MGY - Earnings call transcript Q3 2021 | Magnolia Oil & Gas Corporation

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Operator

Good morning, and welcome to the Magnolia Oil and Gas Third Quarter 2021 Earnings Release and Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to the Vice President of Investor Relations, Mr. Brian Corales. sir. ahead go Please

Brian Corales

President and Officer. third everyone. call. quarter today President Magnolia’s the Chris, Chris Officer; Oil Executive Stavros, Participating to and call Vice Chairman, Chazen, Steve Gas’ XXXX Chief are Chief good you, Executive Welcome and Financial morning, and Magnolia on and Thank earnings 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 third the www.magnoliaoilgas.com. website

Steve Chazen

and some our and guidance the our Chris provide your Good – how third before we update year. free plan we and thank on how to business for for to today. My of additional joining morning, flow comments remainder a our this our you. Thank operations, questions. results, allocate quarter plan the we cash flow will brief review free us take cash morning allocate then provide you

program. and the of assets capital efficiency financial the of demonstrates results Our our quarter quality strong third our

and cash per free levels combined growth, discipline earnings us EBITDAX, to in flow, which of high debt. income execute share. margin, allowed records the our the free on repurchase outstanding improved quarter model, of this during production, activities, several as $XX by and value pretax overall balance during $XXX to We generated cash with flow unhedged to X% structure, and $XXX lower an after quarter, [indiscernible], for prioritizes during shares continue principles and cost million capital as of the an nearly spending, total our despite We third achieve about interest million enhancing business share including debt per stock outlines These moderate quarter, cash million allocated production low X grew or of XX% million. well approximately net capital shares our margins, our the

of repurchasing stock. our For towards use flow opportunistically own free has the our year-to-date, the gone largest cash

months or X% So our shares to far this have of form fully third repurchases our this shares about year, we approximately million have year. total the we for quarter share acquiring in share of of by the in $XXX shareholders of first XXXX, fourth the outstanding. count. million When Since the XX compared count diluted program reducing we quarter the X% million repurchase XX.X stock to own and returned XXXXs share nine diluted have repurchased share establishing shares. spent Therefore of our

least $XX. at our enhance the dividend adjusted under efforts the to first plan oil of for repurchase the make which XXXX quarter. prices also its continue shares Magnolia XXXX, secured payment our to of year to dividend paid and $XX full based and per semi-annual metrics on continue of oil quarter, barrel. $X.XX X% quarter third Our prices expect share a share is to during share of remaining first We in our results per repurchase each interim

We and finding of our base low overall the completing sequentially our quarter, activity during rates, the our At X% well to year. result of continuing capital wells. and in this plan drilling EBITDAX. EBITDAX only is continued will into drill product remain two margins. well volumes, asset total third cap our of this level volumes costs as next prices production at strong high have Quality Giddings below rigs production cycle a investing of rig our for level and asset. D&C non-operated result performance. drilling of at current growth program in assets Despite adjusted XX% grew Our development operated our continue of lower reinvestment XX% full One across our currently to reflected activity would rate on wells

While increasingly Giddings our have development the of drilling the results and become more early predictable. still stages program in repeatable

in Second both areas, wells Giddings. rig in Karnes and wells including some Giddings will drill appraisal

pad productivity. pad see where averaged X,XXX We improvement wells longer This playoff and has lateral combined while XXXX per per field feet the driving have operating three related wells average about wells continue feet pad we lengths to partly than oil average helped averaging our More per materials program laterals X,XXX in as well offsetting Giddings with year average to lengths than feet. well. some and inflation. per compares efficiencies while day and the per with four increasing development with further prior less maintaining Giddings favorably drilling at efficiencies greater

moderate ongoing the over and to to payment Chris of secure, the proposition. generate purchase operating growth margins and sustainable share total Stavros. Magnolia’s call shareholder return annual I’ll important – now with dividend of together program annual strong Our components growing production ability turn with are our

