Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 10, 2023 | Jun. 30, 2022 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38083 | ||
Entity Registrant Name | Magnolia Oil & Gas Corp | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 81-5365682 | ||
Entity Address, Address Line One | Nine Greenway Plaza, Suite 1300 | ||
Entity Address, City or Town | Houston, | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77046 | ||
City Area Code | 713 | ||
Local Phone Number | 842-9050 | ||
Title of 12(b) Security | Class A Common Stock, par value $0.0001 | ||
Trading Symbol | MGY | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3.6 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for the 2023 Annual Meeting of Stockholders, to be filed no later than 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates, are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0001698990 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 192,063,022 | ||
Class B Common Stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 21,826,805 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | Houston, TX |
Auditor Firm ID | 185 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 675,441 | $ 366,982 |
Accounts receivable | 170,770 | 149,769 |
Drilling advances | 3,484 | 615 |
Other current assets | 1,052 | 552 |
Total current assets | 850,747 | 517,918 |
PROPERTY, PLANT AND EQUIPMENT | ||
Oil and natural gas properties | 2,940,011 | 2,381,812 |
Other | 8,991 | 7,036 |
Accumulated depreciation, depletion and amortization | (1,415,973) | (1,172,761) |
Total property, plant and equipment, net | 1,533,029 | 1,216,087 |
OTHER ASSETS | ||
Deferred financing costs, net | 5,636 | 3,701 |
Deferred tax assets | 162,792 | 0 |
Other long-term assets | 20,381 | 9,036 |
Total other assets | 188,809 | 12,737 |
TOTAL ASSETS | 2,572,585 | 1,746,742 |
CURRENT LIABILITIES | ||
Accounts payable | 202,846 | 127,909 |
Other current liabilities (Note 6) | 137,427 | 90,636 |
Total current liabilities | 340,273 | 218,545 |
LONG-TERM LIABILITIES | ||
Long-term debt, net | 390,383 | 388,087 |
Asset retirement obligations, net of current | 95,129 | 89,715 |
Other long-term liabilities | 6,609 | 5,146 |
Total long-term liabilities | 492,121 | 482,948 |
COMMITMENTS AND CONTINGENCIES (Note 10) | ||
Additional paid-in capital | 1,719,875 | 1,689,500 |
Treasury Stock, at cost, 21,684 shares and 14,168 shares in 2022 and 2021, respectively | (329,512) | (164,599) |
Retained earnings (accumulated deficit) | 185,669 | (708,168) |
Noncontrolling interest | 164,136 | 228,492 |
Total equity | 1,740,191 | 1,045,249 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 2,572,585 | 1,746,742 |
Class A Common Stock | ||
Common stock | 21 | 19 |
Class B Common Stock | ||
Common stock | $ 2 | $ 5 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Treasury stock (in shares) | 21,684,000 | 14,168,000 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,300,000,000 | 1,300,000,000 |
Common stock, shares issued (in shares) | 213,727,000 | 193,437,000 |
Common stock, shares outstanding (in shares) | 192,043,000 | 179,270,000 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 225,000,000 | 225,000,000 |
Common stock, shares issued (in shares) | 21,827,000 | 49,293,000 |
Common stock, shares outstanding (in shares) | 21,827,000 | 49,293,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
REVENUES | |||
Total revenues | $ 1,694,493 | $ 1,078,351 | $ 541,303 |
OPERATING EXPENSES | |||
Lease operating expenses | 131,513 | 93,021 | 79,192 |
Gathering, transportation, and processing | 64,754 | 45,535 | 35,442 |
Taxes other than income | 94,031 | 55,834 | 31,250 |
Exploration expenses | 11,586 | 4,125 | 567,333 |
Impairment of oil and natural gas properties | 0 | 0 | 1,381,258 |
Asset retirement obligations accretion | 3,245 | 4,929 | 5,718 |
Depreciation, depletion and amortization | 243,152 | 187,688 | 283,353 |
Amortization of intangible assets | 0 | 9,346 | 14,505 |
General and administrative expenses | 72,426 | 75,279 | 68,918 |
Total operating expenses | 620,707 | 475,757 | 2,466,969 |
OPERATING INCOME (LOSS) | 1,073,786 | 602,594 | (1,925,666) |
OTHER INCOME (EXPENSE) | |||
Income from equity method investee | 0 | 0 | 2,113 |
Interest expense, net | (23,442) | (31,002) | (28,698) |
Gain (loss) on derivatives, net | 0 | (3,110) | 565 |
Other income, net | 6,543 | 85 | 3,363 |
Total other expense, net | (16,899) | (34,027) | (22,657) |
INCOME (LOSS) BEFORE INCOME TAXES | 1,056,887 | 568,567 | (1,948,323) |
Income tax expense (benefit) | 6,638 | 8,851 | (79,340) |
NET INCOME (LOSS) | 1,050,249 | 559,716 | (1,868,983) |
LESS: Net income (loss) attributable to noncontrolling interest | 156,412 | 142,434 | (660,593) |
Net income (loss) attributable to Class A Common Stock | $ 893,837 | $ 417,282 | $ (1,208,390) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | |||
Basic (in shares) | 187,433 | 174,364 | 166,270 |
Diluted (in shares) | 187,901 | 175,360 | 166,270 |
Class A Common Stock | |||
NET INCOME (LOSS) PER SHARE OF CLASS A COMMON STOCK | |||
Basic (in dollars per share) | $ 4.73 | $ 2.38 | $ (7.27) |
Diluted (in dollars per share) | $ 4.71 | $ 2.36 | $ (7.27) |
Oil revenues | |||
REVENUES | |||
Total revenues | $ 1,158,006 | $ 747,896 | $ 421,520 |
Natural gas revenues | |||
REVENUES | |||
Total revenues | 301,494 | 172,648 | 70,416 |
Natural gas liquids revenues | |||
REVENUES | |||
Total revenues | $ 234,993 | $ 157,807 | $ 49,367 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity - USD ($) shares in Thousands, $ in Thousands | Total | Class A Common Stock | Class B Common Stock | Total Stockholders’ Equity | Total Stockholders’ Equity Class A Common Stock | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Additional Paid In Capital | Additional Paid In Capital Class B Common Stock | Treasury Stock | Treasury Stock Class A Common Stock | Retained Earnings/ (Accumulated Deficit) | Noncontrolling Interest | Noncontrolling Interest Class B Common Stock |
Common stock, balance at beginning of period (in shares) at Dec. 31, 2019 | 168,319 | 85,790 | ||||||||||||
Balance at beginning of period at Dec. 31, 2019 | $ 2,728,529 | $ 1,776,051 | $ 17 | $ 9 | $ 1,703,362 | $ (10,277) | $ 82,940 | $ 952,478 | ||||||
Treasury stock, balance at beginning of period (in shares) at Dec. 31, 2019 | 1,000 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock based compensation expense, net of forfeitures | 10,029 | 6,616 | 6,616 | 3,413 | ||||||||||
Changes in ownership interest adjustment | 0 | 3,088 | 3,088 | (3,088) | ||||||||||
Common stock issued related to stock based compensation and other, net (in shares) | 436 | |||||||||||||
Common stock issued related to stock based compensation and other, net | (792) | (522) | (522) | (270) | ||||||||||
Class A Common Stock repurchase (in shares) | 4,475 | |||||||||||||
Class A Common Stock repurchases | $ (28,681) | $ (28,681) | $ (28,681) | |||||||||||
Distributions to noncontrolling interest owners | (680) | (680) | ||||||||||||
Net income (loss) | (1,868,983) | (1,208,390) | (1,208,390) | (660,593) | ||||||||||
Common stock, balance at end of period (in shares) at Dec. 31, 2020 | 168,755 | 85,790 | ||||||||||||
Balance at end of period at Dec. 31, 2020 | 839,422 | 548,162 | $ 17 | $ 9 | 1,712,544 | $ (38,958) | (1,125,450) | 291,260 | ||||||
Treasury stock, balance at end of period (in shares) at Dec. 31, 2020 | 5,475 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock based compensation expense, net of forfeitures | 11,736 | 8,629 | 8,629 | 3,107 | ||||||||||
Changes in ownership interest adjustment | 0 | 15,884 | 15,884 | (15,884) | ||||||||||
Common stock issued related to stock based compensation and other, net (in shares) | 810 | |||||||||||||
Common stock issued related to stock based compensation and other, net | (4,797) | (3,566) | (3,566) | (1,231) | ||||||||||
Class A Common Stock repurchase (in shares) | 8,693 | |||||||||||||
Class A Common Stock repurchases | $ (125,641) | (125,641) | $ (125,641) | |||||||||||
Class B Common Stock purchases and cancellations (in shares) | (13,000) | |||||||||||||
Class B Common Stock purchases and cancellations | $ (171,671) | $ (2) | $ 2 | $ (171,671) | ||||||||||
Non-compete settlement (in shares) | 375 | |||||||||||||
Non-compete settlement | (42,073) | (29,757) | (29,757) | (12,316) | ||||||||||
Conversion of Class B Common Stock to Class A Common Stock (in shares) | 23,497 | (23,497) | ||||||||||||
Conversion of Class B Common Stock to Class A Common Stock | 0 | $ 2 | $ (2) | |||||||||||
Dividends declared | (14,236) | (14,236) | (14,236) | |||||||||||
Distributions to noncontrolling interest owners | (7,207) | (7,207) | ||||||||||||
Net income (loss) | 559,716 | 417,282 | 417,282 | 142,434 | ||||||||||
Common stock, balance at end of period (in shares) at Dec. 31, 2021 | 193,437 | 49,293 | 193,437 | 49,293 | ||||||||||
Balance at end of period at Dec. 31, 2021 | $ 1,045,249 | 816,757 | $ 19 | $ 5 | 1,689,500 | $ (164,599) | (708,168) | 228,492 | ||||||
Treasury stock, balance at end of period (in shares) at Dec. 31, 2021 | 14,168 | 14,168 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock based compensation expense, net of forfeitures | $ 13,314 | 11,415 | 11,415 | 1,899 | ||||||||||
Changes in ownership interest adjustment | 0 | 4,860 | 4,860 | (4,860) | ||||||||||
Common stock issued related to stock based compensation and other, net (in shares) | 773 | |||||||||||||
Common stock issued related to stock based compensation and other, net | (7,001) | (5,829) | (5,829) | (1,172) | ||||||||||
Class A Common Stock repurchase (in shares) | 7,516 | |||||||||||||
Class A Common Stock repurchases | $ (164,913) | $ (164,913) | $ (164,913) | |||||||||||
Class B Common Stock purchases and cancellations (in shares) | (7,949) | |||||||||||||
Class B Common Stock purchases and cancellations | $ (187,273) | $ (1) | $ 1 | $ (187,273) | ||||||||||
Conversion of Class B Common Stock to Class A Common Stock (in shares) | 19,517 | (19,517) | ||||||||||||
Conversion of Class B Common Stock to Class A Common Stock | 0 | $ 2 | $ (2) | |||||||||||
Dividends declared | (75,391) | (75,391) | (75,391) | |||||||||||
Distributions to noncontrolling interest owners | (29,362) | (29,362) | ||||||||||||
Adjustment to deferred taxes | (4,078) | (4,078) | (4,078) | |||||||||||
Tax impact of equity transactions | 99,397 | 99,397 | 99,397 | |||||||||||
Net income (loss) | 1,050,249 | 893,837 | 893,837 | 156,412 | ||||||||||
Common stock, balance at end of period (in shares) at Dec. 31, 2022 | 213,727 | 21,827 | 213,727 | 21,827 | ||||||||||
Balance at end of period at Dec. 31, 2022 | $ 1,740,191 | $ 1,576,055 | $ 21 | $ 2 | $ 1,719,875 | $ (329,512) | $ 185,669 | $ 164,136 | ||||||
Treasury stock, balance at end of period (in shares) at Dec. 31, 2022 | 21,684 | 21,684 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders’ Equity (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Common stock, dividends, declared (in dollars per share) | $ 0.40 | $ 0.08 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
NET INCOME (LOSS) | $ 1,050,249 | $ 559,716 | $ (1,868,983) |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | 243,152 | 187,688 | 283,353 |
Amortization of intangible assets | 0 | 9,346 | 14,505 |
Exploration expenses, non-cash | 554 | 888 | 563,999 |
Impairment of oil and natural gas properties | 0 | 0 | 1,381,258 |
Asset retirement obligations accretion | 3,245 | 4,929 | 5,718 |
Amortization of deferred financing costs | 5,854 | 4,290 | 3,628 |
Unrealized (gain) loss on derivatives, net | 0 | 277 | (277) |
(Gain) on sale of equity method investment | 0 | 0 | (5,071) |
Deferred income tax benefit | (65,720) | 0 | (77,834) |
Stock based compensation | 13,314 | 11,736 | 10,029 |
Other | 0 | (84) | (728) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (21,001) | (68,210) | 24,216 |
Accounts payable | 74,937 | 65,283 | (16,961) |
Accrued liabilities | 8,593 | 7,765 | (2,457) |
Drilling advances | (2,869) | 3,190 | (3,506) |
Other assets and liabilities, net | (13,621) | 1,663 | (768) |
Net cash provided by operating activities | 1,296,687 | 788,477 | 310,121 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Acquisitions | (90,126) | (18,345) | (73,702) |
Proceeds from sale of equity method investment | 0 | 0 | 27,074 |
Additions to oil and natural gas properties | (465,139) | (236,426) | (197,858) |
Changes in working capital associated with additions to oil and natural gas properties | 37,987 | 13,568 | (24,354) |
Other investing | (1,609) | (2,239) | (1,148) |
Net cash used in investing activities | (518,887) | (243,442) | (269,988) |
CASH FLOW FROM FINANCING ACTIVITIES | |||
Non-compete settlement | 0 | (42,073) | 0 |
Dividends paid | (75,198) | (14,131) | 0 |
Distributions to noncontrolling interest owners | (29,362) | (7,207) | (680) |
Cash paid for debt modification | (5,494) | (4,976) | 0 |
Other financing activities | (7,101) | (4,915) | (844) |
Net cash used in financing activities | (469,341) | (370,614) | (30,205) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 308,459 | 174,421 | 9,928 |
Cash and cash equivalents – Beginning of period | 366,982 | 192,561 | 182,633 |
Cash and cash equivalents – End of period | 675,441 | 366,982 | 192,561 |
Class A Common Stock | |||
CASH FLOW FROM FINANCING ACTIVITIES | |||
Common Stock repurchase | (164,913) | (125,641) | (28,681) |
Class B Common Stock | |||
CASH FLOW FROM FINANCING ACTIVITIES | |||
