☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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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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FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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Consolidated Balance Sheets
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Consolidated Statements of Operations (unaudited)
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Consolidated Statements of Changes in Stockholders’ Equity (unaudited)
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Consolidated Statements of Cash Flows (unaudited)
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Notes to Consolidated Financial Statements (unaudited)
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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PART II.
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OTHER INFORMATION
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Item 1.
|
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Legal Proceedings
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Item 1A.
|
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Risk Factors
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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Item 3.
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Defaults Upon Senior Securities
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Other Information
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Item 6.
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Exhibits
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Signatures
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March 31, 2020
|
|
December 31, 2019
|
||||
ASSETS
|
|
(Unaudited)
|
|
(Audited)
|
||||
CURRENT ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
146,492
|
|
|
$
|
182,633
|
|
Accounts receivable
|
|
77,744
|
|
|
105,775
|
|
||
Drilling advances
|
|
863
|
|
|
299
|
|
||
Other current assets
|
|
4,146
|
|
|
4,511
|
|
||
Total current assets
|
|
229,245
|
|
|
293,218
|
|
||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
||||
Oil and natural gas properties
|
|
2,050,470
|
|
|
3,815,221
|
|
||
Other
|
|
3,391
|
|
|
3,087
|
|
||
Accumulated depreciation, depletion and amortization
|
|
(844,255
|
)
|
|
(701,551
|
)
|
||
Total property, plant and equipment, net
|
|
1,209,606
|
|
|
3,116,757
|
|
||
OTHER ASSETS
|
|
|
|
|
||||
Deferred financing costs, net
|
|
7,806
|
|
|
8,390
|
|
||
Equity method investment
|
|
20,171
|
|
|
19,730
|
|
||
Intangible assets, net
|
|
20,225
|
|
|
23,851
|
|
||
Other long-term assets
|
|
3,776
|
|
|
4,460
|
|
||
TOTAL ASSETS
|
|
$
|
1,490,829
|
|
|
$
|
3,466,406
|
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
CURRENT LIABILITIES
|
|
|
|
|
||||
Accounts payable
|
|
$
|
86,154
|
|
|
$
|
79,428
|
|
Other current liabilities (Note 7)
|
|
84,546
|
|
|
95,780
|
|
||
Total current liabilities
|
|
170,700
|
|
|
175,208
|
|
||
LONG-TERM LIABILITIES
|
|
|
|
|
||||
Long-term debt, net
|
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390,147
|
|
|
389,835
|
|
||
Asset retirement obligations, net of current
|
|
97,008
|
|
|
93,524
|
|
||
Deferred taxes, net
|
|
3,181
|
|
|
77,834
|
|
||
Other long-term liabilities
|
|
903
|
|
|
1,476
|
|
||
Total long-term liabilities
|
|
491,239
|
|
|
562,669