Chris Stavros

good and everyone. morning, Thanks, Steve,

net quarter quarter third million company net or adjusted diluted The operating our of quarter, presentation for third mentioned, guidance I over for some year. from it items quarter and Magnolia fourth summary quarter initial X the total had delivered $XXX some a shows with of the per provide of $X.XX questions. diluted second records. and share on results website, quarter our this Starting Slide Steve compared income $X.XX for or XXXX the to to income strong for thoughts share As the $XXX turning in found results our a several XXXX year in before and plan which financial million review third achieving some very of per

million Giddings into at grew NGLs, Product grown EBITDAX Total quarter. equivalent share Our fourth shares million the with higher costs. of volumes total improvement million day $XXX of reminder, oil XX.X year-over-year. and especially financial completely X by XX% have third from in for production. and diluted a XX% Production third as on quarter in sequentially company prices, gas fully has we’re declined lower as Mboe/d per risen oil our was and product benefited in and all Sequential to or the X% represents our by quarter. volumes natural Magnolia’s quarter our quarterly production further the EBITDAX. gas in million adjusted count volumes during D&C third total increased prices production Giddings averaging results unhedged of $XXX.X the XX% total now sequentially $XX capital

quarter small waterfall Looking at the period with cash with $X other working cash We the and flow from in $XXX quarterly by on million Cash before began cash. of changes working capital million changes the capital Slide third items operations million. X. was during chart $XXX benefiting

cash with months through $X million. per the capital share million we and or spending, D&C the Our dividend towards generated sheet, balance million, our Cash during XXXX. third including paid flow we cash nine than $XX land per $X.XX cash $XX allocated of the $XX X was $XXX and of our share quarter. free flow and a million shows on in first with acquisitions Ending more $XXX the first repurchases quarter million of Slide or share. September

million of from working capital. For the in changes $XXX before year-to-date, generated we cash in operations

nine levels During we first dividends. million completing progress paid drilling XXXX without per the a wells. the year, growth incurring months organically grown by million during to period. our $XX incurred our cash. our building $XXX $XX and production We in nine any quarter fourth reduced shares by $XXX share or the month growth the was This we’ve period, Summarizing million share count spent X% debt total share and purchases driven and on XX.X million of million of from XX% XX% diluted leading all production while over

plan Slide illustrates reduced XX% X, share began progress time have total the XXXX. of to strong Since Management’s repurchase least this to our plan since to shares of new repurchasing currently at XX.X our million that a two the in have quarter we we by quarter, million our We share we in any approximately X.X shares count X% balance or continue is not reductions sheet, and of to authorization. issue outstanding shares and our debt. under years. do repurchase philosophy maintain third at shares diluted each Looking remaining

million debt not $XXX Our our not notes, XXXX. and year which are gross is senior next reflected call mature until in do until

million, facility X. total sheet undrawn in revolving $XXX cash. of of our as liquidity condensed are We X shown balance And have on $XXX XX including of Slides September our and million credit liquidity $XXX and an million

income our cash Slide to looking Turning at cost margins. operating XX and and

the improvement costs a million the sequentially $XX Most declined Our increase form total G&A EnerVest costs product the and despite the quarter. with and agreement as expenses of operating in second in of of of associated other prices. in by nearly operating termination lower services the expenses and the result was

generally third Our Including total XX% sequential with line per per DD&A is of including F&D representing in quarter G&A our the second our cash quarter, the adjusted $X.XX were compared in rate operating boe a which $X.XX decline costs, boe, to costs. of XXXX.

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

guidance Turning quarter. the to fourth for

during and approximately be XX,XXX This quarter oil capital run is than our expected to operated per million. XX,XXX to two barrels quarter. earlier in of of fourth guidance equivalent range ongoing is across lower assets day Giddings. primarily of the due to efficiencies Total rigs continue our our We and fourth be expect to $XX production the to

to we differentials in productions the benefit product quarters. with our mentioned further both are price from be anticipated to are discount completely per any prices. unhedged quarter $X during for gas improvement and recent barrel oil approximately I earlier, As line fourth in and should MEH Oil

shares The to the We rate approximately effective shares. be expected repurchasing count quarter share fully as expect our continue to fourth to quarter. approximately And XXX decline expected year diluted further we we million X%. our XXXX fourth in be next is into tax

