Magnolia Oil & Gas Corp Q1 FY26 Results

Magnolia’s first quarter financial and operating metrics delivered a strong start to 2026. Our consistent and disciplined business model, characterized by a low reinvestment rate, high operating margins and moderate production growth delivered over $145 million of free cash flow during the quarter. Our operations rebounded nicely after being affected by the freezing weather in January showing total year-over-year production growth of 6 percent and oil production growth of 4 percent during the quarter. Magnolia returned $83 million of this free cash flow back to shareholders through our dividend and share repurchase program in addition to closing several bolt-on oil and gas property acquisitions in areas where we operate. These numerous bolt-on purchases comprised approximately 6,200 net acres, encompassing acreage in both the Karnes area and in Giddings for what turned out to be a flurry of acquisition activity in the quarter. These assets were acquired for a total of $155 million and included approximately 500 boe per day of low decline production with significant undeveloped upside opportunities located in highly productive areas. In the Karnes area, the acquired acreage creates a large, contiguous block of approximately 10,000 gross acres across Karnes and Gonzales counties, increasing the working interest to 93 percent in existing Magnolia and acquired tracts and in primarily undeveloped acreage. In Giddings, we were able to increase our working interest in approximately 45,000 gross acres, along with purchasing some additional contiguous acreage, and continuing with our strategy of buying more of what we already own. These transactions leverage the deep technical knowledge we’ve gained from our drilling and completion activities in the field, while meaningfully extending our already robust inventory of high-return drilling locations, increasing our working interest in select existing assets, and adding valuable duration to our overall resource portfolio. These actions further demonstrate our ability to deploy a portion of Magnolia’s excess cash flow into high-quality and targeted opportunities. Our goal in pursuing these is intended not simply to replace produced reserves, but to expand our long-term opportunity set and reinforce the sustainability of our strong financial returns. We continue to actively seek out additional asset acquisition opportunities that improve our business and where our technical experience in developing the Austin Chalk and Eagle Ford formations in south Texas provide us with a clear competitive advantage. Beyond the benefit of higher oil prices, Magnolia is well-positioned for success through the disciplined execution of our business model. Our high-quality assets and strategy of continued capital spending discipline, proactive cost management and pursuit of further operational efficiencies continue to serve us well during periods of product price volatility. Our capital allocation priorities, which include a low reinvestment rate, remain unchanged. We are maintaining our original activity plan of running two rigs and one completion crew, which is expected to deliver total production growth of approximately 5 percent in 2026 and within the same range of D&C capital we outlined earlier this year. Our assets continue to generate moderate annual production growth, with high pre-tax margins, allowing for a steady and consistent stream of free cash flow to be returned to shareholders. The absence of commodity hedges on all our production is expected to translate into higher earnings and free cash flow in the current quarter, adding to our significant financial flexibility.