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 9)
|
|
|
|
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STOCKHOLDERS’ EQUITY
|
|
|
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|
||||
Class A Common Stock, $0.0001 par value, 1,300,000 shares authorized, 168,473 shares issued and 166,473 shares outstanding in 2020 and 168,318 shares issued and 167,318 shares outstanding in 2019
|
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17
|
|
|
17
|
|
||
Class B Common Stock, $0.0001 par value, 225,000 shares authorized, 85,790 shares issued and outstanding in 2020 and 2019
|
|
9
|
|
|
9
|
|
||
Additional paid-in capital
|
|
1,703,996
|
|
|
1,703,362
|
|
||
Treasury Stock, at cost, 2,000 shares and 1,000 shares in 2020 and 2019, respectively
|
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(16,760
|
)
|
|
(10,277
|
)
|
||
Retained earnings (Accumulated deficit)
|
|
(1,144,070
|
)
|
|
82,940
|
|
||
Noncontrolling interest
|
|
285,698
|
|
|
952,478
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
1,490,829
|
|
|
$
|
3,466,406
|
|
|
|
Three Months Ended
March 31, 2020
|
|
Three Months Ended
March 31, 2019 |
||||
REVENUES
|
|
|
|
|
||||
Oil revenues
|
|
$
|
154,686
|
|
|
$
|
171,654
|
|
Natural gas revenues
|
|
16,175
|
|
|
27,375
|
|
||
Natural gas liquids revenues
|
|
10,504
|
|
|
19,645
|
|
||
Total revenues
|
|
181,365
|
|
|
218,674
|
|
||
OPERATING EXPENSES
|
|
|
|
|
||||
Lease operating expenses
|
|
24,163
|
|
|
21,518
|
|
||
Gathering, transportation, and processing
|
|
8,020
|
|
|
9,315
|
|
||
Taxes other than income
|
|
10,018
|
|
|
14,401
|
|
||
Exploration expense
|
|
556,427
|
|
|
2,476
|
|
||
Impairment of oil and natural gas properties
|
|
1,381,258
|
|
|
—
|
|
||
Asset retirement obligation accretion
|
|
1,438
|
|
|
1,328
|
|
||
Depreciation, depletion and amortization
|
|
142,671
|
|
|
115,946
|
|
||
Amortization of intangible assets
|
|
3,626
|
|
|
3,626
|
|
||
General and administrative expenses
|
|
18,080
|
|
|
16,196
|
|
||
Transaction related costs
|
|
—
|
|
|
353
|
|
||
Total operating costs and expenses
|
|
2,145,701
|
|
|
185,159
|
|
||
|
|
|
|
|
||||
OPERATING INCOME (LOSS)
|
|
(1,964,336
|
)
|
|
33,515
|
|
||
|
|
|
|
|
||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
||||
Income from equity method investee
|
|
440
|
|
|
388
|
|
||
Interest expense, net
|
|
(6,757
|
)
|
|
(7,416
|
)
|
||
Other income (expense), net
|
|
(472
|
)
|
|
1
|
|
||
Total other income (expense)
|
|
(6,789
|
)
|
|
(7,027
|
)
|
||
|
|
|
|
|
||||
INCOME (LOSS) BEFORE INCOME TAXES
|
|
(1,971,125
|
)
|
|
26,488
|
|
||
Income tax expense (benefit)
|
|
(75,826
|
)
|
|
3,775
|
|
||
NET INCOME (LOSS)
|
|
(1,895,299
|
)
|
|
22,713
|
|
||
LESS: Net income (loss) attributable to noncontrolling interest
|
|
(668,289
|
)
|
|
9,687
|
|
||
NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCK
|
|
$
|
(1,227,010
|
)
|
|
$
|
13,026
|
|
|
|
|
|
|
||||
NET INCOME (LOSS) PER SHARE OF CLASS A COMMON STOCK
|
|
|
|
|
||||
Basic
|
|
$
|
(7.34
|
)
|
|
$
|
0.08
|
|
Diluted
|
|
$
|
(7.34
|
)
|
|
$
|
0.08
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
|
|
|
|
||||
Basic
|
|
167,149
|
|
|
156,322
|
|
||
Diluted
|
|
167,149
|
|
|
158,140
|
|
|
Class A Common Stock
|
Class B Common Stock
|
Additional Paid In Capital
|
Retained Earnings
|
Total Stockholders’ Equity
|
Noncontrolling Interest
|
Total Equity
|
||||||||||||||||||
|
Shares
|
Value
|
Shares
|
Value
|
|
|
|
|
|