operated year-over-year wells to wells operated similar the production single Looking level and to in activity the will appraisal seen and should to current to addition continue Giddings continue development during plan in Karnes mix development on the into should of digits. in a run Giddings two level One generate half be This our mid-to-high drilling rig of to rigs assets second wells of second our in Giddings. XXXX, is XXXX. growth our at activity both with the drill drilling some rig

improve efficiencies earlier, – to Steve in As mentioned operating our continue while maintaining see Giddings we productivity. well improvement at

still average the increased drilling than – leading more efficiencies inflation improvements to in and Since early per in allowing strategy. per increase of cash operating greater feet a in next compared pads. Some in wells average feet drilling the assets XX% these us capital development Giddings, sizeable Magnolia’s some last oil a to and generate we’re than to margins per up XX% to more flow, day, these than quality summarize, well the and XX% continue stages of into allow year. increase efficiency in field high To materials execute of year, partially terms in mitigate fewer lengths pad, free include us should a of to lateral strong X,XXX should our improvements

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

to take your ready questions. now We’re

Operator

of Dingmann sir. Neal you, ahead. Instructions] go first Please question [Operator Thank SunTrust. from The comes

Neal Dingmann

around what the suggest XX% great can’t that with about have is very EBITDA sequential from Steve, this is would that this notice upside guys. else growth only by continue releasing me, all. my to to you should read coming crux you into morning most X% efficiencies production the spend Good really in just, Giddings we but impressive question and I a quarter or of Steve, help, this? resulted so way

Steve Chazen

Yes, by current The it’s predictable. really is driven Giddings. pretty

The but gets Our two and earlier Productions costs delayed predictable. or variation, efficiencies really going well you’re week running starts happening, like It it’s predictable. a Giddings. some basically happening looks rigs, at the reasonably a are variation, something’s later. have nothing’s to

that. haven’t if opportunities net area. this activity. been of a well, so It’s We it that, continue current next that there only this maybe I what’s the is, the is like to we call even thought that year do additional not the we’ll and next we speaking, and for outside year. know, the a now less we And so year difference non-op to much only but for running non-op year, in maybe historical The we – less disappointment, of was half drill. half Generally the drilled than lot happened year. than don’t rig look continue it’s would had And I

year of we the compensate a So, probably Giddings the days change new about, that’s that But the wells. sometime some mostly We and and rig add may completely the if or don’t that only number it next rig to make would a net have about areas non-op. I see focused see, continues, on to that work opportunities for We be wells over – optimistic remain look to talk area. in We’ve results of so. don’t decade interesting. XX we the have drilled next I but

Neal Dingmann

That’s thought just on Giddings. I to follow points. kind of then Great what up. And

the see discount at given, still to with or amount stock that back to, talk quite has fair most you’ve maybe your options does others. I’m little the that you to you the, back. of like the still a the a accretive, now – continue bought up your return, you stock about when just You’ll proceeds had of just look have gone wondering, do bit, most run stock? you And be use all look shareholder Do given that best

Steve Chazen

I’ve XX the never the for – don’t value years, about of I talked stock.

time. And half, not expert. around least nearly wrong I a the I’d at be I’m market right. if it’s more, or wrong were, stock but half because So, Maybe

guess it’s I XX/XX. So,

it oil prices. depends at two works oil is at stock your the $XX. So well works view reasonably almost The on about well industry and $XX

well a $XX I’m really in So, but us. not believer $XX, works for

actually share don’t know have any to think harming going don’t do. But have him, him a shareholder, control so We And the don’t makes want or repurchase also shareholder he’s existing don’t sense. want sizeable a that shareholders. I and him I I over I be the to don’t what

the don’t something. Less basically the price So, set I quantity he shares than know worked we gets, $XX what out all or for our by us. same and forces. which purchased. we price buy And that’s shares at about for market the average is $XX,

So, in She and I for I for out worked sure. worked grow attractive February, does time. shareholders. gone a for and – investment. bought stock that think wife Tesla up dividend well this fairly out a the lot, that’s but attractive it’s we me, valuation, me. it’s compute matter, as think, XX% into I for Luckily to but could practical fairly people easily It’s count once year long a just doesn’t And set we for get the like an the or not that my dividend that, who a a that’s offering the for I the very hate Stock’s something but it’s well, dividends, investment.

