Magnolia Oil & Gas reports Q4 EPS $1.20, consensus 78c

Reports Q4 revenue $349.0M, consensus $362.6M. Total production in the fourth quarter of 2022 grew 6% from the fourth quarter of 2021 to 73.8 thousand barrels of oil equivalent per day. President and CEO Chris Stavros says: "We achieved new company records in most financial and operational categories including production, operating income margins and earnings per share, while continuing to gain efficiencies at Giddings without sacrificing productivity. We achieved this by executing on our strategy of disciplined capital spending, moderate production growth, generating high pre-tax margins, and improving our per share metrics while maintaining a strong balance sheet. During 2022 we grew our total production volumes by more than 14 percent while spending just 34 percent of our EBITDAX drilling and completing wells. Our teams continued focus on managing costs and generating efficiencies in an inflationary service cost environment further enhanced our margins in Giddings and provided significant free cash flow. During the year, we returned 54 percent of our free cash flow to our shareholders in the form of share repurchases and our cash dividend. We repurchased more than 15 million shares in 2022, reducing our diluted share count by 8 percent. In addition, we were able to acquire some acreage, minerals and additional working interests in our Giddings area, primarily outside of our core development area. This further builds on our strong position in the play and is in line with our strategy of incrementally improving our opportunity set and the value of the business. After all our activities, including capital expenditures, bolt-on acquisitions and the significant return of cash to shareholders, we ended the year with a considerable cash balance of $675 million. While Magnolia’s unhedged business captured the benefit of much higher product prices last year, this year’s plan will focus on improved execution and generating further efficiencies in order to offset the impact of higher oil field service costs. Operationally, we expect our 2023 plan to be similar to last year. We expect to continue to operate a two-rig drilling program, which we estimate will generate full-year production growth of approximately 10 percent. We will remain disciplined on our D&C capital, continuing to limit our spending to approximately 55 percent of EBITDAX, allowing for significant free cash flow. Our efforts will continue to focus on improving the overall business while taking actions to increase our dividend per share payout capacity. These activities include moderate growth in our total production, repurchasing at least 1 percent of our outstanding shares per quarter, and the pursuit of small, accretive bolt-on oil and gas property acquisitions. These efforts are expected to support annual dividend growth of approximately 10 percent over time, which is an important component of Magnolia’s total shareholder return proposition."