||||||||||||||||
Balance, December 31, 2018
|
156,333
|
|
$
|
16
|
|
93,346
|
|
$
|
9
|
|
$
|
1,641,237
|
|
$
|
35,507
|
|
$
|
1,676,769
|
|
$
|
1,031,186
|
|
$
|
2,707,955
|
|
Stock based compensation expense
|
—
|
|
—
|
|
—
|
|
—
|
|
2,432
|
|
—
|
|
2,432
|
|
—
|
|
2,432
|
|
|||||||
Changes in ownership interest adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
(919
|
)
|
—
|
|
(919
|
)
|
832
|
|
(87
|
)
|
|||||||
Final settlement adjustment related to Business Combination
|
(496
|
)
|
—
|
|
(1,556
|
)
|
—
|
|
(6,095
|
)
|
—
|
|
(6,095
|
)
|
(19,150
|
)
|
(25,245
|
)
|
|||||||
Contributions from noncontrolling interest owner
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,809
|
|
8,809
|
|
|||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
13,026
|
|
13,026
|
|
9,687
|
|
22,713
|
|
|||||||
Balance, March 31, 2019
|
155,837
|
|
$
|
16
|
|
91,790
|
|
$
|
9
|
|
$
|
1,636,655
|
|
$
|
48,533
|
|
$
|
1,685,213
|
|
$
|
1,031,364
|
|
$
|
2,716,577
|
|
|
Class A Common Stock
|
Class B Common Stock
|
Additional Paid In Capital
|
Treasury Stock
|
Retained Earnings/ Accumulated Deficit
|
Total Stockholders’ Equity
|
Noncontrolling Interest
|
Total Equity
|
||||||||||||||||||||||
|
Shares
|
Value
|
Shares
|
Value
|
|
Shares
|
Value
|
|
|
|
|
|||||||||||||||||||
Balance, December 31, 2019
|
168,319
|
|
$
|
17
|
|
85,790
|
|
$
|
9
|
|
$
|
1,703,362
|
|
1,000
|
|
$
|
(10,277
|
)
|
$
|
82,940
|
|
$
|
1,776,051
|
|
$
|
952,478
|
|
$
|
2,728,529
|
|
Stock based compensation expense, net of forfeitures
|
—
|
|
—
|
|
—
|
|
—
|
|
2,879
|
|
—
|
|
—
|
|
—
|
|
2,879
|
|
—
|
|
2,879
|
|
||||||||
Changes in ownership interest adjustment and in deferred tax liability
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,793
|
)
|
—
|
|
—
|
|
—
|
|
(1,793
|
)
|
1,793
|
|
—
|
|
||||||||
Common stock issued related to stock based compensation, net
|
154
|
|
—
|
|
—
|
|
—
|
|
(452
|
)
|
—
|
|
—
|
|
—
|
|
(452
|
)
|
—
|
|
(452
|
)
|
||||||||
Class A Common Stock repurchase
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,000
|
|
(6,483
|
)
|
—
|
|
(6,483
|
)
|
—
|
|
(6,483
|
)
|
||||||||
Distributions to noncontrolling interest owners
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(284
|
)
|
(284
|
)
|
||||||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,227,010
|
)
|
(1,227,010
|
)
|
(668,289
|
)
|
(1,895,299
|
)
|
||||||||
Balance, March 31, 2020
|
168,473
|
|
$
|
17
|
|
85,790
|
|
$
|
9
|
|
$
|
1,703,996
|
|
2,000
|
|
$
|
(16,760
|
)
|
$
|
(1,144,070
|
)
|
$
|
543,192
|
|
$
|
285,698
|
|
$
|
828,890
|
|
|
|
Three Months Ended
March 31, 2020 |
|
Three Months Ended
March 31, 2019 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
(1,895,299
|
)
|
|
$
|
22,713
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation, depletion and amortization
|
|
142,671
|
|
|
115,946
|
|
||
Amortization of intangible assets
|
|
3,626
|
|
|
3,626
|
|
||
Exploration expense, non-cash
|
|
555,189
|
|
|
483
|
|
||
Impairment of oil and natural gas properties
|
|
1,381,258
|
|
|
—
|
|
||
Asset retirement obligations accretion expense
|
|
1,438
|
|
|
1,328
|
|
||
Amortization of deferred financing costs
|
|
896
|
|
|
871
|
|
||
Deferred tax expense (benefit)
|
|
(74,654
|
)
|
|
3,415
|
|
||
Stock based compensation
|
|
2,879
|
|
|
2,432
|
|
||
Other
|
|
(447
|
)
|
|
(393
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
28,031
|
|
|
5,012
|
|
||
Accrued liabilities
