MGY - Earnings call transcript Q4 2021 | Magnolia Oil & Gas Corporation

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Operator

Good day, and welcome to the Magnolia Oil & Gas Fourth Quarter 2021 and Full-Year 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 Brian Corales, Investor Relations. Please go ahead.

Brian Corales

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

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

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

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

Steve Chazen

Brian. managing product note, expanded XXXX questions. allocating you, cash both take prices Higher and review an I'll continued you we results of Chris for achievements our to your marking our while on XXXX. model some and Good ended we operating how some fourth a plans strength accomplishments our We financially. thank free costs and on today. operationally in solidified margin additional team's our and important XX%. strategy pre-tax comments some a our year Last high for about business before will focus results Magnolia's and quarter guidance then the strong provide provide and our update I further our very joining on milestones. give then significant also year's year and anticipate us morning flow. Thank will full

year-over-year XX% free discipline X%. production spending flow and continued capital on in significant generated just resulted cash completing wells, of which EBITDAX We growth our our drilling of

of repurchases of our we well more cash nearly share diluted payment. with about time initiating At significant net million our same doubled as free During the shares, reducing repurchased the cash XX% dividend returned our to count approximately XX%. as debt the position by We've year, XX zero than first our leaving form year shareholders us in at share date. our

Giddings year, now our efficiencies. feet, operating four to full we this generate inflation. program operate cost the We year, wells high-single-digit greatest of full to service a experience which to development at two-rig X,XXX strong Giddings. Our confidence execution continued the than a a our now addition key of Improved at mid-XXXX. the metrics. averaging was Giddings drilling than continue program plan and represents Operating recently to year the into accomplishment continues expect offset last rig in second of proved additional some lateral our production oilfield year in of supported the per half expected reserves in increased lengths growth. more continue are helping to financial performance to greater pad well program Having field efficiencies this

similar bolt-on portion free metrics. share Our our goal could generate the the a characteristics some cash is This with enhancing our allocate include we to improving per existing business to property sizable small towards continue and and existing to of accretive gas acquisitions flow oil assets.

largest XXXX of in shareholder. share XX%. our reduced this shares our Most majority of free EnerVest XX% with investors of the was flow repurchases, approximately by returned we mentioned, during fully outstanding form our from which of share the last directly cash year stock repurchases diluted to I purchased As our

they of one-third we year, repurchased sold. one-quarter EnerVest amount to As approximately the sold throughout the

this repurchase a So, similar shares expect would we sell EnerVest year, as continue proportion. to to

cash on sheet of we this, for repurchases. to higher for these allow expect keep our So, planned balance adequately to level a

Beyond likely quarter. we this X% more which to allocate how free our normalized see a shift cash will we flow, about would repurchases year, lead per of expect a level in to of share

$X.XX quarter dividend $XX dividend which we second last first oil. installment year, third we our and per recast announced this gas at at results our we This share $X.XX $X.XX semiannual During on the XXXX oil paid share. brings of safe secure $X.XX of financial Earlier month, of believe share. the dividend semiannual $XX per our and is combined to per payments

is appeal earnings a actual growth, long-term to business. and generated safety, philosophy dividend investors the meant who seek by paid that dividend of Our dividend out dividend is

each to payments that We to production we expect shares. of growth outstanding ended our should XXXX as annually business grow momentum plan positive into dividend year. reduction consisting of moderate of We that with Magnolia continue this benefit the our execute the

drilling We wells times more in plan and on Giddings capital at for rigs. result as both includes are will very the outlook of the optimistic in Karnes Improvement our Giddings and XXXX Giddings. same as for of operational development some appraisal at which number more wells well

As should a fully prices sheet, fully hedged result say. remaining high captures product current -- balance of our fully Magnolia by strong unhedged I

share Chris. significant growing turn will the reinvestment of The a below combination double-digit providing support amount organic Magnolia's our of limit and year production capital prices proposition. dividend return product be in XX% single-digit of to and high at current reduction I'll growth growth well generating investment of free call over Our of and this EBITDAX a cash. now

