MGY - Earnings call transcript Q2 2021 | Magnolia Oil & Gas Corporation

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Operator

Good day, and welcome to the Magnolia Oil and Gas Second Quarter 2021 Earnings Release and Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Brian Corales, Investor Relations. ahead. go Please

Brian Corales

President and Officer. and Ilene, Participating everyone. to President Magnolia's Welcome the Chris Officer; Thank Executive Stavros, second good quarter Oil Vice Chairman, Chazen, Steve Gas' today Chief call. Chief XXXX Magnolia Executive call and Financial you, and are morning, and earnings on conference

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

information be Company's cause our results Annual found of the on Additional full slide with to the Form that on A in filed Slide with on XX-K X available risk data on call the supplemental Report the website. conference factors can differ presentation Harbor could SEC. is Safe

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

Steve Chazen

review operating strength second share. on our which consistently as volatility we our exactly years additional and changed to second will I net and capital business has thoughts disciplined Good for almost demonstrated model our then dividend income quarter thank guidance first approach we three also year. with quarter continue to framework. per semiannual flow questions. since of our the for we financial dividend capital plan results, some and today. discuss plan our free My the investment the joining our will Chris earnings record around cash morning, Magnolia's differentiated included comments focus this how partial you. Despite we Thank that provide and performance, yesterday before cleared and on to around us execute our not morning allocate some ago. will the of our and product your take prices, you inception remainder

believe we asset. business and resulting efficiency the Our in strong Giddings our that improved, fundamentally is plan changed, has productivity not in

was defined Another or profits boe is accounting interest XX% to costs, after generate of before realized or corporate DD&A price. all key of taxes. more to as This our and or our equal goals EBIT including

growth Our a margins large will assets average half realized are this in flow at $XX.XX especially for within the result of because The by $XX.XX. could per an productivity, or on of XX% achieved high our the this generate EBITDAX continued is of price me our XX% much Strong allow well the drilling We corporate direct margins, by moderate and fold now compared on in focus to business significant of spending was a pleasing quarter free team's production control, with to within be always completing of product should prices. been spending EBIT unburdened our price. safety, believe cash debt and it's cost lower operating previously. boe quality wells

announced X% the total each of quarters, of return shares buckets, shares. a main the the investments assuming next repurchase provide being the by share share year, And of company the total with paying shift dividend. metrics largest In the would the before is of X% two our half improve shareholder into repurchased count. X% return first in to Our allocated it recently we per two reducing the

approach provides long-term for than continued of confidence prices. out our and sustainability, trying our dividend announcement dividend and characterize appeal dividend our stretching framework base yield and is to can plan meant of principles dividend MLP would windfall security in seek differentiated Instead growth for actual business is royalty as plan. assets. investors of Dividend We to a dividend function this to nor business yesterday our not or moderate the We paid Trust. our rather reinforce is framework to the special, regular designed believe of Our is and aligned product with our models and our who it quality by earnings. the

the semi-annual $X.XX month prices and current The of year and next shares sustainable remaining XXXX dividend full first declare and payable levels. release is interim annual half below our the barrel natural to at $XX February their plan gas dividend oil prices next We of results. NGL secure a of with around

The results. as longer-term barrel well for be second of a prior are $XX based on our will payment year's the approximately as oil view product prices,

dividend We growth expect which production shares. and outstanding these execute based our of the ability our to our each on of plan, annually moderate reduction includes regular that payments grow should business