how purchase locations case. the a to or that come just attractive doesn’t, continue drill So, times for we PDP take to almost think, real cost can us. is that not wouldn’t give think about diluted them, three can can we economic everything much much way go how might, the and finding the market right my our finding it, wouldn’t in has packages be need I our these distribute that in. And that’s That grow? low now, and and production, us. basically I PDP to we standards We a cost drilling. And wouldn’t We of somebody two with got maybe M&A

some find there but anything environment. areas, very difficult that. So, it makes than drill buy our We’d existing small the current in in and and here to to it pieces other

years, a wants, So if gotten level EnerVest more think we’ll ship that for next intensive dividend strategy. has and of will force. to the whatever ownership, be the any, then to the driving And it repurchases share dividends few I once

Neal Dingmann

your you those do, watching Thank if close. you have is wife everybody Steve guess, again. you dividends careful when I

Steve Chazen

Sure.

Operator

is sir. Thank go from you, KeyBanc. of Leo next The Please Mariani question ahead.

Brian Corales

Hello. you Are on mute Leo?

Leo Mariani

guys. you hear Hello Can me? Yes.

Brian Corales

Yes.

can hear you. we Now

Leo Mariani

you’ve historically getting little $X Okay, a Clearly I dig more to great. are I cost. clearly have million you your Giddings laterals. pad a laterals of kind just type kind wanted well for know ability rough increased, here. of longer into But about to drill wells talked deeper guys longer.

give little say get course wanted able continue they’re sounds even might of XXXX. during what any you to maybe a a just just the results to then that it done, days. area, consistent you the looking, foot these And I kind maybe of reduce could, the idea So, inflation. like the guys per comments of little, sense cost you are could optimistic more be I those prepared guys have that us in a to maybe XX,XXX make area you that on the of development development And face did you think Giddings, remarks in

color more you maybe little a So that? if around had

Steve Chazen

Yes.

because area, existing not it’s is showed drill do we repeatable that. of Outside large difference look what – you There about well. it’s we before. it a the in better, a about we the very talk little swings. It’s continue to And that. have for again, but So enough like much same. more – for isn’t look It’s model, they so to We not areas. designed it, very designed to really

them of but the economics especially same, with gas, the gassier, reasonable now are Some little a are prices…

Chris Stavros

yes. NGLs, In

Steve Chazen

Yes, in NGL pricing.

the drill amount always gassier well, with same, even the oil, economics you’re basically because of there’s wells. though oil are fair So, associated some the a

pretty next a little about and year. on year year. We capital we’ll were next this were next are, that spent, optimistic cautious than we but and our less over year, be So, year what I’m cautious cautious we probably this

want thing steel I per the crews. inflation and want crews. good costs, reasonable is well. not the costs, We basically Giddings far. the far the inflation We working the labor is I’m cost basically labor the bothered think mean, and overcome best I to So, with. so We really

or, that. up AM, people hour These a already so always to the This bucks. X:XX the the or whatever no few dollars scotch isn’t it We really it we raise, the are not in about raise this for is tape, or got pay passing got order through. more over I’m small got worked is, per there’s you not If pay of to price tell stock. to question

getting the if just a driven now. it think to see $X that, I stuff, mean, well we very better goes sort think or goes all even cost. longer So, of at I the don’t total the it’s or up, it. right by and that’s and it’s move I supposed it’s what doing with laterals about we’re much we’ll little do, cost up, $X fundamentals,

just, worry until lot more inflation this wouldn’t more I a I for So, get and about a you lot craziness.

people Now a XXX% more program that companies. like by pressure start, your things increasing put capital service capture on and this, the and to you

one as think I program, reasonable manage but the that’s can we – crews good we thing, and small with have have well.

they’re company, complicated, disadvantages, lot but but but this keep under to it’s XX rigs control. rigs, a or running, with get the you advantages XX other major of advantage two or that’s the just more small three company a that’s Some