|
|
(16,547
|
)
|
|
(29,955
|
)
|
||
Accounts payable
|
|
6,726
|
|
|
(6,729
|
)
|
||
Drilling advances
|
|
(563
|
)
|
|
(599
|
)
|
||
Other assets and liabilities, net
|
|
(326
|
)
|
|
(1,588
|
)
|
||
Net cash provided by operating activities
|
|
134,878
|
|
|
116,562
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
||||
Acquisition of EnerVest properties
|
|
—
|
|
|
4,250
|
|
||
Acquisitions, other
|
|
(69,390
|
)
|
|
(53,326
|
)
|
||
Additions to oil and natural gas properties
|
|
(94,210
|
)
|
|
(134,435
|
)
|
||
Other investing
|
|
(200
|
)
|
|
197
|
|
||
Net cash used in investing activities
|
|
(163,800
|
)
|
|
(183,314
|
)
|
||
CASH FLOW FROM FINANCING ACTIVITIES
|
|
|
|
|
||||
Contributions from noncontrolling interest owners
|
|
—
|
|
|
7,301
|
|
||
Distributions to noncontrolling interest owners
|
|
(284
|
)
|
|
—
|
|
||
Class A Common Stock repurchase
|
|
(6,483
|
)
|
|
—
|
|
||
Other financing activities
|
|
(452
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
|
(7,219
|
)
|
|
7,301
|
|
||
|
|
|
|
|
||||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
|
(36,141
|
)
|
|
(59,451
|
)
|
||
Cash and cash equivalents – Beginning of period
|
|
182,633
|
|
|
135,758
|
|
||
Cash and cash equivalents – End of period
|
|
$
|
146,492
|
|
|
$
|
76,307
|
|
|
|
|
|
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
||||
Supplemental non-cash operating activity:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
12,540
|
|
|
$
|
12,571
|
|
Supplemental non-cash investing and financing activity:
|
|
|
|
|
||||
Accruals or liabilities for capital expenditures
|
|
$
|
47,903
|
|
|
$
|
61,778
|
|
Supplemental non-cash lease operating activity:
|
|
|
|
|
||||
Right-of-use assets obtained in exchange for operating lease obligations
|
|
$
|
—
|
|
|
$
|
2,516
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
(In thousands)
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Long-term debt
|
$
|
390,147
|
|
|
$
|
228,000
|
|
|
$
|
389,835
|
|
|
$
|
412,000
|
|
(In thousands)
|
March 31, 2020
|
|
December 31, 2019
|
||||
Non-compete intangible assets
|
$
|
44,400
|
|
|
$
|
44,400
|
|
Accumulated amortization
|
(24,175
|
)
|
|
(20,549
|
)
|
||
Intangible assets, net
|
$
|
20,225
|
|
|
$
|
23,851
|
|
Weighted average amortization period (in years)
|
3.25
|
|
|
3.25
|
|
(In thousands)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Accrued capital expenditures
|
|
$
|
47,903
|
|
|
$
|
40,722
|
|
Other
|
|
36,643
|
|
|
55,058
|
|
||
Total other current liabilities
|
|
$
|
84,546
|
|
|
$
|
95,780
|
|
(In thousands)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Revolving credit facility
|
|
$
|
—
|
|
|
$
|
—
|
|
6.0% Senior Notes due 2026
|
|
400,000
|
|
|
400,000
|
|
||
Total long-term debt
|
|
400,000
|
|
|
400,000
|
|
||
|
|
|
|
|
||||
Less: Unamortized deferred financing cost
|
|
(9,853
|
)
|
|
(10,165
|
)
|
||
Total debt, net
|
|
$
|
390,147
|
|
|
$
|
389,835
|
|
(In thousands)
|
Three Months Ended
March 31, 2020 |
|
Three Months Ended March 31, 2019
|
||||
Current:
|
|
|
|
||||
Federal
|
$
|
(1,172
|
)
|
|
$
|
177
|
|
State
|
—
|
|
|
183
|
|
||
|
(1,172
|
)
|
|
360
|
|
||
Deferred:
|
|
|
|
||||
Federal
|
(68,877
|
)
|
|
3,361
|
|
||
State
|
(5,777
|
)
|
|
54
|
|
||
|
(74,654
|
)
|
|
3,415
|
|
||
Total provision
|
$
|
(75,826
|
)
|
|
$
|
3,775
|
|
|
Restricted Stock Units
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested RSUs, beginning of period
