Delaware
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81-5365682
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Nine Greenway Plaza, Suite 1300
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77046
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Houston,
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Texas
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(Address of principal executive offices)
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(Zip Code)
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Securities registered pursuant to section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Class A Common Stock, par value $0.0001
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MGY
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New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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PART I.
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Successor
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Predecessor
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Three Months Ended
June 30, 2019
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Six Months Ended
June 30, 2019
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Three Months Ended
June 30, 2018
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Six Months Ended
June 30, 2018
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REVENUES
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Oil revenues
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$
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204,513
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$
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376,167
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$
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176,481
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$
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330,637
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Natural gas revenues
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22,590
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49,965
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10,115
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18,489
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Natural gas liquids revenues
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15,855
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35,499
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13,391
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23,173
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Total revenues
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242,958
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461,631
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199,987
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372,299
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OPERATING EXPENSES
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Lease operating expenses
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24,895
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46,413
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10,546
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19,832
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Gathering, transportation and processing
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7,431
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16,746
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6,211
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10,689
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Taxes other than income
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13,091
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27,492
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12,907
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21,676
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Exploration expense
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3,617
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6,093
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350
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452
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Asset retirement obligation accretion
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1,373
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2,701
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(13
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)
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83
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Depreciation, depletion and amortization
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126,102
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242,048
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63,353
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114,714
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Amortization of intangible assets
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3,626
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7,253
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—
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—
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General and administrative expenses
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19,106
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35,302
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5,301
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11,009
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Transaction related costs
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85
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438
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—
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—
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Total operating costs and expenses
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199,326
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384,486
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98,655
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178,455
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OPERATING INCOME
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43,632
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77,145
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101,332
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193,844
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OTHER INCOME (EXPENSE)
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Income from equity method investee
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128
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516
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688
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1,056
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Interest expense, net
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(7,299
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)
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(14,715
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)
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—
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—
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Loss on derivatives, net
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—
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—
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(14,800
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)
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(21,992
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)
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Other income (expense), net
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(13
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)
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(11
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(198
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)
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(74
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)
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Total other income (expense)
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(7,184
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)
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(14,210
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)
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(14,310
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)
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(21,010
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)
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INCOME BEFORE INCOME TAXES
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36,448
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62,935
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87,022
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172,834
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Income tax expense
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5,145
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8,920
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573
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1,019
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NET INCOME
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31,303
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54,015
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86,449
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171,815
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LESS: Net income attributable to noncontrolling interest
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12,797
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22,484
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—
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—
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NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK
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$
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18,506
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$
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31,531
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$
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86,449
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$
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171,815
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NET INCOME PER COMMON SHARE
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Basic
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$
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0.12
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$
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0.20