Chris Stavros

and everyone. Thanks morning Steve good

over on and questions. turning to a four generated results mentioned, presentation operating shows strong slides for quarter slide to diluted review financial XXXX found in some Steve and items for with provide very year fourth some the and results As from our plan guidance levels. $XXX quarter fourth or Starting summary before quarter achieved I $X.XX your quarter our year The per Magnolia delivered fourth first full it share. full which XXXX of the record and record website income quarter. net our several and total million of company

Total capital in just total our the than production oil X% and to Our quarter guidance, count per quarter. averaging lower quarter. million, adjusted of fourth share by $XXX million was and fully million X Magnolia's EBITDAX. EBITDAX equivalent of of grew the our million the $XX year-over-year company shares barrels declined day D&C XX% XX,XXX in XX% sequentially earlier during with fourth volumes $XXX diluted sequentially

financial rising performance diluted and including XXXX, fully adjusted production and Our throughout volumes to EBITDAX margins prices per share pretax continued from operating growing outstanding. lower we shares improve benefited earnings as product

improved from to prices continue oil remains benefit unhedged Magnolia gas this expect on and We to completely as year production. its product

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

with Our shows we $XX on capital XXXX. the year was per ended acquisitions million the quarter our more million spending towards the million sheet share D&C $X.XX fourth of in Cash the quarter. land the cash during cash flows and $XX share. balance repurchases Slide was including six $XXX allocated of in full than or year

XX%, that million our $XXX $XX in We paid including we and share cash. before building of cash and by acquisitions. For count progress wells, compared This changes Summarizing leading reduced our per and $XXX million dividends. flow by XX.X operations $XXX spent drilling million year, of $XXX million from production without And we leasehold driven while or we to total diluted XXXX share all completing the million in incurring over incurred of growth our working levels, to and share any capital. shares period. X% product was XX% million grew production growth generated on organically debt during full repurchases year, the

year. and to cost a XXXX margins. per increase we costs Turning increase realized per ago only a Despite cash modest during XXXX, in Comparing at slide the the rose product substantial operating by prices boe revenue $XX in income our looking our cash about costs total to increased our boe operating our quarter and X and $X.XX barrel. during by fourth the levels year

our operating $X.XX total which was XXXX. with in for per G&A costs DD&A costs, cash including generally boe the leverage We our flow of is cash currently per boe and in through approximately strong sheet. zero expect our to or free rate total were margin Our income of operating $XX.XX Including low amount is the debt of balance Management's the fourth have philosophy $XX.XX a maintain to and net quarter our generate of adjusted F&D revenue. boe significant our line XX% year. per quarter a

later not callable of is notes are Our XXXX. do mature and in gross this which $XXX million year our reflected senior debt until

including have million. revolving total undrawn than million credit our is $XXX of We $XXX facility $XXX more our an cash liquidity and million

and X balance sheet shown and as are slides condensed year-end of Our the X. liquidity on

shareholders our approximately As of Steve we during returned cash to XX% free XXXX. our flow mentioned,

cash we was Although, of payment of during the in our returned year shareholders first initiated most repurchases. to share the form dividend the

progress Looking of share we quarter reduction at repurchasing began third XXXX. slide shares in our of the the XX, this illustrates since

X.X those A years directed count authorization. shares or We the our is Earlier in our shares have authorization, current X/X transaction sold. repurchase Most EnerVest additional repurchases share last share our directly purchased X.X diluted from purchased open purchased or remaining our million two of directly under Class million XX.X by nearly Magnolia were have largest against In B repurchased million market. total the EnerVest year of specifically not shares shares do XX.X we During this from the million separate to from share reduced repurchase approximately shares sold XX%. shares total shareholder. currently which month count market. the Class shares another EnerVest stock towards EnerVest

natural our of $X.XX mid-cycle to year, $X.XX recast the We dividend equated during total Turning per results quarter and oil about last payment the share associated based for paid with earlier on this product declared month. Inclusive at yield a of our share interim the third full-year XXXX of The or results XX. dividend XXXX $X.XX our a X.X%. to XXXX final slide dividend gas. prices dividend of was $XX semiannual of

which least expect at grow shares is expectation our We annually, X% mid-single-digit line per our least annual the quarter. dividend at by for in production reduction and of with our to outstanding XX% growth

