Magnolia Oil & Gas Corporation Smashes Q4 2024 Expectations with Record Production and Strong Financials
Magnolia Oil & Gas Corporation has ended the year on a high note, with the company's Fourth Quarter 2024 Earnings Conference Call revealing record quarterly production volume and strong financial results. The oil and gas company reported a record quarterly production volume of 93,100 barrels of oil equivalent per day (BOE/d) in Q4 2024, which lifted full year 2024 total production to 89,700 BOE/d.
This represents an annual total company production growth of 9% for the second consecutive year and 11% growth in oil production alone, exceeding the company's original expectations. The increase was driven by a combination of factors, including strong well productivity and the continued expansion of the development area at Giddings. Total adjusted net income for the year came in at approximately $401 million.
Despite a 50% reinvestment rate, the company generated free cash flow of $430 million last year. Magnolia's commitment to cost reduction initiatives paid off, with lease operating costs lowered by 10% per BOE through the year. Additionally, efforts to work with material vendors and oilfield service providers resulted in lower finding and development costs.
These factors combined helped achieve a return on capital employed of 22% last year, placing Magnolia's overall cost structure in a position of strength for 2025. The company's confidence in its outlook was reflected in the Board's approval of a 15% increase to the quarterly dividend payment earlier this month, which now stands at $0.15 per share.
The Board also authorized an increase of 10 million shares to the existing share repurchase program designated for open market repurchases. Magnolia continues with its plan to repurchase 1% of its shares outstanding per quarter. Christopher Stavros, President and CEO, highlighted the company's business model as 'reliably consistent and steady since the company was founded', with an objective of operating a highly investable attractive E&P business that generates absolute per share value over the long term.
The outlook for 2025 is promising, with a moderate growth plan in place that includes similar capital spending while providing additional capture of low-cost resource opportunities. Brian Corales, Senior Vice President and Chief Financial Officer, will review the company's financial results in greater detail and provide additional guidance before taking questions from investors.
