Magnolia Oil & Gas Corp (NYSE:MGY) Q1 2022 Earnings Conference Call May 10, 2022 11:00 AM ET

Company Participants

Brian Corales - VP, IR

Stephen Chazen - President, Chairman & CEO

Christopher Stavros - CFO & EVP

Conference Call Participants

Neal Dingmann - Truist Securities

Leo Mariani - KeyBanc Capital Markets

Zachary Parham - JPMorgan Chase & Co.

Umang Choudhary - Goldman Sachs Group

Charles Meade - Johnson Rice & Company

Operator

Good day, and welcome to the Magnolia Oil & Gas First Quarter 2022 Earnings Release and Conference Call. [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, Matt, and good morning, everyone. Welcome to Magnolia Oil & Gas's First Quarter Earnings Conference Call. Participating in 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 first 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.

Stephen Chazen

Thank you, Brian. Good morning, and thank you for joining us today. We continue to execute on our strategy and business model, which limits our spending to 55% of our EBITDAX on drilling and completing wells. This is expected to deliver mid-single-digit annual production growth along with high full-cycle operating margins. The remaining 45% will be allocated towards a mix of accretive bolt-on acquisitions, dividends and share repurchases.

During the first quarter of 2022, we grew our total production 15% year-over-year and 3.5% sequentially, while spending just 28% of our EBITDAX drilling and completing wells and generating operating income margins or EBIT of 62%. Quarterly production was at the high end of our guidance, mainly due to better performance at our Giddings asset. Total production at Giddings grew 24% and oil production grew 31% compared to the same period last year.