The our producing at year-end proved very year year. developed. XXXX only undeveloped to undeveloped and XX, we reserves books D&C to year-end XXXX. Magnolia at XXXX one reserves reserves. XXXX develop had drilling during as expect a slide on Looking convert result, Magnolia proved proved represent a organic our And reserves during were of proved program costs what XX% last successful

in after XX a of program drilling adjusting million year's capital totaled million, and for costs of asset XXXX rate the proved Our equivalent DD&A indicative low per in wells overall our $X.XX the our efficiencies price-related to $XXX boe, for asset. developed completing added and our oil similar level excluding F&D Giddings of and production. cost for of is acquisitions and while development barrels XXX% replacing The F&D base Last drilling revisions. capital resulting

drilling Turning to One to across appraisal continue for rigs drilling assets. drilling operated Giddings be to to both in wells rig wells of run XXXX. addition rig in development in Giddings, at and Giddings. will the plan to with mix wells a dedicated We development second guidance two Karnes some drilling our also

is for We associated provide help the and continue Giddings, and higher-than-average a which estimated spending efficiencies. to the is operational field of offset future core D&C some be to which our which in to Total year development includes our on area million with cost amount should Field, $XXX improve approximately to and efficiencies oil economic of in facilities expected Giddings facilities capital anticipated inflation. the

estimated XXXX is same be capital non-op approximately Our the to as levels. the

deliver this year approximately digits, We and by that with high at production growth to in single activity XX%. the increasing full Giddings level expect program production

recent unhedged production, a capture we fully to discount barrel mentioned per allowing and Oil differentials remain completely earlier, anticipated prices. us I price higher to line gas be in with for approximately oil are MEH both and As to product $X our quarters.

current our equivalent taxes. range approximately be tax to the X%, in effective to of X% We amount an with rate XXXX cash expect of

in $XX oil to approximately our at day million the is the be range barrels first million. estimated capital $XX equivalent of and Looking XX,XXX quarter to be production expect of XX,XXX of D&C per total we XXXX, to to

share quarter approximately now first diluted the ready to fully for be count your million take questions. shares. Our XXX We're should

Operator

Thank you.

Our We from first Please session. will Leo now comes [Operator Mariani with ahead. Instructions] begin the go question KeyBanc. question-and-answer

Leo Mariani

then in many wanted And are questions a in 'XX how about, Giddings? more with you of perhaps here roughly roughly, what Giddings. think many to how accomplish Yeah, A on I And expect of kind with the couple us get could you good you guys to wells give those little sense appraisal color program Giddings better morning guys. of you of little a might wells? XXXX. drill appraisal bit here

Steve Chazen

have -- quickly. One on of drill not and two whatever gassier. little when Sure. point, happen term areas what Maybe but a art of the know we've one we little derisked Giddings is core we the and the that, At where sort a is that a oversight will traditional we smaller this area little wells. smaller is than lot a

may it to month another the period So add wells. payback the on

months, how payback. and in fair four that at that to bring six fruition. we'll to year A model it got this And size So five see will four of or spend can of five months five which we or or wells of instead these. those area. of in those well, number We've another areas are similar many be looking

appropriate underestimate -- can because there's very the only The some we're I for have how is. space -- We what currently, tightly. a another on to think the no to experimental doing work we've we which work But done with see few and some other been spacing space wells months. need the space widely area driver, don't production

So, actually a generates because well daughter a or goal is whatever reserves is, for just tell you well sure that we of when term more really to art you, drill that the make the not faster production. can't

so, the of has Obviously, generated encouraging. we'll pretty of well. it's But curves number so And large this additional a those locations. far, watch

and they'll looking -- lengths. ones So, X,XXX spacing, longer I lateral think at we'll be expanded from than probably that. at year, X,XXX this to try looking feet extended We've we're