While payment income. net dividend not out will total of the the real earnings, be prior will the paid in XX% exceed year's reported annual

the are business. and prices unpredictability, volatile the stock reflect often to want While could the behave we of reality dividend

results secure by use that gas demonstrate to value to of is dividend. improving framework enterprise cash to our our the business stock, a underlying acquisitions to while and environment. goal The well our are growing this improve provide total to share free tendency metrics. and price providing dividend, repurchase dividend superior as of accretive shares to shareholder product the as framework bolt-on to the per oil our ample small a property per Including return this the Our share stable flow provides and pursue

total reducing more This million approximately about volume approach or our most allocated plan in flow XX.X at operating a second X% which Our repurchase spent of Giddings disciplined X% shares. in million each free the our the wells growth level quarter, of provided cash compared quarter, shares unchanged million, leaving $XXX than allocating generated outstanding sequential In cash the second XXXX of the currently at share shares rig by We our $XXX our X% capital and enhancing drilling half nearly for of growth volume free a first the repurchasing organic X% midyear. our and we with $XXX towards fourth outstanding. capital to to investment provides cash, count per shares end of our around share of cash to free continue metrics flow quarter position least is We of at our at quarter. Field. second while million XXXX, added

to for wells drill in this areas, rig Karnes plans appraisal Our the Giddings. both is in some wells and Giddings including

in are to other operated The well, will drill pads multi-well continue Giddings the area.

rig prices We and the higher in were natural place increase already our total wells this and as to rate put back capital far Basically, although strong. expected year normal in a of to capital of spending on wells screen, going gas half our benefit later prices were oil we unhedged gas the turn from has Our run Karnes additional we in when in toward prices. we natural the in Portion some gas were and a strength thing, capital activity, is we level be gassier EBITDAX. adjusted on we the activity our will prices. fully to a will below is be and model we and the side completing remain Giddings business recent the strong, looked the in Karnes, the expired, ago gas of some benefit saw so directed had in and year percent of Karnes drilling year back the in DUCs at half year they

maintaining as outcome our to with environment do a of combined we will significant moderate is growing agreements conclusion and for through operating in the low-cost significant realized A a a to Less at cash operating terminate regular, further flow enhance end dividend set. improved result free of this strong the barrel and greater a Magnolia while secure all the EnerVest business of The share is the growth, more repurchases free of and production opportunity the Finally, can generation flow G&A and generate summarize plan. of approximately in expect going consistent bolt-on presents we and less, forward. other savings balance productivity resulting To $X.XX more cash our quarter, agreement, small structure our an acquisitions. current with Giddings, sheet. efficiencies small, needed

and low free dedicating buybacks. capital growth cash to employed prices could to rate growth without in strong market, months cash. to debt this highly at changing in a of turn to many the XX anywhere not our a the share significant over industry. large near have We'll levels important cash achieve. us of very the it's per predictable same for secure a make by and reduce cost likely and our my This intrinsic has free in flow others dividend the capital Chris. future, stock product the dividend earnings, us without usually in and call sensible reduction intensity believe values time, returns have We to difficult the A than long-term cash high of increasing This flow, amounts level unexpected next is without build over opportunity flow. material confluence higher repurchase, management, share count we Magnolia significant set faster achieved risk. materially is chance and stock. on we will inevitably our I'll view, vast the may At account. little continues based on We and financial purchases free flow give cash lead have generates moderate share share majority prices, to events debt of

Chris Stavros

good everyone. morning, And Thanks, Steve.

second generated net our Slide million third income financial second per results I for year X As diluted provide Starting in delivered $X.XX turning company to the very quarter presentation, over for of The XXXX it and quarter some reported some from Magnolia share. before and the quarterly total remainder $XXX strong items quarter Steve and results. or operating plan the guidance of the mentioned, review questions. with

net of these services million EnerVest. our for associated income was the total activities the averaged our After diluted $X.XX or cash quarter, the tax quarter adjusted million during quarter other per was $XXX million were diluted shares pre-tax had items, were well our and Magnolia provided Net second operating termination million $XXX and most reported we estimates. affecting by charges, period. was of with consensus share. net and operating of adjusted During $XXX the which during records quarterly income special agreements ahead Both for $XX.X and of fully the with

increase, growth. to total day. second Karnes XX.X the million sequentially of drilling capital barrels financial both with quarterly the million total $XXX contributing and sequentially in production in XX% prices nearly was grew our grew assets quarter, EBITDAX about and both second from adjusted equally improvement the benefited The Total and production $XX Mboe/d Our our results product oil our sequential and to XX,XXX completing per with in Giddings X% to wells. quarter production for increase

for the prices oil been gas While and strong. current further NGLs natural prices have have quarter, risen into particularly

with million. quarter Cash second some flow at the cash with million items Slide before working operations was in working X. waterfall capital from We the million changes cash quarterly changes of capital by quarter, on $XX $XXX cash. Looking benefiting and the chart started $XXX other during flow

