Acreage
	Undeveloped	Developed	Total
Gross	58,655	624,490	683,145
Net	44,576	426,687	471,263

☐	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO~~


	December 31, 2021
	Oil (MMBbls)	Natural Gas (Bcf)	NGLs (MMBbls)	Total (MMboe)
Proved reserves
Total proved developed	46.7	216.3	27.1	109.8
Total proved undeveloped	12.0	39.1	7.0	25.6
Total proved reserves	58.7	255.4	34.1	135.4


						Total (MMboe)
Proved undeveloped reserves at January 1, 2021						26.5
Conversions into proved developed reserves						(20.0)
Extensions						22.4
Acquisitions						—
Revisions of previous estimates						(3.3)
Proved undeveloped reserves at December 31, 2021						25.6

					Class A common
	Units (TPGE.U)				stock (TPGE)				Warrants (TPGE.W)
	High		Low		High		Low		High		Low
Year ended December 31, 2017:
Quarter ended June 30, 2017 ⁽¹⁾⁽²⁾	$	10.58	$	10.07	$	10.25	$	10.00	$	1.41	$	1.40
Quarter ended September 30, 2017	$	10.35	$	10.17	$	9.98	$	9.70	$	1.55	$	1.35
Quarter ended December 31, 2017	$	10.37	$	10.05	$	10.07	$	9.67	$	1.40	$	1.10

Statement of Operations Data
	For the Period
	from February 14,
	2017 (Inception) to
	December 31, 2017
Net income attributable to common stock	$	1,532,195
Per share data:
Basic and diluted net income per share of common stock	$	0.02
Basic and diluted weighted average shares of common stock outstanding		62,920,561

Balance Sheet Data
	December 31, 2017
Total assets	$	653,937,462
Total liabilities	$	24,554,828
Working capital	$	629,382,634
Class A common stock subject to possible redemption	$	624,382,630
Stockholders' equity	$	5,000,004

	Preferred Stock				Class A Common Stock						Class F Common Stock						Additional			Retained		Stockholders'
	Shares		Amount		Shares			Amount			Shares			Amount			Paid-In Capital			Earnings		Equity
Balance at February 14, 2017 (Inception)		—	$	—		—		$	—		$	—		$	—		$	—		$	—	$	—
Sale of shares of Class F common stock to Sponsor on February 22, 2017 at $0.002 per share		—		—		—			—			11,500,000			1,150			23,850			—		25,000
Class F common stock dividend effected on April 24, 2017		—		—		—			—			5,750,000			575			(575	)		—		—
Proceeds from initial public offering of Units on May 10, 2017 at $10.00 per Unit		—		—		65,000,000			6,500			—			—			649,993,500			—		650,000,000
Sale of 10,000,000 Private Placement Warrants to Sponsor on May 10, 2017 at $1.50 per Private Placement Warrant		—		—		—			—			—			—			15,000,000			—		15,000,000
Underwriters' discount		—		—		—			—			—			—			(13,000,000	)		—		(13,000,000	)
Deferred offering costs charged to additional paid-in capital		—		—		—			—			—			—			(1,424,561	)		—		(1,424,561	)
Deferred underwriting compensation		—		—		—			—			—			—			(22,750,000	)		—		(22,750,000	)
Class F common stock forfeited by Sponsor on June 24, 2017		—		—		—			—			(1,000,000	)		(100	)		100			—		—
Class A common stock subject to possible redemption; 62,438,263 shares at a redemption value of $10.00 per share		—		—		(62,438,263	)		(6,244	)		—			—			(624,376,386	)		—		(624,382,630	)
Net income attributable to common stock		—		—		—			—			—			—			—			1,532,195		1,532,195
Balance at December 31, 2017		—	$	—		2,561,737		$	256			16,250,000		$	1,625		$	3,465,928		$	1,532,195	$	5,000,004

	For the Period			For the			For the			For the
	from February 14,			Three Months			Three Months			Three Months
	2017 (Inception) to			Ended			Ended			Ended
	March 31, 2017			June 30, 2017			September 30, 2017			December 31, 2017
Operating expenses:
Professional fees and other expenses	$	63,223		$	108,118		$	250,286		$	264,313
Travel expenses		—			98,625			77,363			37,164
State franchise tax		—			—			—			152,610
Interest income		21			652,720			1,357,208			1,636,202
Income tax benefit (expense)		22,121			(156,092	)		(360,346	)		(567,937	)
Net income attributable to common stock	$	(41,081	)	$	289,885		$	669,213		$	614,178
Net income per share of common stock:
Basic and diluted	$	—		$	0.01		$	0.01		$	0.01
Weighted average shares of common stock outstanding:
Basic and diluted		9,500,000			52,862,637			81,250,000			81,250,000

	Number of Shares		Percentage of Outstanding
Name and Address of Beneficial Owner⁽¹⁾	Beneficially Owned⁽²⁾		Common Stock
TPG Pace Energy Sponsor, LLC⁽³⁾		16,090,000		19.8	%
TPG Group Holdings (SBS) Advisors, Inc.⁽³⁾		16,090,000		19.8	%
David Bonderman⁽³⁾		16,090,000		19.8	%
James Coulter⁽³⁾		16,090,000		19.8	%
Adage Capital Partners, L.P.⁽⁴⁾		4,250,000		5.2	%
Stephen Chazen		202,533		0.2	%
Arcilia Acosta		40,000	*
Edward Djerejian		40,000	*
Chad Leat		40,000	*
Dan F. Smith		40,000	*
Martin Davidson		-	*
Michael MacDougall		-	*
Eduardo Tamraz		-	*
All directors and executive officers as a group (9 individuals)⁽³⁾		16,452,533		20.2	%

~~Delaware~~	~~81-5365682~~