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Diluted
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$
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0.12
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$
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0.20
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
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Basic
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156,844
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156,584
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Diluted
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159,057
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158,587
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Predecessor
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BALANCE, DECEMBER 31, 2017
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$
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1,597,838
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Parents’ contribution, net
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133,117
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Net income
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85,366
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Balance – March 31, 2018
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$
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1,816,321
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Parents’ distributions, net
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(48,937
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)
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Net income
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86,449
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Balance – June 30, 2018
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$
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1,853,833
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Class A Common Stock
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Class B Common Stock
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Additional Paid In Capital
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Retained Earnings
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Total Stockholders’ Equity
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Noncontrolling Interest
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Total Equity
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Shares
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Value
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Shares
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Value
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Balance, December 31, 2018
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156,333
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$
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16
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93,346
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$
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9
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$
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1,641,237
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$
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35,507
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$
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1,676,769
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$
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1,031,186
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$
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2,707,955
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Stock based compensation expense
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—
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—
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—
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—
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2,432
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—
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2,432
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—
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2,432
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Changes in ownership interest adjustment
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—
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—
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—
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—
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(919
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)
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—
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(919
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832
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(87
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)
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Final settlement adjustment related to Business Combination
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(496
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)
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—
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(1,556
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)
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—
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(6,095
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)
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—
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(6,095
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)
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(19,150
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)
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(25,245
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)
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|||||||
Contributions from noncontrolling interest owner
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—
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—
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—
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—
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—
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—
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—
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8,809
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8,809
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Net income
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—
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—
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—
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—
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—
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13,026
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13,026
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9,687
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22,713
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Balance, March 31, 2019
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155,837
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$
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16
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91,790
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$
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9
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$
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1,636,655
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$
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48,533
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$
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1,685,213
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$
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1,031,364
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$
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2,716,577
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Stock based compensation expense
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—
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—
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—
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—
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3,115
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—
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3,115
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—
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3,115
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Changes in ownership interest adjustment
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—
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|
—
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|
—
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—
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108
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—
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108
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634
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742
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Shares issued in connection with acquisition
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3,055
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—
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—
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—
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33,693
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—
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33,693
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—
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33,693
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Offering expenses incurred in connection with warrants exchange
|
—
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|
—
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|
—
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|
—
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(1,055
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)
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—
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(1,055
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)
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—
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(1,055
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)
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Distributions to noncontrolling interest owner
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—
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|
—
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—
