MGY - Earnings call transcript Q1 2024 | Magnolia Oil & Gas Corporation

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Operator

Good morning, everyone, and thank you for participating in Magnolia Oil & Gas Corporation's First Quarter 2024 Earnings Conference Call. My name is Megan, and I will be your moderator for today's call. At this time, all participants will be placed in a listen-only mode as their call is being recorded. I will now turn the call over to Magnolia's management for their prepared remarks, which will be followed by a brief question-and-answer session.

Tom Fitter

Thank you, Megan, and good morning, everyone. & Quarter Oil Conference Magnolia to Gas' Earnings First Call. Welcome and Chris the Brian President President call on Stavros, Corales, Financial today Vice and Participating Officer; are Magnolia's Officer. Executive and Senior Chief Chief

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

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

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

Christopher Stavros

cash or delivered your consistent $XXX first million. some we of Starting In with net D&C so X review acquisition year, our of at you, and will far a development a an guidance generating important then of discussion on EBITDAX model, financial quarter take adjusted level discuss morning, business to while Magnolia in bolt-on million Thank field quarter adjusted program quarter, for and free million first continued our investor XXXX and the quarter by our $XXX of provide of comments us keeping with our flow. first our questions. strong some operating capital-efficient actions on everyone. progress operating you cash that Brian presentation. $XXX costs. plan completed recently financial our total spending joining taking the we additional this highlight the we're reduce our detail results some Tom, first We before I we of XX% today income will appreciate greater noting provide good results. and Slide

our billion free cash flow through to return our at free oilier and on of top significant activity share program XX,XXX of assets of production production part XX,XXX provides we Giddings attractive very in gas operator was to some from portion our payment. our goal for company from a a cash increased Total As recently end of position the year's were characteristics core have we that and we Giddings. solid financial oil had acquired our performance similar bolt-on late benefiting planned and acquired a of the $XXX evidence first acquisition Last We than of heart week, for performance, early per plan. in acreage. meaningful closed in properties well this oil last year strong from assets and year. day, Karnes last little our barrels be quarter to and our program private These dividend operational to repurchase shareholders, acreage a production XX% returned Production our guidance towards our of equivalent of the oil was was ongoing our XX%. of XX,XXX representing ahead oil in of barrels overall day, quarter per of year's including quarter, oil growth of production at last day, BOE X%. the year-over-year XX% compared of production growth during per expectations, growth to coming providing first company Total Giddings at

contiguous enhance the opportunity Magnolia the acquisition overall by improve opportunities of making to the business and key sustainability to generated strategy oil is gained with knowledge replacing produced and of latest through core our also The this future our part set and both significant of incremental opportunities some not gas working This often we cash capability and is returns. new acreage. to existing simply our seek that field increasing current our to high-quality better, acreage is the but development leverages that Giddings some interest of operating footprint the the adds our locations transaction working out of use attractive interest. high bolt-on in Giddings, our acquisition while I've mentioned, inventory excess in bolt-on extends the the in and in goal from have business of As by our high-return new deep of

and Magnolia the oil This X, approximately Slide the additional per our net for most moving the strengthens enhances this in representing planned Magnolia majority an located and on continues operate BOE Magnolia, with base to of position rigs Giddings. a of the Giddings with activity relatively group in which an in and about acquisition significantly drilling over in and shown company of X,XXX small Washington, properties X As is of acres. of with volumes. total XX% X the XX,XXX operating core spanning are ideal of completion XX,XXX production year's include majority amount forward. acres Lee properties Fayette acreage Giddings gross The the Counties, day

D&C full million year range to for to in $XXX guidance Our XXXX the million. be remains $XXX expected is unchanged and of spending

