MGY - Earnings call transcript Q4 2018 | Magnolia Oil & Gas Corporation

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Operator

Good morning, and welcome to the Magnolia Oil & Gas Corporation's Fourth Quarter 2018 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Brian Corales, Vice President, Investor Relations. Please go ahead.

Brian Corales

good and Anita, you, morning, everyone. Thank Magnolia Conference Call. to Oil & Earnings XXXX Quarter Fourth Gas' Welcome Participating call Stavros, and Chief and on Chairman, Financial Executive Magnolia's the Chief Officer; today are and Chris Officer. Executive President Chazen, Vice Steve President

implied results certain those risk today's within these forward-looking may and in of federal uncertainties contains meaning expressed statements These actual and securities other that As a laws. call to are projections from reminder, the conference or differ statements materially the subject statements. cause to

Additional risk differ that filed cause is on call full found could available SEC. conference presentation statement the be safe slide the data information our proxy on with factors website. on of supplemental results Slide harbor can in to the with X A company's the

quarter I press of Magnolia's the now as from You release as call www.magnoliaoilgas.com. download section call the to the Steve Investors can at will now XXXX website earnings Chazen. conference slides Mr. turn over company's fourth the well

Stephen Chazen

thank of overview some of guidance take Good morning, and some brief provide financials also in business go provide your you I'll today. and we and will additional Chris details, our a the the before us joining questions. for

almost stated model year from we the over long term. started to value the this when to generate we Magnolia's being As business be objective ago, a designed primary and differentiated stock market

characteristics growth actual exhibit appeal an investors. and to strategies of continuing that significant flow levels debt. and earnings generating company's free with attributes low Our include attractive generalist cash These moderate

of the business we last transaction XXXX. plan six has more since been have our closing than objectives business July, in Magnolia during little EnerVest a original only While exceeded most for of months

day, rate nearly XX% XXXX XX,XXX more Our guidance. original our BOE averaged than fourth full and year production the a higher than was quarter

assets roughly We due this we averaging doubled the is growth the accomplished was like production higher out ownership XXXX. X.X activity. crew over has by I'd nonoperated rigs the performance, gains expected forecast point balance completion well stronger our to to one since that than higher throughout of also much assumed Giddings utilizing emphasized and that in of drilling efficiency than assets. and Our production of

South Our our & double-digit and approximately free Giddings. the Giddings production substantially and strengthened which by XXXX acquisitions, to further County core business well of organic business within acquired achieved of by of spending during Karnes drilling used XX% closing quarter bolt-on inventory notably, on plan. since the assets. completing all which Significant of transactions our both our Texas Most the EBITDAX third generated growth we of drilling make in added assets our to and Harvest was Karnes cash and production the wells during of ownership was our flow and XXXX, both Oil portion Corporation, operations Gas

quarter, fourth our margins the of acquiring Generating to characteristic acres. in we added our high pretax Karnes is model. Additionally, position business net approximately X,XXX another

period. million objectives month the Our XX% during financial five in $XXX facility quarter. EBIT we in adjusted these a including low a accomplished fourth quarter the owned or XX% assets during XXXX, including an basis We for period for the the on margin XX% fourth the and and maintaining balance approximately million grew $XXX undrawn while liquidity, by strong that leverage cash credit

we nearly the for move or are is in the model believe we levels a we prices little when - suited one announced than and we the ago, above environment. and we year can well as As first transaction through business product view forward that strategy we our even Current thrive. that this a which XXXX, higher current flexible environment and

to order most quarter, to rig by lower the one two levels in the of Karnes product running we of plan prices. rigs in for capital end been release the have to quarter first we adjust our While

during a as of a towards product little higher quarter. rate is EBITDAX than anticipated levels adjust our at expected normal of nonop our activity, first activity result to hotter prices. normalize to expected percent run midyear to operated As the our and capital This is

activity to of We our we reduction - the year production our continue anticipate in evaluate as while will our progresses. the EBITDAX. spending XXXX, at rate drilling double-digit still activities, within Despite double a at growing operated-rig XX% during our