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—
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—
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—
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—
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(227
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)
|
(227
|
)
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Net income
|
—
|
|
—
|
|
—
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—
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—
|
|
18,506
|
|
18,506
|
|
12,797
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|
31,303
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Balance, June 30, 2019
|
158,892
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|
$
|
16
|
|
91,790
|
|
$
|
9
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|
$
|
1,672,516
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|
$
|
67,039
|
|
$
|
1,739,580
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$
|
1,044,568
|
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$
|
2,784,148
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|
|
Successor
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Predecessor
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Six months ended
June 30, 2019
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Six months ended
June 30, 2018
|
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CASH FLOWS FROM OPERATING ACTIVITIES
|
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|
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Net income
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$
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54,015
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$
|
171,815
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Adjustments to reconcile net income to net cash provided by operating activities:
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|
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|
||||
Depreciation, depletion and amortization
|
242,048
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|
|
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114,714
|
|
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Amortization of intangible assets
|
7,253
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|
|
|
—
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|
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Exploration expense, non-cash
|
483
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|
|
|
—
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Asset retirement obligations accretion expense
|
2,701
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|
|
|
83
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|
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Amortization of deferred financing costs
|
1,752
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|
|
|
—
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Non-cash interest expense, net
|
10,059
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|
|
—
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Loss on derivatives, net
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—
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|
21,992
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Cash settlements of matured derivative contracts
|
—
|
|
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(25,556
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)
|
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Deferred taxes
|
8,351
|
|
|
|
191
|
|
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Stock based compensation
|
5,547
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|
|
|
—
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Other
|
(428
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)
|
|
|
(1,141
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)
|
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Changes in operating assets and liabilities
|
|
|
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|
||||
Accounts receivable
|
(14,541
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)
|
|
|
(46,276
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)
|
||
Prepaid expenses and other assets
|
1,265
|
|
|
|
—
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Accounts payable and accrued liabilities
|
(18,938
|
)
|
|
|
263
|
|
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Drilling advances
|
11,073
|
|
|
|
—
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|
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Other assets and liabilities, net
|
(1,249
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)
|
|
|
(421
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)
|
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Net cash provided by operating activities
|
309,391
|
|
|
|
235,664
|
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|
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|
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CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
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|
||||
Acquisition of EnerVest properties, final settlement
|
4,250
|
|
|
|
—
|
|
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Acquisitions, other
|
(91,903
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)
|
|
|
(150,139
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)
|
||
Additions to oil and natural gas properties
|
(267,309
|
)
|
|
|
(169,529
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)
|
||
Purchase of and contributions to equity method investment
|
—
|
|
|
|
(176
|
)
|
||
Other investing
|
(248
|
)
|
|
|
—
|
|
||
Net cash used in investing activities
|
(355,210
|
)
|
|
|
(319,844
|
)
|
||
|
|
|
|
|
||||
CASH FLOW FROM FINANCING ACTIVITIES
|
|
|
|
|
||||
Parents’ contribution, net
|
—
|
|
|
|
84,180
|
|
||
Noncontrolling interest contributions and distributions
|
7,075
|
|
|
|
—
|
|
||
Other financing activities
|
(305
|
)
|
|
|
—
|
|
||
Net cash provided by financing activities
|
6,770
|
|
|
|
84,180
|
|
||
|
|
|
|
|
||||
NET CHANGE IN CASH
|
(39,049
|
)
|
|
|
—
|
|
||
Cash – Beginning of period
|
135,758
|
|
|
|
—
|
|
||
Cash – End of period
|
$
|
96,709
|
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
|
|
||||
Cash paid for income taxes
|
390
|
|
|
|
337
|
|
||
Cash paid for interest
|
13,063
|
|
|
|
—
|
|
||
Supplemental non-cash investing and financing activity
|
|
|
|
|
||||
Accruals or liabilities for capital expenditures
|
46,524
|
|
|
|
38,682
|
|
||
Equity issuances in connection with acquisition
|
33,693
|
|
|
|
—
|
|
||
Supplemental non-cash lease operating activities
|
|
|
|
|
||||
Right-of-use assets obtained in exchange for operating lease obligations
|
6,382
|
|
|
|
—
|
|
•
|
certain right, title, and interest in certain oil and natural gas assets located primarily in the Karnes County portion of the Eagle Ford Shale in South Texas (the “Karnes County Assets” and, such business the “Karnes County Business”) pursuant to that certain Contribution and Merger Agreement (as subsequently amended, the “Karnes County Contribution Agreement”), by and among the Company, Magnolia LLC and certain affiliates (the “Karnes County Contributors”) of EnerVest Ltd. (“EnerVest”);
|
•
|
certain right, title, and interest in certain oil and natural gas assets located primarily in the Giddings Field of the Austin Chalk (the “Giddings Assets”) pursuant to that certain Purchase and Sale Agreement (the “Giddings Purchase Agreement”) by and among Magnolia LLC and certain affiliates of EnerVest (the “Giddings Sellers”); and
|
•
|
a 35% membership interest (the “Ironwood Interests”) in Ironwood Eagle Ford Midstream LLC (“Ironwood”), a Texas limited liability company, which owns an Eagle Ford gathering system, pursuant to that certain Membership Interest Purchase Agreement (together with the transactions contemplated by the Karnes County Contribution Agreement and the Giddings Purchase Agreement, the “Business Combination Agreements,” and the transactions contemplated thereby, the “Business Combination”), by and among Magnolia LLC and certain affiliates of EnerVest (the “Ironwood Sellers”).
|
(1)
|
At closing of the Business Combination, the Karnes County Contributors received 83.9 million shares of Class B Common Stock (and a corresponding number of Magnolia LLC Units) and 31.8 million shares of Class A Common Stock. On March 29, 2019, Magnolia and EnerVest consummated the final settlement pursuant to the Contribution and Merger Agreement as agreed to by the parties, with the Karnes County Contributors forfeiting 2.1 million shares of Class A and Class B Common Stock to Magnolia (and a corresponding number of Magnolia LLC Units).
|
(2)
|
Pursuant to ASC 805, ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging,” the Karnes County earnout consideration was valued at fair value as of the Closing Date and was classified in stockholders’ equity. The Giddings earnout was valued at fair value as of the Closing Date and was classified as a liability. The fair value of the earnouts was determined using the Monte Carlo simulation valuation method based on Level 3 inputs in the fair value hierarchy.
|
(1)
|
The fair value measurements of oil and natural gas properties and asset retirement obligations are based on inputs that are not observable in the market and therefore represent Level 3 inputs. The fair values of oil and natural gas properties and asset retirement obligations were measured using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation of oil and natural gas properties included estimates of: (i) recoverable reserves; (ii) production rates; (iii) future operating and development costs; (iv) future commodity prices; and (v) a market-based weighted average cost of capital rate.
|
(1)
|
The fair value measurements of oil and natural gas properties and asset retirement obligations are based on inputs that are not observable in the market and therefore represent Level 3 inputs. The fair values of oil and natural gas properties and asset retirement obligations were measured using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation of oil and natural gas properties included estimates of: (i) recoverable reserves; (ii) production rates; (iii) future operating and development costs; (iv) future commodity prices; and (v) a market-based weighted average cost of capital rate. These inputs required significant judgments and estimates by management at the time of the valuation.
|
•
|
On May 31, 2019, the Company completed the acquisition of certain oil and gas assets located in the Company’s Karnes County Assets for approximately $36.3 million in cash, subject to customary closing adjustments, and approximately 3.1 million shares of the Company’s Class A Common Stock. The transaction was accounted for as an asset acquisition.