But last in seeing of more acquire of economics years. number leases, slightly very of got have running think promising in kind look that where it. ones leased wires areas a we'll long you can longer beginning we phase. what there, phase past. of forthcoming up, least nothing That testing tell And we'll be location This than we trying can We're that sort already -- we'll stuff the is room about the a I at could to a We've we're absolutely got be more we've out are have. game We testing of couple extent a the out Giddings. we poker.

thing, into location but I to don't want really lot get So, a a of locations.

a large will I checks. as shareholder, feel errors so, that And long-term Giddings be confident still cashing my

Leo Mariani

plan you to it? to that that wanted the roughly of I hey, all X%? you a repurchases. kind little of we'll Okay. you switching top of bit look know, right this of And from sort about it think overview Very be regular I to helpful for tell at here, that repurchase market just yourselves X% call quarter. more I could just clarify. a sure. regular Maybe EnerVest just is gears know to that, through as per way the have on basically when you do X% a the view that than do what that well. But kind of of purchases be kind supplement kind of Is to way kind way

Steve Chazen

it. think a think way about to I that's good

at always us an talk oil comparing I to – company. as remember, an company industrial opposed If you to about look

dividends regular and have and they share balance what growth, so cycles little good they generally basically year. every they they growing they and predictably There's companies And sheets, growth. industrial repurchase a pay business, their dividends. year have, reduce some have And but every every growing shares count in regular have

how money or that's model. year. really not So see distribute this the much It's particular to any year can we

look watt. will pace XXX down to at I that something million down this be shares X%, in can of buying as So at a shares, if you view we we the do close

market I truly buying can do won't a the have company. once we of so the more share we per the there's as in on open distributed, EnerVest quarter, which rely to million view shares EnerVest. shares two And value proving

able that. nearby ought believe what to I I Karnes, don't I'm I opportunities, to you this. I a time. way, Giddings business as we and As firmly private really debt own we buy at at a this over that and be as I small if can generate to guys but just I want look doing. big companies the at by call look position look in other should I shares do shares, the discount what wrongly what believe their got to And buying and perhaps But are you business, think I know say at

look I of is plan. part at out X% to shares to So at period don't because for own And the do the thing they I've the sell buying long-term of the and a usually what as EnerVest The this would an like I have time? they shares this as opportunity viewed you stock an as is go opportunity market. always long

And they to want so million say shares. let's sell seven

the and or that. two million get for price on of the I seven top shares million So clearing they million is shares three buy price the

So not get a testing the actually to them I'm price. getting just a We're price. fair price. market We're negotiating with

getting we're do the little stock. fair overpaying careful I'm for the not think negotiated. but And a about that's -- what we're could discount shareholders careful we I of off So for also also

-- So overpriced some the sale stock should by got measure.

think process, slow always I volatile we'd you'll probably up a market the so have chance. is because the

Leo Mariani

one Maybe for Okay. last That's helpful. you very guys. a just quick

I certainly growth there looks high So guidance the single-digit production you good. had XXXX out know

to be indication on the any here oil cut come what rough Just think in you will out XXXX?

Chris Stavros

in I say would similar what XXXX. Yeah. to we saw

Steve Chazen

Giddings my shift -- I wells We a model. bet the actually but can these away wouldn't locations, a exactly we of can't We predicts of know. to because tell on some got we we life that couple if it don't far model

want can manage we changing there's wells, also and this oilier, drill to if And variance. we some Karnes really we whatever without so really they're So anything. some

some to just to the follow buyers Again, as than rather we trying of about, we're shares talked here And manage the economics exactly not sellers. so basically number. we'll number

Leo Mariani

Okay. you, guys. Thank

Operator

next comes Neal go Our Dingmann question from Please Truist. with ahead.

