Magnolia Oil & Gas Corporation (NYSE:MGY) Q2 2022 Earnings Conference Call August 3, 2022 11:00 AM ET

Company Participants

Brian Corales – Vice President, Investor Relations

Steve Chazen – Chairman, President and Chief Executive Officer

Chris Stavros – Executive Vice President and Chief Financial Officer

Conference Call Participants

Neal Dingmann – Truist Securities

Leo Mariani – MKM Partners

Umang Choudhary – Goldman Sachs

Austin Aucoin – Johnson Rice

Nicholas Pope – Seaport Research

Operator

Good day, and welcome to the Magnolia Oil and Gas Second Quarter 2022 Earnings Release and Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask question. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Brian Corales. Please go ahead.

Brian Corales

Thank you, Maria, and good morning, everyone. Welcome to Magnolia Oil and Gas' second quarter earnings conference call. Participating on the call today are Steve Chazen, Magnolia's Chairman, President and Chief Executive Officer; and Chris Stavros, Executive Vice President and Chief Financial Officer.

As a reminder, today's conference call contains certain projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements. Additional information on risk factors that could cause results to differ is available in the Company's Annual Report on Form 10-K filed with the SEC.

A full Safe Harbor can be found on Slide 2 of the conference call slide presentation with the supplemental data on our website. You can download Magnolia's second quarter 2022 earnings press release as well as the conference call slides from the Investors section of the Company's website at www.magnoliaoilgas.com.

I will now turn the call over to Mr. Steve Chazen.

Steve Chazen

Thank you and good morning and thank you for joining us today. Magnolia just completed its fourth year as a public company. And despite the continued product volatility, our business model remains unchanged. Our ongoing confidence in the business supported by our core values and based on our strong financial and operating results and our team's numerous accomplishments. Over the last four years, we have profitably increased our production while transitioning our Giddings asset to a full development mode.

We also continue to generate significant free cash flow allowing us to opportunistically repurchase our shares. Our business model limits the spending on drilling and completing wells at 55% of our EBITDAX and is expected to provide mid single digit annual production growth over time. The remaining unallocated cash flows can be used for small bolts-on oil and gas property acquisitions, share repurchases and dividends. So far this year we have far exceeded our plan. We now expect our full year 2022 production to grow between 12% and 14% while investing less than a third of our cash flows with the excess cash allocated to activities that should enhance our per share value of the company.