Common Stock repurchase | $ (187,273) | $ (171,671) | $ 0 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Organization and Nature of Operations Magnolia Oil & Gas Corporation (either individually or together with its consolidated subsidiaries, as the context requires, the “Company” or “Magnolia”) is an independent oil and natural gas company engaged in the acquisition, development, exploration, and production of oil, natural gas, and natural gas liquid (“NGL”) reserves. The Company’s oil and natural gas properties are located primarily in Karnes County and the Giddings area in South Texas, where the Company targets the Eagle Ford Shale and Austin Chalk formations. Magnolia’s objective is to generate stock market value over the long-term through consistent organic production growth, high full cycle operating margins, an efficient capital program with short economic paybacks, significant free cash flow after capital expenditures, and effective reinvestment of free cash flow. Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Certain reclassifications of prior period financial statements have been made to conform to current reporting practices. The consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of intercompany transactions and balances. As of December 31, 2022, Magnolia owned approximately 89.8% of the interest in Magnolia Oil & Gas Parent LLC (“Magnolia LLC”) and the noncontrolling interest was 10.2%. The Company’s interests in oil and natural gas exploration and production ventures and partnerships are proportionately consolidated. The Company reflects a noncontrolling interest representing the interest owned by the Magnolia LLC Unit Holders through their ownership of Magnolia LLC Units in the consolidated financial statements. The noncontrolling interest is presented as a component of equity. See Note —Stockholders’ Equity for further discussion of noncontrolling interest. Variable Interest Entities Magnolia LLC is a variable interest entity (“VIE”). The Company determined that it is the primary beneficiary of Magnolia LLC as the Company is the managing member and has the power to direct the activities most significant to Magnolia LLC’s economic performance as well as the obligation to absorb losses and receive benefits that are potentially significant. At December 31, 2022, the Company had an approximate 89.8% economic interest in Magnolia LLC and 100% of Magnolia LLC’s assets, liabilities, and results of operations are consolidated in the Company’s consolidated financial statements contained herein. At December 31, 2022, the Magnolia LLC Unit Holders had an approximate 10.2% economic interest in Magnolia LLC; however, the Magnolia LLC Unit Holders have disproportionately fewer voting rights, and are shown as noncontrolling interest holders of Magnolia LLC. See Note —Stockholders’ Equity for further discussion of the noncontrolling interest. Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and changes in these estimates are recorded when known. Significant estimates with regard to these financial statements include the fair value determination of acquired assets and liabilities, the assessment of asset retirement obligations, the estimate of proved oil and natural gas reserves and related present value estimates of future net cash flows, and the estimates of fair value for long-lived assets. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and short-term, highly liquid investments that are readily convertible to cash. Cash and cash equivalents were approximately $675.4 million and $367.0 million at December 31, 2022 and 2021, respectively. Accounts Receivable and Allowance for Expected Credit Losses The Company’s receivables consist mainly of trade receivables from commodity sales and joint interest billings due from owners on properties the Company operates. The majority of these receivables have payment terms of 30 days or less. For receivables due from joint interest owners, the Company generally has the ability to withhold future revenue disbursements to recover non- payment of joint interest billings. The Company’s existing historical credit losses have been de minimis and are expected to remain so in the future assuming no substantial changes to the business or creditworthiness of Magnolia’s business partners. Oil and Natural Gas Properties The Company follows the successful efforts method of accounting for its oil and natural gas properties. Under this method of accounting, exploration expenses such as exploratory geological and geophysical costs, delay rentals, and exploration overhead are expensed as incurred. All costs related to production, general corporate overhead, and similar activities are expensed as incurred. Unproved properties are assessed for impairment at least annually and are transferred to proved oil and natural gas properties to the extent the costs are associated with successful exploration activities. Unproved properties are assessed for impairment based on the Company’s current exploration plans. Costs of expired or abandoned leases are charged to exploration expense, while costs of productive leases are transferred to proved oil and natural gas properties. Costs of maintaining and retaining unproved properties, as well as impairment of unsuccessful leases, are included in “Exploration expenses” in the consolidated statements of operations. Costs to develop proved reserves, including the costs of all development wells and related equipment used in the production of crude oil and natural gas, are capitalized. Depreciation, depletion and amortization of the cost of proved oil and natural gas properties is calculated using the unit-of-production method. The reserve base used to calculate depletion for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. The reserve base used to calculate the depreciation for capitalized costs for exploratory and development wells is the sum of proved developed reserves only. Estimated future abandonment costs, net of salvage values, are included in the depreciable cost. Oil and natural gas properties are grouped for depreciation, depletion and amortization in accordance with the Accounting Standards Codification (“ASC”) ASC 932 “Extractive Activities—Oil and Gas”. The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field. When circumstances indicate that proved oil and natural gas properties may be impaired, the Company compares unamortized capitalized costs to the expected undiscounted pre-tax future cash flows for the associated assets grouped at the lowest level for which identifiable cash flows are independent of cash flows of other assets. If the expected undiscounted pre-tax future cash flows, based on the Company’s estimate of future crude oil and natural gas prices, operating costs, anticipated production from proved reserves, and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally estimated using the income approach described in ASC 820, “Fair Value Measurements” (“ASC 820”). If applicable, the Company may utilize prices and other relevant information generated by market transactions involving assets and liabilities that are identical or comparable to the item being measured as the basis for determining fair value. The expected future cash flows used for impairment reviews and related fair value calculations are typically based on judgmental assessments of future production volumes, commodity prices, operating costs, and capital investment plans, considering all available information at the date of review. These assumptions are applied to develop future cash flow projections that are then discounted to estimated fair value, using a discount rate believed to be consistent with those applied by market participants. See Note — Fair Value Measurements for further discussion. Asset Retirement Obligations Asset retirement obligations (“ARO”) represent the present value of the estimated cash flows expected to be incurred to plug, abandon, and remediate producing properties, excluding salvage values, at the end of their productive lives in accordance with applicable laws. The significant unobservable inputs to this fair value measurement include estimates of plugging, abandonment, and remediation costs, well life, inflation, and credit-adjusted risk-free rate. The inputs are calculated based on historical data as well as current estimates. When the liability is initially recorded, the carrying amount of the related long-lived asset is increased. Over time, accretion of the liability is recognized each period, and the capitalized cost is amortized over the useful life of the related asset using the unit of production method and is included in “Depreciation, depletion and amortization” in the Company’s consolidated statements of operations. If the ARO is settled for an amount other than the recorded amount, a gain or loss is recognized. To estimate the fair value of an asset retirement obligation, the Company employs a present value technique, which reflects certain assumptions, including its credit‑adjusted risk‑free interest rate, inflation rate, the estimated settlement date of the liability, and the estimated cost to settle the liability. Changes in timing or to the original estimate of cash flows will result in changes to the carrying amount of the liability and related long lived asset. Fair Value Measurements Certain assets and liabilities are reported at fair value on a recurring basis on the Company’s consolidated balance sheet. The Company also uses fair value measurements on a nonrecurring basis when a qualitative assessment of its assets indicates a potential impairment. For more discussion on recurring and nonrecurring fair value measurements, refer to Note The valuation techniques that may be used to measure fair value include a market approach, an income approach and a cost approach. A market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. An income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectations, including present value techniques, option-pricing models and the excess earnings method. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). ASC 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment, characteristics specific to the investment, market conditions, and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value. The three levels of the fair value hierarchy under ASC 820 are as follows: Level 1—Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used. Level 2—Pricing inputs are other than quoted prices included within Level 1 that are observable for the investment, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, inputs other than quoted prices that are observable for the investment, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3—Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. The inputs used in determination of fair value require significant judgment and estimation. In some cases, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the investment is categorized in its entirety is determined based on the lowest level input that is significant to the investment. Assessing the significance of a particular input to the valuation of an investment in its entirety requires judgment and considers factors specific to the investment. The categorization of an investment within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the perceived risk of that investment. Income Taxes Under ASC 740, “Income Taxes,” deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to net operating losses, tax credits, and temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of the enactment date. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. The Company reports a liability or a reduction of deferred tax assets for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. When applicable, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. Refer to Note 11—Income Taxes for additional information. Derivatives Magnolia utilized natural gas costless collars to reduce its exposure to price volatility for a portion of its natural gas production volumes. The Company’s policies do not permit the use of derivative instruments for speculative purposes. The Company has elected not to designate any of its derivative instruments as hedging instruments. Accordingly, changes in the fair value of the Company’s derivative instruments were recorded immediately to earnings as “Gain (loss) on derivatives, net” on the Company’s consolidated statements of operations. The Company had settled all of its natural gas costless collar derivative contracts by September 30, 2021. Purchase Price Allocation Accounting for the acquisition of a business requires the allocation of the purchase price to the various assets and liabilities of the acquired business and recording deferred taxes for any differences between the allocated values and tax basis of assets and liabilities. Any excess of the purchase price over the amounts assigned to assets and liabilities is recorded as goodwill. The purchase price allocation is accomplished by recording each asset and liability at its estimated fair value. Estimated deferred taxes are based on available information concerning the tax basis of the acquired company’s assets, liabilities, and tax-related carryforwards at the merger date, although such estimates may change in the future as additional information becomes known. The amount of goodwill recorded in any particular business combination can vary significantly depending upon the values attributed to assets acquired and liabilities assumed relative to the total acquisition cost. When estimating the fair values of assets acquired and liabilities assumed, the Company must apply various assumptions. The most significant assumptions relate to the estimated fair values assigned to proved and unproved crude oil and natural gas properties. To estimate the fair values of these properties, the Company prepares estimates of crude oil and natural gas reserves. Estimated fair values assigned to assets acquired can have a significant effect on results of operations in the future. Commitments and Contingencies Accruals for loss contingencies arising from claims, assessments, litigation, environmental, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Refer to Note 10—Commitments and Contingencies for additional information. Revenue Recognition Magnolia’s revenues include the sale of crude oil, natural gas, and NGLs. Oil, natural gas, and NGL sales are recognized as revenue when production is sold to a customer in fulfillment of performance obligations under the terms of agreed contracts. Performance obligations are primarily comprised of delivery of oil, natural gas, or NGLs at a delivery point, as negotiated within each contract. Each barrel of oil, million Btu of natural gas, gallon of NGLs, or other unit of measure is separately identifiable and represents a distinct performance obligation to which the transaction price is allocated. The Company’s oil production is primarily sold under market-sensitive contracts that are typically priced at a differential to the NYMEX price or at purchaser posted prices for the producing area. For oil contracts, the Company generally records sales based on the net amount received. For natural gas contracts, the Company generally records wet gas sales (which consists of natural gas and NGLs based on end products after processing) at the wellhead or inlet of the natural gas processing plant (i.e., the point of control transfer) as revenues net of gathering, transportation, and processing expenses if the processor is the customer and there is no redelivery of commodities to the Company at the tailgate of the plant. Conversely, the Company generally records residual natural gas and NGL sales at the tailgate of the plant (i.e., the point of control transfer) on a gross basis along with the associated gathering, transportation, and processing expenses if the processor is a service provider and there is redelivery of one or several commodities to the Company at the tailgate of the plant. The facts and circumstances of an arrangement are considered and judgment is often required in making this determination. For processing contracts that require noncash consideration in exchange for processing services, the Company recognizes revenue and an equal gathering, transportation, and processing expense for commodities transferred to the service provider. Customers are invoiced once the Company’s performance obligations have been satisfied. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days. There are no judgments that significantly affect the amount or timing of revenue from contracts with customers. Additionally, the Company’s product sales contracts do not give rise to material contract assets or contract liabilities. The Company’s receivables consist mainly of receivables from oil, natural gas, and NGL purchasers and from joint interest owners on properties the Company operates. Receivables from contracts with customers totaled $138.6 million and $125.1 million as of December 31, 2022 and 2021, respectively. Accounts receivable are stated at the historical carrying amount net of write-offs and allowance for doubtful accounts. The Company routinely assesses the collectability of all material trade and other receivables. The Company accrues a reserve on a receivable when, based on the judgment of management, it is probable that a receivable will not be collected and the amount of any reserve may be reasonably estimated. The Company had no allowance for doubtful accounts as of December 31, 2022 or 2021. The Company has concluded that disaggregating revenue by product type appropriately depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors and has reflected this disaggregation of revenue on the Company’s consolidated statements of operations for all periods presented. Performance obligations are satisfied at a point in time once control of the product has been transferred to the customer. The Company considers a variety of facts and circumstances in assessing the point of control transfer, including but not limited to: whether the purchaser can direct the use of the hydrocarbons, the transfer of significant risks and rewards, the Company’s right to payment, and transfer of legal title. The Company does not disclose the value of unsatisfied performance obligations for contracts as all contracts have either an original expected length of one year or less, or the entire future consideration is variable and allocated entirely to a wholly unsatisfied performance obligation. Net Income or Loss Per Share of Common Stock The Company’s basic earnings or loss per share (“EPS”) is computed based on the weighted average number of shares of Class A Common Stock outstanding for the period. Diluted EPS includes the effect of the Company’s outstanding restricted stock units (“RSUs”), performance stock units (“PSUs”), performance restricted stock units (“PRSUs”), and exchanges or repurchases of Class B Common Stock if the inclusion of these items is dilutive. The Company’s unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are deemed participating securities and, therefore, are deducted from earnings in computing basic and diluted net income (loss) per share under the two-class method. Diluted net income (loss) per share attributable to common stockholders is calculated under both the two-class method and the treasury stock method and the more dilutive of the two calculations is presented. Refer to Note 14— Earnings (Loss) Per Share for additional information and the calculation of EPS. Stock Based Compensation Magnolia has established a long-term incentive plan for certain employees and directors that allows for granting RSUs, PSUs, and PRSUs. RSUs granted are valued on the date of the grant using the quoted market price of Magnolia’s Class A Common Stock. PSUs and PRSUs granted are valued based on the grant date fair value determined using Monte Carlo simulations, which use a probabilistic approach for estimating the fair value of the awards. RSUs, PSUs, and PRSUs are expensed on a straight-line basis over the requisite service period. The Company records expense associated with the fair value of stock based compensation under the fair value recognition provisions of ASC Topic 718, “Compensation-Stock Compensation” and that expense is included within “General and administrative expenses” and “Lease operating expenses” in the accompanying consolidated statements of operations. The Company accounts for forfeitures as they occur. These plans and related accounting policies are defined and described more fully in Note Stock Based Compensation Leases Magnolia recognizes right of use assets and lease liabilities for certain commitments with terms greater than one year primarily related to real estate, vehicles, and field equipment. The Company determines if an arrangement is a lease at inception. Operating leases are included in other long-term assets other current liabilities other long-term liabilities Note Leases Recent Accounting Pronouncements The Company has evaluated all recent accounting pronouncements issued and believes that these recent pronouncements will not have a material effect on the Company's consolidated financial statements. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions During the year ended December 31, 2022, the Company completed various leasehold, mineral rights, and property acquisitions of certain oil and natural gas assets totaling $90.1 million, subject to customary closing adjustments. The transactions were accounted for as asset acquisitions. The Company made individually immaterial bolt-on acquisitions during the year ended December 31, 2021. On February 21, 2020, the Company completed the acquisition of certain non-operated oil and natural gas assets located in Karnes and DeWitt Counties, Texas, for approximately $69.7 million in cash. The transaction was accounted for as an asset acquisition. Divestitures On October 23, 2020, the Company sold its 35% membership interest in Ironwood Eagle Ford Midstream, LLC for approximately $27.1 million in cash and recognized a gain on sale of the equity method investment of $5.1 million included within “Other income (expense), net” on the Company’s consolidated statements of operations. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The Company settled all of its natural gas costless collar derivative contracts by September 30, 2021. From September 30, 2020 to September 30, 2021, Magnolia utilized natural gas costless collars to reduce its exposure to price volatility for a portion of its natural gas production volumes. The Company’s policies do not permit the use of derivative instruments for speculative purposes. Under the Company’s costless collar contracts, each collar had an established floor price and ceiling price. When the settlement price was below the floor price, the counterparty was required to make a payment to the Company and when the settlement price was above the ceiling price, the Company was required to make a payment to the counterparty. The Company elected not to designate any of its derivative instruments as hedging instruments. Accordingly, changes in the fair value of the Company’s derivative instruments were recorded immediately to earnings as “Gain (loss) on derivatives, net” on the Company’s consolidated statements of operations. The following table summarizes the effects of derivative instruments on the Company’s consolidated statements of operations: Years Ended (In thousands) December 31, 2021 December 31, 2020 Derivative settlements, realized gain (loss) $ (2,833) $ 288 Unrealized gain (loss) on derivatives (277) 277 Gain (loss) on derivatives, net $ (3,110) $ 565 The Company had no outstanding derivative contracts in place as of December 31, 2022. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Certain of the Company’s assets and liabilities are carried at fair value and measured either on a recurring or nonrecurring basis. The Company’s fair value measurements are based either on actual market data or assumptions that other market participants would use in pricing an asset or liability in an orderly transaction, using the valuation hierarchy prescribed by GAAP under ASC 820. The three levels of the fair value hierarchy under ASC 820 are as follows: Level 1 - Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used. Level 2 - Pricing inputs are other than quoted prices included within Level 1 that are observable for the investment, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, inputs other than quoted prices that are observable for the investment, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 - Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. The inputs used in determination of fair value require significant judgment and estimation. Recurring Fair Value Measurements The carrying value and fair value of the financial instrument that is not carried at fair value in the Company’s consolidated balance sheets as of December 31, 2022 and 2021 is as follows: December 31, 2022 December 31, 2021 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Long-term debt $ 390,383 $ 382,704 $ 388,087 $ 411,500 The fair value of the 2026 Senior Notes as of December 31, 2022 and 2021 is based on unadjusted quoted prices in an active market, which is considered a Level 1 input in the fair value hierarchy. The Company has other financial instruments consisting primarily of receivables, payables, and other current assets and liabilities that approximate fair value due to the nature of the instruments and their relatively short maturities. Non-financial assets and liabilities initially measured at fair value include assets acquired and liabilities assumed in business combinations and asset retirement obligations. Nonrecurring Fair Value Measurements Certain of the Company’s assets and liabilities are measured at fair value on a nonrecurring basis. Specifically, stock based compensation is not measured at fair value on an ongoing basis but is subject to fair value calculations in certain circumstances. For further detail, see Note 13—Stock Based Compensation in the Notes to the consolidated financial statements. During the first quarter of 2020, Magnolia recorded impairments of $1.9 billion related to proved and unproved properties as a result of a sharp decline in commodity prices. Proved property impairment of $1.4 billion is included in “Impairment of oil and natural gas properties” and unproved property impairment of $0.6 billion is included in “Exploration expenses” on the Company’s consolidated statements of operations. Proved and unproved properties that were impaired had aggregate fair values of $0.8 billion and $0.3 billion, respectively. The fair values of these oil and natural gas properties were measured using the income approach based on inputs that are not observable in the market, and therefore, represent Level 3 inputs. The Company calculated the estimated fair values of its oil and natural gas properties using a discounted future cash flow model. Significant inputs associated with the calculation of discounted future net cash flows include estimates of future commodity prices based on NYMEX strip pricing adjusted for price differentials, estimates of proved oil and natural gas reserves and risk adjusted probable and possible reserves, estimates of future expected operating and capital costs, and a market participant based weighted average cost of capital of 10% for proved property impairments and 12% for unproved property impairments. No impairments were recorded for the years ended December 31, 2022 and 2021. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Non-Compete Agreement On the Closing Date, the Company and EnerVest, separate and apart from the Business Combination, entered into the Non-Compete, which prohibited EnerVest and certain of its affiliates from competing with the Company in the Eagle Ford Shale until July 31, 2022 (“Prohibited Period End Date”). In January 2021, the Company amended the Non-Compete such that, rather than delivering an aggregate of 4.0 million shares of Class A Common Stock upon the two and one-half year and the four year anniversaries of the Closing Date, the Company would deliver (i) the cash value of approximately 2.0 million shares of Class A Common Stock and approximately 0.4 million shares of Class A Common Stock on the two and one-half year anniversary of the Closing Date and (ii) an aggregate of 1.6 million shares of Class A Common Stock on the four year anniversary of the Closing Date, in each case subject to the terms and conditions of the Non-Compete. On February 1, 2021, as consideration for compliance with the Non-Compete, the Company paid $17.2 million in cash and issued 0.4 million shares of Class A Common Stock. On June 30, 2021, the Company amended the Prohibited Period End Date to terminate on June 30, 2021 and paid $24.9 million in cash in lieu of delivering the remaining 1.6 million shares of Class A Common Stock (the “Second Non-Compete Amendment”). The Second Non-Compete Amendment resulted in the Company accelerating the amortization of the remaining intangible assets. The Company includes the amortization in “Amortization of intangible assets” on the Company’s consolidated statements of operations. |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other Current Liabilities The following table provides detail of the Company’s other current liabilities for the periods presented: (In thousands) December 31, 2022 December 31, 2021 Accrued capital expenditures $ 67,923 $ 29,936 Other 69,504 60,700 Total other current liabilities $ 137,427 $ 90,636 |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Dec. 31, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations The following table summarizes the changes in the Company’s asset retirement obligations for the periods presented: Years Ended (In thousands) December 31, 2022 December 31, 2021 December 31, 2020 Asset retirement obligations, beginning of period $ 90,650 $ 88,404 $ 95,542 Revisions to estimates 531 (7,167) (14,883) Liabilities incurred and assumed 3,243 5,293 3,484 Liabilities settled (1,422) (809) (1,457) Accretion expense 3,245 4,929 5,718 Asset retirement obligations, end of period $ 96,247 $ 90,650 $ 88,404 Asset retirement obligations reflect the present value of the estimated future costs associated with the plugging and abandonment of oil and natural gas wells, removal of equipment and facilities from leased acreage, and land restoration in accordance with applicable local, state, and federal laws. Inherent in the fair value calculation of ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, and timing of settlement. To the extent future revisions to these assumptions impact the value of the existing ARO liability, a corresponding offsetting adjustment is made to the oil and natural gas property balance. |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt The Company’s long-term debt is comprised of the following: (In thousands) December 31, 2022 December 31, 2021 Revolving credit facility $ — $ — Senior Notes due 2026 400,000 400,000 Total long-term debt 400,000 400,000 Less: Unamortized deferred financing cost (9,617) (11,913) Long-term debt, net $ 390,383 $ 388,087 Credit Facility In connection with the consummation of the Business Combination, the original RBL Facility was entered into by and among Magnolia Operating, as borrower, Magnolia Intermediate, as its holding company, the banks, financial institutions, and other lending institutions from time to time party thereto, as lenders, the other parties from time to time party thereto and Citibank, N.A., as administrative agent, collateral agent, issuing bank, and swingline lender. On February 16, 2022, Magnolia Operating, as borrower, amended and restated the original RBL Facility in its entirety, providing for maximum commitments in an aggregate principal amount of $1.0 billion with a letter of credit facility with a $50.0 million sublimit, with an initial borrowing base of $450.0 million. The RBL Facility, maturing in February 2026 is guaranteed by certain parent companies and subsidiaries of Magnolia LLC and is collateralized by certain of Magnolia Operating’s oil and natural gas properties. Borrowings under the RBL Facility bear interest, at Magnolia Operating’s option, at a rate per annum equal to either the term SOFR rate or the alternative base rate plus the applicable margin. Additionally, Magnolia Operating is required to pay a commitment fee quarterly in arrears in respect of unused commitments under the RBL Facility. The applicable margin and the commitment fee rate are calculated based upon the utilization levels of the RBL Facility as a percentage of unused lender commitments then in effect. The RBL Facility contains certain affirmative and negative covenants customary for financings of this type, including compliance with a leverage ratio of less than 3.50 to 1.00 and a current ratio of greater than 1.00 to 1.00. As of December 31, 2022, the Company was in compliance with all covenants under the RBL Facility. The Company incurred approximately $5.5 million of lender and transaction fees related to the modification of which $5.1 million were recorded as deferred financing costs and will be amortized prospectively over the remaining term of the RBL Facility and $0.4 million of which were expensed and are reflected in “Interest expense, net” on the Company’s consolidated statements of operations for the year ended December 31, 2022. Deferred financing costs in connection with the RBL Facility are amortized on a straight-line basis over a period of four years from February 2022 to February 2026 and included in “Interest expense, net” in the Company’s consolidated statements of operations. The Company recognized interest expense related to the RBL Facility and the original RBL Facility, as applicable, of $5.9 million, $4.1 million, and $4.2 million during the years ended December 31, 2022, 2021, and 2020, respectively. The unamortized portion of the deferred financing costs is included in “Deferred financing costs, net” on the Company’s consolidated balance sheet as of December 31, 2022. The Company did not have any outstanding borrowings under the RBL Facility as of December 31, 2022. 