Following cost operating nearly XXXX, on gotten we drive to start and last have strong by off continue to year's our success efficiencies. and drilling completions further in in reducing XX%, a our well

efficiencies high-margin well program considerable our support improved this costs to laterals, realized drilling in Lower improvement XXXX, While drilled, line overall be for with wells days we year's reducing per well. recent completed have longer Magnolia's operating to allow turned combined during and growth. more helping somewhat in includes drilling

mentioned we activity year. volumes will production first this on focus remain year's portion expect resilient the as last that oil plan. assets program the of oilier our of As than year's some anticipate our We oilier should last oil strong a this I and support earlier, to development acquired be quarter year

view away the that with natural year. its year Some would natural due gas production prices, of gas expect in we prices our some and that in growth drilling the later year very should activity leaned gas the to from see the weak early our as reassert progresses recovery

chain few, improved that across from systems and maintenance are name deliver initiated level Part optimization utilization, will to cash and per have reduction assets. and a lower the efforts areas labor acquired expected and the assets. costs increase field field capturing of a year BOE efficiencies our reduction procurement management supply contract teams the Lastly, X% targeting other the optimize and throughout repair surface XX% field just synergies processes compared to and LOE first program second These during cost cash while quarter. to half as in will and to such such our our of these initiatives to our the operations employ a

while our assets the an is to on past learned time evolution and grown we believe X over embark appropriate years, program. has operating Magnolia As our this in this

high the for these us record should cash Our and to improve goal details business, Brian reinvest objectives. flow our additional the financial either provide quarter actions to return efficiently to free on on operating providing help our to achieve while first and turn margins or is in our to now over I'll track operating generating more these shareholders call results.

Brian Corales

some across the questions. Chris on it and had XXXX board. morning, provide to over of and Thanks, good refer Chris, and as X, results some our Beginning before slides Slide the first review remainder for I'll Magnolia and on presentation of I for additional quarter also from our a quarter first the the the discussed, guidance items website. quarter found everyone. second year turning will solid

generated quarter, income million total income the A with $XXX $X.XX During attributable net stock total common share. net we million of Class GAAP diluted or to adjusted $XX of per

adjusted with capital was for the million, quarter adjusted million associated and EBITDAX below $XXX of facilities total of XX% $XXX Our our our drilling, XX% with almost and associated EBITDAX completions guidance. or

total X% our share year-over-year production volumes equivalent to quarter fell by X% year-over-year barrels to oil First XXX.X million of day, grew count per and diluted XX,XXX shares.

$XX repurchases. million. was from and ended and and Total quarterly cash. before year bolt-on chart levels. $XXX million million we with flow spent the on million, the other capital Slide increasing dividends on by $XX cash in million at working million, $XXX in small for year-end paid the changes XXXX toward operations capital acquisitions, started X, cash first $X Cash with of Looking quarter working cash million of primarily $XXX flow with allocated relatively items share and of $XX million $XXX We quarter changes was waterfall capital Giddings, the from we flat

Looking our share first illustrates goal net diluted shares begun X since issuances X. of the we shares program by chart repurchase during XX% our have This metrics. shares, change sequentially, supports share improving quarter. count and average of fully Magnolia's our million shares million than outstanding total the more weighted at progress declined the per half we've of in diluted XXX.X Slide shares in of share million averaging outstanding over repurchased second leading reducing that in our time, to a XX.X Since 'XX.

repurchase under directed open repurchasing authorization, our We are market. which the shares million in have share X.X A remaining specifically toward shares current Class

Turning to Slide X.

has grown over share dividend years, year announced a including on past quarterly XX% Our substantially earlier basis. few a per $X.XX this to increase the

annualized Our next an rate quarterly per provides on of June dividend X payout payable and $X.XX dividend is share.

outstanding growth dividend capacity and production the with benefits an reducing balance sheet, of important X debt quarter dividend part we moderate the overall cash. strong increasing shares of a annualized net Magnolia's and proposition for annual investment Magnolia million and achieving our supported our is plan Our growth, of from payout strategy very of $XXX by and company. the ended approximately

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

is sheet XX balance of shown as condensed Our on X. March Slide

NGL Slide cash operating per margins. year-over-year prices in and Turning revenue of due gas income at declined cost natural to when first decrease to quarter per 'XX. looking compared XX and unit Total BOE the our to and

ago a $X.XX BOE including The decrease adjusted to was per due G&A, $XX.XX cash to of primarily lower total the operating Our of in X% compared XX%, BOE year-over-year decrease or costs, first were production GTP. taxes levels. year quarter in per

per quarter Our decrease the by BOE higher total was operating $XX.XX commodity The XX% prices DD&A rate. our in year-over-year pretax and income first the revenue. or decrease operating our margin of margin for driven was in

to Turning guidance.