Neal Dingmann

little to your want you've know always a wife said I Steve, ask appreciates different. Hey, return question a I dividend. shareholder bit the

assume So I'm can term? be wondering we'll near focusing dividends we on the bit just in more a

Steve Chazen

dividends our like at house. We Yeah.

well -- we're could that I so unless brain And -- got don't of at, think I've think and I me guess. then is stop pretty aligned. now XX-year for but a some Chris been returning concept surgery will surgery money so there's shareholders XX-year there's between you to -- that's one if a been don't new a pretty to I history there dividends -- -- on unless is not can got need you me. brain get me brain surgery, look really drag

so very And a the essentially culture of attracts and dividends its every every smaller. Occi grew force grew of long time. business I And business. dividends year. to of what period of could the people to We're part for it's part year the change

So cash I also the growth a point important of growth pay company. is dividend. get the more the repurchase share fewer to to is But for more shares, will point shareholder smaller more each to is so generate of the dividends. mean generate

well, pick still because I away pay cycles assume said, might it's dividend. pick the we'll and right I deferred. to somebody okay to choices pick growing deferred, as it to away the We else plenty there inevitable right be say and people occur, be deferred. just we who want Somebody want will of it mean there's

Neal Dingmann

Well spend. on just amazing said. then my all to And you second continue D&C, just

seeing of I'm out just said D&C maybe EBITDA with Thank wondering given what on getting you. you're you address just solid on just a the think that is I growth. repeatable bit? XX%

Steve Chazen

forecasts team. don't you that our by us the see given are to D&C luckily Well,

had off... change much lot past And can we repeat So think it is cost We've the a doubt that. we caught of don't year. because without this improvement I I answer

Neal Dingmann

a of efficiencies... Yeah, lot

Steve Chazen

Lot of efficiencies.

there. going all to the bank that's talking don't you're nowhere XX% another that the I up at percentages wait and -- but rigs would -- certainly percentage money it's with in increase in the the think only I the be -- going So I And so is is so. and is I going this to XX%. rig I about year, to I really near But yeah roughly. be, end now And money just near so don't that get on either XX% spreadsheets. much going make the to know a capital don't to of cash running add people's -- with is have problem think be boxes going But what so to -- is in all other two your anywhere account for point, assume piling

And so that not for we're up either.

So I think that's pretty straightforward.

Neal Dingmann

you. Thank straight Very forward.

Steve Chazen

Thanks.

Operator

question comes Parham next with JPMorgan. go Our Zach ahead. from Please

Zach Parham

Thanks guys. taking question. I first return. Hey, guess my cash off for on

a up built pretty cash obviously balance. sizable You've

a just generate commodity control that that's back been to somewhat much cash or could going sell. If out a decides consider when slowed variable to buying build, this bit year. of lot cash given special current you're of to You've At but and stock, prices, how balance dividend? your continues EnerVest you free flow a

Steve Chazen

or don't a we I think dividend. formula-based got variable a

We a but you formula, have is. we're to not what tell going it

a us opportunity would of So ever environment the there's near, no get right? repurchases to the whenever small We're by came we there's acquisitions going cash the generally performance, around on again around to don't no and to that, buy the like cash not in half So the X%. could and cash see on next point money do is to but allow up, that time, half normal what is if for flow much do on to if allow just way. that. But build dividends I around year a-quarter that that. that, – the – the was that spend share no speaking, We there's a-quarter bolt-on that's free we something we to

have if continues of going line sight. to build clear we'll I and year, dividend, So – what end dividend And of a the than up, we a it do. by it to get is of sight put could call we on a think a special clear rather this I'll formula-based a EnerVest line

my Again, cash house, be wouldn't welcome. special single of out some to unreasonable. dividend a at it'll of think be the sort I always pay

Zach Parham

LOE just GP&T that makes sense. That guess, model what costs talk about the lot operating and just higher bit in you outlook a during one on both operating your for a XXXX? of Can on costs and XQ. I ticked it. Got drove