|
•
|
On February 5, 2019, Magnolia Operating formed a joint venture, Highlander Oil & Gas Holdings LLC (“Highlander”), to complete the acquisition of a 72% working interest in the Eocene-Tuscaloosa Zone, Ultra Deep Structure gas well located in St. Martin Parish, Louisiana and 31.1 million royalty trust units in the Gulf Coast Ultra Deep Royalty Trust from McMoRan Oil & Gas, LLC. Highlander paid cash consideration of approximately $51.9 million, for such interests. MGY Louisiana LLC, a wholly owned subsidiary of Magnolia Operating, holds approximately 85% of the units in Highlander. The transaction was accounted for as an asset acquisition.
|
|
|
June 30, 2019
|
||||||
(In thousands)
|
|
Carrying Value
|
|
Fair Value
|
||||
Long-term debt
|
|
$
|
389,225
|
|
|
$
|
410,000
|
|
(In thousands)
|
June 30, 2019
|
||
Non-compete intangible assets
|
$
|
44,400
|
|
Accumulated amortization
|
(13,296
|
)
|
|
Intangible assets, net
|
$
|
31,104
|
|
Weighted average amortization period (in years)
|
3.25
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In thousands)
|
Three Months Ended
June 30, 2019
|
|
Six Months Ended
June 30, 2019
|
|
|
Three Months Ended
June 30, 2018
|
|
Six Months Ended
June 30, 2018
|
||||||||
Current:
|
|
|
|
|
|
|
|
|
||||||||
Federal
|
$
|
(176
|
)
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
386
|
|
|
569
|
|
|
|
264
|
|
|
828
|
|
||||
|
210
|
|
|
569
|
|
|
|
264
|
|
|
828
|
|
||||
Deferred:
|
|
|
|
|
|
|
|
|
||||||||
Federal
|
5,092
|
|
|
8,454
|
|
|
|
—
|
|
|
—
|
|
||||
State
|
(157
|
)
|
|
(103
|
)
|
|
|
309
|
|
|
191
|
|
||||
|
4,935
|
|
|
8,351
|
|
|
|
309
|
|
|
191
|
|
||||
Total provision
|
$
|
5,145
|
|
|
$
|
8,920
|
|
|
|
$
|
573
|
|
|
$
|
1,019
|
|
(In thousands)
|
|
June 30, 2019
|
||
Revolving credit facility
|
|
$
|
—
|
|
6.0% Senior Notes due 2026
|
|
400,000
|
|
|
Total long-term debt
|
|
400,000
|
|
|
|
|
|
||
Less: unamortized deferred financing cost
|
|
(10,775
|
)
|
|
Total debt, net
|
|
$
|
389,225
|
|
(In thousands)
|
June 30, 2019
|
||
Operating Leases
|
|
||
Operating lease assets
|
$
|
5,305
|
|
|
|
||
Operating lease liabilities - current
|
$
|
2,884
|
|
Operating lease liabilities - long-term
|
2,423
|
|
|
Total operating lease liabilities
|
$
|
5,307
|
|
|
|
||
Weighted Average Remaining Lease Term (in years)
|
2.1
|
|
|
Weighted Average Discount Rate
|
3.8
|
%
|
(1)
|
As of December 31, 2018, minimum future contractual payments for long-term operating leases under the scope of ASC 840 were $881 thousand in 2019, $646 thousand in 2020, $198 thousand in 2021, $14 thousand in 2022, $15 thousand in 2023 and $63 thousand thereafter.
