Magnolia Oil & Fuel Company reported web earnings of $113.9 million for the fourth quarter of 2023, a drop of 55 p.c from $254.8 million in the identical interval in 2022.
The corporate posted revenues of $322.6 million for the quarter, in comparison with $349 million within the prior-year interval.
Magnolia’s whole manufacturing within the fourth quarter of 2023 grew 16 p.c 12 months over 12 months to 85,400 barrels of oil equal per day (boepd), the corporate stated in a current earnings launch. Manufacturing from its Giddings and Different section elevated 46 p.c, with oil manufacturing rising 48 p.c over the prior 12 months’s fourth quarter. Magnolia’s fourth-quarter capital spending on drilling, completions and related services was marked at $91.5 million.
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The Houston-based firm’s full-year 2023 web earnings was $442.6 million, in comparison with $1.05 billion in 2022, which is a lower of 58 p.c.
Magnolia’s manufacturing for the total 12 months of 2023 averaged 82,300 boepd representing year-over-year quantity development of greater than 9 p.c. Manufacturing at Giddings represented roughly 71 p.c of the corporate’s general volumes in 2023 and the Giddings space “continues to see working effectivity enhancements within the area equivalent to fewer drilling days per properly and important beneficial properties in stimulation levels per day”, the corporate stated.
Magnolia stated it plans to function two drilling rigs and one completion crew in 2024 and expects to keep up this stage of exercise all year long. Whereas the exercise stage is much like the 2023 working plan, decrease properly prices mixed with improved working efficiencies permit for extra wells to be drilled, accomplished and turned in line, the corporate famous.
A lot of the growth exercise will include multi-well growth pads within the firm’s Giddings space, with a smaller quantity of growth deliberate within the Karnes space, along with some appraisal wells at Giddings. For Giddings growth exercise in 2024, Magnolia expects to drill multi-well pads with considerably longer lateral lengths of roughly 8,500 toes.
Magnolia’s whole 2023 proved reserves elevated eight p.c to 169.8 million barrels of oil equal (MMboe) from 157.0 MMboe in 2022 and changed 143 p.c of 2023 manufacturing. The corporate’s whole proved developed reserves on the finish of 2023 was measured at 135.2 MMboe. Excluding acquisitions, gross sales, and price-related revisions, the corporate added 43.9 MMboe of proved developed reserves through the 12 months, in line with the discharge.
Magnolia President and CEO Chris Stavros stated 2023 was “one other stable 12 months of execution” on the corporate’s general technique and core rules, together with disciplined capital spending and excessive working margins.
“Our enterprise mannequin is designed to offer a balanced strategy towards prudently and effectively reinvesting in our belongings whereas returning a major amount of money to traders. Throughout 2023, we spent 47 p.c of our EBITDAX drilling and finishing wells whereas returning 74 p.c of our free money move to shareholders through share repurchases and dividends”, Stavros stated.
“Wanting ahead, final 12 months’s actions have strengthened our place into 2024 as we count on whole firm manufacturing development to be within the excessive single digits, with oil volumes rising at related charges and remaining pretty regular by way of the 12 months. Our capital plan will proceed to be disciplined and we anticipate a reinvestment fee of lower than 55 p.c of adjusted EBITDAX at present product costs. Nicely prices in Giddings have declined by greater than 20 p.c from year-ago ranges resulting in decrease F&D [finding and developing] prices as we begin the 12 months. We count on to generate a large quantity of free money move and plan to return a good portion of this again to shareholders by way of our rising dividend and ongoing share repurchase program. Magnolia’s technique is aimed toward maximizing per share worth by way of the cycle and over time, and we stay well-positioned to execute on our plan”, he concluded.
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