The following is a summary of the Magnolia Oil & Gas Corporation (MGY) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Q3 2024 revenue impacted by unplanned third-party midstream facility outages, affecting natural gas and NGL production approximately by 1,000 BOE per day.

• Net income for the quarter reached $106 million with adjusted net income at $100 million or $0.51 per diluted share.

• Adjusted EBITDAX stood at $244 million, with capital expenditures at $103 million, below the guidance of $120 million, reflecting strong capital discipline and efficiency.

• Production for the quarter was 91,000 barrels of oil equivalent per day, with oil production achieving a significant year-over-year growth of 18%.

Business Progress:

• Magnolia continues to emphasize efficiency in operations, achieving lower capital spend and reduced lease operating costs, which fell 11% from Q1 to $5.33 per BOE.

• The company plans to continue its strategy of returning significant free cash flow to shareholders through dividends and share repurchases, while also pursuing financially accretive bolt-on acquisitions enhancing its asset base.

• An additional 4-well pad will be drilled in the Giddings area in Q4, not originally planned for 2024, highlighting operational flexibility and strategic growth capacity.

Opportunities:

• Magnolia's approach towards strategic acquisitions, particularly in the Giddings and Karnes areas, continues to bolster its position and enhance future development potential. These acquisitions are targeted to be both financially and strategically accretive.

Risks:

• Potential risks involve dependency on third-party midstream facilities for natural gas and NGL production, as evidenced by recent outages that impacted production. Concerns were noted about future reliability, especially regarding power issues affecting midstream operations.

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