Leo Mariani

couple folks of mentioned offset the to understood of there isn’t, a fact helpful. rig Steve, lack of what That’s wanted kind around in sounded the compensate for rig made. that that things I much from non-op Okay. a that did And make the third sure potentially a runoff? be you XXXX you just years just a to Would some like that. it partial adding activity comments

Steve Chazen

simpler to to activity much it, maybe send idea the for. And or of we exploration the it’s growth wells overestimated a it. looking the the create mind rig, – would two a getting the with much focus wells, we’re this whatever product wells then year, probably is, production we’re to to other net had or call non-op definite want and that the or that the that, would short you in we number on drill that in and not development. And the our how you certain And overestimated rigs wells development you’d be. because, net be It’s want whatever how call of would pure for because the be do time, you a two drilling period

Now, better thought. wells did the Giddings we than

net but we wells for So of of ought a compensated still it’s vision some be. that, have what sort the

generate would spring short number It’s spending. get so period the net drill for I well would sure, not And wells. time the we be, in the in make going just rig a capital right relatively a lot to to and of some I more don’t time in think.

XX% end spending EBITDA, of is, our a level go of the – XX%. such low it only wouldn’t So whatever we’re spending, we’re some to world be to

Leo Mariani

And you makes Yes. And next still in cash from started quarters, to couple a that come a that were little of couple low sure. number kind in taxes but lot then a Only have for level, year. the of sense zero guys. a last clarifications noticed bit, just they

guys was guys that on the notice go. oil oil I into And quarter, on had to XX% quarter, if those the also the do you in see wanted where the anticipate XX% cut? So, in just any cut, in going third you get here thoughts what then may second XQ we it as

Steve Chazen

it’s to to about loss world, to and EBIT margins eventually concerned, operating pay some XX%, these generate, answer of next I you’re probably really going the which as not as to shares, I going looking tax them increased have if you’re of honest. finding taxes, huge be number, DD&A the taxes XX%, but not but know XX%, will taxes, don’t are better that at spend you’re which I XX% from to at accurate, but and some next loss some much, because taxes to a, tax not up cut. let not think taxes if to than point rate, the cash fairly be only financial – are year. end year, how that have go of our think the you going XX%, not and it’s pay is continue don’t earnings, spend would real you We’ll the carry it’s pay statements a generating the forwards while to we’re and we some B But conversion costs full far XX%, are

Leo Mariani

it. right doubt. you. I Thank appreciate guys, No All

Steve Chazen

answers that question cut. I on the the hope

Chris Stavros

Yes.

I I for timing sure, it that bit of mean, the cut, cut, a and activity lower in is, drilling of oil Karnes and is Steve mentioned. part think it non-op part year drilling spending on is the timing, this and the of for is and certainly

think a higher. the as oil we And that bit cut you so had little I had had originally in come would’ve expected, probably

so say that’s probably the not in we’re strong to than, we on of better what cut is that, And seeing sort early Giddings and thought days. relatively oil very what

Leo Mariani

guys. Thanks it. Appreciate

Steve Chazen

Thanks.

Operator

Umang Please The you. Choudhary is next ahead. Thank go question of Goldman from Sachs.

Umang Choudhary

Great. Thank you for taking my question.

macro. Just one prices flow from lot free and me. now Steve, share of of organic looks price higher. $XX oil oil you mentioned on and are currently oil cash the much healthy are love the deployment there term at here thoughts longer How your sector does higher, Would Say impact your expectation drilling price oil $XX, – macro there’s between your the and on completions? term. moving pieces that are dividends, prices a repurchase, long

Steve Chazen

or out than if $XX be. rather of were so on of they’re around shares and eventually level EnerVest be $XX prices view say oil driven, whatever the they’ll term gone, Well, a We my to I’m return sort long will basis, going to $XX.

executable, And not And the buy shares that of market looking won’t repurchase very it of buying doing in difficult the open point. open level a the shares which there’s be what volume. is enough stock then market, so just just share we’re at we’re so in to fact, that’s And now. just the this our at part

goes can as of only, you to mean, of far do leads raising it the there’s the think so spending I number I things hell. really. road as a lot is capital money So

we’re So, XX%. and to XX% capped I reduce at might it

to think road bad the So, returns. I that’s

dividends. leaves so only you with general, it So

So, that’s your I guess answer.

