Magnolia Oil & Fuel Company reported web revenue of $97.6 million for the primary quarter, down 9 p.c from the identical interval in 2023.
The Houston-based firm posted adjusted web revenue of $101.0 million for the quarter, a lower of 15 p.c from the previous-year determine of $119.3 million, in line with its newest earnings launch.
Magnolia’s whole manufacturing within the first quarter grew seven p.c on a year-over-year foundation to 84.8 thousand barrels of oil equal per day (boepd), together with 37.5 thousand barrels per day of oil. Manufacturing at its Giddings and Different phase was 61.4 thousand boepd, offering general progress of 17 p.c in comparison with final 12 months’s first quarter, together with oil manufacturing progress of 16 p.c, the corporate mentioned.
Magnolia mentioned its whole manufacturing volumes benefited from continued sturdy properly efficiency, along with some manufacturing from belongings acquired final 12 months, in addition to a” barely oilier growth program”. Its first-quarter capital spending on drilling, completions, and related services was $119.0 million.
In April, Magnolia acquired oil and fuel properties in Giddings from a personal operator encompassing roughly 27,000 web acres for about $125 million. The belongings embrace whole manufacturing of roughly a million boepd, along with leasehold and royalty acres. The acquisition “considerably will increase Magnolia’s working curiosity in future high-return growth areas and provides new acreage which additional expands the corporate’s main place within the Giddings space,” it mentioned.
“Magnolia’s first quarter efficiency delivered a stable begin to 2024, persevering with our technique of disciplined capital spending, whereas delivering regular manufacturing progress with sturdy pre-tax margins and constant free money move,” Magnolia President and CEO Chris Stavros mentioned. “Our rising manufacturing and continued low reinvestment fee offered free money move technology of roughly $117 million. We returned 68 p.c of our free money move to our shareholders by our not too long ago elevated dividend and share repurchase program. Larger oil manufacturing of 37.5 thousand barrels per day throughout the quarter was pushed by sturdy properly efficiency and extra volumes from belongings acquired final 12 months”.
“A key goal of Magnolia’s marketing strategy and technique is to make the most of a number of the extra money generated by the enterprise to pursue enticing bolt-on oil and fuel property acquisitions. Properties are focused to not merely substitute the oil and fuel that has already been produced however importantly, to enhance the longer term alternative set of our general enterprise and improve the sustainability of our excessive returns,” Stavros outlined.
“We proceed to search for bolt-on oil and fuel property acquisitions using our technical experience and the place we now have a aggressive benefit within the growth of the Austin Chalk and Eagle Ford formations in South Texas,” he continued.
“Whereas I’m pleased with our groups’ accomplishments, we proceed to hunt out areas the place we will enhance. Our discipline operations staff not too long ago initiated a field-level optimization and value discount program all through our belongings. A part of these efforts will make use of improved discipline administration methods that can enhance efficiencies and optimize processes throughout the sector whereas capturing synergies from acquired belongings. These and different initiatives are anticipated to ship a 5 to 10 p.c discount in money working prices (LOE) per boe throughout the second half of the 12 months in comparison with the primary quarter. Our objective is to enhance on our observe file for producing excessive working margins whereas offering further free money move to both return to our shareholders or reinvest within the enterprise,” he concluded.
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