Our cash million $XXX by approximately $XXX quarter reduced million XX.X million on years. spending of the We cash count $XX capital and shares time, share second in in D&C XXXX. towards million original quarter share reducing the place X of the and we've diluted our progress third count the diluted of flow reduction was $XXX Slide sheet. and two or authorization we fully shares million repurchasing efforts our about was under allocated million illustrates repurchase total that ended share second XX% free by put share the quarter, with the generated in our X.X shares. period in since balance Since our the in

we shares. XX.X million count our year-to-date, diluted spent $XXX fully reducing toward XXXX have For by million

of Magnolia We quarter. to our debt. plan outstanding continue remaining million shares XX.X the remains Our least unburdened large shares currently each amounts to repurchase authorization. under by X% repurchase is current have of at

our not million debt. senior to do is mature until we so do issue $XXX of gross XXXX, Our in any new reflected not which expect debt notes,

more credit million our have $XXX business to an undrawn $XXX and than million, $XXX execute cash of revolving We our is plan. and our of facility, strategy adequate million including total liquidity

sustainable flow cash allowing in to advantage dividend. security free and price pursue also a bolt-on growing Our an amidst element and acquisitions strong of volatility small accretive is balance repurchase our consistent strong provides a sheet, product pay shares, opportunistically us

and Our sheet shown liquidity as X June are of Slide and condensed XX on X. balance

at costs Slide X our and income and looking margins. operating unit Turning to

per our G&A, costs, with DD&A in boe in Our total quarter. of F&D $XX.XX operating $X.XX the Including including cash is second costs. per generally our adjusted which were rate boe, line

operating per Our margin revenue. the was income of for our XX% boe quarter $XX.XX second total or

of our due part business strong in and productivity large As asset. Steve referenced Giddings our fundamentally earlier, to improved has efficiencies the

$X drilled ago inflation part of our second Results with growing early-stage to with from second year continue year's grew production development our some has wells XX% averaged approximately continued continued period. Our quarter production to the recent wells representative in XX% production in as have XX Recent offsetting XXXX. experienced this the Giddings previously from and and how Giddings of modest last oil oil efficiencies quarter part business the of to of field. scene. of with compared Slide disclosed strong illustrate strong outcome the Giddings improved as be helps we program million

While our represents similar more to of to overall half current X/X is now XXXX. our compared total XXXX Giddings production than in volumes levels,

and amounts our to this have XX% more adjusted level And year less reduced of count diluted are by D&C compared free a over we share XX% our cash XXXX, this of higher flow our to leading that More expected expectations than our business. spending EBITDAX importantly, to is decline of profitable XX% to in will period.

has this levels. are accomplished to at prices product of similar been that All XXXX

to be remainder of Turning the year $XXX capital generate production expect for addition drilling million. between moderate The the in of second full to D&C our of second EBITDAX a guidance well rig year below expected XXX rate adjusted late to June, long-term spending capital of half to our XX% be is we growth. and of the for total XXXX,

in Karnes Field, is the in some rig both this including currently we use wells and rig Second drill appraisal Giddings wells to plan Giddings. wells ultimately in assets, drilling the to Giddings and

year reflected smaller of a portion not to impact in our the most later production the second pads benefit drill from development Giddings continue will other this rig multi-well be the seen XXXX.Our area. with expect of We until rig to