includes capital are capital We expected annual an million, that about basis. to high XXXX D&C nonoperating be same are still production of to of levels. production and the in grow to $XXX spending oil estimate on XXXX single digits is reiterating an our range as expected $XXX which Total million the

diluted fully Magellan with expenditures second share expected barrel count barrel to Magnolia quarter, approximately all second oil million a completely facilities For the Houston second quarter to to and our East which million natural be Oil D&C lower are million, the estimated approximately expected oil differentials XX approximately equivalent are sorry, associated production. -- per discount anticipated $XXX its to to and XX,XXX barrels second is for capital is X% remains be of production -- approximately day. XXXX for price $XXX levels. total production be a to be The XXXX the and of for XXX shares, $X quarter than gas unhedged million quarter

prices, be oil effective expected rate our XX% approximately expect And X% our tax XXXX. We be increased cash with approximately to tax XX%. for rate to to is

We are ready now your questions. take to

Operator

now question-and-answer We Instructions]. begin session. the will [Operator

Our first question comes from Neal Dingmann with Truist.

Neal Dingmann

returns breakeven. the about the could breakeven could the breakeven to look wondering, -- at about Chris, compares maybe now, a just you versus maybe when just just that year days always in these how latest ago. or We've breakeven even you're the talk talk about there latest about Giddings you -- wondering, thinking right how returns you Karnes I'm I'm the talked

Christopher Stavros

of a Yes, quite the we just the this I gas wells we basic Giddings full bit certainly Karnes. talked more frankly, a better. well, little prices Giddings better in The it. were they often their we've most I pay drill and core the out mean year frank around a Karnes returns the less. cycle area produce thoughts or that typical in often oil in drill over and But have And our all, in well. that's wells certainly than than all life wish about wells complete

Giddings the very even environment. are and high So in returns well this

in differently of sort return to slanting necessarily to also se, anything a of just or skewing of rate do or Karnes have shallower per wouldn't the Giddings terms you so And activity decline. wells and capture

us all benefits So it I all. in think

Neal Dingmann

much And brought you the continued? breakevens how your operational have down Chris, have efficiencies as

Christopher Stavros

I last quite of material and with have said our costs our down that And service well is cost bit about of probably our efforts well was working providers, before, a we down through Well, much brought captured year continuing by a XX%, some into and year. this this vendor. that come

a down foot I drilling a faster. probably the $X,XXX probably some or coming So costs less as too, and bit further. currently inroads, little well made more are said, on We've

on real just are that side. things working out well So

the little are bit. of down continue to sort come efficiencies and breakevens So the a

Neal Dingmann

then And a maybe on one second M&A. quick just

on not of wondering million how set. opportunity bit you the bolt-ons, color or more $XXX did [Indiscernible] oil So improving what improve to a really latest but replacing you're location far the gas, comment your set like on did that can there? simply I'm terms and give opportunity that just just how as maybe deal, us as the

Christopher Stavros

prices at money going We've sure. for The time, Yes, least. at right to Steve pay optionality commodity not looking on know I'm low a decline is said oil to cost much long business, PDP maybe used strip a to price to deals, the to for this real or for there's to value the full even the guess of terms or in And I true. it, production lot make upside. but and a say and free. that of not it attractive comes And that it's have very inherit way rate. business a overcome or you're require to the when to in either

bolt-on this a a but with what of sort cost our importantly, a opportunities terms So great in at strategy, high-return low is we as significant far potential look volumes, fit this development PDP particular upside. for very specifically of and lower deal, as

productive our or Giddings a this busy in area where with the And set interest of very our right on or so been acreage and acreage new of least we tried next to in lot to a showed current very, existing to development. map at we've increased working

a So probably unique at represents pace high-return current confident of transaction Giddings. I'm drilling us of it a of years this opportunity, drilling very minimum provides locations and of in with that couple our net a and

the here more frankly, it's meets that buck. think eye I for the more and So than bang

Operator

Roth comes Mariani question Leo from next Our with MKM.