solve we of remained simply does rate our the continued our quality rather a not Importantly, constant position growth the growth to rate required is and well capital our increase achieve to over speaks high-quality see we program. to ample this to variable. be steady productions related the while to Giddings, time. to to of midsized outcome the continued which our results results, small assets. where here fairly In growth the the opportunities acquisitions rate, of wells with further goal In quality quite strengthen see Karnes, of and the drilled, capital for rate The the predictable We outcome. the bolt-on

current run wells at rig Giddings in appraisal additions understanding further gross our continue help our to delineate some Our drill where to plan and and sizable have we acres. is improve XXX,XXX one to approximately

is held by production. almost entirely acreage Giddings Our

performance. Finally, continuing to should enhance which several we're key gradually up administrative our build technical adding staff, Magnolia's positions, asset

prospect our on far. still in Stavros. of to turn company, optimistic assets over We and very are XXXX, pleased performance so now the and for very us what shareholders. call in our the we've accomplished and we're Magnolia's early to our remain regarding the We value deliver allow create to business of of of Chris the I'll objectives opportunities which model continue stages

Christopher Stavros

morning, good Thank you, and Steve, everyone.

some of understanding I in statement financial through a help Before our may out that disclosures. the few point items to like numbers, I'd walk

XXXX which EnerVest we the of quarter we last full period at July. own we assets with first end disclosed ending under First, the since the the closed was quarterly fourth transaction since the -

in mind the financial period the lack to through statements that Keep with from ownership. end the our the for period period Second, comparability that year-end July financial period refer to prior successor statements we'll the predecessor five of date. of as month successor XXXX

period we adopted a using ASC the revenue XXX, accounting retrospective the Finally, approach. end for modified standard, new the successor of at recognition XXXX

adoption of to was the percentage natural production there anticipated While impact company's NGL and oil mix. small a also EBITDAX, for contributed of have new gas net standard and on has positive material the our in lower volumes is a earnings impact production not our or slightly to the

for production reported our be move is the the My adjustment easy Our financial adoption volumes through and successor to that consistent of we year. the statement standard. ownership disclosures this month more expectation understand for of period as five reflect new the should

$X.XX share the both this was to per and Slide call EPS website. companies. conference for approximately analysts outstanding. common that's or net should - Investors Moving posted measure that to diluted quarter for the presentation diluted common $XX of total on period, A interest, of includes million million the XXXX. fourth Class to income the our including Class X latter A some on of the would use similar of the and other noncontrolling of reported share referencing GAAP $XX We $X.XX on Total attributable us per when or reported stock numbers, the which when income Class net B stock comparing

Turning to X. Slide

Mboe quarter an Field was X% at more XX.X - driven addition The XX%. our by completions increase well XX,XXX guidance. a production production increase Mboe higher-than-expected ahead Giddings was at of from day, the Fourth sequential quarter and benefit than or for of mainly day full new XX.X of to the Harvest nearly quarter acquisition. per fourth the fourth sequentially Giddings per of averaged previous production total during Our the quarter, production in

mentioned, Our and Giddings volumes announced about have original a approximately our remain doubled as we optimistic very nearly transaction opportunities prospect the of ago, since we Steve in the year field.

volumes $XXX realizations, which during strong oil higher the averaged fourth the totaled shown and Slide benefiting in revenues from X. $XX.XX per million price both period Our is quarter, on and production barrel

remained Although, our the oil to strong we market sequentially quarter, Gulf indexed the were prices on Coast. throughout export fourth prices as relatively prices declined realized

oil such, $X As XXX% barrel our WTI the and fourth premium per during of were quarter. than more realizations a

