MGY - Earnings call transcript Q2 2022 | Magnolia Oil & Gas Corporation

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Operator

Good day, and welcome to the Magnolia Oil and Gas Second Quarter 2022 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 question. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Brian Corales. ahead. go Please

Brian Corales

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

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

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

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

Steve Chazen

thank remains Thank public for the and product despite company. and business as just you fourth morning good Magnolia And joining us a our volatility, continued unchanged. completed its you model today. year

supported Our operating our strong values accomplishments. results numerous by ongoing financial and the confidence and in business and core our based on our team's

development increased profitably transitioning Over mode. asset have a four our production while the full we years, last our Giddings to

significant free generate flow to shares. opportunistically continue also our us We cash allowing to repurchase

single production over unallocated can bolts-on completing and gas for expected of be EBITDAX oil remaining limits model is annual cash acquisitions, wells drilling repurchases the growth mid at provide used business share spending and XX% The property flows small and dividends. Our on and time. to our digit

We far allocated excess cash value third and that year to exceeded less grow should production enhance XXXX have with while the to this share the plan. cash our XX% flows expect a company. of between our our XX% we full per now our investing year far So than activities of

several net set operating volumes, results grew and just while and and completing income quarter earlier including total and wells XX% financial margins, records XX% metrics, our production of second sequentially total exceeded year-over-year operating We Our guidance. which barrels for spending generating our EBITDAX X% company earnings Giddings per production performance of to share and income, led the wells well and more activity. operating end for income guidance margins some was Production our quarter per efficiencies Karnes our at XX,XXX of assets, the net which both Giddings, was of day to XX%. additional and due non-operated at ongoing high better in drilling

year's quarter. our total strong Our reducing to unencumbered diluted by price than shares which shares, with balance at combined total to compared free quarter. to is outstanding last $X.X second remaining approximately of flow, The by a X.X record our more product build free allowed second million the $XXX cash flow X% of million. contributed hedges the cash record repurchased end We billion our production, realizations cash

growth and production steady expected outstanding dividend approach is This our shares. a double growth. combination annual in consistent cash result flow in balanced allocating reduction Our digit provides to our to

associated $X.XX believe Magnolia's plan. this payout is to of We to annually from transitioned – We recast secure year payment to compared dividend with our will share XXXX. that we $X.XX payment annualized base represents on share next a a with distribution and new on $XX based the dividend oil dividend financial with yesterday, level last increase dividend have the business XXXX execute full The year as our we our semi-annual revisit product results per we to year sustainable less – per and basis. their a XX% using price rate increase to environment. initial prices at early base year quarterly our results quarterly announced a full dividend rate than As and a of $X.XX our at level plan half dividend grow expect continue current to from share

resulting assets of two believe shares our that operate to drilling X% continue growth year. our plan at towards outstanding rigs per and our to balance share proposition free combined our gradual repurchase Stavros. and quarter. XX% be completing company cash outstanding turn of across of our prices, result reduction including is to generation. the the value each flow the activity level should a We significant our of call allocated this to investment consistent moderate free wells for the of now drilling is shares expect well least in Magnolia's steady Most improving and of below the two spending the current flow product company, cash We differentiated. At production growth share expect for over capital cap dividend. of maintain and I'll Chris our in a be per the growing to with

Chris Stavros

our $X.XX. quarter many on demonstrated price Thanks, to around our of management items share and also refer shows income strong production, which on the by free for of earnings margins will million production, quarter, XX% website. business during model of review growth. notably EBIT it operating realizations, second for questions. of diluted $XXX operating our hedges Steve, which from records everyone. supported by I net income very the financial to earnings execute established quarter operating with second I'll total and year of the before turning over key diluted as per for the generated provide additional Beginning Magnolia product stronger results the containment and continued adjusted We very some the provided the results. strong most were of period. These quarter, supply quarterly and XXXX third our good absence for We chain overall or and second cost efforts our presentation financial metrics quarter and our of per the and production including remainder some and share, cash guidance morning our Slide quarter flow summary on slides net during X, income, found our

second quarter. the we Our sequentially $XXX XX,XXX per quarter wells equivalent the basis associated due which $XXX barrels new adjusted EBITDAX non-operated more grew benefit of to and our or during and higher a capital half and Overall guidance just than production XX% our company year-over-year year. the was completions million production than was million activity and oil bringing X% volumes our total expected, of D&C on on drilling with activity was somewhat our for XX% second the earlier day capital and the in timing should of EBITDAX.