Steve Chazen

say workovers just way larger go and by the small volatile, on quarterly in a LOE LOE, a is out I'll that. on for company basis even because of

activity these reason. part something. that all a And quarter, a tend becomes workovers or of the fourth happened. you then do job, this for you many do even of true related quarter next figured to better did their almost I've the you looks And for expensed of is to and in guys workover companies been see fourth in And costs LOE. changes all nothing don't workovers. largest and it for century. so bit about It time, your So really like quarter has you see they cares nobody – workovers they operating some workovers. been I the watching guess, quarter do those

you – what Chris can looking think, LOE, in really that's the So I at you're

Chris Stavros

Yeah.

to think On gas related I the being really higher... it's and GP&T, the prices NGL

Steve Chazen

sort just it's think of some percentage... I – higher of – Being them are

Chris Stavros

That's right...

Steve Chazen

are more... got what a and The the NGLs get of contract $XX when contract barrel to it costs so you've and to you pay

Zach Parham

You certainly quarter. the that in saw fourth

Chris Stavros

Yes.

Steve Chazen

works for it of part like that's of really tax, It right? severance sort

Zach Parham

Thanks, sense. makes guys. That Okay.

Operator

Our go ahead. Choudhary next Umang with Sachs. from question comes Please Goldman

Umang Choudhary

can the two? service What efficiency questions. you think question inflationary the on I Thank some lateral improvement now? improvement? do you you. is us right for disaggregate if Good morning like what was first and tack more offsetting mentioned in My lengths is on drill seeing from which landscape And one are efficiency around Giddings And my you pressures. secular how can you Giddings, Can you area? you in a taking long thank help

Steve Chazen

question last What was the Umang?

Umang Choudhary

drill you area? -- you on can long in Long how lengths Giddings lateral can

Steve Chazen

well the -- understanding reservoir -- footage We're up simply By drill right a how XX,XXX have long this the do we worth at and gaining now. doing? physically we that's can really XX,XXX are maybe is something additional it point. we the costs feet. The much more adding How of do could good it know we question because feet question more to we and longer because around than

economic than So the physical parts question there answer And it's one. be may it in an yet. we of different know answer different And don't also. more a a

As not is there'll don't guys the cost till it I I probably far they're some will fix build late pretty next But -- be other like is temporary. service think. Steel providers. They think funny year stuff service eventually and to eventually steel as capacity that of like steel itself. and

because some a of And and And On that we any have sort of this drivers that which we're program. for off. issues already purchasing labor set kids to of there's truck little is year's than come We're years maybe costs, don't now the were the that. And through well true the used couple as field been who them a ago companies back year. they jobs. used this an -- It's little jobs in It's take we've about. for I'm a in a retirement as people stuff, from of -- the operations. People average work tend less somewhere closer kind else to older to or downturn their to gone business to of They've oil driven our to lot in years. good talking is the We've Walmart, were last of Amazon out. especially bring challenging. And whatever. be work business the service

to that's the going a answer fairly will is think our component bit also. affect sizable I little there's labor increase a G&A So

all to our people work And are pay it time. this good you have oil Some have something. of raises year. always people Amazon more. I mean been business. tough our is the people, the a people cyclical all going IT could they've at to get I'm sized or who -- That's through not which really when bothered this. accounting Cyclical business way by

added so you $X.XX – barrel forget through probably that. dollars rolls about equivalent past of you're couple Could you're is add a all Sometimes talking as total in of when which about – it this through.

So it's so $X. the up price – than I $X more oil BOE went a think

somebody getting find the Johnson me you pay it's a doesn't the I Band-Aids. so strike already not either to where unwarranted. We're told Johnson, bit given or before like unfair like And and money to workers got little & to the this more for they as

Umang Choudhary

Karnes. question Makes sense. non-op in activity there? And is update Any on latest my next

Steve Chazen

They don't tell pay us, you it. the you sort bill get of and

know in really a positions but positions is not production. by the big held in these don't it's different. companies Karnes of thing leasing because maybe that sort You Karnes Permian. and very And their lot have all of just

two some that And the you pressure. true probably have drill not for put of in a can you today can lot of well where in you have off the years might a competitive leases somebody so thing without Texas, or anything. It's West losing