X-month higher period. the third Turning per was successor our during and to quarter costs, BOE the LOE quarter than fourth XXXX $X.XX

costs these slightly We continue our volumes trend through as lower and the to grow. expect to year production

per reserves. fourth PUD $X.XX organizational reflects continued DD&A or $XX.X some other to increased that BOE. expenses our as development as XXXX we out should expenses. fourth build estimate up We well startup were our costs near-term corporate quarter incurring million and to IT on be to systems quarter per structure, $XX.XX focus cost These G&A BOE, was G&A quarter as sequentially in of and levels. plan Fourth similar related Our per-unit Magnolia's

consulting XX% and fourth income adjustment X of $X.X reported included service original related be in tax are costs to noncontrolling show approximately Slide this quarter, range to the related these total in costs quarter year. income accounting to net We fourth net presentation. to for expect transactions the of These the Our interest. on treatment the fees expected as an we rate The the acquisition. our to and through other the rate to million dissipate the XX% of effective XXXX was XX%, approximately due of the

on our XX% we assets or million the was successor and fourth quarter show and we the for EBITDAX and approximately period on five the basis. an million XXXX own Slide on As for respectively month XX XXXX. and operating XX% XX% pretax shown X, margins XX% the $XXX as quarter for were in fourth adjusted Slide Adjusted $XXX period

X-month XXXX and the after EnerVest successor chart the of as on $XXX we immediately shown last cash period the at waterfall million started cash Looking flows our approximately with transaction Slide with for on July. XX, closing

combination changes period. in costs from business were flow after paid during of close cash transaction million excluding operations working and at Our the capital the the $XXX

we excluding asset Our and million, on cash acquisitions. capital of $XXX property outlays were $XXX spent cash and million accruals, capital

of free million generated million balance acquisition of and sheet, of cash During end cash with ended third to period, of quarter. capital in on $XXX spending an XXXX approximately $XXX the flow increase the excess on compared we our the

us We $XXX facility and allowing our million have have undrawn credit ample to strategy. liquidity to continue execute on an

and approximately Our XXXX in of long-term million conservative with policy leverage. debt was maintaining line our at year-end $XXX

annualized stands shown a turn on Slide summary XXXX XX. Our net year-end is sheet of debt balance at than X.X our and less for EBITDAX

acquired Our reserve XXX XXXX. of at transaction to reserves reserves BOE and the total undeveloped within composed end in BOE XXXX the developed approximately million plan which development million year of of XX% proved the X/X year the XX% approximately liquids assets vast with will X represent proved XXXX XX compared at year-end were reserves, Proved year-end at EnerVest. end one relates total year. of amount 'XX be to The roughly oil and of majority

we production wells. XX% strong note earlier adjusted mentioned, Steve ended the guidance, our and on exceeding our of while completing drilling spending EBITDAX As year a on

higher the of year wells our in production or that day total expect equal Karnes, in expected turned in day XXXX, well quarter roughly timing that approximately assets. be Production for transaction fourth levels. estimate we about we a activity new the planned first guidance adding our in nonop expectations we activity. XXXX. be moderately, first nonop ago, completions volumes per Giddings to of When to our or what XXXX pipeline not were quarter line X,XXX to and to to we That better X,XXX our by outlook in quarters Giddings subsequent both Turning lower and the is grow fourth achieved to of changed a and year each quarter accelerate a in Karnes higher X,XXX first each Karnes nearly some new due we impacted than to Mboe in would Giddings due quarter announced that expect maintenance. day production the downtime barrels has exit than We to and

of this than is As Steve oil prices. capital EBITDAX a percentage periods first the quarter is little partly to to run recent the hotter noted, our and as due expected than a spending declining during

capital lower our into As we our are lower trend to the as expected levels second activity run operated current pace plan to two our adjust of to product rigs is quarter. prices,

We services. to specifically completion materials capital related well and savings anticipate X% of approximately also

our full to our total that to within XXXX completions EBITDAX. XX% be drilling year continue of for We capital and expect

quarter and we these DD&A per so was proxy reasonable the full for fourth approximately unit our base, be We per XXXX the owning a should XXXX. asset rate cost, $XX our estimate our BOE. Regarding period first costs believe that are

now change an annualized ready for basis take an by price questions. to Our basis on roughly Product barrel current is and earnings before unit quarter X per We're taxes on successor or the for $X.XX our Slide the change in natural period your and oil presentation. month prices per fourth per five of prices in million at affect million shown every changes annualized prices. cost a $X MCF $X $XX gas on income

Operator

[Operator Instructions].