A the of gassier approximately Giddings several third to increase production average XX in at prolific of of completing some strength sequential Looking directed Karnes. wells activity XXXX, gas Mboe/d will in the and to benefit this and towards both compared of quarter. our includes this Karnes recent expect X% prices, completion the gas representing drilling quarter capital and from portion in natural a to order year, natural in wells about we second the be

year in anticipated are natural approximately from price MEH hedge ago and gas ended, and put unhedged completely barrel prices. the mentioned, gas, quarter. during to the Oil Steve benefit As a the both a third has recent to us for we're we oil in place $X strength product natural be now discount differentials allowing to

and The by our be resulting further agreements third the were quarter, the onetime mentioned other I operating efforts. charges expected quarter terminated fully to EnerVest is earlier. and and noncash diluted decline reduction share count ongoing is cash second expected to to due that to approximately end XXX at several of year-end share million in shares The continue

to boe of the per for $X.XX the $X of As to third in G&A XXXX a result excess the our run operating quarter services XX%. full compared year approximately in expected of or per beginning decline costs during to conclusion the rate agreement, is cash boe

corporate capital high-quality questions. to to cash now the efficiency our free strong execute website. core to want first second to us summarize, and that total return I margins demonstrates report allowing quarter. the that on shown issued generate and investors operating sizable other our Magnolia and objectives factors our strategy report on should shareholder sustainability, commitment to sustainability values mention this and of We're To our take Slide and outlines Magnolia's and to is full and are summary Magnolia's Finally, XX, stakeholders. your to report brief important A in assets The is report proposition. ready contribute available addresses our continue its flow,

Operator

question-and-answer comes question begin Sachs. Instruction] now today [Operator from Choudhary first session. Umang Our will Goldman the with We

Umang Choudhary

My question how on is cash to and cash first returns flow. plan your free you deploy

how the think a talked generating cash increasing opportunity dividend if operations current and are on to which comparing back XX% us you given flow $XX oil attractive towards How about your pay organic You help earnings. prices growth free we shares returns excess on was based dividend? of frame, next at commodity further you kind are also of very prices? should versus capping long-term the is it can after the at I about year the you wondering investing buy

Steve Chazen

To and the our really model that's change. target. for we the of us growth business XX% mid trying keep the drilling us, from doesn't to up constrain provides buff The or business, in speed use It to a reasonable it rate really drilling. single-digit

the repurchases. is when I years, over sale couple remarks, in focus the because -- stock of be now, for next available said we model I amounts share on of my the As The believe hope, our there'll you dramatic large share XX%. wells flow earnings, our the into price is the effect reasonable Drilling cash not cards, really based things. more share on per and except a a at has those share model, repurchases in it on all our

this dividend next, reprice this the package February, year. sure. this based price the think you reprice you, year's what much results dividend very long pay that because we for interim $XX a going could of that information it to value, could does. we've year. we safely for That's believe going We're a long-term whole be to We're about pay and Xx, how on dividend at than That's it our this to say going given larger if price. oil. this So that's the to to going We're afford $X.XX, could that's results, lower to so that's dividend way, we in term a reprice $X.XX we take information

stays dividends, where opportunity in we're will-- the period stock this less about then after the not per could plan. we But have now, be rare re-evaluate capital metrics, on haven't dividend, capital company every employed every to right to be such through structure clear strategy we'll stock a and the to risk get have afford want to it all we we than enhance or theory whatever return the shares the shares, the we debt is, varies many dividend value is A much the the so because It's stock. To the up. so to from in hour. trying at pay. stock the increased raised-- all and And very an to go bring that your go it, in to same. But haven't we dividend, X%, and to buy X% we reduction make the share up day, the buy to dividend it's share significantly build share this opportunity your the to

this So dividend. through to the regular growing able safe dividend And placeholder future. be for the pay we but get period, is a a we'll regular as a dividend,

sort you if production we year, growth. a you could year, If think of we have about X% the at the of for investors, outcome, many profitably stock XX% X% think or especially grow area buy-in me. each an for and that's it, X% And we dividend so attractive

So story. that's the

Umang Choudhary

really is about more a will seeing helpful. can be side. activity? question guess little next more well I Giddings bit the And talk Got your a probably recently my around just Anything appraisal on That performance? you. you're operations you Maybe helpful. Any from That's update program.