|
1,099,901
|
|
|
$
|
12.97
|
|
Granted
|
686,345
|
|
|
7.45
|
|
|
Vested
|
(213,846
|
)
|
|
12.68
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Unvested RSUs, end of period
|
1,572,400
|
|
|
$
|
10.60
|
|
|
Performance Stock Units
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested PSUs, beginning of period
|
701,128
|
|
|
$
|
14.31
|
|
Granted
|
401,958
|
|
|
6.14
|
|
|
Vested
|
(8,334
|
)
|
|
14.58
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Unvested PSUs, end of period
|
1,094,752
|
|
|
$
|
11.31
|
|
Grant Date Fair Value Assumptions
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
Expected term (in years)
|
2.85
|
|
2.85
|
Expected volatility
|
33.50%
|
|
33.61%
|
Risk-free interest rate
|
1.16%
|
|
2.48%
|
(In thousands, except per share data)
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Basic:
|
|
|
|
|
||||
Net income (loss) attributable to Class A Common Stock
|
|
$
|
(1,227,010
|
)
|
|
$
|
13,026
|
|
Weighted average number of common shares outstanding during the period - basic
|
|
167,149
|
|
|
156,322
|
|
||
Net income (loss) per share of Class A Common Stock - basic
|
|
$
|
(7.34
|
)
|
|
$
|
0.08
|
|
|
|
|
|
|
||||
Diluted:
|
|
|
|
|
||||
Net income (loss) attributable to Class A Common Stock
|
|
$
|
(1,227,010
|
)
|
|
$
|
13,026
|
|
Weighted average number of common shares outstanding during the period - basic
|
|
167,149
|
|
|
156,322
|
|
||
Add: Dilutive effect warrants, stock based compensation, and other
|
|
—
|
|
|
1,818
|
|
||
Weighted average number of common shares outstanding during the period - diluted
|
|
167,149
|
|
|
158,140
|
|
||
Net income (loss) per share of Class A Common Stock - diluted
|
|
$
|
(7.34
|
)
|
|
$
|
0.08
|
|
•
|
the length, scope and severity of the recent coronavirus disease 2019 (“COVID-19”) pandemic, and the impacts of the competition between Russia and Saudi Arabia for crude oil market share, including the effects of related public health concerns and the impact of actions taken by governmental authorities and other third parties in response to the pandemic and its impact on commodity prices, supply and demand considerations, and storage capacity;
|
•
|
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;
|
•
|
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.
|
•
|
The Company incurred a net loss of $1.9 billion for the quarter ended March 31, 2020 compared to net income of $22.7 million for the quarter ended March 31, 2019. The net loss was primarily a result of impairments of $1.9 billion related to proved and unproved oil and natural gas properties for the quarter ended March 31, 2020;
|
•
|
On February 21, 2020, the Company completed the acquisition of certain non-operated oil and natural gas assets located in Karnes and DeWitt Counties, Texas, for approximately $71.3 million in cash, subject to customary closing adjustments;
|
•
|
On May 31, 2019, the Company completed the acquisition of certain oil and natural gas assets located in the Company’s Karnes County Assets for approximately $36.3 million in cash and approximately 3.1 million shares of the Company’s Class A Common Stock; and
|
•
|
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 (the “Highlander Well”), in which MGY Louisiana LLC, a wholly owned subsidiary of Magnolia Operating, holds approximately 85% of the units, with the remaining 15% attributable to noncontrolling interest.