2026 Senior Notes On July 31, 2018, the Issuers issued and sold $400.0 million aggregate principal amount of 2026 Senior Notes in a private placement under Rule 144A and Regulation S under the Securities Act of 1933, as amended. The 2026 Senior Notes were issued under the Indenture, dated as of July 31, 2018 (the “Indenture”), by and among the Issuers and Deutsche Bank Trust Company Americas, as trustee. The 2026 Senior Notes are guaranteed on a senior unsecured basis by the Company, Magnolia Operating, and Magnolia Intermediate and may be guaranteed by certain future subsidiaries of the Company. The 2026 Senior Notes will mature on August 1, 2026 and bear interest at the rate of 6.0% per annum. On April 5, 2021, the terms of the Indenture were amended to modify, among other things, the criteria used by the Company to make Restricted Payments (as defined in the Indenture). The amendment to the Indenture was accounted for as a debt modification. Costs incurred with third parties directly related to the modification were expensed as incurred. The Company incurred approximately $1.1 million of transaction fees in the second quarter of 2021 related to the modification which were expensed. The Company also paid $5.0 million in fees to holders of the 2026 Senior Notes, which fees are recorded as deferred financing costs and amortized using the new effective interest rate applied prospectively over the remaining term of the 2026 Senior Notes. Deferred financing costs related to the issuance of, and the amendment to the Indenture governing, the 2026 Senior Notes are amortized using the effective interest method over the term of the 2026 Senior Notes and are included in “Interest expense, net” in the Company’s consolidated statements of operations. The unamortized portion of the deferred financing costs is included as a reduction to the carrying value of the 2026 Senior Notes, which has been recorded as “Long-term debt, net” on the Company’s consolidated balance sheet as of December 31, 2022. The Company recognized interest expense related to the 2026 Senior Notes of $26.3 million, $27.1 million, and $25.3 million for the years ended December 31, 2022, 2021, and 2020, respectively. At any time, the Issuers may redeem all or a part of the 2026 Senior Notes based on principal plus a set premium, as set forth in the Indenture, including any accrued and unpaid interest. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases Magnolia’s leases primarily consist of real estate, vehicles, and field equipment. The Company’s leases have remaining lease terms of up to 5 years, some of which include options to renew or terminate the lease. The exercise of lease renewal options is at the Company’s sole discretion. Magnolia’s lease agreements do not contain any restrictive covenants or material residual value guarantees. As most of Magnolia’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. (In thousands) December 31, 2022 December 31, 2021 Operating Leases Operating lease assets $ 7,632 $ 7,737 Operating lease liabilities - current $ 3,967 $ 4,031 Operating lease liabilities - long-term 4,854 5,146 Total operating lease liabilities $ 8,821 $ 9,177 Weighted average remaining lease term (in years) 2.6 3.0 Weighted average discount rate 4.0% 3.4% For the years ended December 31, 2022 and 2021, the Company incurred $5.0 million and $3.7 million, respectively, of lease costs for operating leases included on the Company’s consolidated balance sheet, and $36.0 million and $22.9 million, respectively, for short-term lease costs. For the years ended December 31, 2022 and 2021, the Company did not incur any material expenses for variable lease costs. Cash paid for amounts included in the measurement of lease liabilities in operating cash flows from operating leases for the years ended December 31, 2022 and 2021 are $5.2 million and $2.9 million, respectively. Maturities of lease liabilities as of December 31, 2022 under the scope of ASC 842 are as follows: (In thousands) Maturity of Lease Liabilities Operating Leases 2023 $ 4,124 2024 2,546 2025 1,889 2026 731 2027 16 After 2027 1 Total lease payments $ 9,307 Less: Interest (486) Present value of lease liabilities $ 8,821 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters From time to time, the Company is or may become involved in litigation in the ordinary course of business. Certain of the Magnolia LLC Unit Holders and EnerVest Energy Institutional Fund XIV-C, L.P. (collectively the “Co-Defendants”) and the Company have been named as defendants in a lawsuit where the plaintiffs claim to be entitled to a minority working interest in certain Karnes County Assets. The litigation is in the pre-trial stage. The exposure related to this litigation is currently not reasonably estimable. The Co-Defendants retained all such liability in connection with the Business Combination. A mineral owner in a Magnolia operated well in Karnes County, Texas filed a complaint with the Texas Railroad Commission (the “Commission”) challenging the validity of the permit to drill such well by questioning the long-standing process by which the Commission granted the permit. After the Commission affirmed the granting of the permit, and after judicial review of the Commission’s order by the 53rd Judicial District Court Travis County, Texas (the “District Court”), the District Court reversed and remanded the Commission’s order. The Commission and Magnolia have appealed the District Court’s judgment to the Third Court of Appeals in Austin, Texas. At December 31, 2022, the Company does not believe the outcome of any such disputes or legal actions will have a material effect on its consolidated statements of operations, balance sheet, or cash flows. No amounts were accrued with respect to outstanding litigation at December 31, 2022 or December 31, 2021. Environmental Matters The Company, as an owner or lessee and operator of oil and natural gas properties, is subject to various federal, state, and local laws and regulations relating to discharge of materials into, and the protection of, the environment. These laws and regulations may, among other things, impose liability on a lessee under an oil and natural gas lease for the cost of pollution clean-up resulting from operations and subject the lessee to liability for pollution damages. In some instances, the Company may be directed to suspend or cease operations in an affected area. The Company maintains insurance coverage, which it believes is customary in the industry, although the Company is not fully insured against all environmental risks. Commitments At December 31, 2022, contractual obligations for long-term operating leases and purchase obligations are as follows: Net Minimum Commitments (In thousands) Total 2023 2024-2025 2026-2027 2028 & Beyond Purchase obligations (1) $ 11,990 $ 2,200 $ 9,775 $ 15 $ — Operating lease obligations (2) 9,307 4,124 4,435 747 1 Total net minimum commitments $ 21,297 $ 6,324 $ 14,210 $ 762 $ 1 (1) Amounts represent any agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms. These include minimum commitments associated with firm transportation and delivery contracts, as well as operations- and IT-related service commitments. The costs incurred under these obligations were $1.6 million, $1.4 million, and $1.2 million for the years ended December 31, 2022, 2021, and 2020, respectively. (2) Amounts include long-term lease payments for office space, vehicles, and equipment related to exploration, development, and production activities. Risks and Uncertainties The Company’s revenue, profitability, and future growth are substantially dependent upon the prevailing and future prices for oil and natural gas, which depend on numerous factors beyond the Company’s control such as overall oil and natural gas production and inventories in relevant markets, economic conditions, the global and domestic political environments, regulatory developments, and competition from other energy sources. Oil and natural gas prices historically have been volatile and may be subject to significant fluctuations in the future. Additionally, the economy has begun to experience elevated inflation levels as a result of global supply and demand imbalances. Elevated inflation levels have resulted in increased capital and oilfield service costs and continued inflationary pressures and labor shortages could result in further increases to the Company’s operating and capital costs. The coronavirus disease 2019 (“COVID-19”) pandemic and related economic repercussions have created significant volatility, uncertainty, and turmoil in the oil and natural gas industry. While oil and natural gas prices have increased since 2020, the |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s income tax provision consists of the following components: Years Ended (In thousands) December 31, 2022 December 31, 2021 December 31, 2020 Current: Federal $ 66,540 $ 5,452 $ (1,167) State 5,818 3,399 (339) Total current 72,358 8,851 (1,506) Deferred: Federal (62,826) — (71,792) State (2,894) — (6,042) Total deferred (65,720) — (77,834) Income tax expense (benefit) $ 6,638 $ 8,851 $ (79,340) The Company is subject to U.S. federal income tax, margin tax in the state of Texas, and Louisiana corporate income tax. The Company’s effective tax rates for the years ended December 31, 2022, 2021, and 2020, were 0.6%, 1.6%, and 4.1%, respectively. The primary differences between the annual effective tax rates and the statutory rate of 21.0% are income attributable to noncontrolling interest, state taxes, and changes in valuation allowances. As a result of impairments in the first quarter of 2020, the Company established full valuation allowances on the federal and state deferred tax assets which resulted in additional differences between the effective tax rate and the statutory rate for the years ended December 31, 2021 and 2020. During the year ended December 31, 2022, the Company released the valuation allowance against net deferred tax assets. As of December 31, 2022, the Company does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. For the year ended December 31, 2022, no significant amounts were incurred for interest and penalties. Currently, the Company is not aware of any issues under review that could result in significant payments, accruals, or a material deviation from its position. The Company’s tax years since its formation remain subject to possible income tax examinations by its major taxing authorities. During the year ended December 31, 2022, the Magnolia LLC Unit Holders redeemed 19.5 million Magnolia LLC Units (and a corresponding number of shares of Class B Common Stock) for an equivalent number of shares of Class A Common Stock and subsequently sold these shares to the public. Magnolia did not receive any proceeds from the sale of shares of Class A Common Stock by the Magnolia LLC Unit Holders. The redemption and exchange of these Magnolia LLC Units increased Magnolia’s tax basis in Magnolia LLC. The Company recorded a deferred tax asset of $99.4 million related to this additional tax basis in Magnolia LLC Units with a corresponding increase to additional paid-in capital on the Company’s consolidated balance sheet. The Company periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets. Valuation allowances for deferred tax assets are recognized when it is more likely than not that some or all of the benefit from the deferred tax assets will not be realized. As of December 31, 2022, the Company’s total deferred tax assets were $162.8 million. Management assessed whether it is more likely than not that the Company will generate sufficient taxable income to realize its deferred income tax assets. In making this determination, the Company considered all available positive and negative evidence and made certain assumptions. The Company considered, among other things, the overall business environment, its historical earnings and losses, current industry trends, and its outlook for future years. As of December 31, 2022, the Company concluded that it is more likely than not that it will be able to realize all of its deferred tax assets and that a valuation allowance is no longer necessary. A reconciliation of the statutory federal income tax expense to the income tax expense (benefit) from continuing operations is as follows: Year Ended (In thousands) December 31, 2022 December 31, 2021 December 31, 2020 Income tax expense at the federal statutory rate $ 221,954 $ 119,392 $ (409,148) State income tax expense, net of federal income tax benefits 9,526 2,763 (12,759) Noncontrolling interest in partnerships (33,325) (30,615) 141,027 Change in valuation allowances (183,976) (82,696) 201,786 Research and development credits (4,980) — — Other (2,561) 7 (246) Income tax expense (benefit) $ 6,638 $ 8,851 $ (79,340) The tax effects of temporary differences that give rise to significant positions of the deferred income tax assets and liabilities are presented below: (In thousands) December 31, 2022 December 31, 2021 Deferred tax assets: Investment in partnership $ 153,938 $ 161,910 Net operating loss carryforwards — 11,855 Capital loss carryforward 319 1,522 Oil and natural gas properties 6,093 6,337 Capitalized transaction costs 2,442 2,690 Total deferred tax assets 162,792 184,314 Deferred tax liabilities: Oil and natural gas properties (53) — Total deferred tax liabilities (53) — Net deferred tax assets 162,739 184,314 Valuation allowances — (184,314) Net deferred tax assets, net of valuation allowances $ 162,739 $ — On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security Act. Applying the net operating loss (“NOL”) carryback provision resulted in an income tax benefit of $1.2 million during the year ended December 31, 2021. As of December 31, 2022, the Company had no U.S. federal net operating loss carryforward, and a $1.5 million capital loss carryforward which will expire in 3 years. On August 16, 2022, the U.S. enacted legislation referred to as the Inflation Reduction Act (the “IRA”), which significantly changes U.S. corporate income tax laws and is effective for tax years beginning after December 31, 2022. These changes include, among others, a new 15% corporate alternative minimum tax on adjusted financial statement income of corporations with profits over $1 billion, a 1% excise tax on stock buybacks, and various tax incentives for energy and climate initiatives. The Company is in the process of evaluating the provisions of the IRA, but it does not currently believe the IRA will have a material impact on its reported results, cash flows or financial position. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Class A Common Stock At December 31, 2022, there were 213.7 million shares of Class A Common Stock issued and 192.0 million shares of Class A Common Stock outstanding. The holders of Class A Common Stock and Class B Common Stock vote together as a single class on all matters and are entitled one vote for each share held. There is no cumulative voting with respect to the election of directors, which results in the holders of more than 50% of the Company’s outstanding common shares being able to elect all of the directors, subject to voting obligations under the Stockholder Agreement. In the event of a liquidation, dissolution, or winding up of the Company, the holders of the Class A Common Stock are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. The holders of the Class A Common Stock have no preemptive or other subscription rights, and there are no sinking fund provisions applicable to such shares. Class B Common Stock As of December 31, 2022, there were 21.8 million shares of Class B Common Stock issued and outstanding. Holders of Class B Common Stock vote together as a single class with holders of Class A Common Stock on all matters properly submitted to a vote of the stockholders. The holders of Class B Common Stock generally have the right to exchange all or a portion of their shares of Class B Common Stock, together with an equal number of Magnolia LLC Units, for the same number of shares of Class A Common Stock or, at Magnolia LLC’s option, an equivalent amount of cash. Upon the future redemption or exchange of Magnolia LLC Units held by any holder of Class B Common Stock, a corresponding number of shares of Class B Common Stock held by such holder of Class B Common Stock will be canceled. In the event of a liquidation, dissolution, or winding up of Magnolia LLC, the holders of the Class B Common Stock, through their ownership of Magnolia LLC Units, are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of units of Magnolia LLC, if any, having preference over the common units. The holders of the Class B Common Stock have no preemptive or other subscription rights, and there are no sinking fund provisions applicable to such shares. Share Repurchases As of December 31, 2022, the Company’s board of directors had authorized a share repurchase program of up to 30.0 million shares of Class A Common Stock. In addition, the Company may repurchase shares pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Act of 1934, which would permit the Company to repurchase shares at times that may otherwise be prohibited under the Company’s insider trading policy. The share repurchase program does not require purchases to be made within a particular time frame. As of December 31, 2022, the Company had repurchased 21.1 million shares under the program at a cost of $317.9 million. During the year ended December 31, 2022, the Company repurchased 0.6 million shares of Class A Common Stock for $11.6 million from EnerVest Energy Institutional Fund XIV-C, L.P. outside of the share repurchase program. During the year ended December 31, 2022, Magnolia LLC repurchased and subsequently canceled 7.9 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $187.3 million of cash consideration (the “Class B Common Stock Repurchases”). During the same period, the Magnolia LLC Unit Holders redeemed 19.5 million Magnolia LLC Units (and a corresponding number of shares of Class B Common Stock) for an equivalent number of shares of Class A Common Stock and subsequently sold these shares to the public. During the year ended December 31, 2021, Magnolia LLC repurchased and subsequently canceled 13.0 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $171.7 million of cash consideration (the “Class B Common Stock Repurchases”). During the same period, the Magnolia LLC Unit Holders redeemed 23.5 million Magnolia LLC Units (and a corresponding number of shares of Class B Common Stock) for an equivalent number of shares of Class A Common Stock and subsequently sold these shares to the public. Magnolia did not receive any proceeds from the sale of shares of Class A Common Stock by the Magnolia LLC Unit Holders. Magnolia funded the Class B Common Stock Repurchases with cash on hand. Dividends and Distributions In 2021, the Company’s board of directors announced the Company’s first dividend, payable on issued and outstanding shares of Class A Common Stock, and a corresponding distribution from Magnolia LLC to Magnolia LLC Unit Holders. Dividends in excess of retained earnings are recorded as a reduction of additional paid-in capital. The distributions to the Magnolia LLC Unit Holders were recorded as a reduction of noncontrolling interest on the Company’s consolidated balance sheets as of December 31, 2022 and December 31, 2021. The following table sets forth information with respect to cash dividends and distributions declared by the Company’s board of directors during the years ended December 31, 2022 and December 31, 2021, on its own behalf and in its capacity as the managing member of Magnolia LLC, on issued and outstanding shares of Class A Common Stock and Magnolia LLC Units: Record Date Payment Date Dividend/ Distribution Amount per share (1) Distributions by Magnolia LLC (2) Dividends Declared by the Company (2) Distributions to Magnolia LLC Unit Holders (In thousands, except per share amounts) November 7, 2022 December 1, 2022 $ 0.10 $ 21,867 $ 18,996 $ 2,871 August 12, 2022 September 1, 2022 $ 0.10 $ 21,983 $ 19,112 $ 2,871 February 14, 2022 March 1, 2022 $ 0.20 $ 45,851 $ 37,283 $ 8,568 August 12, 2021 September 1, 2021 $ 0.08 $ 19,078 $ 14,236 $ 4,842 (1) Per share of Class A Common Stock and per Magnolia LLC Unit. (2) Reflects total cash dividend and distribution payments made, or to be made, to holders of Class A Common Stock and Magnolia LLC Unit Holders (other than the Company) as of the applicable record date. Noncontrolling Interest Noncontrolling interest in Magnolia’s consolidated subsidiaries includes amounts attributable to Magnolia LLC Units that were issued to the Magnolia LLC Unit Holders in connection with the Business Combination. The noncontrolling interest percentage is affected by various equity transactions such as issuances and repurchases of Class A Common Stock, the exchange of Class B Common Stock (and corresponding Magnolia LLC Units) for Class A Common Stock, or the cancellation of Class B Common Stock (and corresponding Magnolia LLC Units). As of December 31, 2022, Magnolia owned approximately 89.8% of the interest in Magnolia LLC and the noncontrolling interest was 10.2%. Highlander Oil & Gas Holdings LLC (“Highlander”) is a joint venture, whereby MGY Louisiana LLC, a wholly owned subsidiary of Magnolia Operating, holds approximately 84.7% of the units of Highlander, with the remaining 15.3% attributable to noncontrolling interest. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Based Compensation | Stock Based Compensation The Company’s board of directors adopted the “Magnolia Oil & Gas Corporation Long Term Incentive Plan” (as amended, the “Plan”), effective as of July 17, 2018. A total of 16.8 million shares of Class A Common Stock have been authorized for issuance under the Plan as of December 31, 2022. The Company grants stock based compensation awards in the form of restricted stock units (“RSU”), performance restricted stock units (“PRSU”), and performance stock units (“PSU”) to eligible employees and directors to enhance the Company and its affiliates’ ability to attract, retain, and motivate persons who make important contributions to the Company and its affiliates by providing these individuals with equity ownership opportunities. Shares issued as a result of awards granted under the Plan are generally new shares of Class A Common Stock. Stock based compensation expense is recognized net of forfeitures within “General and administrative expenses” and “Lease operating expenses” on the consolidated statements of operations and was $13.3 million, $11.7 million, and $10.0 million for the years ended December 31, 2022, 2021, and 2020. The Company has elected to account for forfeitures of awards granted under the Plan as they occur in determining compensation expense. The following table presents a summary of Magnolia’s unvested RSU, PRSU, and PSU activity for the year ended December 31, 2022. Restricted Performance Restricted Performance Units Weighted Average Grant Date Fair Value Units Weighted Average Grant Date Fair Value Units Weighted Average Grant Date Fair Value Unvested, beginning of period 1,187,509 $ 8.94 968,654 $ 9.36 460,414 $ 9.20 Granted 315,939 21.14 515,405 19.22 — — Granted for performance multiple (1) — — — — 90,965 13.88 Vested (555,764) 9.15 (215,197) 9.36 (272,893) 13.88 Forfeited (36,398) 13.67 (11,279) 14.15 — — Unvested, end of period 911,286 $ 12.89 1,257,583 $ 13.36 278,486 $ 6.14 (1) Upon completion of the performance period for the PSUs granted in 2019, a performance multiple of 150% was applied to each of the grants resulting in additional grants of PSUs in 2022. Restricted Stock Units The Company grants service-based RSU awards to employees, which generally vest and settle ratably over a three-year or four-year service period, and to non-employee directors, which vest in full after one year. Non-employee directors may elect to defer the RSU settlement date. RSUs represent the right to receive shares of Class A Common Stock at the end of the vesting period equal to the number of RSUs that vest. RSUs are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient ceases to be an employee or director of the Company prior to vesting of the award. Compensation expense for the service-based RSU awards is based upon the grant date market value of the award and such costs are recorded on a straight-line basis over the requisite service period for each separately vesting portion of the award, as if the award was, in-substance, multiple awards. The aggregate fair values of RSUs that vested during the years ended December 31, 2022, 2021, and 2020 were $13.8 million, $12.6 million, and $3.0 million, respectively. Unrecognized compensation expense related to unvested RSUs as of December 31, 2022 was $7.2 million, which the Company expects to recognize over a weighted average period of 2.5 years. Performance Restricted Stock Units and Performance Stock Units The Company grants PRSUs to certain employees. Each PRSU represents the contingent right to receive one share of Class A Common Stock once the PRSU is both vested and earned. PRSUs generally vest either ratably over a three-year service period or at the end of a three-year service period, in each case, subject to the recipient’s continued employment or service through each applicable vesting date. Each PRSU is earned based on whether Magnolia’s stock price achieves a target average stock price for any 20 consecutive trading days during the five-year performance period (“Performance Condition”). If PRSUs are not earned by the end of the five-year performance period, the PRSUs will be forfeited and no shares of Class A Common Stock will be issued, even if the vesting conditions have been met. Compensation expense for the PRSU awards is based upon grant date fair market value of the award, calculated using a Monte Carlo simulation, as presented below, and such costs are recorded on a straight-line basis over the requisite service period for each separately vesting portion of the award, as if the award was, in-substance, multiple awards, as applicable. The aggregate fair value of PRSUs that vested during the year ended December 31, 2022 was $4.8 million. Unrecognized compensation expense related to unvested PRSUs as of December 31, 2022 was $9.1 million, which the Company expects to recognize over a weighted average period of 1.9 years. The grant date fair values of the PRSUs granted during the years ended December 31, 2022 and 2021 were $9.9 million and $9.5 million, respectively. Since the Performance Conditions for the PRSUs granted in 2022 and 2021 were met on March 28, 2022 and March 17, 2021, respectively, the fair value of the PRSUs granted after the Performance Conditions were met was based upon the grant date market value of the award. The fair value of the awards granted prior to the date the Performance Conditions were met was determined using a Monte Carlo simulation, the assumptions of which are summarized in the table below. The Company has granted PSUs to certain employees. The grant date fair value of the PSUs granted during the year ended December 31, 2020 was $2.5 million. Each PSU, to the extent earned, represents the contingent right to receive one share of Class A Common Stock and the awardee may earn between zero and 150% of the target number of PSUs granted based on the total shareholder return (“TSR”) of the Class A Common Stock relative to the TSR achieved by a specific industry peer group over a three-year performance period. In addition to the TSR conditions, vesting of the PSUs is subject to the awardee’s continued employment through the date of settlement of the PSUs, which will occur within 60 days following the end of the performance period. The aggregate fair value of PSUs that vested during the years ended December 31, 2022, 2021, and 2020 were $5.5 million, $4.0 million, and $0.3 million, respectively. Unrecognized compensation expense related to unvested PSUs as of December 31, 2022 was $1.6 thousand, which the Company expects to recognize over a weighted average period of 0.1 years. Years Ended PRSU and PSU Grant Date Fair Value Assumptions December 31, 2022 December 31, 2021 December 31, 2020 Expected term (in years) 3.55 3.64 2.85 Expected volatility 59.58% 55.18% 33.50% Risk-free interest rate 1.89% 0.56% 1.16% Dividend yield 1.97% —% —% |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per ShareThe Company’s unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are deemed participating securities, and therefore dividends and net income allocated to such awards have been deducted from earnings in computing basic and diluted net income (loss) per share under the two-class method. Diluted net income (loss) per share attributable to Class A Common Stock is calculated under both the two-class method and the treasury stock method and the more dilutive of the two calculations is presented. The components of basic and diluted net income (loss) per share attributable to Class A Common Stock are as follows: Years Ended (In thousands, except per share data) December 31, 2022 December 31, 2021 December 31, 2020 Basic: Net income (loss) attributable to Class A Common Stock $ 893,837 $ 417,282 $ (1,208,390) Less: Dividends and net income allocated to participating securities 8,204 2,789 — Net income (loss), net of participating securities $ 885,633 $ 414,493 $ (1,208,390) Weighted average number of common shares outstanding during the period - basic 187,433 174,364 166,270 Net income (loss) per share of Class A Common Stock - basic $ 4.73 $ 2.38 $ (7.27) Diluted: Net income (loss) attributable to Class A Common Stock $ 893,837 $ 417,282 $ (1,208,390) Less: Dividends and net income allocated to participating securities 8,185 2,775 — Net income (loss), net of participating securities $ 885,652 $ 414,507 $ (1,208,390) Weighted average number of common shares outstanding during the period - basic 187,433 174,364 166,270 Add: Dilutive effect stock based compensation and other 468 996 — Weighted average number of common shares outstanding during the period - diluted 187,901 175,360 166,270 Net income (loss) per share of Class A Common Stock - diluted $ 4.71 $ 2.36 $ (7.27) The Company excluded 32.8 million, 64.0 million, and 85.8 million of weighted average shares of Class A Common Stock issuable upon the exchange of Class B Common Stock (and corresponding Magnolia LLC Units) for the years ended December 31, 2022, 2021, and 2020, respectively, as the effect was anti-dilutive. In addition, for the year ended December 31, 2020, the Company excluded 4.0 million contingent shares of Class A Common Stock related to the Non-Compete and 0.3 million RSUs and PSUs because the effect was anti-dilutive. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsAs of December 31, 2022, no entity held more than 10% of the Company’s common stock or qualified as a principal owner of the Company, as defined in ASC 850, “Related Party Disclosures.” |