|
|
Restricted Stock Units
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested restricted stock units, beginning of period
|
807,431
|
|
|
$
|
13.97
|
|
Granted
|
539,495
|
|
|
$
|
12.41
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Unvested restricted stock units, end of period
|
1,346,926
|
|
|
$
|
13.34
|
|
|
Performance Stock Units
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested performance stock units, beginning of period
|
475,313
|
|
|
$
|
14.58
|
|
Granted
|
267,482
|
|
|
$
|
13.87
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Unvested performance stock units, end of period
|
742,795
|
|
|
$
|
14.32
|
|
|
Grant Date Fair Value Assumptions
|
Expected term (in years)
|
2.67 - 2.85
|
Expected volatility
|
31.58% - 33.61%
|
Risk-free interest rate
|
2.29% - 2.48%
|
(in thousands, except per share data)
|
Three months ended
June 30, 2019
|
|
Six months ended
June 30, 2019
|
||||
Basic:
|
|
|
|
||||
Net Income attributable to Class A Common Stock
|
$
|
18,506
|
|
|
$
|
31,531
|
|
Weighted average number of common shares outstanding during the period
|
156,844
|
|
|
156,584
|
|
||
Net income per common share - basic
|
$
|
0.12
|
|
|
$
|
0.20
|
|
|
|
|
|
||||
Diluted:
|
|
|
|
||||
Net Income attributable to Class A Common Stock
|
$
|
18,506
|
|
|
$
|
31,531
|
|
Basic weighted average number of common shares outstanding during the period
|
156,844
|
|
|
156,584
|
|
||
Add: Dilutive effect of warrants and stock based compensation
|
2,213
|
|
|
2,003
|
|
||
Diluted weighted average number of common shares outstanding during the period
|
159,057
|
|
|
158,587
|
|
||
Net income per common share - diluted
|
$
|
0.12
|
|
|
$
|
0.20
|
|
•
|
the market prices of oil, natural gas, natural gas liquids (“NGLs”), and other products or services;
|
•
|
the supply and demand for oil, natural gas, NGLs, and other products or services;
|
•
|
production and reserve levels;
|
•
|
drilling risks;
|
•
|
economic and competitive conditions;
|
•
|
the availability of capital resources;
|
•
|
capital expenditures and other contractual obligations;
|
•
|
currency exchange rates;
|
•
|
weather conditions;
|
•
|
inflation rates;
|
•
|
the availability of goods and services;
|
•
|
legislative, regulatory, or policy changes;
|
•
|
cyber attacks;
|
•
|
occurrence of property acquisitions or divestitures;
|
•
|
the integration of acquisitions; and
|
•
|
the securities or capital markets and related risks such as general credit, liquidity, market, and interest-rate risks.
|
•
|
For the three and six month period ended June 30, 2018, the results of operations reflect the results of solely the Predecessor, which, as described above, consists of only the results of the Karnes County Business, including, as applicable, its ownership of the Ironwood Interests, when the Predecessor was not owned by the Company, and do not include the results of the Giddings Assets;
|
•
|
The results of operations of the Predecessor were not previously accounted for as the results of operations of a stand-alone legal entity, and accordingly have been carved out, as appropriate, for the periods presented. The results of operations of the Predecessor therefore include a portion of indirect costs for salaries and benefits, depreciation, rent, accounting, legal services, and other expenses. In addition to the allocation of indirect costs, the results of operations reflect certain agreements executed by the Karnes County Contributors for the benefit of the Predecessor, including price risk management instruments. For more information, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. These allocations may not be indicative of the cost of future operations or the amount of future allocations;
|
•
|
The Predecessor completed the acquisition of certain assets from GulfTex Energy III, L.P. and GulfTex Energy IV, L.P. on March 1, 2018 during the Predecessor Period, and accordingly the results of operations of the Predecessor reflect the impact of the assets acquired in that acquisition only from their respective acquisition date;
|
•
|
As a corporation, the Company is subject to U.S. federal income taxes at a statutory rate of 21% of pretax earnings whereas the Karnes County Contributors were treated as partnerships for income tax purposes. As a result, items of income, expense, gains and losses flowed through to the owners of the Karnes County Contributors and were taxed at the owner level. Accordingly, no U.S. tax provision for federal income taxes is included in the financial statements of the Predecessor;
|
•
|
On August 31, 2018, the Company acquired substantially all of the South Texas assets of Harvest Oil & Gas Corporation (the “Harvest Acquisition”) for approximately $133.3 million in cash and 4.2 million newly issued shares of the Company’s Class A Common Stock. On March 14, 2019, Magnolia consummated the final settlement with Harvest receiving a cash payment of $1.4 million. The Harvest Acquisition added an undivided working interest across a portion of the Karnes County Assets and all of the Giddings Assets;
|
•
|
On February 5, 2019, Magnolia Operating formed a joint venture, Highlander Oil & Gas Holdings LLC, to complete the acquisition of a 72% working interest in the Eocene-Tuscaloosa Zone, Ultra Deep Structure gas well located in St. Martin Parish, Louisiana (the “Highlander Well”).