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

acquisitions D&C was incurred million. $XXX capital Our land including

company's we X.X ended quarter $XXX the value. sheet shares cash quarter, million of with balance about for repurchased the $XXX Magnolia the and million or XX% market During have of equity in million the

began Magnolia's this repurchasing in shares averaging approximately We a our XXXX. XX time illustrates which Looking by nearly in diluted million reduction we've under the the during the X shares fully had share we shares shares by average the authorization our of since Since count towards of outstanding remaining our total XX.X weighted diluted at sequentially million half XXX.X the shares the XX%. progress share reduced specifically shares directed that repurchase or million second total repurchase Slide end is program quarter, in count the declined market. of million quarter. X, open at second

payout semi-annual dividend a quarterly increase initially to pace as represents XX% quarterly dividend Turning Slide discussed, $X.XX rate rate share. we schedule a from schedule This Steve with to And from our XXXX a transitioned annualized base our rate. of X. new per have dividend an

shares least annualized moderate plan overall at for quarter. of at aligned our outstanding our growth by company per dividend and least share and per achieving Our is supplement XX% of with expected strategy reducing is X% to growth of production the annual the rate growth

We will oil early that environment. a based payment results price and next our recap rate revisit year XXXX our dividend in on $XX

we net position more remains the cash of than million. very sheet and a ended balance Our quarter with $XXX strong

which second liquidity quarter our of reflected is our million debt million $XXX Including callable million in million. of our cash now credit total notes, not and XXXX. balance gross are senior ending $XXX revolving Our mature is $XXX undrawn until facility, not $XXX our do and

Slides of XXth June balance shown on and liquidity are Our X. sheet X as condensed and

increase cash total Turning over at the the looking product seen to only costs. our modest costs increase past a we've year, and income X Slide our per prices in despite and in margins, substantial unit operating

which year-over-year increase in are compared in our our per revenue this second margin higher per $XX was to $XX.XX the product for sharp an line rate captured were XX% levels. costs of production of and related Our is compared of year XX% increase compared year F&D $XX.XX to operating our than increase put our BOE Simply total the in – barrel the revenue our due per on with $X.XX is to increase prices revenue $X.XX a or G&A per costs, nearly that increase the increase cost our generally cash double about adjusted income second basis. in operating in two per DD&A was quarter to margins more The period. levels. Almost was increase BOE total operating quarter of modest per ago over which taxes, thirds BOE, of the XXXX, including to BOE. Including ago of nominal directly BOE

this guidance third pads the next multi-well we're asset. of two and level One rig plan at Turning year, the drilling continue remainder quarter operating quarter to to will of end drill and continue Giddings rigs to development of for year into second activity for and the year. the our in currently the or through the

some mix in Karnes of and rig areas the both will including drill wells appraisal Second a in wells Giddings. Giddings

We operating offset which continue in our service to help of oil Field, field inflation. Giddings the the efficiencies some should improve

we've wells this some year. As lead additional previously, the to noted net will also during

efficiencies well non-operated production of and as year results we our our assets, activity, our ongoing Given for levels. expectations full as XX% XX% between to improved XXXX and cycle growth strong are XXXX higher well compared from the times both raising

XX,XXX between would our we and Looking day BOE prices third to to million. levels. at to We X% product between tax XX,XXX around capital per be production XX%. and our quarter Chip million the to cash be current D&C is and quarter $XXX rate our be XXXX, between of remain expect estimated $XXX third total expect effective

discount we to of prices. narrower product high barrel a production, to Oil our to price capture fully levels. I current As are for both benefit be MEH unhedged oil us remain to mentioned differentials allowing and anticipated slightly gas earlier, historical and $X completely $X than the per

for be diluted estimated third fully million is X% is share Our the shares, ago, count below quarter which to levels. approximately year XXX

released which we report our efforts. update The report, our month on disclosures. last expands significantly earlier on sustainability Finally, provides our XXXX an

and in a natural The teams safely executing take our Our responsibly to sustainability section now questions. website. are oil found report We're gas ready to resources. be your our and can develop of