Major Customers
Major Customers | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Major Customers | Major Customers For the year ended December 31, 2022, four customers, including their subsidiaries, accounted for 19%, 17%, 14%, and 11% of the Company’s combined oil, natural gas, and NGL revenue. For the year ended December 31, 2021, four customers, including their subsidiaries, accounted for 22%, 15%, 15%, and 11% of the Company’s combined oil, natural gas, and NGL revenue. For the year ended December 31, 2020, three customers, including their subsidiaries, accounted for 40%, 17%, and 12% of the Company’s combined oil, natural gas, and NGL revenue. The Company is exposed to credit risk in the event of nonpayment by counterparties. The creditworthiness of customers and other counterparties is subject to continuing review, including the use of master netting agreements, where appropriate. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow disclosures are presented below: Years Ended (In thousands) December 31, 2022 December 31, 2021 December 31, 2020 Supplemental cash items: Cash paid (received) for income taxes $ 72,230 $ 3,157 $ (724) Cash paid for interest 26,648 26,933 25,895 Supplemental non-cash investing and financing activity: Accruals or liabilities for capital expenditures $ 67,923 $ 29,936 $ 16,368 Supplemental non-cash lease operating activity: Right-of-use assets obtained in exchange for operating lease obligations $ 4,578 $ 4,668 $ 5,923 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn January 31, 2023, the Company’s board of directors declared a quarterly cash dividend of $0.115 per share of Class A Common Stock, and Magnolia LLC declared a cash distribution of $0.115 per Magnolia LLC Unit to each holder of Magnolia LLC Units, each payable on March 1, 2023 to shareholders or members of record, as applicable, as of February 10, 2023. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Certain reclassifications of prior period financial statements have been made to conform to current reporting practices. |
Variable Interest Entities | Variable Interest EntitiesMagnolia LLC is a variable interest entity (“VIE”). The Company determined that it is the primary beneficiary of Magnolia LLC as the Company is the managing member and has the power to direct the activities most significant to Magnolia LLC’s economic performance as well as the obligation to absorb losses and receive benefits that are potentially significant. At December 31, 2022, the Company had an approximate 89.8% economic interest in Magnolia LLC and 100% of Magnolia LLC’s assets, liabilities, and results of operations are consolidated in the Company’s consolidated financial statements contained herein. At December 31, 2022, the Magnolia LLC Unit Holders had an approximate 10.2% economic interest in Magnolia LLC; however, the Magnolia LLC Unit Holders have disproportionately fewer voting rights, and are shown as noncontrolling interest holders of Magnolia LLC. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and changes in these estimates are recorded when known. Significant estimates with regard to these financial statements include the fair value determination of acquired assets and liabilities, the assessment of asset retirement obligations, the estimate of proved oil and natural gas reserves and related present value estimates of future net cash flows, and the estimates of fair value for long-lived assets. |
Cash and Cash Equivalents | Cash and Cash EquivalentsCash and cash equivalents include cash on hand and short-term, highly liquid investments that are readily convertible to cash. |
Accounts Receivable and Allowance for Expected Credit Losses | Accounts Receivable and Allowance for Expected Credit Losses The Company’s receivables consist mainly of trade receivables from commodity sales and joint interest billings due from owners on properties the Company operates. The majority of these receivables have payment terms of 30 days or less. For receivables due from joint interest owners, the Company generally has the ability to withhold future revenue disbursements to recover non- |
Oil and Natural Gas Properties | Oil and Natural Gas Properties The Company follows the successful efforts method of accounting for its oil and natural gas properties. Under this method of accounting, exploration expenses such as exploratory geological and geophysical costs, delay rentals, and exploration overhead are expensed as incurred. All costs related to production, general corporate overhead, and similar activities are expensed as incurred. Unproved properties are assessed for impairment at least annually and are transferred to proved oil and natural gas properties to the extent the costs are associated with successful exploration activities. Unproved properties are assessed for impairment based on the Company’s current exploration plans. Costs of expired or abandoned leases are charged to exploration expense, while costs of productive leases are transferred to proved oil and natural gas properties. Costs of maintaining and retaining unproved properties, as well as impairment of unsuccessful leases, are included in “Exploration expenses” in the consolidated statements of operations. Costs to develop proved reserves, including the costs of all development wells and related equipment used in the production of crude oil and natural gas, are capitalized. Depreciation, depletion and amortization of the cost of proved oil and natural gas properties is calculated using the unit-of-production method. The reserve base used to calculate depletion for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. The reserve base used to calculate the depreciation for capitalized costs for exploratory and development wells is the sum of proved developed reserves only. Estimated future abandonment costs, net of salvage values, are included in the depreciable cost. Oil and natural gas properties are grouped for depreciation, depletion and amortization in accordance with the Accounting Standards Codification (“ASC”) ASC 932 “Extractive Activities—Oil and Gas”. The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field. |
Asset Retirement Obligations | Asset Retirement Obligations Asset retirement obligations (“ARO”) represent the present value of the estimated cash flows expected to be incurred to plug, abandon, and remediate producing properties, excluding salvage values, at the end of their productive lives in accordance with applicable laws. The significant unobservable inputs to this fair value measurement include estimates of plugging, abandonment, and remediation costs, well life, inflation, and credit-adjusted risk-free rate. The inputs are calculated based on historical data as well as current estimates. When the liability is initially recorded, the carrying amount of the related long-lived asset is increased. Over time, accretion of the liability is recognized each period, and the capitalized cost is amortized over the useful life of the related asset using the unit of production method and is included in “Depreciation, depletion and amortization” in the Company’s consolidated statements of operations. If the ARO is settled for an amount other than the recorded amount, a gain or loss is recognized. |
Fair Value Measurements | Fair Value Measurements Certain assets and liabilities are reported at fair value on a recurring basis on the Company’s consolidated balance sheet. The Company also uses fair value measurements on a nonrecurring basis when a qualitative assessment of its assets indicates a potential impairment. For more discussion on recurring and nonrecurring fair value measurements, refer to Note The valuation techniques that may be used to measure fair value include a market approach, an income approach and a cost approach. A market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. An income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectations, including present value techniques, option-pricing models and the excess earnings method. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). ASC 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment, characteristics specific to the investment, market conditions, and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value. The three levels of the fair value hierarchy under ASC 820 are as follows: Level 1—Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used. Level 2—Pricing inputs are other than quoted prices included within Level 1 that are observable for the investment, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, inputs other than quoted prices that are observable for the investment, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3—Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. The inputs used in determination of fair value require significant judgment and estimation. |
Income Taxes | Income Taxes Under ASC 740, “Income Taxes,” deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to net operating losses, tax credits, and temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of the enactment date. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. The Company reports a liability or a reduction of deferred tax assets for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. When applicable, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. Refer to Note 11—Income Taxes for additional information. |
Derivatives | DerivativesMagnolia utilized natural gas costless collars to reduce its exposure to price volatility for a portion of its natural gas production volumes. The Company’s policies do not permit the use of derivative instruments for speculative purposes. The Company has elected not to designate any of its derivative instruments as hedging instruments. Accordingly, changes in the fair value of the Company’s derivative instruments were recorded immediately to earnings as “Gain (loss) on derivatives, net” on the Company’s consolidated statements of operations. The Company had settled all of its natural gas costless collar derivative contracts by September 30, 2021. |
Purchase Price Allocation | Purchase Price Allocation Accounting for the acquisition of a business requires the allocation of the purchase price to the various assets and liabilities of the acquired business and recording deferred taxes for any differences between the allocated values and tax basis of assets and liabilities. Any excess of the purchase price over the amounts assigned to assets and liabilities is recorded as goodwill. The purchase price allocation is accomplished by recording each asset and liability at its estimated fair value. Estimated deferred taxes are based on available information concerning the tax basis of the acquired company’s assets, liabilities, and tax-related carryforwards at the merger date, although such estimates may change in the future as additional information becomes known. The amount of goodwill recorded in any particular business combination can vary significantly depending upon the values attributed to assets acquired and liabilities assumed relative to the total acquisition cost. |
Commitments and Contingencies | Commitments and ContingenciesAccruals for loss contingencies arising from claims, assessments, litigation, environmental, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. |
Revenue Recognition | Revenue Recognition Magnolia’s revenues include the sale of crude oil, natural gas, and NGLs. Oil, natural gas, and NGL sales are recognized as revenue when production is sold to a customer in fulfillment of performance obligations under the terms of agreed contracts. Performance obligations are primarily comprised of delivery of oil, natural gas, or NGLs at a delivery point, as negotiated within each contract. Each barrel of oil, million Btu of natural gas, gallon of NGLs, or other unit of measure is separately identifiable and represents a distinct performance obligation to which the transaction price is allocated. The Company’s oil production is primarily sold under market-sensitive contracts that are typically priced at a differential to the NYMEX price or at purchaser posted prices for the producing area. For oil contracts, the Company generally records sales based on the net amount received. For natural gas contracts, the Company generally records wet gas sales (which consists of natural gas and NGLs based on end products after processing) at the wellhead or inlet of the natural gas processing plant (i.e., the point of control transfer) as revenues net of gathering, transportation, and processing expenses if the processor is the customer and there is no redelivery of commodities to the Company at the tailgate of the plant. Conversely, the Company generally records residual natural gas and NGL sales at the tailgate of the plant (i.e., the point of control transfer) on a gross basis along with the associated gathering, transportation, and processing expenses if the processor is a service provider and there is redelivery of one or several commodities to the Company at the tailgate of the plant. The facts and circumstances of an arrangement are considered and judgment is often required in making this determination. For processing contracts that require noncash consideration in exchange for processing services, the Company recognizes revenue and an equal gathering, transportation, and processing expense for commodities transferred to the service provider. Customers are invoiced once the Company’s performance obligations have been satisfied. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days. There are no judgments that significantly affect the amount or timing of revenue from contracts with customers. Additionally, the Company’s product sales contracts do not give rise to material contract assets or contract liabilities. The Company’s receivables consist mainly of receivables from oil, natural gas, and NGL purchasers and from joint interest owners on properties the Company operates. Receivables from contracts with customers totaled $138.6 million and $125.1 million as of December 31, 2022 and 2021, respectively. Accounts receivable are stated at the historical carrying amount net of write-offs and allowance for doubtful accounts. The Company routinely assesses the collectability of all material trade and other receivables. The Company accrues a reserve on a receivable when, based on the judgment of management, it is probable that a receivable will not be collected and the amount of any reserve may be reasonably estimated. The Company had no allowance for doubtful accounts as of December 31, 2022 or 2021. The Company has concluded that disaggregating revenue by product type appropriately depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors and has reflected this disaggregation of revenue on the Company’s consolidated statements of operations for all periods presented. Performance obligations are satisfied at a point in time once control of the product has been transferred to the customer. The Company considers a variety of facts and circumstances in assessing the point of control transfer, including but not limited to: whether the purchaser can direct the use of the hydrocarbons, the transfer of significant risks and rewards, the Company’s right to payment, and transfer of legal title. The Company does not disclose the value of unsatisfied performance obligations for contracts as all contracts have either an original expected length of one year or less, or the entire future consideration is variable and allocated entirely to a wholly unsatisfied performance obligation. |