Leo Mariani

here Wanted off on oil to focusing with cut. start just little a bit

I guess, expected in oil quarter. the was So definitely, cut stronger than

Just kind get wanted see kind sense that a of of out. to how of playing you

the get year? the more some in starting oil can the you on know the kind that of I the years it's a focus of see soften Do kind of cut of couple get drilling? later bit the think of a year. maybe maintained think highest had throughout that I quarterly course we some you do to little Or oilier as in you here. of

Christopher Stavros

that saw So performance came for quarter last we be good strong development Karnes quarter. support of volumes oilier our across as the year's year production, activity obviously, well the some first performance, online acquired. oilier performance that. I business. will overall said, quarter the we had Strong plan during first oil that from the than in assets This on We

the as Some those activity is a in we from reassert that to but of leaned remain the some said, on away is as buoyant of pretty bit focus that recover drilling, a But early and oilier year's production as of acquired. as I to I little should assets portion gas going I the forward. natural oil also year said, that year, moves this expect going our itself

percentage, on volumes So ability year. mix oil rather remain pretty than our focusing to absolute I would as having oil simply the the robust characterize throughout the or

oil think So But it little move that It's plan. part we as little was be pretty typically is. to lumpy that to the quarter-to-quarter is I going a as and color. forward good, a gives be of you going

Leo Mariani

you just here. acquisition to going the then And back that did

kind not kind small or noticed whole of year. volumes, terms maybe this you in the that changing of not it year. sounds doing I adds but amount guide are capital know you're your that of the it a pretty lot certainly a it. D&C So, that guys implies about of I production excited like you're for on asset

I but of for Just interest it's Is what some want to your last plan guess you're opportunities I do own, of it there's this other to year in well. as get in already of terms of kind additional like know just new there? a kind next the you drilling? integrate on going X to sense you presumably, desealittle And bolt-on months. some then better little is second is? in stuff see the your this something out what program just drill

sense is to trying a the forward. just going what get of So plan

Christopher Stavros

Yes. there. a It's in lot packed

fine represent very to the the my year, part doesn't acquired So are I the a opportunities, bit is about of said, just the external there's I what own and are acquired X/X the touch think And for Right properties guidance, we prefer with -- rather volumes delivering a manage it of currently much. which, I way expectations from of guidance. drilling production are We quite didn't the job production my conservatism of completion producing for assets because capability but The it think, significant Maybe solid amount get that's deal I our cute actually, the overall on here undeveloped PDP. of these and on in high-quality to as to not the law the too results. well acquire on things or going -- we'll me, since the for Murphy's within it, the maybe and view. side. only little now,

and and evolving our even really to pretend the decisions, it do types both be sort about opportunities to I'm from lot us took to with it size sure. for production business would better, there hard itself, not year. objective digits the all these term. that And speak So necessarily that's by hope to things started who've be very within This one, last happen The -- oil made our was It to certainly going of of should long unique year take would The in is on necessarily And the to individuals of say but for personal in opportunities. these our high make single sizing. profile it production for total digits, process. cooperation or that shape operator. parties that model But to not yes, I and great. or managing high not about make like this something effort started private last the to a with are them it's be these our margins is is a mind, acquisition grow of that maybe and I high, to ourselves this time single the could bigger. have objective capability high. I think high things, in year sustain

And at so look things. that's how we

I acquisition -- what fold get some in think is. it it into it is. because the program next year. folded will more wells year. We'll like broader It's because will -- be It itself what this our will look that's Giddings wells in just will fold Giddings that's it

Operator

Our with Johnson next question from comes Meade Charles Rice.

Charles Meade

the you could is at maybe do And locations if undeveloped And And going it want more is I I'm how down target column. your target characterize than developed wondering in think acquisition. take net run how in for the it to after? Chris, targets? you the many that us differ if one have another you're you might bringing then zones How in? you're

Christopher Stavros

not very developed. Well, it's

can undeveloped. would it That you In fact, as as I characterize undeveloped frankly imagine. is

the and ourselves all our I But we subsurface look to -- unique, lot Giddings. areas ability of a as our for potential fact we've in drill So upside. well our wells of executed opportunity couple there's this, pace that added it of understand anyway, as there's locations so in said. and here, to of very the we low-hanging I'm wells here. a It's pads why. at confident better a that's that not fruit I to see some of core lot net because and years real say And to perspective. from worth some a similar of can there's

years' quite So Charlie, that couple And it's this to worth the how it's tie but to pace know drilling.Â of good. can of I'm got -- me off. much don't pull fact currently, down. able I our excited at you about one a say, were more I it's pretty about we