|
(In thousands, except per unit data)
|
|
Three Months Ended
March 31, 2020
|
|
Three Months Ended
March 31, 2019 |
||||
Production:
|
|
|
|
|
||||
Oil (MBbls)
|
|
3,391
|
|
|
2,906
|
|
||
Natural gas (MMcf)
|
|
10,053
|
|
|
9,763
|
|
||
NGLs (MBbls)
|
|
1,155
|
|
|
1,084
|
|
||
Total (Mboe)
|
|
6,222
|
|
|
5,617
|
|
||
|
|
|
|
|
||||
Average daily production:
|
|
|
|
|
||||
Oil (Bbls/d)
|
|
37,259
|
|
|
32,289
|
|
||
Natural gas (Mcf/d)
|
|
110,475
|
|
|
108,478
|
|
||
NGLs (Bbls/d)
|
|
12,688
|
|
|
12,044
|
|
||
Total (boe/d)
|
|
68,360
|
|
|
62,413
|
|
||
|
|
|
|
|
||||
Revenues:
|
|
|
|
|
||||
Oil revenues
|
|
$
|
154,686
|
|
|
$
|
171,654
|
|
Natural gas revenues
|
|
16,175
|
|
|
27,375
|
|
||
Natural gas liquids revenues
|
|
10,504
|
|
|
19,645
|
|
||
Total revenues
|
|
$
|
181,365
|
|
|
$
|
218,674
|
|
|
|
|
|
|
||||
Average Price:
|
|
|
|
|
||||
Oil (per barrel)
|
|
$
|
45.62
|
|
|
$
|
59.07
|
|
Natural gas (per Mcf)
|
|
1.61
|
|
|
2.80
|
|
||
NGLs (per barrel)
|
|
9.09
|
|
|
18.12
|
|
(In thousands, except per unit data)
|
|
Three Months Ended
March 31, 2020 |
|
Three Months Ended
March 31, 2019 |
||||
Operating Expenses:
|
|
|
|
|
||||
Lease operating expenses
|
|
$
|
24,163
|
|
|
$
|
21,518
|
|
Gathering, transportation, and processing
|
|
8,020
|
|
|
9,315
|
|
||
Taxes other than income
|
|
10,018
|
|
|
14,401
|
|
||
Exploration expenses
|
|
556,427
|
|
|
2,476
|
|
||
Impairment of oil and natural gas properties
|
|
1,381,258
|
|
|
—
|
|
||
Asset retirement obligations accretion
|
|
1,438
|
|
|
1,328
|
|
||
Depreciation, depletion and amortization
|
|
142,671
|
|
|
115,946
|
|
||
Amortization of intangible assets
|
|
3,626
|
|
|
3,626
|
|
||
General and administrative expenses
|
|
18,080
|
|
|
16,196
|
|
||
Transaction related costs
|
|
—
|
|
|
353
|
|
||
Total operating costs and expenses
|
|
$
|
2,145,701
|
|
|
$
|
185,159
|
|
|
|
|
|
|
||||
Other Income (Expense):
|
|
|
|
|
||||
Income from equity method investee
|
|
$
|
440
|
|
|
$
|
388
|
|
Interest expense, net
|
|
(6,757
|
)
|
|
(7,416
|
)
|
||
Other expense, net
|
|
(472
|
)
|
|
1
|
|
||
Total other expense
|
|
$
|
(6,789
|
)
|
|
$
|
(7,027
|
)
|
|
|
|
|
|
||||
Average Operating Costs per boe:
|
|
|
|
|
||||
Lease operating expenses
|
|
$
|
3.88
|
|
|
$
|
3.83
|
|
Gathering, transportation, and processing
|
|
1.29
|
|
|
1.66
|
|
||
Taxes other than income
|
|
1.61
|
|
|
2.56
|
|
||
Exploration expense
|
|
89.43
|
|
|
0.44
|
|
||
Impairment of oil and natural gas properties
|
|
222.00
|
|
|
—
|
|
||
Asset retirement obligation accretion
|
|
0.23
|
|
|
0.24
|
|
||
Depreciation, depletion and amortization
|
|
22.93
|
|
|
20.64
|
|
||
Amortization of intangible assets
|
|
0.58
|
|
|
0.65
|
|
||
General and administrative expenses
|
|
2.91
|
|
|
2.88
|
|
||
Transaction related costs
|
|
—
|
|
|
0.06
|
|
(In thousands)
|
|
Three Months Ended
March 31, 2020 |
|
Three Months Ended
March 31, 2019 |
||||
Sources of cash and cash equivalents
|
|
|
|
|
||||
Net cash provided by operating activities
|
|
$
|
134,878
|
|
|
$
|
116,562
|
|
Other
|
|
—
|
|
|
11,748
|
|
||
|
|
$
|
134,878
|
|
|
$
|
128,310
|
|
Uses of cash and cash equivalents:
|
|
|
|
|
||||
Acquisitions, other
|
|
$
|
(69,390
|
)
|
|
$
|
(53,326
|
)
|
Additions to oil and natural gas properties
|
|
(94,210
|
)
|
|
(134,435
|
)
|
||
Class A Common Stock repurchase
|
|
(6,483
|
)
|
|
—
|
|
||
Other
|
|
(936
|
)
|
|
—
|
|
||
|
|
(171,019
|
)
|
|
(187,761
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
|
$
|
(36,141
|
)
|
|
$
|
(59,451
|
)
|
(In thousands)
|
|
Three Months Ended
March 31, 2020
|
|
Three Months Ended
March 31, 2019
|
||||
Drilling and completion
|
|
$
|
100,611
|
|
|
$
|
139,763
|
|
Leasehold acquisition costs
|
|
780
|
|
|
5,929
|
|
||
Total capital expenditures
|
|
$
|
101,391
|
|
|
$
|
145,692
|
|
Period
|
Number of Shares of Class A Common Stock Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares of Class A Common Stock Purchased as Part of Publicly Announced Program (1)
|
|
Maximum Number of Shares of Class A Common Stock that May Yet be Purchased Under the Program
|
|||||
January 1, 2020 - January 31, 2020
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
9,000,000
|
|
February 1, 2020 - February 29, 2020
|
100,000
|
|
|
7.55
|
|
|
100,000
|
|
|
8,900,000
|
|
|
March 1, 2020 - March 31, 2020
|
900,000
|
|
|
6.36
|
|
|
900,000
|
|
|
8,000,000
|
|
|
Total
|
1,000,000
|
|
|
$
|
6.48
|
|
|
1,000,000
|
|
|
8,000,000
|
|
(1)
|
In August 2019, the Company’s board of directors authorized a share repurchase program of up to 10 million shares of Class A Common Stock. The program does not require purchases to be made within a particular time frame.
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1*
|
|
|
|
|
|
3.2*
|
|
|
|
|
|
10.1**
|
|
|
|
|
|
10.2**
|
|
|
|
|
|
10.3**
|
|
|
|
|
|
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.
