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Magnolia Oil & Gas Corp (MGY) Up 12.4% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Magnolia Oil & Gas Corp (MGY - Free Report) . Shares have added about 12.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Magnolia Oil & Gas Corp due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Magnolia Q4 Earnings and Revenues Top Estimates
Magnolia reported fourth-quarter adjusted net income per share of 82 cents, beating the Zacks Consensus Estimate of 74 cents and the year-ago quarter’s bottom line of 15 cents.
This outperformance can be primarily attributed to a surge in commodity prices and a healthy increase in year-over-year production volumes. South Texas-focused Magnolia’s average daily total output of 69,411 barrels of oil equivalent per day (boe/d) was up 14.5% from the year-ago quarter’s figure of 60,617 boe/d. However, it narrowly missed the Zacks Consensus Estimate of 69,419 boe/d.
Total revenues came in at $332.15 million, ahead of the Zacks Consensus Estimate of $326 million. Moreover, the top line rose 120.3% from the year-ago level of $150.79 million.
Production & Prices
As mentioned earlier, Magnolia’s oil and gas production reported a year-over-year increase of 14.5% to 69,411 boe/d (comprising 69.2% of liquids). Oil volumes at 30,913 barrels per day (bpd) were up 7.5% from the level achieved in the fourth quarter of 2020. However, the same missed the Zacks Consensus Estimate of 31,197 bpd.
The average realized crude oil price during the fourth quarter was $76.16 per barrel, reflecting an 87.7% rise from the year-ago period’s realization of $40.58. The average realized natural gas liquids price was $35.41 per barrel, up 124.8% from the year-ago period’s tally, while natural gas prices increased 115.7% year over year to $5.07 per thousand cubic feet. Overall, MGY fetched $52.01 per barrel of oil equivalent (boe) compared with $27.04 a year ago.
Balance Sheet & Capital Expenditure
As of Dec 31, Magnolia had $366.98 million of cash and cash equivalents. The oil explorer has a long-term debt of $388.09 million. In the reported quarter, Magnolia spent $72.1 million on its capital program.
The company had property, plant and equipment worth $1.2 billion on its books.
Guidance
Magnolia plans to spend somewhere around $85 to $90 million on drilling and completion activities in the first quarter of 2022 and approximately $350 million for the full year based on the 2-rig drilling plan. MGY’s capital expenditure plans for this year reflect a more than 50% increase over the actual spending for 2021, which is likely to result in high-single-digit production growth. The total output in the first quarter of 2022 is expected in the 70,000-72,000 boe/d range.
As part of Magnolia’s shareholder return initiative, it is using excess cash from a supportive environment to reward shareholders with dividends and buybacks. As a result, the company lowered its share count by 10% in the past year through repurchases and introduced a semi-annual cash dividend in addition to bringing down net debt to zero. MGY is looking to buy back some 1% of its total shares outstanding each quarter. Finally, the firm will actively scout for accretive acquisitions in 2022.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Magnolia Oil & Gas Corp has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Magnolia Oil & Gas Corp has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Magnolia Oil & Gas Corp (MGY) Up 12.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Magnolia Oil & Gas Corp (MGY - Free Report) . Shares have added about 12.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Magnolia Oil & Gas Corp due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Magnolia Q4 Earnings and Revenues Top Estimates
Magnolia reported fourth-quarter adjusted net income per share of 82 cents, beating the Zacks Consensus Estimate of 74 cents and the year-ago quarter’s bottom line of 15 cents.
This outperformance can be primarily attributed to a surge in commodity prices and a healthy increase in year-over-year production volumes. South Texas-focused Magnolia’s average daily total output of 69,411 barrels of oil equivalent per day (boe/d) was up 14.5% from the year-ago quarter’s figure of 60,617 boe/d. However, it narrowly missed the Zacks Consensus Estimate of 69,419 boe/d.
Total revenues came in at $332.15 million, ahead of the Zacks Consensus Estimate of $326 million. Moreover, the top line rose 120.3% from the year-ago level of $150.79 million.
Production & Prices
As mentioned earlier, Magnolia’s oil and gas production reported a year-over-year increase of 14.5% to 69,411 boe/d (comprising 69.2% of liquids). Oil volumes at 30,913 barrels per day (bpd) were up 7.5% from the level achieved in the fourth quarter of 2020. However, the same missed the Zacks Consensus Estimate of 31,197 bpd.
The average realized crude oil price during the fourth quarter was $76.16 per barrel, reflecting an 87.7% rise from the year-ago period’s realization of $40.58. The average realized natural gas liquids price was $35.41 per barrel, up 124.8% from the year-ago period’s tally, while natural gas prices increased 115.7% year over year to $5.07 per thousand cubic feet. Overall, MGY fetched $52.01 per barrel of oil equivalent (boe) compared with $27.04 a year ago.
Balance Sheet & Capital Expenditure
As of Dec 31, Magnolia had $366.98 million of cash and cash equivalents. The oil explorer has a long-term debt of $388.09 million. In the reported quarter, Magnolia spent $72.1 million on its capital program.
The company had property, plant and equipment worth $1.2 billion on its books.
Guidance
Magnolia plans to spend somewhere around $85 to $90 million on drilling and completion activities in the first quarter of 2022 and approximately $350 million for the full year based on the 2-rig drilling plan. MGY’s capital expenditure plans for this year reflect a more than 50% increase over the actual spending for 2021, which is likely to result in high-single-digit production growth. The total output in the first quarter of 2022 is expected in the 70,000-72,000 boe/d range.
As part of Magnolia’s shareholder return initiative, it is using excess cash from a supportive environment to reward shareholders with dividends and buybacks. As a result, the company lowered its share count by 10% in the past year through repurchases and introduced a semi-annual cash dividend in addition to bringing down net debt to zero. MGY is looking to buy back some 1% of its total shares outstanding each quarter. Finally, the firm will actively scout for accretive acquisitions in 2022.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Magnolia Oil & Gas Corp has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Magnolia Oil & Gas Corp has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.