Operator

Tudor, question Holt Pickering, next comes Company. Huang Our & from with Oliver

Oliver Huang

Giddings bolt having the the on allocation that Giddings you inventory think of should relative in continue year the speaking. between basis? As capital which acknowledged How on this you've all we generally Karnes Karnes, to a economics split about to versus that in and better that go-forward area, you XX are remains mix running

Christopher Stavros

for the Yes. Thanks question.

and it's that I right I'm predict. as I on see now. hard that less. can it's and here think, for to generally, to applies far little for us But don't about XX-XX, speaking, and sort of be going dramatically. it or non-operated while otherwise, I think a And changing see more I a Karnes, as operated,

Oliver Huang

on maybe efficiencies bit And to touch a more. just little

how drilling costs previously big in driver a last of bigger of the was year much lower kind mentioned You things XXXX. for side side well frac that focus is of a the

to also Just below wondering we're when bit and timing or a in efficiency more was at if to driven, any of progress behind date more coming the talk it the working maybe a if cost seen just little your you can guidance, you've color well interest there's CapEx aspect? QX if of looking kind

Christopher Stavros

I think got the why that, quarter. -- some second capital I which you're into is of certainly timing the some really second there's the quarter, shifted to think

around for sort of going timing could little matters depends. more always be see we that. It frankly, of And there's So just to that.

like minus borne now. sort that we've have what if and I the we're the in first guide quarter an to in think the that it to to without now out of drilling for up right potential that's that plus the it to can trying -- or faster, numbers some to is quarter been continue we bake extent. looks outcome that has But improvements make, second

for comes of more more creates and in mean thing, cushion I remainder us is the way. be a into the for to good year. may the play This by there or optionality And program. the so that it

softness or the the softish impact is of out OCTG and of are quoted second well competing have price, favorably we'll as you, earlier. numbers think cost single-digit quarter. I I I these it's softness still availability on I'd ample. price pumping us, said, And prices materials benefits continues is certainly think that an pricing, on get sort the probably in that sort factored gas works rig and seen and So to for into Operators that's weakness small And natural performance. tell see pressure those crew fine. into some of quality, that I

Operator

question next Jack JPMorgan. from Our comes with Zach Parham

Zachary Parham

First, I cash the ask to just wanted return on program.

been the pretty of quite like for that You've cash you've the balance lot on point, back consistent to with buyback stock? But a cash time At some of some sheet. buyback. sense use accelerate got some the could and it buy make

Christopher Stavros

mean consistency the model. I the of could. of It and like I program the

sensitivity in So a sort flow repurchases somewhat and sort given get be number, repurchases of I dividend price share pointing return on of some our cash too pricing, pricing, don't looking out just X/X it share dividend. free the like that. want -- mix There and flexibility at a the a product range may specific around of rather feels of but you're of the to this on on

necessarily Now we'll figure stock or we're -- can't or some sort happy that not. in reason is if of we to out lean for weak particular justify the

and a we'll balance about bank. We're not our because and goes. just keeping sheet better, much returns, favorably the not makes joked necessarily now, Right is of don't feel around. I'd rather a put real on very I'm debt if no sitting of so cash comfortable, how you but to obviously cash weighs It it sort people to net sort to generate And having need see it can. have of to it we this. bunch just that on inclined just returns use higher I've

Zachary Parham

LOE you what of just a what Can follow-up give detail maybe doing little back before on looks thoughts on any declining XQ you're year? the to LOE like reduce more LOE. the my in us on And and in half

Christopher Stavros

Yes. first now, started a little for We've but we're been already bit. at this. about on talking we've it here I mean, already it

and of so into start is improvement the back sooner to the and And quarter. per evident you'll year the would But the year. larger the the cost improvement think been I'm than frankly, the should have half hope be operating gains more second my see BOE I in third the of the that that even in for confident quarters very But first cash quarter fourth year. highest some

like across As some labor, these from mean, employ lead improved to there's a I procurement of the can synergies said, repair that things I field we'll the contract maintenance, I will fields, that acquired surface of efficiencies well management optimization capture. think low-hanging we field assets. systems lot and optimization, fruit