Operator

We Please begin Securities. Truist question-and-answer Our will from session. with first Instructions] [Operator question now the go comes ahead. Neal Dingmann

Neal Dingmann

dividend? dividend, all. mentioned you how question, even value? think buybacks Thanks on about adding how boost remarks, my at the mentioned wife Steve, think speak just for first of dividend you or something versus first and that growth, all or and wondering that question just guys. is the context morning view, Steve in prepared could your you is about versus external when No, sort got the pressure from adding look you much Good my about I'm you your how value with is, in you just those of comments to you to wondering organic seriously,

Steve Chazen

Okay.

of dividend part dividend this with to at So, think the we'll base plan we believe least dividend. the start the business that XX% on annually. we grow and it We is integral

$XX. the then revisit this you based you what rationally we'll results, first we'll the on rate pay another And in recast $X.XX. the expected So year's quarter, in fourth the quarter,

easily a in cover be means we that $XX the dividend. environment, what So able would to

there really share opportunistic. you The a last is doesn't things. may repurchase us. have sure it into would the some period even blackout And did during to are cut a market opportunity other know, noticed, I'm little people a always – some is, know, well So The you volatile. as repurchases company. of I shares for company month normally be that. lot it And

way to more we think this important I assets continue at It's than reduction saying it. are worth share look that just as we part view So, way. an that of the really

shareholders our fixed is total our repurchases sum so, the really the share to plus And distribution of the dividend.

of dividend price we actually the as to high, too shares We'll about the probably not buy is the shares or you do. can approach. in anything clearly what a continue we're we that kind say, But an you share as the to share cash If up we need don't can We environment. in picky. this is to different is shift Far as go, but this going is reflective, – program. Building as get of to pretty to sort rate is in cheap. interesting, where EnerVest or know as long our point acquisitions accelerated long reduction

the rate. it, If PDPs, value you SEC pure a PDPs, so curve for that's and buy pays discount XX% you forward at

in because it, are is X% XX%, taxes, almost count their that overhead, on and wouldn't the real drill return. when up that been that locations make XX%. are competitive they are does there you if only Most for which a wells about entirely the can way around XX%, our pay and that be you talk virtually you package are you get packages The put they returns If about purchase PDPs to going more tax, for talk sale and probably business. nobody you ones have are the of

the I do basically are packages. PDPs is competitive wells So of mineral if there not too as around them base generally need they wells. think, and small we as the been not, do. $X we continue for in we'll And $X really don't interests us. And those looking if very to like return $X it's And sort of our a because, million, there in $X or those. low million, the I buying million, million, maybe now are are we can a radar something in wells have concerned interests But drilling are need these wells both than acquisitions, small more $X But with we larger really million, be getting while. lucky. far $XX fair we for million, number, Giddings working stuff. And is for the has of

we of fit don't us maybe one, return the or probably business North we competition far of these would where decent rates orphan Rockies, probably Permian, accretive something And that's thing. probably forward as money the So, and acquisitions, within Dakota as the skill. like would something our clearly acreage know We but of – in going or about us and model less do. one lot to into that's about a are Eagleford areas little our need and and that not Giddings and anything for sort make places we knows a can

it. So, that's how we about think

plenty work, work there volatility a of of opportunities view buy gets point it reasonable share rethink we'll different be to dividend. right it a make now the process. shares at it plenty to So repurchase we levels. If of way. as It’s the to just form the seems the doesn't we where But can't or and

Neal Dingmann

Steve. on to heard in successful or follow-up give of now that? had the a I details, thorough Would in delineated got high Are that to haven't of XX,XXX, you your you at look maybe while how you if are confidence able when you say then a you've you now talk quantify already? one Giddings, talk much you've I original suggestions Now, wells. how lot could. sort or able much beyond about And

Steve Chazen

have currently look think five-year period the a somebody that the be quality don't about the of how might rough locations at forecast just period way about in Giddings, as actually Well, pick in think and actually we Permian. same what ones the we around think And We same I we're we that and have the we forecast. and forecast a drilling. they can long

two rigs results in So sort we drilling of Giddings with have about getting the five running, years same activity we're of now.