SunTrust. today Dingmann comes Neal from with question first The

Neal Dingmann

Steven is you I the rig guidance overall the particularly the this know might Karnes just after year and and rig out how if then just, think the - change given production, that question Chris, you've later first quickly trajectory back? about dropping question do production all my there, maybe bring one you how

Stephen Chazen

It's there really. than to because is our drilling much indications they in partners had going - make last hotter the in program the not effect year for a from

- if So were even quick paybacks and at if returns in about who anything challenging more their I look their. well you at environment, - companies, assets you their portfolio, Karnes they're high you price the know look portfolios, and if have but to shifting shift they these are, they're don't

party. third more expect would we So

otherwise just more back so our we balance, And cut produce in to keep that. things than we've operated

see what that the think is all - will year. that production I you'll up So go

Neal Dingmann

lastly, - Steve, Okay. M&A think just given is? the and about in how I this in alluded for talked - potential the And just for that the to acreage potential around pristine you've then past, Karnes,

Stephen Chazen

of or when whatever $XXX now to hard people go They of. There's and their and whatever, the properties is million a get spouse million used home small to going and tell that properties have - worth it's their $XX so worth lot it's to they to sell. $XXX and oil around

we're it. there somewhat several have that don't anxious we more - to am of to it and worried we how them - But look used currently, not just overpaying So disciplined, I'm no too feel under about see get continue see we people stuff, no do to pressured review as price. we're anything, about not something. I just about We're worried opportunities, to reason don't we're to pretty we have but we'll worry - really missing we'll goes, do need because to lower for anything, is

Operator

Lenny with Rice. Johnson The Raymond next question from comes

Leonard Raymond

cash? cash in now have impressive million the you'll evaluating are $XXX the the million [Indiscernible] also fit have asset to are in you are the And sheet, that all these business options Karnes? of $XXX balance the XQ small in release with all and deals model, what mentioned you have in

Stephen Chazen

don't floor there's But mean but for the three a for do with public that, broker you the sometimes I do acquisitions, large-scale it there, I like deal process. that I While about bolt-on putting hear or these cash. we to leave small but anything guess to choices company suppose have what that's any just that only should people plan. plans a that's hype some trying aside, to

business. point, early acquisitions, really be program this But dividend think some - And about think in bolt-on a of at sort little area, we won't in I small that, in Giddings, likely some probably So the build big It's program, and so finally, of our a sort Giddings area thinking the than find I so fill the out Giddings case. rather debt right reduction in. to we're we see a to and in we're year. leases dividend on footprint have to next be be Karnes I likely if in maybe not now there think I can may we focused to to that small something thing be

also I until acreage I But a - try a look which model, than and whatever it and up model, should find find all about primarily good would As XX% areas we your it it would we're thing. go lease slow a that we're look some we business cash of so we'll if telling we of flow need. little Karnes similar a view lease when were for Giddings, to business that, the earnings as to that we you in similar those sort margins, right we grow to something, do it, with do exploration the XX% so thinking sort XX% sized But call was more we'll think in the of you find and and is better you areas be reported or that's areas, in plan. that, program But have going cost. margins, We think we acquisition including or conservatively. good fairly to want and this see but now in than much pretax of

Operator

The Rezvan from next Oppenheimer. Tim question with comes

Timothy Rezvan

looks that maybe trend to it's expect My Giddings first question, that I down about footprint noticed could your like forward? the January. going XX,XXX acres we Can from and about you presentation how drove in talk that prior what

Stephen Chazen

- about was it. was anything, just actually looked it owned was any acreage - that about or There wasn't they seller like it what it he I us, when acreage adjustment they went found - purchase - just sold It sale when look didn't XX,XXX, the down scattered actually, through accounting. they some an the was that think

Timothy Rezvan

Okay, okay.

wasn't to major wanted make Just exploration. sure it

Stephen Chazen

enough. reason anything There It's leases reason particular We're a to - all might never is of plan, smart smart no some activity enough the we're to do down. May lack have no lose production, for read where program there no selling but held drilling or it into sell something you you yet not by about is shouldn't be it. that. not so much. There's that, to