Giddings Karnes little So been think is this -- it, of an us for terms time like a cleaning. to grown for spring appropriate with call learned We've could while this the operating at this we've in is you I X a And and bit both and areas to environment. thoughtful in stronger, the this organization over last years. can a weaker pursue at forced make in and in improve decisions cycle it. And little a more than were knee-jerk more if a reactions we're much a portion the of way we being look draconian that to I rather is think or so but

So a to good time I it. do think is this

board I out it pretty well. think work and field everybody on is Our to starting it's and have folks embraced

Operator

from Our Bank Noah question Hungness comes with next America.Â of

Noah Hungness

with quick here drilling November, on Does allow are guys associated I what this saw question gaps. it potentially X,XXX wanted again. it that have lot feet fills this ask the like to the just in deal than It longer laterals you a there of looks to a deal acreage? guys any then deal And does similar to we that stranded the contingency payments with you closed the this year? potentially November? unlock also, in are Or acreage

Christopher Stavros

et cost year tell this -- wells But as there I'm than opportunity you we're will unlock in far able unlocking feet. But additional not cetera. what certainly, we and stated. for The The at may closer the to terms that no the more there of lines, that. would a will as of acreage average, payments on that transaction expect that X,XXX longer it longer contingency about be as which for all look locations or answer will -- drilling there's be lease and No, be longer I I laterals there's think taking whatsoever. be We're yes. on to currently yes what going yes, some sure.

Noah Hungness

the today, just curve will to maybe guys economics give you you oilier core are then could drill do on to you any later color over And XQ? switching the just has up. XQ moved how think How And or forward assets those this those wells looking year. to online come when Giddings given compare

Christopher Stavros

later be are can there. be There'll Yes, to that production some this able able see out be to think sets probably in quantify. you'll data, that that data you I some year the

oilier, As mean, as -- is But our than it's are an typical very these wells. I feet oily core returns, They're important again, to Giddings. than point general X,XXX Giddings Giddings or X,XXX obviously, wells. shallower the the shallower far that

D&C the lower. costs So are

we in So frankly, what very the are similar economics, core to see the Giddings.Â

Operator

Ati Goldman Our from with comes Modak Sachs. next question

Ati Modak

a that your several cost lot at question And your have over there with to quick cost doing on of reduction cost. a this like been time are peers Just beginning reduction. if obviously, you're sounds things the It reduce plan point.

that initial So us will journey you where understand phase maybe help be versus this on others. after

to so that just go there And we after how room much that is -- this. can so gauge

Christopher Stavros

how X% XX% to a said, see we think the of of done I -- We point. it good a lot We'll starting this. is really sort very goes. I Well, haven't as

the I fruit. got this dryer, mean you in dryer the the We've been with pick almost a it's I to you're longer the and guys. So spin the where like the was joking I occasionally, shake lint lint. you at think And up. in years X taking off more there's low-hanging

the of things obviously we and Giddings. accumulated And in understanding of assets. so a We've that a of wells lot more drilled can after, lot we've go there's

We that focus I the and out There's of some some, synergies here have systems have really it. our the with that in a core think, of managing better understanding field. application of we us field the help and processes the within some management will

end pick cash and the free continue to gains the that will really before and is us I'm of start margins see That's equal the So see how year, all we'll we'll here goes. to up provide better the just here cash really mean things with the day. the we'll see of early flow. at margins our more but costs The I come objective go, operating down, optimistic and earnings half else would objective. how it to improve back operating some the

Ati Modak

I [Indiscernible] guess, that tie objectives. the then, does should strategy? efficiency efficiency more think this of we into capital, capital how long-term how plan free sort And taking And that up allocation about as you objectives,

Christopher Stavros

or activities more Well, to exercise. of less the day, is it capital money. the end of both a exercise this a is amount as actions At really of field the of

capital folded the F&D just your So gets your and costs into side DD&A.