|
|
|
Successor
|
|
|
Predecessor
|
||||
(In thousands, except per unit data)
|
|
Three Months Ended June 30, 2019
|
|
|
Three Months Ended June 30, 2018
|
||||
Production:
|
|
|
|
|
|
||||
Oil (MBbls)
|
|
3,189
|
|
|
|
2,496
|
|
||
Natural gas (MMcf)
|
|
10,057
|
|
|
|
3,554
|
|
||
NGLs (MBbls)
|
|
1,060
|
|
|
|
517
|
|
||
Total (Mboe)
|
|
5,925
|
|
|
|
3,605
|
|
||
|
|
|
|
|
|
||||
Average daily production:
|
|
|
|
|
|
||||
Oil (Bbls/d)
|
|
35,044
|
|
|
|
27,429
|
|
||
Natural gas (Mcf/d)
|
|
110,516
|
|
|
|
39,055
|
|
||
NGLs (Bbls/d)
|
|
11,648
|
|
|
|
5,681
|
|
||
Total (boe/d)
|
|
65,111
|
|
|
|
39,619
|
|
||
|
|
|
|
|
|
||||
Revenues:
|
|
|
|
|
|
||||
Oil revenues
|
|
$
|
204,513
|
|
|
|
$
|
176,481
|
|
Natural gas revenues
|
|
22,590
|
|
|
|
10,115
|
|
||
Natural gas liquids revenues
|
|
15,855
|
|
|
|
13,391
|
|
||
Total revenues
|
|
$
|
242,958
|
|
|
|
$
|
199,987
|
|
|
|
|
|
|
|
||||
Average Price:
|
|
|
|
|
|
||||
Oil (per barrel)
|
|
$
|
64.13
|
|
|
|
$
|
70.71
|
|
Natural gas (per Mcf)
|
|
2.25
|
|
|
|
2.85
|
|
||
NGLs (per barrel)
|
|
14.96
|
|
|
|
25.90
|
|
|
|
Successor
|
|
|
Predecessor
|
||||
(In thousands, except per unit data)
|
|
Three Months Ended June 30, 2019
|
|
|
Three Months Ended June 30, 2018
|
||||
Operating Expenses:
|
|
|
|
|
|
||||
Lease operating expenses
|
|
$
|
24,895
|
|
|
|
$
|
10,546
|
|
Gathering, transportation and processing
|
|
7,431
|
|
|
|
6,211
|
|
||
Taxes other than income
|
|
13,091
|
|
|
|
12,907
|
|
||
Exploration expenses
|
|
3,617
|
|
|
|
350
|
|
||
Asset retirement obligations accretion
|
|
1,373
|
|
|
|
(13
|
)
|
||
Depreciation, depletion and amortization
|
|
126,102
|
|
|
|
63,353
|
|
||
Amortization of intangible assets
|
|
3,626
|
|
|
|
—
|
|
||
General and administrative expenses
|
|
19,106
|
|
|
|
5,301
|
|
||
Transaction related costs
|
|
85
|
|
|
|
—
|
|
||
Total operating costs and expenses
|
|
$
|
199,326
|
|
|
|
$
|
98,655
|
|
|
|
|
|
|
|
||||
Other Income (Expense):
|
|
|
|
|
|
||||
Income from equity method investee
|
|
$
|
128
|
|
|
|
$
|
688
|
|
Interest expense, net
|
|
(7,299
|
)
|
|
|
—
|
|
||
Loss on derivatives, net
|
|
—
|
|
|
|
(14,800
|
)
|
||
Other expense, net
|
|
(13
|
)
|
|
|
(198
|
)
|
||
Total other expense
|
|
$
|
(7,184
|
)
|
|
|
$
|
(14,310
|
)
|
|
|
|
|
|
|
||||
Average Operating Costs per Boe:
|
|
|
|
|
|
||||
Lease operating expenses
|
|
$
|
4.20
|
|
|
|
$
|
2.93
|
|
Gathering, transportation and processing
|
|
1.25
|
|
|
|
1.72
|
|
||
Taxes other than income
|
|
2.21
|
|
|
|
3.58
|
|
||
Exploration costs
|
|
0.61
|
|
|
|
0.10
|
|
||
Asset retirement obligation accretion
|
|
0.23
|
|
|
|
—
|
|
||
Depreciation, depletion and amortization
|
|
21.28
|
|
|
|
17.57
|
|
||
Amortization of intangible assets
|
|
0.61
|
|
|
|
—
|
|
||
General and administrative expenses
|
|
3.22
|
|
|
|
1.47
|
|
||
Transaction related costs
|
|
0.01
|
|
|
|
—
|
|
|
|
Successor
|
|
|
Predecessor
|
||||
(In thousands, except per unit data)
|
|
Six Months Ended June 30, 2019
|
|
|
Six Months Ended June 30, 2018
|
||||
Production:
|
|
|
|
|
|
||||
Oil (MBbls)
|