I thing would on people can go other there's modest penalty in with have who guess been there'll with well Karnes, we activity But to well need have Permian. the they along Permian that Permian pure issues the if – competing people, to on of wells. lot think in that switch economics. trouble least to no the with out as don't I stand competing of a in who in leases activity So sort do from continue be and At people those it's to forcing

in the in you of much You Karnes. see Permian of that it don't lot that see a

be I think there's So wrong that cash it be all extra turns got I it cover don't somewhere to lot as going could would we've I of a activity. say out. to and is some

Umang Choudhary

Thank helpful. Got it. you. That’s

Steve Chazen

Thanks.

Operator

go comes Brothers. question Tuohy with ahead. from next Noel Parks Our Please

Noel Parks

morning. good Hi,

Steve Chazen

morning. Good

Noel Parks

I course talk months we've just at sort just think what then last managed XX. to three and you or a to first happened hang had maybe few when in about of the just in And now November, we I sort topics seen XX macro look in touched the of wanted there. of as time for so

so also $XX about I were remember motion in got your pretty NGL like barrel think prices we've time I the prices some realized can't oil last saw clear And but that. a NGL and we

just about about talk your NGL So can thoughts feel there? you outlook? wondering, you visibility on just the How

Steve Chazen

XX% is sort mostly of value all of And NGL gas. and it's so Well, is oil. sort XX% the yes, about is of gas

by So very some the and driven oil for prices. is by The prices really the gas feedstocks. is strong demand pricing

the with but per gas in price effectively. weakness se, see don't float I does So it it

prices it People they forget be forgotten and and decades. gas the tomorrow. And some March other have So before change $X follow and could for April change in that they're were and it number East now February. $X

gut gets every call somehow my come year. March April in and and XX. So February warmer is And

commodity cyclical gas. heavily So by influenced it's and a it's

-- I petrochemicals but is into I demand really. that the fundamental fire think and market the So whole sector very on is strong

Noel Parks

another to constraints production far raising pretty there US' in wanted as I as ask and about constraints thing some expand physical Right. I know the the ability that on talked And you serious production. about past to we've are Great.

the last backwarding to back. the of sort lead over months Just cost takes really rig the and just or environment what's actually up strip it just next [ph] it standing just from your getting given on time the with what few US happened year two? what on macro and a wonder thoughts can I your thoughts cash are do supply

Steve Chazen

stop will and -- Well people and not labor the large-scale from this much on steel year, think stuff constraints I increases. the supply

what choose Remember it's the EBITDAX talk simply spend. pretty next into what cash number the margins and is at drill hardly about people As of so-called run number they at wait they choose are oil to free Not more drilling. they some And year, that wells and they see just $XX drillers they E&Ps can heart. we God-given enticing. to less to spend the the go most flow

but so over this whatever this so probably are do to can not And don't and year. how choose to think time margins available much the much they'll spend think more because really year. it's to that they I I they'll them see accretive

Some might, the think really ones public the people but private I can't. of

so next that. year, year may take And beyond even maybe another

XX cautious next production I think. the be about to see months, for US you So

Noel Parks

on the you I Right. kind me. A&D that in said the one know of for might in what updated Great. spot Any you're thoughts just market. last And the past nonoperated interest? seeing for the acquisition Ford a in for Eagle sweet be in market you've the

Steve Chazen

they about over the be be owned interest would operated as to the IQs But what people would with that true. XXX in same interest. price saying good. should But you're if seem they non-operated Well get think were by

Noel Parks

Right.