Steve Chazen

at nothing the really highly oilier. There's The over XX have newer point. We area ones, And look the new. except wells core a older little predictable. maybe they're like wells in this

when decline good started, and we're on reason long we was predictability, decline producer, measure environment, enough -- reduce of The Karnes we're a thing great the other rate high. outcomes, reason highly course, have to getting them can And it, were the real but sort we of in we we-- some confident, rate this is low. great been is the every to of everything,

rate decline Here, less. much is the

more more intensive. very So quarter we've last thing. the there's that And to driving much That's drill. the wells. what's quarter nothing positive same It's wasn't got And going less more had a point. before. at this Giddings just we're a capital on lot at whole this as story and We and

Chris Stavros

last it's draw to XXXX. happened clear. what's Umang, sort the years. and tried of we It's over Well, It's now the much couple and indicative of better comparison, between of

Steve Chazen

it we asset. this And I it's be I when not better the would much imagined have Giddings would than thought bought outcome.

when I think we're plan of in. of started, in-year is that sort put plan years we if at I the this together looked and three we my six

Umang Choudhary

our are Those thing and same comments helpful results. we the seeing in when do end are core we the well at area

Operator

with from question Our comes KeyBanc. next Leo Mariani

Leo Mariani

stick I the operations wanted to here. with

position Giddings. guys kind at larger have within clearly I that you've a of XX,XXX got the identified think much acreage you in past a core footprint

You that appraisal sufficiently core. spot. you're in talked XX that do wells entire XX do with to feel work And acre know XX,XXX appraised rig. sweet the you that some year those of about I kind this have wells guess, further I going second

late spots a the of looking this into So potential thoughts what's you expansion? are greater at be and XX,XXX that And year your in on the Or other that expanding next contiguous would acres sweet more year? acres? XXX,XXX

Steve Chazen

The and is answer add. question continue step as that. that simple that's to And out to your we

me retain those than what tip rather of the sort The as to for the off continues that We We have grow get we more spacing you can that of other progress. that doing. want know why continues have analogies. well, to want significant to thing. that area the data. areas the we to and try opportunities. and do different model, some in somebody this think spacing, we sports way. sort core it of can opportunities every is a time in of When kinds of a to And I to more if if in and some sort add, other work a hate still out We step of add leasing which we're because we build we're to in we figure model innings, testing to answer don't at. them see We the right? that's second really Brian talk grow other area. we That's still baseball, point. they're this about like talk sort nine if want We have think to has assured or we We're to But year. extensions whatever, about looking is we go at out, And right. I to areas inning wells. don't

to always or you But can and to it two answer. data, good be figure more drill wells imagine out have is well different, but the it's what might out. three then well an really to better it true. And drill You or a you to find unfortunately, figure have so you if you may gives

So we well went a to couple a think ago. a of those area oil. -- quarters XXX gassier gassier day black are the oil, makes We barrels

developing So under at the But mid- other single-digit to to a these might shares, point, things important. things This maintain some rate, want buy-in control. not we that. have dividends, all start are to we all try burn we is drilling growth to we want capital to do, we're to keep our we we're trying wells. trying money pay And --

small a trust. go up. For It's to not small needs company, MLP, a it's company, not stock an the a royalty

company, it's the small You is different up. model a different made don't way by because money thinking things, stock The some money a about large And want it's we're out. small. going all in to dump company just a than the of

in However, we $X billion near might sales.