in acreage, not because my really that's than a at, rather business, looking estate way at lease real not really So of deliberately. looking

way going at a in we're maybe and may that's look or – fourth of lot eight-well the drill five it. here to not Giddings that's so, we in locations. an the with And pad And be quarter six pad. And they a

it the starting on. into third the now quarter, it we're fourth So through will quarter run go it sometime will

growing. of some business more of out a the of cost structure. So, to infrastructure take the is scale some adding We're away the

So, a now it's be today. from than going to bigger three business it years is

about so, And we are optimistic pretty it.

more, because some As reality. years But that a this something divide but ways know on how what of of of not you give and far as misleading a five based if sort by inventory reflective bigger far acreage inventory now five idea will certainly give as and on program maybe that's stuff, a number an it's you we get of think about as two-rig much number got. it you years probably to we've you

So two will I it overcome grow. think and safe for the decline, five rigs decline. the continue to years we're exceed will continue pretty to The

so we year. And grow in every will have production what

we're with growth. on of Again, do. a what that would reasonable into and business pretty think, acquisition our need not could if size, another we up it, we to could But safe, pretty reasonable it. mid-single being, something extend go size large So, that and I that this, now digit find model we to right then on we add we're full do rig fit

Neal Dingmann

Thanks, your Steve. Appreciate time.

Steve Chazen

Sure.

Operator

from Our go Mariani next Leo with Please MKM question ahead. Partners. comes

Leo Mariani

to sweet a of really in the Was starting increase here are to all Yes, some kind you little acres spot on sweet And of bit could that of XXXX. get sense kind was move hey if looking guys. spot to originally of I of another about the wells some of but about had you perspective step-out that into a maybe in kind progress hear then know hoping the category. there kind more trying acres more just talked that XX,XXX sweet Giddings, XX,XXX this spots. you

the here and XXXX Just wanted sense to some drilling of of in get the a results recent there. progress

Steve Chazen

working had Basically, there spacing. we've good One is what’s things on. never is been any really idea spacing. two We

be areas the we together. been so the rich found closer to little And oil we spacing for had than narrower drilling

So in the flows we locations is the gassier were was about more better. okay, areas, there because doing and what gas

doing we've that. So, been of lot a

concerned, As inventory. to the we are areas continue far to as add

something last you by As question, the give number you answered number of misleading because low acreage don't locations. I it's divide get think to will a I an and

you we got extension it running think I And program five at two in successful. looked is way with the very going the been has the Giddings. on That's years time wells look like of that should currently that just rigs drilling. ones we're full the the inventory

And five-year so, keep in today. we continue environment quality a work at high to oil of than lower wells price inventory much

So, and are very paybacks well. very wells have these doing short

of better them wells. economic Some than the extensions but of others, all were were

Leo Mariani

us Is or on infrastructure And on of more Giddings? the kind some years you in of to talked you details some update costs has that down just one used $X a Okay. bit well of would these guys about recent more and more million number a to of be Giddings, some XXXX? terms so throw been out wells XXXX And or at able I get to beyond also guess projects I know rough there XXXX inflation, guys a or you little you around provide kind well cost? at could of of

Steve Chazen

Chris. Yes,

Chris Stavros

of drilling it's the a lateral been in foot costs. X,XXX Yes, running Leo terms about per

up. our two. over risen year picked laterals through or length of The has sort last and year obviously we've Now the the of

follow-on, of things momentum what results has of mean mean, before, lot up efficiencies which drilling other terms wells. that. doing more asking lot our on added picked we're of a lot in were I I mentioned a you new we've through Steve So, operating and a as on a

the the indicative effectively production, picked in So, some the added sort we've the efficiencies, or momentum of of wells. well new pretty you in of terms up volumes we've through the performance that can had see year. it just It's the of

at or better Steve later year. a that so, pad the in And the be year late on this. we've the in will lot that coming referenced gotten eight-well

said be So for that. there is a lot to

Leo Mariani

And just around any Okay. details infrastructure.

