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- **Record Production & Growth**: Q3 2025 total production up 11% YoY to 100,500 BOE/day, with full-year growth expected to exceed 10%.
- **Exceptional Cash Flow**: Generated $134M free cash flow, returning $80M to shareholders via buybacks and dividends.
- **Disciplined Capital Allocation**: 2025 capital spending at $450M (~55% of EBITDAX), with flexibility to adjust 2026 budget based on oil prices.
- **Dividend Growth**: Q3 dividend increased 15%, annualized payout rate $0.60/share, supported by moderate production growth and buybacks.
- **Operational Efficiency**: Deferred completions saved $5M in Q3, with ongoing improvements in D&C efficiency and field-level costs.

**【CEO Summary Section】**
- **Record Production Growth**: Q3 2025 total production reached 100,500 BOE/day, up 11% YoY, with oil production at Giddings growing nearly 5% YoY. Full-year 2025 production growth expected to exceed 10%, surpassing initial guidance of 5-7%.
- **Operational Efficiency**: Deferred completion of 6 wells in Q3, saving ~5% of 2025 capital, improving free cash flow and flexibility. 2025 capital spending projected at $110M for Q4, totaling ~$450M for the year.
- **Financial Performance**: Adjusted EBITDAX of $219M, operating margin 31%, and free cash flow of $134M. Returned 60% of FCF ($80M) to shareholders via dividends and share buybacks.
- **2026 Outlook**: Plan to maintain 2-rig, 1-completion crew program with capital spending at ~55% of EBITDAX. Expect mid-single-digit production growth, focusing on Giddings and Karnes appraisal activities.

**【CFO Financial Commentary】**
- **Q3 Financials**: Adjusted net income $78M ($0.41 EPS), EBITDAX $219M. Free cash flow $134M, with $280M cash balance at quarter-end (highest since Q1 2024).
- **Capital Allocation**: $118M capital spending (54% of EBITDAX), $29M dividends, $51M share buybacks. Repurchased 2.1M shares, reducing diluted share count by 26% since 2019.
- **Dividend Growth**: Q3 dividend increased 15% to $0.15/share, annualized payout rate $0.60/share. 2026 dividend growth supported by moderate production growth and share buybacks.
- **Balance Sheet Strength**: $280M cash, $450M undrawn revolver, total liquidity $730M. No debt maturities until 2032.

**【Q&A Highlights】**
- **Efficiency & Capital Flexibility**: CEO emphasized ability to adjust 2026 budget (~$450M) based on oil prices, with 55% reinvestment cap. Deferred completions and operational improvements (e.g., water handling) driving cost savings.
- **M&A Strategy**: Focused on small, accretive bolt-ons in Giddings and Karnes. 2025 bolt-on acquisitions added $65M of value, maintaining 10%+ production growth without M&A.
- **Karnes Appraisal**: Testing new concepts in Karnes to extend field life, with focus on economic viability. Giddings appraisal program expected to continue generating incremental volumes.
- **Gas Realizations**: Strong natural gas pricing in Q3 (31% of revenue), with ongoing efforts to optimize basis differentials without hedging.
- **Share Buybacks**: 5.2M shares remaining under repurchase authorization, targeting $0.05/share accretion through buybacks.

Magnolia Oil & Gas Corporation (MGY) Q3 2025 Earnings Call Transcript

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MGY

MGY fundamentals

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