Umang Choudhary

like towards on are a gone? XX% Like, that right? would And variable mean given the dividends, be of dividend you once that shares EnerVest would cards have then cap the

Steve Chazen

are I earnings. don’t care the to that care in sure quality. Because They sheet of dividends, about because They safe. the out things. want dividends they care dividend limited investors, my make three about balance like ratable dividends paid No, experience

So don’t you them flow, then you about dividends. so-called of you of but care out out pay pay And cash it earn. finally growing what

would normal increase you wouldn’t the be So, if on plan that the dividend dividend had stream. at February, that dividend special normal least pay a excess, see a every we The our part would working we and, in some dividend XX% least of once in streams, year. just you assumption can be

to we keep we thing too to is, cash Again, the a if So, to but I’m a this pay And and your not difference about – it cash things that This investor. flow we special for it’s is cash cautious tying won’t in put much that earnings. build related aren’t your to capital. flow cash standard free dividend we’re free can want very a play dividend, payments – between going EBITDA there.

And so don’t means I that know what exactly.

not. cash. You know if don’t less could spend that’s And free more or less permanent money or money or and more I generate

And that. much of thing wife this them the that distribute sort that is one time dividend way cash, so cash. permanent the to, looked or can too investors And rationally sort the build and My like growth get to company. we if we distribute at level would so at the I of in can in sort look

Umang Choudhary

That of a lot makes you. sense. Thank

Operator

question from Charles very is you Johnson ahead. The go much. Meade Thank of Rice. next Please

Charles Meade

a what like would would make looks the it, morning, Good relates the in mean, to it appreciate and mix make Chris, there I of that question things line Steve, crew with your oil guessing knowing and especially that XQ? same it quarter-and-quarter, that QX, pieces or whole to like and to for mix the there. and comments earlier trend other product but the back Giddings, anything change see play strength that, that, in go I’d of forecast, are would are to on can which with need that it I decline turn to the there things be activity much, that expect without in are things to Karnes your go the happening XQ non-op particularly slight in difficult I I’m that but schedule XQ the else, don’t to out there – into was there? versus we in, reasons actually for area, in

Steve Chazen

Well, not going fourth they’re the now, forget, wells through the we’re in producing you, or be quarter to most the quarter. producing of as halfway

we to the first affect quarter, point. or is the whatever quarter at so And quarter more this probably do second the going fourth than

carryover it’s third that because, to quarter, I similar So, roughly way. think the works the

Charles Meade

Right.

Steve Chazen

and sight thing or wells much. lose one fact doesn’t or six that, or three four the even of the two or move You very

The – other sure is, some to and double while here. prices gas people prices thing believe NGL from going are we’re I’m natural

and gas got in on drilling wells. NGL a getting mean, NGLs. I because We’ve is to exceptional attracted are We we lot areas, those profitability were of the that. of

of barrel or something think now. year we’re like that a I ago, for NGLs and over $XX getting $X a

So, underestimate of the windfall that. really I effects

Chris Stavros

And our activity Charles, gassier Karnes completion some wells steering quarter you ducks. some that were some we towards corns last in and of the we did tell of

over of dribbles were And so influence the a in they third so cut bunch into gassy. a also that did have sort as fourth the had of an and quarter little weren’t, well. the generally but It quarter oil, more they

Steve Chazen

you States, gassy gases. way was because, about I the lot a It’s noticed. of it in $X of it, don’t know thinking little I deliberate if and more United A view, gas

to more. And very so, going if a be sits long, $X it at you’re lot

hedging. their despite So

Charles Meade

picture you becoming hot of another of question, about in is, of well in you, A the really Giddings. there results but talked repeatable, little a but strong second bit, position your the kind anticipated a piece eye too. United results the offsetting just air – at But but you States there’s and, maybe it more been opening, not the predictable lot some Steve, bit Giddings, my

playing offset out saying the guess How XXXX, bit versus to adjusted coming results, the we some tilt bit open should that? at these that you’re to already I’m how’s I a more areas. how you guys – as a well So, your approaching And gassy between results more with that areas, what curious and look look gassier are approached is of – the – you you’ve or well for? you’ve strong how and