Net Income or Loss Per Share of Common Stock | Net Income or Loss Per Share of Common StockThe Company’s basic earnings or loss per share (“EPS”) is computed based on the weighted average number of shares of Class A Common Stock outstanding for the period. Diluted EPS includes the effect of the Company’s outstanding restricted stock units (“RSUs”), performance stock units (“PSUs”), performance restricted stock units (“PRSUs”), and exchanges or repurchases of Class B Common Stock if the inclusion of these items is dilutive. The Company’s unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are deemed participating securities and, therefore, are deducted from earnings in computing basic and diluted net income (loss) per share under the two-class method. Diluted net income (loss) per share attributable to common stockholders is calculated under both the two-class method and the treasury stock method and the more dilutive of the two calculations is presented. |
Stock Based Compensation | Stock Based CompensationMagnolia has established a long-term incentive plan for certain employees and directors that allows for granting RSUs, PSUs, and PRSUs. RSUs granted are valued on the date of the grant using the quoted market price of Magnolia’s Class A Common Stock. PSUs and PRSUs granted are valued based on the grant date fair value determined using Monte Carlo simulations, which use a probabilistic approach for estimating the fair value of the awards. RSUs, PSUs, and PRSUs are expensed on a straight-line basis over the requisite service period. The Company records expense associated with the fair value of stock based compensation under the fair value recognition provisions of ASC Topic 718, “Compensation-Stock Compensation” and that expense is included within “General and administrative expenses” and “Lease operating expenses” in the accompanying consolidated statements of operations. The Company accounts for forfeitures as they occur. |
Leases | LeasesMagnolia recognizes right of use assets and lease liabilities for certain commitments with terms greater than one year primarily related to real estate, vehicles, and field equipment. The Company determines if an arrangement is a lease at inception. Operating leases are included in other long-term assets other current liabilities other long-term liabilities |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company has evaluated all recent accounting pronouncements issued and believes that these recent pronouncements will not have a material effect on the Company's consolidated financial statements. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Effect of Derivative Instruments on Consolidated and Combined Statements of Operations | The following table summarizes the effects of derivative instruments on the Company’s consolidated statements of operations: Years Ended (In thousands) December 31, 2021 December 31, 2020 Derivative settlements, realized gain (loss) $ (2,833) $ 288 Unrealized gain (loss) on derivatives (277) 277 Gain (loss) on derivatives, net $ (3,110) $ 565 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Fair Values of Financial Instruments Not Carried at Fair Value | The carrying value and fair value of the financial instrument that is not carried at fair value in the Company’s consolidated balance sheets as of December 31, 2022 and 2021 is as follows: December 31, 2022 December 31, 2021 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Long-term debt $ 390,383 $ 382,704 $ 388,087 $ 411,500 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | The following table provides detail of the Company’s other current liabilities for the periods presented: (In thousands) December 31, 2022 December 31, 2021 Accrued capital expenditures $ 67,923 $ 29,936 Other 69,504 60,700 Total other current liabilities $ 137,427 $ 90,636 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Summary of Changes in Asset Retirement Obligations | The following table summarizes the changes in the Company’s asset retirement obligations for the periods presented: Years Ended (In thousands) December 31, 2022 December 31, 2021 December 31, 2020 Asset retirement obligations, beginning of period $ 90,650 $ 88,404 $ 95,542 Revisions to estimates 531 (7,167) (14,883) Liabilities incurred and assumed 3,243 5,293 3,484 Liabilities settled (1,422) (809) (1,457) Accretion expense 3,245 4,929 5,718 Asset retirement obligations, end of period $ 96,247 $ 90,650 $ 88,404 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Debt | The Company’s long-term debt is comprised of the following: (In thousands) December 31, 2022 December 31, 2021 Revolving credit facility $ — $ — Senior Notes due 2026 400,000 400,000 Total long-term debt 400,000 400,000 Less: Unamortized deferred financing cost (9,617) (11,913) Long-term debt, net $ 390,383 $ 388,087 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Lease Assets and Liabilities and Supplemental Information | (In thousands) December 31, 2022 December 31, 2021 Operating Leases Operating lease assets $ 7,632 $ 7,737 Operating lease liabilities - current $ 3,967 $ 4,031 Operating lease liabilities - long-term 4,854 5,146 Total operating lease liabilities $ 8,821 $ 9,177 Weighted average remaining lease term (in years) 2.6 3.0 Weighted average discount rate 4.0% 3.4% |
Schedule of Maturity of Lease Liabilities | Maturities of lease liabilities as of December 31, 2022 under the scope of ASC 842 are as follows: (In thousands) Maturity of Lease Liabilities Operating Leases 2023 $ 4,124 2024 2,546 2025 1,889 2026 731 2027 16 After 2027 1 Total lease payments $ 9,307 Less: Interest (486) Present value of lease liabilities $ 8,821 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contractual Obligations for Long-term Operating Leases and Purchase Obligations | At December 31, 2022, contractual obligations for long-term operating leases and purchase obligations are as follows: Net Minimum Commitments (In thousands) Total 2023 2024-2025 2026-2027 2028 & Beyond Purchase obligations (1) $ 11,990 $ 2,200 $ 9,775 $ 15 $ — Operating lease obligations (2) 9,307 4,124 4,435 747 1 Total net minimum commitments $ 21,297 $ 6,324 $ 14,210 $ 762 $ 1 (1) Amounts represent any agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms. These include minimum commitments associated with firm transportation and delivery contracts, as well as operations- and IT-related service commitments. The costs incurred under these obligations were $1.6 million, $1.4 million, and $1.2 million for the years ended December 31, 2022, 2021, and 2020, respectively. (2) Amounts include long-term lease payments for office space, vehicles, and equipment related to exploration, development, and production activities. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Provision (Benefit) | The Company’s income tax provision consists of the following components: Years Ended (In thousands) December 31, 2022 December 31, 2021 December 31, 2020 Current: Federal $ 66,540 $ 5,452 $ (1,167) State 5,818 3,399 (339) Total current 72,358 8,851 (1,506) Deferred: Federal (62,826) — (71,792) State (2,894) — (6,042) Total deferred (65,720) — (77,834) Income tax expense (benefit) $ 6,638 $ 8,851 $ (79,340) |
Reconciliation of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory federal income tax expense to the income tax expense (benefit) from continuing operations is as follows: Year Ended (In thousands) December 31, 2022 December 31, 2021 December 31, 2020 Income tax expense at the federal statutory rate $ 221,954 $ 119,392 $ (409,148) State income tax expense, net of federal income tax benefits 9,526 2,763 (12,759) Noncontrolling interest in partnerships (33,325) (30,615) 141,027 Change in valuation allowances (183,976) (82,696) 201,786 Research and development credits (4,980) — — Other (2,561) 7 (246) Income tax expense (benefit) $ 6,638 $ 8,851 $ (79,340) |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant positions of the deferred income tax assets and liabilities are presented below: (In thousands) December 31, 2022 December 31, 2021 Deferred tax assets: Investment in partnership $ 153,938 $ 161,910 Net operating loss carryforwards — 11,855 Capital loss carryforward 319 1,522 Oil and natural gas properties 6,093 6,337 Capitalized transaction costs 2,442 2,690 Total deferred tax assets 162,792 184,314 Deferred tax liabilities: Oil and natural gas properties (53) — Total deferred tax liabilities (53) — Net deferred tax assets 162,739 184,314 Valuation allowances — (184,314) Net deferred tax assets, net of valuation allowances $ 162,739 $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Dividends | The following table sets forth information with respect to cash dividends and distributions declared by the Company’s board of directors during the years ended December 31, 2022 and December 31, 2021, on its own behalf and in its capacity as the managing member of Magnolia LLC, on issued and outstanding shares of Class A Common Stock and Magnolia LLC Units: Record Date Payment Date Dividend/ Distribution Amount per share (1) Distributions by Magnolia LLC (2) Dividends Declared by the Company (2) Distributions to Magnolia LLC Unit Holders (In thousands, except per share amounts) November 7, 2022 December 1, 2022 $ 0.10 $ 21,867 $ 18,996 $ 2,871 August 12, 2022 September 1, 2022 $ 0.10 $ 21,983 $ 19,112 $ 2,871 February 14, 2022 March 1, 2022 $ 0.20 $ 45,851 $ 37,283 $ 8,568 August 12, 2021 September 1, 2021 $ 0.08 $ 19,078 $ 14,236 $ 4,842 (1) Per share of Class A Common Stock and per Magnolia LLC Unit. (2) Reflects total cash dividend and distribution payments made, or to be made, to holders of Class A Common Stock and Magnolia LLC Unit Holders (other than the Company) as of the applicable record date. |
Distributions Made to Limited Liability Company (LLC) Member, by Distribution | The following table sets forth information with respect to cash dividends and distributions declared by the Company’s board of directors during the years ended December 31, 2022 and December 31, 2021, on its own behalf and in its capacity as the managing member of Magnolia LLC, on issued and outstanding shares of Class A Common Stock and Magnolia LLC Units: Record Date Payment Date Dividend/ Distribution Amount per share (1) Distributions by Magnolia LLC (2) Dividends Declared by the Company (2) Distributions to Magnolia LLC Unit Holders (In thousands, except per share amounts) November 7, 2022 December 1, 2022 $ 0.10 $ 21,867 $ 18,996 $ 2,871 August 12, 2022 September 1, 2022 $ 0.10 $ 21,983 $ 19,112 $ 2,871 February 14, 2022 March 1, 2022 $ 0.20 $ 45,851 $ 37,283 $ 8,568 August 12, 2021 September 1, 2021 $ 0.08 $ 19,078 $ 14,236 $ 4,842 (1) Per share of Class A Common Stock and per Magnolia LLC Unit. (2) Reflects total cash dividend and distribution payments made, or to be made, to holders of Class A Common Stock and Magnolia LLC Unit Holders (other than the Company) as of the applicable record date. |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Unvested RSU, PSU, and PRSU Activity | The following table presents a summary of Magnolia’s unvested RSU, PRSU, and PSU activity for the year ended December 31, 2022. Restricted Performance Restricted Performance Units Weighted Average Grant Date Fair Value Units Weighted Average Grant Date Fair Value Units Weighted Average Grant Date Fair Value Unvested, beginning of period 1,187,509 $ 8.94 968,654 $ 9.36 460,414 $ 9.20 Granted 315,939 21.14 515,405 19.22 — — Granted for performance multiple (1) — — — — 90,965 13.88 Vested (555,764) 9.15 (215,197) 9.36 (272,893) 13.88 Forfeited (36,398) 13.67 (11,279) 14.15 — — Unvested, end of period 911,286 $ 12.89 1,257,583 $ 13.36 278,486 $ 6.14 (1) Upon completion of the performance period for the PSUs granted in 2019, a performance multiple of 150% was applied to each of the grants resulting in additional grants of PSUs in 2022. |
Schedule of Assumptions Used to Calculate Grant Date Fair Value of PSUs and PRSUs | Years Ended PRSU and PSU Grant Date Fair Value Assumptions December 31, 2022 December 31, 2021 December 31, 2020 Expected term (in years) 3.55 3.64 2.85 Expected volatility 59.58% 55.18% 33.50% Risk-free interest rate 1.89% 0.56% 1.16% Dividend yield 1.97% —% —% |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerators and Denominators for Basic and Diluted Per Share Computation | The components of basic and diluted net income (loss) per share attributable to Class A Common Stock are as follows: Years Ended (In thousands, except per share data) December 31, 2022 December 31, 2021 December 31, 2020 Basic: Net income (loss) attributable to Class A Common Stock $ 893,837 $ 417,282 $ (1,208,390) Less: Dividends and net income allocated to participating securities 8,204 2,789 — Net income (loss), net of participating securities $ 885,633 $ 414,493 $ (1,208,390) Weighted average number of common shares outstanding during the period - basic 187,433 174,364 166,270 Net income (loss) per share of Class A Common Stock - basic $ 4.73 $ 2.38 $ (7.27) Diluted: Net income (loss) attributable to Class A Common Stock $ 893,837 $ 417,282 $ (1,208,390) Less: Dividends and net income allocated to participating securities 8,185 2,775 — Net income (loss), net of participating securities $ 885,652 $ 414,507 $ (1,208,390) Weighted average number of common shares outstanding during the period - basic 187,433 174,364 166,270 Add: Dilutive effect stock based compensation and other 468 996 — Weighted average number of common shares outstanding during the period - diluted 187,901 175,360 166,270 Net income (loss) per share of Class A Common Stock - diluted $ 4.71 $ 2.36 $ (7.27) |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Disclosures | Supplemental cash flow disclosures are presented below: Years Ended (In thousands) December 31, 2022 December 31, 2021 December 31, 2020 Supplemental cash items: Cash paid (received) for income taxes $ 72,230 $ 3,157 $ (724) Cash paid for interest 26,648 26,933 25,895 Supplemental non-cash investing and financing activity: Accruals or liabilities for capital expenditures $ 67,923 $ 29,936 $ 16,368 Supplemental non-cash lease operating activity: Right-of-use assets obtained in exchange for operating lease obligations $ 4,578 $ 4,668 $ 5,923 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies - Basis of Presentation and Principles of Consolidation and Variable Interest Entities (Details) - Variable Interest Entity, Primary Beneficiary - Magnolia LLC | 12 Months Ended |