Timothy Rezvan

just Okay, but line expect give on have? Wall hard XQ, you or count CapEx. XXXX any spoken the with about of signaling XX%. that I above model good could more on put understand granularity that is it the a follow-up to on it the Can not you you've can based your any CapEx how okay, have designed parameters pretty helpful. on we - you maybe and rig sight be kind have obviously what look now to my to that's guess CapEx Street then to I of business you guidance question And wants allow that pretty

Stephen Chazen

to you - that in forecasting and Karnes least of understand which hands abilities the even what people, us have lack gives more don't at in company, oil of which the X/X no other of program ability. is We has standard Yes. the is the

So none. we're than less

of So by model know it's We're for that and be I $X.XX using $XX use that. sort we evasive, EBITDA if an NGLs it's the trying exactly. to not to gas, oil, area multiply you X.X, close think don't $XX just for $XX, and

and XX%, XX% will down the quarter first north quarter that's probably The - into a would okay be parties we'll are yes, end, we of guess and of third the we fairly by the the around but fall what it'll it and be do. back second because mid-XXs sort hot, be burn, guess then don't to know going of

if more And have, those if X.X than take then multiply you could think so parameters and probably model off you XX%. or you wouldn't I whatever be use X% by you

Operator

question with Jeff next Capital comes Northland The Markets. from Grampp

Jeffrey Grampp

nonop you up guess guys, equivalent you guys full mentioned was XXXX get guys, to it know guess insight side, the it's - rig a of understand is on there, 'XX quarters best you guys to - is one rig comment three I but as as of but a we you just or kind to just I it net trying to Sticking a does today, of I up get have half don't a sense... to rig - of longer-term ton you can the

Stephen Chazen

- on it's It's based to probably know probably we closer what closer today, one.

Jeffrey Grampp

evenly rig but growth and understanding exit, leaving that Karnes. if still us be there of prepared the mentioned I kind And between operated of looking rate regarding Can remarks, shortly? weighted Giddings in remind kind come think exit the it. X,XXX when at baked after in in - here are back got you you of and guys it's Karnes Okay, you the to may what's on pretty Perfect. kind

Stephen Chazen

We in. doesn't. that didn't It bake

Jeffrey Grampp

nonoperated? and there's one so the two operated - that's so - Okay, the

Stephen Chazen

the if numbers Yes, organic picking that's you all and not the up nonop everything. that basically will. And organic, slack, are those

Jeffrey Grampp

see you're it at, more small you . or to on flow do the that that if acquisition generation about you talk expectation looking I of Perfect. side, line free the acquisitions level you some credit do tapping cash here? one Got the that primarily just is any And mentioned can comfort guys can on of your with one's out can sneak might you just just

Stephen Chazen

line that very free for to in. the cash so... I sheet likely balance think against a or We But I it's done borrow cash. of don't or the something month comes until the two be or might cash within like either

Operator

question comes next Imperial Irene from with The Capital. Haas

Irene Haas

question previous kind can you ought what on trying area it's a and has how you far? have on why exploration of give us engineering nail play? have That drilling comfortable - to the is you trend from for parameters you a or much bit I can variable you're a thus with before And so data. be historical to get question And of little Giddings. drilled quite what my is, down color the

Stephen Chazen

sure. Yes,

to the with don't there was helps you frac happens do you fractures. it hadn't - oil would micro But to micro is what's you while but shows place, large know oil a them, the heat drill maps happen fractures also basically If guide sort and well lot there's there that data we the maybe don't you going a say, the - in Giddings. really seen in it, you or not of to of lot a and you and just in you - and what well place in you fractures we like use can't see that Karnes is

you, is. And so work to sometimes do figure fracture and so what to need out doesn't, sometimes we it it pattern more helps the

even happen microseismic or forget wells just And going we we're doing can to or vice found oil exactly - seismic to and what's more unable or to if out the not look be - gas wells going less see what's our they're but more we the and think - sometimes predict - to we're that It's fracture, exactly, versa. very are improve micro predictability. and good to we either wells - so figure

it's So the we think pattern. we don't understand, something fracture

fracture drain area. people are the ago, The So got I to a bigger back you production the way a on fractures think fractures that's - drilled and fracking. years remember, without get if

to is on six over tell come a months builds. much Karnes something comes So with fractures up, unlike it take in tend so first months, of you the you water making pretty odd clean well the six first improve well and and where probably because months, the out the a well the in can wells couple good the how

to possibly we're just so out. acquire areas to acreage also figure trying that reason of looking there's to And lot we're good So are of what some and are as a and detail a provide lot not. what to areas not