Steve Chazen

like that fits Well, in have. if, we ours other – or the acreage. so we see offsetting And, generally drilling – to sort look we’re or don’t are acreage modeling we doing. what And, away. forever – acreage of we our up, how the their don’t so, have into And try because, them we locations people go at is

always it happy somebody have prove we’re us. for So, up to

next So, it can or perspective, the year them and, after. experiment from my we drill we’ll let year

I’m was view Giddings not I for nobody was believed one results. in so drilling, of So, it, us historically nobody problems the really, their there that else

hope and, got drill make guys than and more swell got because a we be lot. acreage and they these that So, would by good money we

Charles Meade

for Got it. that Steve. Thanks

Steve Chazen

Thanks.

Operator

Please Brothers. from [Operator Thank The go Instructions] of Tuohy question you. Parks ahead. next is Noel

Noel Parks

morning. good Hey,

Steve Chazen

morning. Good

Just point essentially, drilling, had neutral plan the that irrelevant you cost as your I as as or things. at in you and you environment at maintenance modeling capital the ahead of as scenarios. was when couple and, look self-funding thinking and we the point are a your And is and Are various look ahead we rate sort essentially you where interest about forecast? think of

Steve Chazen

even million didn’t I when that money did of and Well, said, we when we’re not I for we $XXX that. borrow started, want the complained to about we us, borrowers

borrow making for we $XX I million don’t would roughly. the So, – we even cheaper know, if more leverage interest And dividends. now any of could at is pay $XX, have we’re than that, expense better. wife got returns because We oil sure I we wanted, just, I’m price, guess you kind interest I or with of anything. particularly that not $XX didn’t don’t helpful My like if but think, expense we

think if doesn’t to are up awhile, just to about for in error, can or the know, bills, flying be international certainly economies look which doing really Saudis rate oil extent but year, what us they next doing. at next of the the now strong I that an time, open to I what always is going is rates year now, really are of matter major about is certainly the interest is and don’t make interest it muck what it. Russian it demand, point, over as this And demand demand they will a up but people the user and the in So, the environment be it’s want that at things

for looking all on very you’re demand oil a prices. So strong

the get more when a dollar. it’s than we the period think important we’re does. that’s some fed just important, And bounded next in time, I or of somebody the oil extent for what is weaken dollars. So, But to the lot paid that determined

And not so anything we’ll with but, I it, buy dollars. may dollars. more that to we’ll make able be make more

I oil $XX going the growth. this are demand of own a the you’re And have to to the Saudis the lot is world a in of up, about frankly reasons their some they the is So, time. opens for Russians think demand there as growth demand $XX and like there you’re for in feeding economy strong oil. clearly guess my But haul at

Noel Parks

Ford Fair the advances enough. Ford. up guess standpoint, do up less harvest play capital there that, of the caught thinking activity you Eagle having with might talking with you the there other the having caught lot view a as days closed? the more had technology-wise essentially that Eagle into about from few a technology I’m a we is or Permian still ago to gap view technology years some fruit when Eagle I Do as when pre-COVID and And advances, still lot be Ford into the essentially the flowing basins? about from I’m was

Steve Chazen

Eagle of wells you efficient be. There’s The Karnes moved probably were as the room. could lot it not I’m Ford inefficiencies play extremely Yes. more a so but they’re look, because will, There’s Karnes gassier not as play. in and weaker Ford you general there’s in and talk, with the areas the the your good. to where as the well-developed, the think is I of if play, in Eagle while we’re probably rest to itself – But

five stuff project where science Karnes use do money – other with more of even sort we years. make for is – of or the On in of try of that the not then to some to not I’m lot trying kind hand and efficient Giddings, capital us next some can over And to an they’re monkeying a production. trying our a in work marginal that put are We capital.

Noel Parks

Okay.

Okay, a great. lot. Thanks

Steve Chazen

Thank you.

Operator

you disconnect. questions. attending concluded. Thank we for may Thank presentation. much. conference no And has today’s you now and now have Ladies the you very further And gentleman,

Magnolia Oil & Gas (MGY) 2 Nov 212021 Q3 Earnings call transcript