Steve Chazen

$XX when maybe is of the the infrastructure. the infrastructure it some predictable. not something We well, can't was both production We when, for million $XX and because own because to added frankly, reasons We've planned they the can't The on. that. can't turning drill it's on they this deviation capital spent about on non-op turn we capital predict and it had they're going predict if had when About stuff, million. we on originally their predict the

– So year. up in the picked the of materially it's half back but

we drill some Somebody money short and least a $XXX both at now inability on But not capital oil's predict and lot capital. that's really said, oil we're maybe a generally, woke should of up our the wells. to of

spent So us just I extra as million production year. capital. view $XX at the going give next It money well is more to very

are year strong So quite production now. next again based on should be we where

Leo Mariani

And guess it kind That's next mean, little years. rough a infrastructure, call I'll the I I that a maybe million follow the Okay. where on is up helpful. it's couple for small, bit relatively of year number $XX just on to a

get Just you forward; you infrastructure sense see more trying a to significant look needs? do of

Steve Chazen

No.

You that. don't I won't see think.

was opportunity this a costs truck. think by our lower less basically to haul to oil I one-time

Leo Mariani

Thanks Okay. guys.

Operator

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

Umang Choudhary

morning. and good you, Thank

Steve Chazen

morning. Good

Umang Choudhary

sheet balance end $XX a kind at there, scenario the let's answer thorough at if, investors through oil about to dividend it through look to $X.XX very X. and a envision don't current to will one-time value on the make returns. of at Wanted XXX If organization $X.XX you cash day? do In a pace year? – purchases quick for the like capital that remain for prices creating to where the is prices you oil build the a then follow-up come Or the than on of and the special more and first plan oil the of plan My remain on you scenario deployment on future have and share dividend, gas. hold so gas the recast

Steve Chazen

the of a mean, actually market be we've you there's, to noisy market, twice at I the in lot of sort that, oddly retire periods or these through level so you than the acts able of been to sort goes shares buy higher can a go – X%. shares. to We expect the

I now we and they're getting the all to shorting happening we – us, spending don't continue think expect I any selling money. shares regard the the to the somebody's have to selling So but buy continue the EnerVest them shouldn't from, most where of shares money, what's shares but does. what is without know and We trouble to

be we'd make We able As far couple as a balance have our it some to special expectation be survive acquire But from we dividend generally goes that's cash build $XXX would time. the so some point environment. is where only easily and any cash that reason up over in we're The high can not going the balance – to an of million shares EnerVest sheet. plenty.

– first As far price. speaker. have wife wife – but by the a pointed My the does is as doesn't dividend. stock as the out doesn't I dividends the we'll look don't we count she to the pay dividend was more mark-the-market, concerned dividend bias at my on to have

be for her program. will dividend So year good this a

Umang Choudhary

awesome. great, That's

Chris Stavros

$XX $XXX forward I shares, production. simply going million, I think progresses, $XX $XXX,XXX $XX or acquisitions can't that as you're the it oil is in is build we're I what you'd and don't find other question $X mean, million do is, going buy small, million, of where have gas the day know would to sustainable to, going I exactly if we to as to you try is, the environment number? sort get find because be – business a in some to we the to to closer some some the forecast you other environment to But think

– but that's may not be valuable somewhere, use fair for of some hard money. think right forecast a to out able is what family is it's share thing stay do would to sort Giddings sticky there's different that environment, there, very stock off ownership I the in you of some of account reducing we the and the a But of of to people number sort that just a who now So do not in to in generally the speaking but want been

Umang Choudhary

years following sense, and lot on that are a us just can you remind getting Makes that were a oily statistics right the that into mean, account five guess and acknowledging before more now you of years inventory where your of argue I in up now? spacing Anchorage? part I sense of you the the in right where comment. planning core pacing, on for appreciate probably five I could you have than heading one

Steve Chazen

strategy all than how we wells, and can deploy is of make sort area. so – – Well and lay pay five it's – gas attention can can five what we can really of we sort we much area. probably part of oilier We're years sure, We in some how for and we and we're look but find almost have more how It's out. we in it's isn't the a area whether free. don't agnostic, gas, and it drilling oil years easily an some we or some gasier money money wells think much about just to at it's

wells, and gas shifting position more shifting really drill quickly or but on may price. product on based together. based the we we how It's land we what really do bring can isn't So we it can what can organize

or good. little but that, a area more gas price, the areas natural think could complicated gassy, now more the we're any We'll again chance, will view, price not in than pass $X we right different of the oilier driven a a just, by the not to that oilier $X.XX falls of product to just oil shift locations. continue and sort have on It's unlikely splitting all. gasier by I that's $X to with gas or more but but areas, be necessarily So probably or pretty between sheer better land, we're it number also active is

Umang Choudhary

a that of you. Thank Now makes lot sense.