|
|
|
|
104**
|
|
Cover Page Interactive Data File (embedded within the Inline XBRL document).
|
*
|
Incorporated herein by reference as indicated.
|
**
|
Filed herewith.
|
***
|
Furnished herewith.
|
|
|
MAGNOLIA OIL & GAS CORPORATION
|
|
|
|
|
|
Date: May 11, 2020
|
|
By:
|
/s/ Stephen Chazen
|
|
|
|
Stephen Chazen
|
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
Date: May 11, 2020
|
|
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 this Grant Notice, the Agreement, and the Plan, 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 in full 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 the occurrence of a Change in Control. Any deferral election must be made pursuant to a Settlement Election Form 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:
|
|
SPP Election Form
Submission Period |
Offering Period Commencement Date
(first day of an Offering Period) |
Offering Period Termination Date
(last day of an Offering Period)
|
10-day period commencing on the third trading day after the date of public disclosure of the Company’s financial results for the third quarter of the preceding calendar year
|
January 1 of the calendar year
|
March 31 of the calendar year
|
10-day period commencing on the third trading day after the date of public disclosure of the Company’s year-end financial results for the preceding calendar year
|
April 1 of the calendar year
|
June 30 of the calendar year
|
10-day period commencing on the third trading day after the date of public disclosure of the Company’s financial results for the first quarter of the calendar year
|
July 1 of the calendar year
|
September 30 of the calendar year
|
10-day period commencing on the third trading day after the date of public disclosure of the Company’s financial results for the second quarter of the calendar year
|
October 1 of the calendar year
|
December 31 of the calendar year
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Magnolia Oil & Gas Corporation (the "registrant");
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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.
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5.
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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):
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(a)
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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
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(b)
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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.
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Date: May 11, 2020
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By:
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/s/ Stephen Chazen
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Stephen Chazen
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Chief Executive Officer
(Principal Executive Officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Magnolia Oil & Gas Corporation (the "registrant");
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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.
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5.
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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):
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(a)
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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
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(b)
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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.
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Date: May 11, 2020
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By:
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/s/ Christopher Stavros
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Christopher Stavros
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Chief Financial Officer
(Principal Financial Officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: May 11, 2020
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By:
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/s/ Stephen Chazen
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Stephen Chazen
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Chief Executive Officer
(Principal Executive Officer)
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Date: May 11, 2020
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By:
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/s/ Christopher Stavros
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Christopher Stavros
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Chief Financial Officer
(Principal Financial Officer)
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