Irene Haas

Got are your opinion, views nearby you. on In boat in same the competitors neighborhood? you have - the the in sort your same much pretty of they

Stephen Chazen

There's the there there and down - different, not assets really really and some of and south like wells us north the and is that's much The in the the are producers kind have quite GeoSouthern neighborhood. the some of variability a of fair amount old looks WildHorse of smaller of in to variability.

going drill I apply just need real You randomly do wells drill to well. if wells, you what probably do to tell not - is that need you we science mean, you to the you're can

So sometimes do randomly just drilling the what have bad guys you see results because they drill and they anything, didn't they well. it's is the

Operator

from The with next Citi. question comes Downey Brian

Brian Downey

trajectory that you how between? I X have translates periods? you exit on translated any cut expectations oil Giddings, if Karnes mentioned color the roughly in had Mboe few there each are but and wasn't any those next timing from sure you exit the over that accelerate production quarters know I We the over of to but midyear, into appreciate volumes on cadence the on do as sense how

Stephen Chazen

XX% to we're No, looking black oil. XX%

Brian Downey

Okay.

of Sort up.

average your So is...

Stephen Chazen

when then - by shut is Yes, down fracs up stop so problem let's come here stop, initially when out and well don't that, it, say, and sort little the back in of in get your a that really a and gas in well - and Karnes, you have somebody well you, don't process. if they a really bring you hit again you you frac, you tend it start so to near your you

averaging there's out the thing. this were no so fairly - of remember, that So real small are numbers

what So than you more up wind variability with actually looks like exists.

Brian Downey

wondering Got I'm adding that. too acreage, the increased versus Appreciate of working much Karnes And comment net really that? acreage on adjacent. all if interest reading noticed it. much was but could bolt-on I then on much into how you didn't that change was maybe that existing the map I

Stephen Chazen

You're reading mapmakers. we so our too a don't went professional much - Yes, we little into it. have low [indiscernible]

Operator

with Your Biju Susquehanna. next question Perincheril comes from

Biju Perincheril

wondering, you've one of operating much the this sense rig any some Giddings, it, portion you versus the to be, you around development us in going delineated? drilling all can of that are will the how will give year be be will Just they that that be already of call a delineation areas

Stephen Chazen

So some depending guessing I'm how going. half development. the are to on things third in development

go some one good the sure have to - from to things. flexibility maybe weaker, [indiscernible]. We be exploration there'll we get of And more we'll results our if results if the the are a little

Biju Perincheril

some sort at it's there? had and you even are area Karnes versus the - area, of differences a And key Chalk that the - looking about so should the talk what then you been at? the if Giddings, we look it. Austin And the look in smaller be you've the you've of when though can differences Got results Karnes consistent footprint, key

Stephen Chazen

fact One some during the fractures of oil. the is was that key of so it the and the are the that in drilled differences and Chalk wells heavily there 'XXs 'XXs, these and drained

it's it's of you it, want produced been of was a kid. when I to think if was already some - So -

not through area, think it's covers and that so good understated, it's it a that and good the are Chalk variable less areas the there blanket the - overstate entire is and Karnes but so in - you but some Austin shouldn't I county. are So good areas,

Operator

Brothers. Jeffrey comes with Tuohy Campbell The from next question

Jeffrey Campbell

just that the be pretty there to to wanted paying advantages to area. to competitive impressive a these such acquisitions it pulling been the And these if any I advantage. keep bringing cash I ask proving also fact material found a are is was you're deals? to wondering in you acquisitions for side. other that Magnolia's go off - guys back bolt-ons able I

Stephen Chazen

think three. I there's

- the whatever, want the Some to than for may paid it. stock we people they less offer because overspent acquire they