Operator

Our Austin comes Rice. Aucoin Please next from question Johnson with go ahead.

Austin Aucoin

morning, Good you my questions. for Thank team. taking and Steve

Steve Chazen

Sure.

Austin Aucoin

about CapEx the for in [indiscernible] million $XXX forward of midpoint quarter think guide, million guidance $XXX should of million XQ million and a range? With going rate $XXX run $XXX the we to of

Steve Chazen

Yes.

Our forecast to activity is non-existent. shown be ability non-op the to

use drilling just for of net a a we number – noise. We more the we and $XX than you'd production can't. we'll in participating outlook like and inflate that don't $XXX And We're wells wells, or – we've We production like get So money; can't. attractive. see as so as net just just you last net oil inflation more lot or and can we accurate more it's just of just any pretty we if not are, adjusted probably of lot quarter. oil that's more a It's because you're can't. is

in get certainly you money so And six months. your back

I see somebody just imaginary our has. make we problem. some that cut Money why back a So of got not don't We money. to lot that on would activity is number

Austin Aucoin

I get adding follow you to appreciate said have has it be, Would rig new but up. still changed? And be the a color. a a industry be it rig? quarter seems week, would the hard to Last anything every

Steve Chazen

take with running, another Well might we right wanted months now rig to we add it a rigs six if to add two would rig.

have months there but have were, it And imminently. a some to need now. rig. not don't in plans a that, do if point to to right if us it So to But would rig, we'll add take future, certainly do about any the six we at real there's it's add third no

Austin Aucoin

time. That's me. you Thank all for for the

Steve Chazen

Thanks.

Operator

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

Nicholas Pope

everyone morning, Good

Steve Chazen

morning. Good

Nicholas Pope

that there detail inventory Giddings on do you as how up that right the I about guys? to and gave kind back for inventory. that runway And I blocked of is to have in on mean, there – fair know you Karnes, amount Ford guys of it's think the of you you with is a now? shift expand You Eagle side the asset And opportunity operators, very

Steve Chazen

operated lot a area. the the not non-op it of in some Frankly, more in

And the competitive the sometimes with aren't wells Wells. Giddings

we the So, them Giddings us. from better stay away for Wells basically returns and give

or do both that gift where competitive could relied on while. in in for and the There's can keeps probably Karnes. than basically we Giddings probably right plan for and a giving. year – of mode do Giddings, a into the just But around we'll more a So, sort fooling drilling go stay we Karnes, always wells a to and what a some we now rigs that some wells the for better rig, it's year simply with in going with whole in non-op take for so aren't a whole

Nicholas Pope

interest any area, concentrated of outside think Eagle just in that of in even in not it's be or there nearby? competitive Would expanding other parts Ford,

Steve Chazen

the in of question a locations, is there. sort out There that? number that out drilling thing do how tend fairly locations do private But you large basically Well, stuff I there the equity and the with Giddings. of not else you spend would PDPs to money get drilling the well, But in buy the how be you we in competitive bigger, is guess.

out So there. these we the that promoters locations put wouldn't drill

deals, there company is for point, this the some just a think small at So, might I focus because it be not but it certainly expensive. too

us. We that's got exciting so bit, make real is I a X% a than basically to business lot You But depleting acquisition, cash. cook or books PDPs more some looks something which because more and this a sense a asset. think return as to matter, cash it It me. a a can to doesn't of lot like not buy don't we're free X% make the a you on free little generates PDP

Nicholas Pope

had. it. I That's comments. appreciate the all Got I

Steve Chazen

Thanks.

Chris Stavros

Thank you.

Operator

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

You may now disconnect.

Magnolia Oil & Gas (MGY) 3 Aug 222022 Q2 Earnings call transcript