Leo Mariani

sure guys the the it. get for to you thinking way terms rig program. wanted on two helpful a I in about to question Very are

was little are more guys rigs term, grow strong in running are talked of of data, over DUCs do performance that happy rig kind X% if of of about at Do you some looking that, continue production you to kind the just or one But year past little Or than well running into have any longer to are a the know -- bit of quarters, next several the for such continuously? two results to benefit kind Steve. kind theoretically bit but the you more the growth well Giddings you there You there, outstanding have grown a the I just put growth X% two? at a concern see overdrive?

Steve Chazen

that's We'll what can we take get. correct. But

bar one makes want spend, with to maybe do the rig $XX for because delayed not we some problem to is running rig, noise. one money. the and we million, rig for it error The two spend want but weeks think I something, extra is

The hoped. little than some numbers is Is thought. has Karnes, Giddings, had but thing been it other region a non-op going that in are in the than less on the the not of in activity, we that's we different

set this to an better, could gives seem well, the control it second number. in doesn't us we all next And so manage more production rig. the if but idea. I wanted suppose go it exceed things possible the it it's good over of well, year, But the the the like outcome I I could if

Leo Mariani

makes of just mechanics the growth dividend That sense. clarify kind lastly, the to guess of I the wanted just the and I lot dividend. And base of versus variable

just You talk everything like come work? would dividend the price. lower I But about perhaps in kind sounds and I much just sure about full certainly of be kind variable February, It but of talked make payout maybe circle this there reassessing a dividend will understood. to at wanted semi-annual how base that's oil sustainable

Steve Chazen

be to variable going a Not dividend.

Leo Mariani

off That's table. been kind of the taken

Steve Chazen

to Yes. was I these guys I listen and confused. all calls, other

company. run we that would decided industrial I this so And like an

market know very dividend, give that way it. a our numbers that a there's that's grow on variable but convey in rely I'm the that. to you way on we secure to computed defined you can't we business. how have And of based stock in You information I about but and to do results. room And a not trying dividend, we to

And the my So like we're about this, dividends dividend. that's business to the too, of trying can now. I is fairly that we really at especially, oil information the to low the do this strong but that's prices wife afford point how convey of point

dividend, fool to deliver and safe, it's that that's This it's balance about and pay don't it's sheet time, care out that But do. money fundamental grows. throw difference. things: We that isn't investors industrial and smoke, dividend are what it earnings, scam over bunch debt. on complicated, That's dividend. time. factors, debt, of any good. will the issue, of care it safe care care about to trying out this variable some three Those about a plan this they it's paid not take you Now to really over it's don't evolve they to what we're have it's not We that a three things out have a it's the earnings, companies of grows. That's of down that

world used the just basically in buying gas And this and shareholders, is that's over non-oil opportunity funneled of do plan. But it dividend. anything. so period towards or buys stock that is really a be significant billion change like more $XXX -- the The would or that billion it's in payments fundamentally, for reduction share be the $XX us pay in the in people lots will of large cash to either that. billion, the and And of time, to interest doesn't out to opportunity company make it's the shifted $X dividend all trick,

we're deliberate buying stability. financial and all important it's in us, is I'm our of change large different. Financial For -- will our stability really to it's earnings metrics me. but harming quantities our And without deliberately sorry,

Operator

Zach JP Our comes next question with Morgan. Parham from

Zach Parham

but levels two Gallagher look rig I guess, activity half as continuing a out, million that to near you CapEx do on follow-up rig year, current strip are about general, just the $XX of to in And I you 'XX? Magnolia know it's the running spends a two program back thinking you in Maybe how barrel? see early, $XX $XX Leo's run through with XXXX quarter million just on program. a question. the a

Steve Chazen

program year. next run expect two the rig We to

you the safe, too activities right, is economical. through. under the operating want about do say things, there's efficient, won't And be XX% money plan be to activities. we'll I'm unlikely but the do of I'm right. a likely quickly. focused opportunity way But provide strip I we're numbers very reticent well and always the to about probably it's run hit I that should it's In event you'd And I guess, on it's if to will other to cautious be XX%, I for wanted If you want that. that be it, We that. the to and plenty expanding XX%.