Steve Chazen

grasp there And cheaper company. real or rich PDPs could market got buy a my I -- buying a private cost as be in Giddings basically we We were the interesting call cheaply story. in But you PDP mean. to areas generate DD&A Xx speaking, good really whatever Karnes or the it different I can are area fair a equity story. the just had less a spend so PDPs want of that's Karnes our for rate generally If number from why DD&A of not in that locations buy a parties. would than or But or some make really third to some it is we're in to X rate got to where PDPs. an a undeveloped where

can in. not get I So get that's we're with upside we that something locations, we think interested some much If it. really

think for optionality amount acquisition Giddings that. the a the talk was we But but about or there was upside could I of acquisition a to production, absent lot significant the perfect of we where paid upside, original it.

million other just to at worry understand we're than look So, few had. We than to that impressed. we We about to not in cost of and we're find for that to really better. can other need our to anything locations we just maintaining they growth can't locations. that do have anything do as we're didn't worry dollars about looking what It's If nothing don't it's really area. we buying make reduction. look Because And somebody fill-in it acquisitions, acquisitions have don't where we do get that more margins. not at we We that. a don't

Noel Parks

the where enough hands my Eagle hasn't your can't the my what guess said as somebody five like of when acreage guess comparatively around last woods long I is, there could that. other had. you where a I I thought question Right. there much like on how there people in understand first over be opportunities been lot study. be production years. locations many But neck they the And be held the that that of it as near just gone locations describing received or someone's Ford Permian hand that? energy has well But by doesn't the into is It's that anywhere has of interesting think

Steve Chazen

about way some. owns think the reason that it. do There's and nothing which it But with who for a that. has held whatever with they it's clearly physical to aspect

they So again perfectly but rational. you was party ever there's what met the perfectly do that would rational know no seller I

Noel Parks

enough. Fair a lot. Thanks

Steve Chazen

Thanks.

Operator

next Pope from Our with Nicholas question ahead. Seaport Research. Please comes go

Nicholas Pope

Good morning guys.

Steve Chazen

morning. Good

Nicholas Pope

Kind $X.X kind quarter. M&A curious was acquisition on flow? question. during listed have of did I acquisition the cash you the What following on the million an was of the

Steve Chazen

drilled to acreage It to going was are wells some sense the -- a to are there. drilled a going to be the think be some for going small land wells I it was made us acquisition. that price We're being and buy are the drill wells wells know and drilled. We

Nicholas Pope

Karnes related? Got Giddings you. And is or County it that is in

Steve Chazen

No, it's Karnes acquisition. related

Nicholas Pope

available any purchases… guys repurchase it the Got of it. were I make not shares it appreciate have comment there just agreement. there of EnerVest clarify think was that to from part limit that. prepared that, made The flexibility from of that the or kind comes the EnerVest. I you Is is the on share Chris was repurchase Class I as the comment on The repurchase -- to wanted B from remarks.

Steve Chazen

one an who essentially. separately, because with the dealing or insider each Board that nominal is our EnerVest. it's directors, insider, of we're -- Because excluding trade which the The of in approves acquisition an party head name was person

real is economics that. One that which And right, limit what has care but that's partnership is a is two the so they're shares. is -- really second with Understand the has no whole the in which It which parts. to the about, is not it you an voting interest, And interest exactly business. share, there's no it.

a buy a that's the company it, -- it. buy buying directly you So when we extinguished and partner of piece when you're

So X% buy over owners the we is spread the if X% of directly. that the all B shares -- ownership

So it it's done because stock buying up it's EnerVest. count length it the Board doesn't -- B they're ensure hasn't approved why But shows that exactly. discussion the little any an a different arm's with reason than is shares, the the to and because when

Nicholas Pope

That Got makes it. sense.

in versus comment during to Karnes operations was Because of in off XQ side, that another that what was there. quarter? the Like online activity in the in On brought skewed I release production my a little there What was model was Giddings. the split? your was

Chris Stavros

activity It was mostly that we online. brought Karnes

Steve Chazen

variation crew only we're one any have running this doesn't intrinsic completion quarter-to-quarter But meaning.

Chris Stavros

get things when Yes. things… of can line these And the in turned timing skew

Steve Chazen

is than to things Skew and warranted. try you make of more it

Nicholas Pope

appreciate I I all the guys. time needed. That's it. Got

Steve Chazen

Thank you.

Operator

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

You may now disconnect.

Magnolia Oil & Gas (MGY) 17 Feb 222021 Q4 Earnings call transcript