And so rather they're I we're caused Class this, takes it structure, B the person tax in deferred this the had them shares we the who identical the all confusion them, the is the right to pay having them these calling shares, tax shares for but away. except apologize upside, or before whatever off-sea and gives ways with other noncontrolled

maybe an somebody put would ordinary they have has a be or that under like advantage. the something that's in tax law, that, or to promoter low it income the a So new tax can basis so pay structure, have

to premium, you're lot road again, be advantage many truck - the than of as understanding. our G&A the short over the wells, doesn't decides lot we drilled cost they're entrant And field we've like up. and always and understand wells, G&A because even The driving hell. But area field a you pay usually new this risk better been main comes, in run what we we many understand long average. that's spread, spread to he's hands acquired distance, a is is, an The we he will doing a can in entrant new think he is really a so and as I we've within spread got our other what so

to there's real depending of flexibility think on some cost, party. needs either stock cash and pay the synergies the I there's operating knowledge tax in the field So the or

Jeffrey Campbell

Karnes quarter XX, its was cash free spend Giddings its forecasting the My were generate up to going might below I drop, to that fourth believe EBITDA EBITDAX. self-generated spend other you was question flow class, and the close price that well 'XX before

back So was or the docking is plan that still is Giddings a bit. just I wondering, little spend

Stephen Chazen

[indiscernible] Giddings. - We've plan. the still back we've [indiscernible] back That's

them him manager, you've he million, I you tell got this X portfolio like technique. ideas, the is is gives his this, good diet think tell you've a best $XX he's billion you you ideas, $XX I've on got so a a billion, keeping a told management guys

Operator

next Instructions]. Michael McAllister with The [Operator comes question from MUFG.

Michael McAllister

earlier? the a same actually the XXXX for bit because of comfortability Giddings this the that juncture a little seems program take to forecast rig you production and It the of have better kind keeping that you you're is at program doing gave out

Stephen Chazen

it you better it's do. was going to it's Yes, certainly told - we still than

So on rig caused got completion lumpy And crews some beginning. we wanted the a decide quarter-to-quarter - enough we'll that's lumpiness sending be Giddings, but There'll be the it's because to be the drilling caused around the for in we little is frankly move little. conservative the the you get there, in when because so complete by to from crew wells. to you a completions completion might

Michael McAllister

signal be what that And add to a program? to second the would rig

Stephen Chazen

cash When accomplish the numbers. we it could flow with

So the acreage...

Michael McAllister

built... if you Well,

Stephen Chazen

have if call locations acreage on Yes, and from cash as - our business manage the well, exploration we'll going of and program better in isn't the oil away, flow improves. lots the it, we our,

worried really about not I'm that. So

with You have really own you could off you discipline, to ruin if wander enthusiasm. keep thing - a your good of sort you

year to get you next So your have and obligations take now of stuff. care gun, and any itself, let's focus try people continuous drilling if good to what's don't real on head you life

Michael McAllister

own end, boundaries? you Is where guess, a or have I the a... low your high there, Okay. Is that on level end, end cash either

Stephen Chazen

I like don't I - that's businesses. for that think commodity bad I we because mean,

So year, an I short I - we the - that's mean, being a but short-term for under acquisition borrow about basis, on would all.

I money, acquisitions, give if assume problem just not think the wasting have it spending job and I good I a can do it XX% value it's value. don't so... just So or as if long it's But wife building my back building finding can spend - as we any I we're

Michael McAllister

made to that sense was to You $XXX would million, million to the... nothing if be $XXX willing there build there up out

Stephen Chazen

simply, I and time either stock, will only - the says in we'll of mean liquidity else we that's choices dividend like do and to consumed I really something that in a buy a now. the if there's be two year, again, It's the doubt period figure enough And by buying on out that. other forward choice money it. look reasonable there's have right a with stock to not don't

Michael McAllister

time? be a True. tolerate able - would length Would you the for you - of on what like end low as a

Stephen Chazen

no we're of be in and cash right too.. that had the all and would out we If line

Operator

you This for concludes presentation. conference. concludes our and our question-and-answer attending session, today's Thank also

disconnect. You may now

Magnolia Oil & Gas (MGY) 26 Feb 192018 Q4 Earnings call transcript