Magnolia Oil & Gas Corp is a leading independent E&P operator in the Permian Basin delivering strong free cash flow and growing shareholder returns through disciplined asset management.
MGY offers an attractive yield profile for income-focused investors, supported by a massive $266.8M cash balance and low recent debt issuance activity. The company's ability to generate over $800M in annual operating cash flow provides a safety buffer against commodity downturns while funding shareholder returns.
The stock carries risks associated with the significant retained earnings deficit of nearly $1B, which may indicate historical capital allocation challenges or legacy debt obligations. Declining revenue trends from 2022 levels combined with high depreciation costs could pressure future margins if production volumes do not recover.
Magnolia Oil & Gas Corp (MGY) is an independent exploration and production company focused on acquiring, exploring, developing, and producing oil and natural gas assets primarily in the Permian Basin. The company generates substantial revenue from crude oil and natural gas sales, leveraging a portfolio of unconventional reserves to deliver consistent cash flows to shareholders.
Despite a slight revenue contraction from 2024 to 2025, Magnolia maintained strong profitability with net profit decreasing only marginally from $397.3M to $337.3M over the last two years. The company generated impressive non-GAAP cash metrics, with operating cash flow significantly exceeding net income, allowing for substantial dividends of $113.1M and minimal external debt financing in the latest period.
The oil and gas exploration and production industry is highly cyclical, driven by global energy demand and volatile commodity pricing. Companies in this sector face intense competition for acreage and capital, requiring rigorous operational efficiency to maintain margins amidst fluctuating energy markets.
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $1.69B | $1.23B | $1.32B | $1.31B |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $1.69B | $1.23B | $1.32B | $1.31B |
| Operating Expenses | $620.7M | $692.5M | $803.9M | $872.7M |
| Operating Income | $1.07B | $534.5M | $512.0M | $439.2M |
| G&A | $72.4M | $77.1M | $88.7M | $97.0M |
| Stock-Based Comp | $13.3M | $16.2M | $18.7M | $27.3M |
| D&A | $243.2M | $324.8M | $414.5M | $437.8M |
| Amortization | $0 | $0 | — | — |
| Other OpEx | $548.3M | $615.4M | $715.2M | $775.6M |
| Non-Operating Income | $-16.9M | $15.3M | $-18.8M | $-21.8M |
| Pre-Tax Income | $1.06B | $549.8M | $493.1M | $417.4M |
| Income Tax | $6.6M | $107.2M | $95.8M | $80.1M |
| Continuing Ops | $1.05B | $442.6M | $397.3M | $337.3M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $1.05B | $442.6M | $397.3M | $337.3M |
| Minority Interest | $156.4M | $54.3M | $31.3M | $12.0M |
| Net to Common | $893.8M | $388.3M | $366.0M | $325.3M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $850.7M | $591.3M | $410.8M | $442.4M |
| Cash & Equivalents | $675.4M | $401.1M | $260.0M | $266.8M |
| Accounts Receivable | $170.8M | $189.7M | $147.9M | $116.5M |
| Other Current Assets | $4.5M | $447.0K | $2.9M | $59.1M |
| Long-Term Assets | $1.72B | $2.16B | $2.41B | $2.46B |
| Operating Leases | $7.6M | $15.5M | $17.1M | $26.0M |
| Other LT Assets | $1.71B | $2.15B | $2.39B | $2.43B |
| Total Assets | $2.57B | $2.76B | $2.82B | $2.90B |
| Current Liabilities | $340.3M | $314.9M | $290.3M | $288.0M |
| Accounts Payable | $202.8M | $193.2M | $181.1M | $177.6M |
| Current Leases | $4.0M | $9.6M | $12.2M | $18.2M |
| Other Current Liab | $133.5M | $112.1M | $97.0M | $92.2M |
| Long-Term Liabilities | $492.1M | $558.7M | $563.2M | $615.9M |
| Long-Term Debt | $390.4M | $392.8M | $392.5M | — |
| LT Operating Leases | $4.9M | $7.1M | $5.6M | $8.1M |
| Other LT Liab | $96.9M | $158.7M | $165.1M | $607.8M |
| Total Liabilities | $832.4M | $873.5M | $853.5M | $903.9M |
| Shareholders' Equity | $1.74B | $1.88B | $1.97B | $2.00B |
| Paid-In Capital | $1.72B | $1.74B | $1.88B | $1.90B |
| Retained Earnings | $185.7M | $486.2M | $754.6M | $966.7M |
| AOCI | — | — | — | $-1.6M |
| Total L&E | $2.57B | $2.76B | $2.82B | $2.90B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $1.05B | $442.6M | $397.3M | $337.3M |
| Non-Cash Adjustments | $128.3M | $405.5M | $583.3M | $502.8M |
| Working Capital Changes | $118.2M | $7.7M | $-59.8M | $38.6M |
| Cash from Operations | $1.30B | $855.8M | $920.9M | $878.6M |
| Cash from Investing | $-518.9M | $-814.9M | $-655.1M | $-540.7M |
| Debt Issuances | — | — | $400.0M | $0 |
| Debt Repayments | — | — | $404.0M | $0 |
| Dividends Paid | $75.2M | $88.1M | $97.6M | $113.1M |
| Cash from Financing | $-469.3M | $-315.2M | $-406.8M | $-331.2M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $308.5M | $-274.3M | $-141.1M | $6.7M |
| Beginning Cash | $367.0M | $675.4M | $401.1M | $260.0M |
| Ending Cash | $675.4M | $401.1M | $260.0M | $266.8M |
The company operates primarily through its Exploration and Production segment, which accounts for the vast majority of revenue at $1.31B. While specific downstream or midstream segments are not explicitly detailed in the provided data, the significant operating expenses and depreciation suggest a heavy focus on upstream extraction activities with potential minor contributions from production-based services or marketing operations.
Investors should consider the volatility of oil and natural gas commodity prices which directly impacts revenue stability. The company faces significant exposure to regulatory changes and environmental liabilities inherent in the E&P sector. Additionally, high levels of long-term liabilities ($615.9M) and a retained earnings deficit of $966.7M suggest potential capital structure pressure under prolonged low-price regimes.
MGY holds a competitive moat through its strategic asset location in the prolific Permian Basin, offering access to low-cost drilling environments. The company demonstrates operational efficiency with high free cash flow conversion, evidenced by $878.6M in operating cash flow relative to a $337.3M net profit, indicating robust cost management and production discipline.
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.