|
6,095
|
|
|
|
4,858
|
|
||
Natural gas (MMcf)
|
|
19,820
|
|
|
|
6,442
|
|
||
NGLs (MBbls)
|
|
2,144
|
|
|
|
937
|
|
||
Total (Mboe)
|
|
11,542
|
|
|
|
6,869
|
|
||
|
|
|
|
|
|
||||
Average daily production:
|
|
|
|
|
|
||||
Oil (Bbls/d)
|
|
33,674
|
|
|
|
26,840
|
|
||
Natural gas (Mcf/d)
|
|
109,503
|
|
|
|
35,591
|
|
||
NGLs (Bbls/d)
|
|
11,845
|
|
|
|
5,177
|
|
||
Total (boe/d)
|
|
63,770
|
|
|
|
37,949
|
|
||
|
|
|
|
|
|
||||
Revenues:
|
|
|
|
|
|
||||
Oil revenues
|
|
$
|
376,167
|
|
|
|
$
|
330,637
|
|
Natural gas revenues
|
|
49,965
|
|
|
|
18,489
|
|
||
Natural gas liquids revenues
|
|
35,499
|
|
|
|
23,173
|
|
||
Total revenues
|
|
$
|
461,631
|
|
|
|
$
|
372,299
|
|
|
|
|
|
|
|
||||
Average Price:
|
|
|
|
|
|
||||
Oil (per barrel)
|
|
$
|
61.72
|
|
|
|
$
|
68.06
|
|
Natural gas (per Mcf)
|
|
2.52
|
|
|
|
2.87
|
|
||
NGLs (per barrel)
|
|
16.56
|
|
|
|
24.73
|
|
|
|
Successor
|
|
|
Predecessor
|
||||
(In thousands, except per unit data)
|
|
Six Months Ended June 30, 2019
|
|
|
Six Months Ended June 30, 2018
|
||||
Operating Expenses:
|
|
|
|
|
|
||||
Lease operating expenses
|
|
$
|
46,413
|
|
|
|
$
|
19,832
|
|
Gathering, transportation and processing
|
|
16,746
|
|
|
|
10,689
|
|
||
Taxes other than income
|
|
27,492
|
|
|
|
21,676
|
|
||
Exploration expenses
|
|
6,093
|
|
|
|
452
|
|
||
Asset retirement obligations accretion
|
|
2,701
|
|
|
|
83
|
|
||
Depreciation, depletion and amortization
|
|
242,048
|
|
|
|
114,714
|
|
||
Amortization of intangible assets
|
|
7,253
|
|
|
|
—
|
|
||
General and administrative expenses
|
|
35,302
|
|
|
|
11,009
|
|
||
Transaction related costs
|
|
438
|
|
|
|
—
|
|
||
Total operating costs and expenses
|
|
$
|
384,486
|
|
|
|
$
|
178,455
|
|
|
|
|
|
|
|
||||
Other Income (Expense):
|
|
|
|
|
|
||||
Income from equity method investee
|
|
$
|
516
|
|
|
|
$
|
1,056
|
|
Interest expense, net
|
|
(14,715
|
)
|
|
|
—
|
|
||
Loss on derivatives, net
|
|
—
|
|
|
|
(21,992
|
)
|
||
Other expense, net
|
|
(11
|
)
|
|
|
(74
|
)
|
||
Total other expense
|
|
$
|
(14,210
|
)
|
|
|
$
|
(21,010
|
)
|
|
|
|
|
|
|
||||
Average Operating Costs per Boe:
|
|
|
|
|
|
||||
Lease operating expenses
|
|
$
|
4.02
|
|
|
|
$
|
2.89
|
|
Gathering, transportation and processing
|
|
1.45
|
|
|
|
1.56
|
|
||
Taxes other than income
|
|
2.38
|
|
|
|
3.16
|
|
||
Exploration costs
|
|
0.53
|
|
|
|
0.07
|
|
||
Asset retirement obligation accretion
|
|
0.23
|
|
|
|
0.01
|
|
||
Depreciation, depletion and amortization
|
|
20.97
|
|
|
|
16.70
|
|
||
Amortization of intangible assets
|
|
0.63
|
|
|
|
—
|
|
||
General and administrative expenses
|
|
3.06
|
|
|
|
1.60
|
|
||
Transaction related costs
|
|
0.04
|
|
|
|
—
|
|
|
|
Successor
|
|
|
Predecessor
|
||||
(In thousands)
|
|
Six Months Ended June 30, 2019
|
|
|
Six Months Ended June 30, 2018
|
||||
Net cash provided by operating activities
|
|
$
|
309,391
|
|
|
|
$
|
235,664
|
|
Net cash used in investing activities
|
|
(355,210
|
)
|
|
|
(319,844
|
)
|
||
Net cash provided by financing activities
|
|
6,770
|
|
|
|
84,180
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
