Magnolia (MGY) Q4 Earnings and Revenues Miss Estimates
Magnolia Oil & Gas Corporation MGY reported a fourth-quarter 2023 adjusted net income of 50 cents per share, which missed the Zacks Consensus Estimate of 54 cents. The bottom line also deteriorated from the year-ago quarter’s level of 86 cents due to a decline in commodity prices.
Total revenues came in at $322.6 million, which missed the Zacks Consensus Estimate of $325 million. The top line also declined 4.9% from $349 million recorded in the year-ago period.
On Feb 5, 2024, South Texas-focused Magnolia declared a cash dividend of 11.5 cents per share of Class A common stock and a cash distribution of 13 cents per Class B unit, payable on May 1, 2024, to shareholders of record as of Feb 16, 2024. This represents a 13% hike to Magnolia’s quarterly dividend rate. The company repurchased 2.5 million of its Class A common shares for $54.2 million in the reported quarter.
Magnolia Oil & Gas Corp Price, Consensus and EPS Surprise
Magnolia Oil & Gas Corp price-consensus-eps-surprise-chart | Magnolia Oil & Gas Corp Quote
Production & Prices
The average daily total output of 85,414 barrels of oil equivalent per day (boe/d) increased from the year-ago quarter’s figure of 73,785 boe/d.The figure also beat our estimate of 85,000 boe/d.
Oil and gas production increased 15.8% year over year. Oil volumes totaled 35,466 barrels per day (bpd), up 9.8% from that reported in the fourth quarter of 2022. However, the figure missed our estimate of 36,500 bpd.
The average realized crude oil price was $77.39 per barrel, indicating a 6.2% decline from the year-ago period’s level of $82.53. The average realized natural gas liquids price was $19.69 per barrel, implying a 22.6% deterioration from the year-ago period’s figure. Natural gas price decreased 61.2% year over year to $1.85 per thousand cubic feet. MGY recorded $41.06 per boe compared with $51.42 a year ago.
Balance Sheet & Capital Expenditure
As of Dec 31, Magnolia had cash and cash equivalents of $401.1 million and long-term debt of $392.8 million. The total debt-to-total capital was 17.3%.
The company spent $91.5 million on its capital program in the reported quarter. Operating expenses increased to $184.5 million from $151.1 million in the year-ago period.
Guidance
Magnolia expects to spend between $450 million and $480 million on D&C capital in 2024. The company anticipates first-quarter D&C capital expenditures to be around $130 million, which will be the highest quarterly rate of spending in 2024.
Total production for the first quarter is expected to be in the range of 84-85 Mboe/d, including several days of production and facility downtime caused by severe winter weather in mid-January.
MGY plans to offer a discount of $3.00 per barrel to Magellan East Houston, leaving it unhedged for all oil and natural gas production.
The company expects the diluted share count to be around 205 million in the first quarter of 2024, which is 4% lower than that in the year-ago period.
Zacks Rank and Key Picks
Currently, MGY carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like Subsea 7 S.A. SUBCY and Energy Transfer LP ET, both sporting a Zacks Rank #1 (Strong Buy), and Murphy USA Inc. MUSA, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Subsea 7 is valued at $ 3.96 billion. The company currently pays a dividend of 38 cents per share, or 2.93%, on an annual basis.
SUBCY offers offshore project services for the energy industry, specializing in subsea field development, covering project management, design, engineering, procurement, fabrication, survey, installation and commissioning of seabed production facilities.
Energy Transfer is valued at $ 44.38 billion. The company currently pays a dividend of $1.26 per share, or 8.93%, on an annual basis.
ET is an independent energy company, principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.
Murphy USA is valued at around $8.33 billion. In the past year, its shares have risen 46.4%.
MUSA is involved in the marketing of retail motor fuel products and convenience merchandise, operating retail stores under the brands Murphy USA, Murphy Express and QuickChek.
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