now, now. to not-op on that I be of I have control where -- like activity. think business little getting we're any now, can will we're the depends. sort year. growth next that But we sort question next going I timing better. we year And of maybe But thing, like of what so don't sort the the see the depends we the the that's I growth more about reason expand than forecast then and want a sort of

So bunch to reason an cap called you economical would dividends, the I to -- generate it's appeal business. a own like and wells. It's other run management we're larger something companies, want, people decent cost, stupid want And Not don't that. away in higher to they want do to they to as anything drill This but investor designed that the from trying low of to medium or the candid. finding like returns. the whatever that's it's these the idea, as money keep is

I'll drilling so take And for not stupid responsibility the wells.

Zach Parham

this your Got which quarter? it, quarter. NYMEX? one maybe of one the little then about were ahead was talk You just gas realization And on $X.XX, helpful. what price quick bit drove well you at a that's Can

Chris Stavros

No. It's just.

Steve Chazen

divided that we pretty much. When

Chris Stavros

But better the third its than much was in second -- now looking than the quarter. it obviously

Steve Chazen

NGL prices beginning, are quarter, if actually are you NGL this to really quarter, the the got -- The us. very third prices know, attractive We for I No. you've special. mean, the nothing don't go into remember,

check it. As somebody said it, cashed we

Operator

Charles Rice. next with Meade Our Johnson question comes from

Charles Meade

prepared back in you that to ramp earlier could really so that be you shutting your that Steve, wells sale don't exceed past up I would to lot have mentioned in program for EMP But before. comments, X%. of buyback one target, stock see that you a that company, your heard comments your and novel that a an you growth way run your Going

like share is, out, there? X-part that kind and at if question with there the an And liquidity? it a talking you're still seems come naturally hands successful there. up, Are it's specific mean daily of do you're as and day blocks the price about question specific the second go to sale for some your program end. more you would stock then buyback well Or making that's So point, pointed with you every just stock

you so And imagine play how do might that out?

Steve Chazen

the answer with one. first start question, first we'll the We'll

used own of owner, about XX%. company, We have owns private equity the a to XX% he

at to market and companies, have be from, bought the in into the you time, sale. thing. have and prior they bought going they're and shares they same will a people. blocks the period assuming of some idea of stuff We for what So from over quarter, But some X million I a no do. Those last of They quarter, liquidity. look block them as lot sold, to dumped the equity see private here, larger sort the stock

that X gains life So we'll The he sale. it they those of million might have shares shares. instead sell another market they in shares, buy this some sells when we of so the buy market, shares everybody X into dumping if by the and million a

stock, people So the but because everybody, gain down. existing buy the shareholders count goes our share just the not who

what end, any past, you much. of but is we have we unlike could buy some would too is or we most actually some just going to time. he the he's And offering is-- if to life this any prefer so some it fund some it, the sells that stock, stock we expect that and maybe them when that. up of and show guys right. we're comes And information. when And recent part don't as to or go if an so wanted do private that's absorbing to have point, understand, we pay an the over people, the equity the stock At insight dump doing we're the and when don't But stock, given of whatever idea

Chris Stavros

And we're still $XXX carry almost up, million wouldn't the cash. we

Steve Chazen

do arises. it in of million $XXX need need case We don't We the cash. Yeah.

I three don't two we're So or know. out years,

market in shift shares return because with and don't It's they don't open a the like risk that quantities because difficult this quarter lot we're want is the that got like next the really lot business so a company model. of to really, It apparent You'll easy. more the But even the not buying towards a in debt, buying difficult, get involve normally, have unique -- very It's a of tighter. their over very it volume. buying couple And to market it's of in opportunity may shares. the is large X% assemble shares a seem the fact, dividend in of because larger years haven't don't issue. we to people increases the on in risk improved capital employed raised is we significantly

just of I up, always lucky think. we think better good, because than really So it's the I different were set to way be that

Charles Meade

Right.