10.2
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
|
|
MAGNOLIA OIL & GAS CORPORATION
|
|
|
|
|
|
Date: August 7, 2019
|
|
By:
|
/s/ Stephen Chazen
|
|
|
|
Stephen Chazen
|
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
Date: August 7, 2019
|
|
By:
|
/s/ Christopher Stavros
|
|
|
|
Christopher Stavros
|
|
|
|
Chief Financial Officer (Principal Financial Officer)
|
Participant:
|
|
Date of Grant:
|
|
Total Number of Restricted Stock Units:
|
|
Vesting Commencement Date:
|
______________________________ (“Vesting Commencement Date”)
|
Vesting Schedule:
|
Subject to the terms and conditions of the Agreement, the Plan and the other terms and conditions set forth herein, the RSUs shall vest on the earlier to occur of: (i) the day preceding the next annual meeting of stockholders of the Company at which directors are elected or (ii) the first anniversary of the Vesting Commencement Date, in each case, so long as you remain a director or service provider to the Company or an Affiliate, as applicable, from the Date of Grant through such date.
Notwithstanding the foregoing, in the event that, in connection with or following a Change in Control, you cease to serve as a director or a service provider to the Company or an Affiliate, the RSUs will vest upon such cessation of service.
In accordance with of Section 7(b) the Plan, you may elect to defer settlement of the RSUs until you are no longer a director or service provider to the Company or an Affiliate or a Change in Control. Any deferral election must be made in compliance with such rules and procedures as the Committee deems advisable.
|
Settlement Event:
|
Stock will become issuable and Dividend Equivalents payable on the date elected by you on a timely submitted Settlement Election Form or, if no such form is timely submitted by you, then on the date of vesting of the RSUs (such date or event, a “Settlement Event”). Absent a provision in the Agreement or the Plan to the contrary, Stock and Dividend Equivalents with respect to vested RSUs will be delivered to you no later than 60 days following the applicable Settlement Event.
|
|
|
|
|
|
MAGNOLIA OIL & GAS CORPORATION
|
|
|
|
|
|
By:
|
|
|
Title:
|
|
|
Name:
|
|
|
Name: [Grantee Name]
|
DIRECTOR
|
[Grantee Name]
|
|
Date:
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Magnolia Oil & Gas Corporation (the "registrant");
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 7, 2019
|
|
By:
|
|
/s/ Stephen Chazen
|
|
|
|
|
Stephen Chazen
|
|
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Magnolia Oil & Gas Corporation (the "registrant");
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 7, 2019
|
|
By:
|
|
/s/ Christopher Stavros
|
|
|
|
|
Christopher Stavros
|
|
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 7, 2019
|
|
By:
|
|
/s/ Stephen Chazen
|
|
|
|
|
Stephen Chazen
|
|
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
Date: August 7, 2019
|
|
By:
|
|
/s/ Christopher Stavros
|
|
|
|
|
Christopher Stavros
|
|
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|