at that biggest end the the so of And day your cost. is

reinvestment so And requiring more over drilling lower a well, your greater do same and the and as you time efficiencies cash more provide on well rate the more will on costs can free flow outcome.

may that what tied could we that terms So But that we've at some in we that of well -- the in overlap capital were the to side There's can look they're clearly some in together. things of on apply field. we'll apply do able things. learned terms probably

Operator

from Wells Our next question Fargo. Chang Hanwen comes with

Hanwen Chang

the the behind up metrics acquisition? the follow valuation the color provide of want to on rationale Giddings acquisition. Could of perhaps new key some investment you some I on

Christopher Stavros

a lot get didn't it Well, Yes. of volume. whole

like value So all acre, I'd something current sure out back to say. PDP, looking X,XXX X,XXX I'm I what not if at you that can just the of you're imagine an the

I think pretty that's frankly. attractive,

Hanwen Chang

acquisitions? preferences And any do you oil have ratio regarding future for

Christopher Stavros

terms it's designed free at our as drilling -- sellers cost the -- completely over time. how our the and we we're improve not the as best to we the provide is much to of continues flow to how our that. efficient lowest and around to operator No. to we we're the being it can cash managing of model, business shareholders we've our most count model, of at sort share increase it business I and or look And of reduce not debt extent don't financial stock. the wells looking don't that return look have I levels in capability going which and outcome at like just it

And cash just generated done here we've so organically business. pretty we've done by everything through the

So that's plan. the

Operator

Our next with Mitchell from Daniel comes question Partners. Energy Sean

Sean Mitchel

are Deals these come deal. by the not to on days. Congrats easy

there about doing guys peers How than work, thinking guys something to refrac in buzz of getting think you your today the for at Several congrats there's done. more I this has you and opportunity, Eagle all? So are the Ford. are if been Bakken,

Christopher Stavros

Yes, it's all, category. at if more in the,

Sean Mitchel

fair. that's know I lots... I there's mean

Christopher Stavros

hear like way, lots from way are in a and that. before focusing can't These broad we are science -- question, Sean. substantial much in see just It's Frankly, to really our I that. think a mix any away far too projects. many for that appreciate get early that you. there's and us do on I things to the us way too early this drill time. way. us in about for ever we long There's I of for too things for to

Sean Mitchel

Yes, a on but probably And think rig a follow-up I enough. or the no? the were guys I maybe running bolt-on, fair answer, know these

Christopher Stavros

To not... knowledge... were They my

Sean Mitchel

do and rigs remind you of crew today, spot? me, those guys contracted? have on then X you are And the X Or those frac guys have

Christopher Stavros

Contracted.Â

Operator

question Paul next comes with Citi. from Our Diamond

Paul Diamond

or the how quick are the of more opportunity should more a generalized bolt-ons of think one that a just available? just that the on to Is Lee, opportunity a lot geographically? set Giddings. of How of that Eastern scale similar about kind Washington, north kind smaller more Just of or still type seeing we y'all

Christopher Stavros

within other work Well, that to counties a mentioned to addition in acreage that we the in a lot And areas of elsewhere Giddings sure. you Giddings Proper. there's have on and lot Field for the in

strong us well with bolt-ons better continue that to whether understanding for a will with work worked still opportunities, economics. that, better has we appraisal and we and led define some or some So out new seek other have could very just to areas drill frankly, areas

still days. So relatively I think it's early

once. into the to You a any it to in -- all that just in period, some time is everything going plan is can't fall execute. given us there of given to year any have how get at to and available we money much It's of question

but to can't get we that a it We'll over there's time. do you time, lot So everything. can over look at

Paul Diamond

this game you done Are the And to the more they do how one ground they scale how size quarter? stuff? similar opportunities? Or does small -- type are the bolt-ons like of

Christopher Stavros

type areas specific are us. round not would say, that working -- for There there at look and to me it mean, transaction, going we small interests other just of and fill-ins, this something be this this for again, you're working unfair I small out properties to say be are. potentially we would it to like that did are that I see but or well help just fill-in like

Operator

for The attending concluded. presentation. you conference now has today's Thank

disconnect. now may You

Magnolia Oil & Gas (MGY) 8 May 242024 Q1 Earnings call transcript