I as question well. Karnes that kind of of one then and picture area. more that painted regard high the your specifically DUCs, You the Karnes or gassy oil wells. about rate And high-quality

So what am these? I missing have that you guys

Steve Chazen

just this you, an wells. a A explain than next just you the be these been expect to higher that little in gassier was is percentage little see we're normal. you maybe aren't than a gas make We off probably quarter. told to quarter it's going in It's there. -- We have been be All it, to for and it should explanation tell we little should is tried to it. wells, to the gas trying this Haynesville inelegantly, the not

Charles Meade

steven. thanks Message received,

Steve Chazen

over Brian's lunch to fault. if have We'll all It's a have it. comes to talk it

Operator

will question Truist. next Dingmann Neal with come from Our Instruction] [Operator

Neal Dingmann

you this little gas obviously, mentioned some about gassier prepared believe I to in year? more in to My know first a the plan, some your there you talk given Steve? case. to gassier, had plan wells, shift year mentioned next would kind there's plan? oilly the question, shift go -- just back saying, later if always are that or folks the to the out Was be remarks don't I more in well, about prices. And bit Could you just of that these guys

Steve Chazen

a isn't shift. is much wells, principally. oil tweak. really drilling There We're This

think. couple I in because gas I've anything at But a there. We're not XX we been of $X, certainly planning a We have tempted, a talked for gassier area about am Giddings maybe that quarters bearer years. I ago,

but that much. tempted, not I'm So

So gas oil what we we're producer, and NGLs, an we'll be. produce that's

or shouldn't You re-emphasize the shift.

say trying put this we're DUCs time. and trust to but a gas of control it'll and markets. trust drillers little don't oil less, wells, drillers going not be these to all is I because these So I door we're gas rig at the a to gassier

Neal Dingmann

So there? Chris, guidance I nothing the on mean, different

Chris Stavros

shift. Steve as said, I not-- think It's it's a not no. No,

Steve Chazen

quarter Not a shift, tweak. it's all is a one or this tweak, one two

Chris Stavros

timing. More

Steve Chazen

Yeah. More when were because wells we thought. in put the to timing the I winter essentially, going on

Neal Dingmann

you I Well do continue coming in your know, have many there, locations that said. when how left locations the wasn't just then keep that Karnes. just ago -- kind boosting on strong, of second thoughts small there, bolt-ons how opportunities have my many were there? And can as now? some ballpark And many boost? to there if on around boosting How current. just Giddings And you some year you is you are a would to what, continually

Steve Chazen

inventory private there keep look financial stuff we we efficiency capital and on it's a amount production over growing. a of of the not bolt-ons. we a think And it and There's acquisition, much, well got equity. in spending small Giddings. keep statements, that varying basically And I and in focused decline we three-to wells here sort a in show activity there. less if small doesn't pressed you Those a buying I the honest, five-year of have be lot as of for small Karnes, very not to from it sort of to are interest money. keep we I'm bulky -- mostly in and have we're

in the interested So treadmill. I'm not emphasizing

Neal Dingmann

And next just right? then guess, oil late same year that, been the the going Understood. of just, to No. a your combination -- it's I progression be in year always the I is guess, and this the next two, as

Steve Chazen

don't we any it's over non-op they're Karnes, going got of Yes, a That's also place control lot the what and really, opportunity. to only that. potential in don't we And know you've to similar. have and be -- do. where We--

in and lot our obviously, of if don't forecasting issue any. a we can't doesn't little know a people, go noise there we and numbers. locations away, It of what these is is of process some the it, the And the makes it predict is thought make

Operator

conference call. concludes This for well Thank question-and-answer as as you today's session our presentation. today's attending

You may disconnect. now

Magnolia Oil & Gas (MGY) 3 Aug 212021 Q2 Earnings call transcript