Dec. 31, 2022 | |
Variable Interest Entity [Line Items] | |
Percentage of economic interest | 89.80% |
Percent consolidated in the financial statements | 100% |
Percentage of interest owned by noncontrolling interest holders | 10.20% |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Cash and cash equivalents | $ 675.4 | $ 367 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||
General required payment period | 30 days | |
Receivables from contracts with customers | $ 138,600,000 | $ 125,100,000 |
Allowance for doubtful accounts | $ 0 | $ 0 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Leases (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other long-term assets | Other long-term assets |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities (Note 6) | Other current liabilities (Note 6) |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Oct. 23, 2020 | Feb. 21, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||||
Asset acquisition, consideration transferred | $ 90,100 | ||||
Proceeds from sale of equity method investment | 0 | $ 0 | $ 27,074 | ||
Gain recognized on sale of equity method investment | $ 0 | $ 0 | $ 5,071 | ||
Ironwood | |||||
Business Acquisition [Line Items] | |||||
Percentage of membership interest | 35% | ||||
Proceeds from sale of equity method investment | $ 27,100 | ||||
Gain recognized on sale of equity method investment | $ 5,100 | ||||
Karnes And Dewitt County Assets | |||||
Business Acquisition [Line Items] | |||||
Cash payments to acquire certain oil and natural gas properties | $ 69,700 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Derivative settlements, realized gain (loss) | $ (2,833) | $ 288 | |
Unrealized gain (loss) on derivatives | $ 0 | (277) | 277 |
Gain (loss) on derivatives, net | $ 0 | $ (3,110) | $ 565 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Values and Fair Values of Financial Instruments Not Carried at Fair Value (Details) - Fair Value, Inputs, Level 1 - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 390,383 | $ 388,087 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 382,704 | $ 411,500 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairments recorded related to proved and unproved oil and natural gas properties | $ 1,900,000,000 | $ 0 | $ 0 | |
Proved property impairment | $ 0 | $ 0 | $ 1,381,258,000 | |
Unproved property impairment | $ 600,000,000 | |||
Weighted Average | Cost of Capital | Market Participant Based | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Market participant based weighted average cost of capital for proved property impairments | 10% | |||
Market participant based weighted average cost of capital for unproved property impairments | 12% | |||
Fair Value, Nonrecurring | Fair Value | Fair Value, Inputs, Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Proved properties impaired, fair values as of the most recent date of impairment | $ 800,000,000 | |||
Unproved properties impaired, fair values as of the most recent date of impairment | $ 300,000,000 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) shares in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Feb. 01, 2021 | Jul. 31, 2018 | Jan. 31, 2021 | Dec. 31, 2022 | |
EnerVest | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Cash paid upon compliance of non-compete agreement milestones, milestone 1 | $ 17.2 | ||||
Cash paid upon compliance of non-compete agreement milestones, milestone 2 | $ 24.9 | ||||
EnerVest | Class A Common Stock | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of shares authorized for issuance based on compliance of non-compete agreement milestones (in shares) | 4 | ||||
Cash value of equity interest authorized for issuance upon compliance of non-compete agreement milestones, milestone 1 (in shares) | 2 | ||||
Number of shares authorized for issuance based on compliance of non-compete agreement milestones, milestone 1 (in shares) | 0.4 | ||||
Number of shares authorized for issuance based on compliance of non-compete agreement milestones, milestone 2 (in shares) | 1.6 | 1.6 | |||
Equity interests issued upon compliance of non-compete agreement milestones, milestone 1 (in shares) | 0.4 | ||||
Non-Compete | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated economic life of intangible asset | 2 years 6 months | 2 years 6 months | 2 years 6 months | ||
Non-Compete | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated economic life of intangible asset | 4 years | 4 years |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other Liabilities Disclosure [Abstract] | ||
Accrued capital expenditures | $ 67,923 | $ 29,936 |
Other | 69,504 | 60,700 |
Total other current liabilities | $ 137,427 | $ 90,636 |
Asset Retirement Obligations -
Asset Retirement Obligations - Changes in Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Asset retirement obligations, beginning of period | $ 90,650 | $ 88,404 | $ 95,542 |
Revisions to estimates | 531 | (7,167) | (14,883) |
Liabilities incurred and assumed | 3,243 | 5,293 | 3,484 |
Liabilities settled | (1,422) | (809) | (1,457) |
Accretion expense | 3,245 | 4,929 | 5,718 |
Asset retirement obligations, end of period | $ 96,247 | $ 90,650 | $ 88,404 |
Long Term Debt - Components of
Long Term Debt - Components of Debt (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 400,000,000 | $ 400,000,000 |
Less: Unamortized deferred financing cost | (9,617,000) | (11,913,000) |
Long-term debt, net | 390,383,000 | 388,087,000 |
Line of Credit | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 0 | 0 |
Senior Notes | Senior Notes due 2026 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 400,000,000 | $ 400,000,000 |
Long Term Debt - Credit Facilit
Long Term Debt - Credit Facility Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Feb. 16, 2022 USD ($) | |
Line of Credit Facility [Line Items] | ||||
Deferred financing costs, net | $ 5,636,000 | $ 3,701,000 | ||
Amortization of deferred financing costs | 5,854,000 | 4,290,000 | $ 3,628,000 | |
Outstanding borrowings | $ 400,000,000 | 400,000,000 | ||
Line of Credit | RBL Facility | ||||
Line of Credit Facility [Line Items] | ||||
Amortization period | 4 years | |||
Interest expense | $ 5,900,000 | 4,100,000 | $ 4,200,000 | |
Outstanding borrowings | 0 | $ 0 | ||
Line of Credit | RBL Facility | Magnolia Operating | ||||
Line of Credit Facility [Line Items] | ||||
Maximum commitments, aggregate principal amount | $ 1,000,000,000 | |||
Borrowing base | $ 450,000,000 | |||
Leverage ratio (less than) | 3.50 | |||
Current ratio (greater than) | 1 | |||
Transaction fees related to the modification | $ 5,500,000 | |||
Deferred financing costs, net | 5,100,000 | |||
Amortization of deferred financing costs | $ 400,000 | |||
Line of Credit | Letter of Credit Sublimit | Magnolia Operating | ||||
Line of Credit Facility [Line Items] | ||||
Maximum commitments, aggregate principal amount | $ 50,000,000 |
Long-term Debt - 2026 Senior No
Long-term Debt - 2026 Senior Notes Narrative (Details) - Senior Notes - Senior Notes due 2026 - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 05, 2021 | Jul. 31, 2018 | |
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 400,000,000 | |||||
Stated interest rate | 6% | |||||
Transaction fees | $ 1,100,000 | |||||
Deferred financing costs incurred in connection with securing the 2026 Senior Notes | $ 5,000,000 | |||||
Interest expense | $ 26,300,000 | $ 27,100,000 | $ 25,300,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Remaining lease term (up to) | 5 years | |
Operating lease costs | $ 5 | $ 3.7 |
Short-term lease costs | 36 | 22.9 |
Cash paid for amounts included in the measurement of lease liabilities in operating cash flows from operating leases | $ 5.2 | $ 2.9 |
Leases - Lease Assets and Liabi
Leases - Lease Assets and Liabilities and Supplemental Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
Operating lease assets | $ 7,632 | $ 7,737 |
Operating lease liabilities - current | 3,967 | 4,031 |
Operating lease liabilities - long-term | 4,854 | 5,146 |
Total operating lease liabilities | $ 8,821 | $ 9,177 |
Weighted average remaining lease term (in years) | 2 years 7 months 6 days | 3 years |
Weighted average discount rate | 4% | 3.40% |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2023 | $ 4,124 | |
2024 | 2,546 | |
2025 | 1,889 | |
2026 | 731 | |
2027 | 16 | |
After 2027 | 1 | |
Total lease payments | 9,307 | |
Less: Interest | (486) | |
Present value of lease liabilities | $ 8,821 | $ 9,177 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Amounts accrued with respect to outstanding litigation | $ 0 | $ 0 | |
Purchase obligations | |||
Total | 11,990,000 | ||
2023 | 2,200,000 | ||
2024-2025 | 9,775,000 | ||
2026-2027 | 15,000 | ||
2028 & Beyond | 0 | ||
Operating lease obligations | |||
Total | 9,307,000 | ||
2023 | 4,124,000 | ||
2024-2025 | 4,435,000 | ||
2026-2027 | 747,000 | ||
2028 & Beyond | 1,000 | ||
Total net minimum commitments | |||
Total | 21,297,000 | ||
2023 | 6,324,000 | ||
2024-2025 | 14,210,000 | ||
2026-2027 | 762,000 | ||
2028 & Beyond | 1,000 | ||
Costs incurred under obligations | $ 1,600,000 | $ 1,400,000 | $ 1,200,000 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ 66,540 | $ 5,452 | $ (1,167) |
State | 5,818 | 3,399 | (339) |
Total current | 72,358 | 8,851 | (1,506) |
Deferred: | |||
Federal | (62,826) | 0 | (71,792) |
State | (2,894) | 0 | (6,042) |
Total deferred | (65,720) | 0 | (77,834) |
Income tax expense (benefit) | $ 6,638 | $ 8,851 | $ (79,340) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) shares in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Annual effective tax rate | 0.60% | 1.60% | 4.10% |
Tax impact of equity transactions | $ 99,397,000 | ||
Deferred tax asset | 162,792,000 | $ 184,314,000 | |
Income tax benefit resulting from applying NOL carryback provision | $ 1,200,000 | ||
Additional Tax Basis | |||
Operating Loss Carryforwards [Line Items] | |||
Tax impact of equity transactions | 99,397,000 | ||
Capital Loss Carryforward | |||
Operating Loss Carryforwards [Line Items] | |||
Capital loss carryforward subject to expiration | $ 1,500,000 | ||
Capital loss carryforward, expiration period | 3 years | ||
U.S. Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss with indefinite carryforwards | $ 0 | ||
Class B Common Stock | Magnolia LLC Unit Holders | |||
Operating Loss Carryforwards [Line Items] | |||
Stock redeemed (in shares) | 19.5 | 23.5 | |
Magnolia LLC Units | Magnolia LLC Unit Holders | |||
Operating Loss Carryforwards [Line Items] | |||
Stock redeemed (in shares) | 19.5 | 23.5 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Income Tax Expense to Income Tax Expense or Benefit from Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense at the federal statutory rate | $ 221,954 | $ 119,392 | $ (409,148) |
State income tax expense, net of federal income tax benefits | 9,526 | 2,763 | (12,759) |
Noncontrolling interest in partnerships | (33,325) | (30,615) | 141,027 |
Change in valuation allowances | (183,976) | (82,696) | 201,786 |
Research and development credits | (4,980) | 0 | 0 |
Other | (2,561) | 7 | (246) |
Income tax expense (benefit) | $ 6,638 | $ 8,851 | $ (79,340) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Investment in partnership | $ 153,938 | $ 161,910 |
Net operating loss carryforwards | 0 | 11,855 |
Capital loss carryforward | 319 | 1,522 |
Oil and natural gas properties | 6,093 | 6,337 |
Capitalized transaction costs | 2,442 | 2,690 |
Total deferred tax assets | 162,792 | 184,314 |
Deferred tax liabilities: | ||
Oil and natural gas properties | (53) | 0 |
Total deferred tax liabilities | (53) | 0 |
Net deferred tax assets | 162,739 | 184,314 |
Valuation allowances | 0 | (184,314) |
Net deferred tax assets, net of valuation allowances | $ 162,739 | $ 0 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ in Thousands | 12 Months Ended | 41 Months Ended | ||
Dec. 31, 2022 USD ($) vote shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) vote shares | |
Highlander | ||||
Class of Stock [Line Items] | ||||
Percentage of interest owned by noncontrolling interest holders | 15.30% | 15.30% | ||
Variable Interest Entity, Primary Beneficiary | Magnolia LLC | ||||
Class of Stock [Line Items] | ||||
Percentage of interest owned | 89.80% | |||
Percentage of interest owned by noncontrolling interest holders | 10.20% | 10.20% | ||
MGY Louisiana LLC | Highlander | ||||
Class of Stock [Line Items] | ||||
Percentage of units held | 84.70% | |||
Magnolia LLC | ||||
Class of Stock [Line Items] | ||||
Stock repurchased, cash consideration | $ | $ 187,300 | $ 171,700 | ||
Class A Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock, shares issued (in shares) | 213,727,000 | 193,437,000 | 213,727,000 | |
Common stock, shares outstanding (in shares) | 192,043,000 | 179,270,000 | 192,043,000 | |
Number of votes for each share held | vote | 1 | 1 | ||
Number of shares authorized to be repurchased (in shares) | 30,000,000 | 30,000,000 | ||
Number of shares repurchased (in shares) | 21,100,000 | |||
Total cost of shares repurchased | $ | $ 164,913 | $ 125,641 | $ 28,681 | $ 317,900 |
Stock repurchased, cash consideration | $ | $ 164,913 | $ 125,641 | 28,681 | |
Class A Common Stock | EnerVest Energy Institutional Fund XIV-C, L.P. | Affiliate | ||||
Class of Stock [Line Items] | ||||
Number of shares repurchased (in shares) | 600,000 | |||
Total cost of shares repurchased | $ | $ 11,600 | |||
Class B Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock, shares issued (in shares) | 21,827,000 | 49,293,000 | 21,827,000 | |
Common stock, shares outstanding (in shares) | 21,827,000 | 49,293,000 | 21,827,000 | |
Number of votes for each share held | vote | 1 | 1 | ||
Stock repurchased, cash consideration | $ | $ 187,273 | $ 171,671 | $ 0 | |
Class B Common Stock | Magnolia LLC | ||||
Class of Stock [Line Items] | ||||
Class B Common Stock purchases and cancellations (in shares) | 7,900,000 | 13,000,000 | ||
Class B Common Stock | Magnolia LLC Unit Holders | ||||
Class of Stock [Line Items] | ||||
Stock redeemed (in shares) | 19,500,000 | 23,500,000 | ||
Magnolia LLC Units | Magnolia LLC | ||||
Class of Stock [Line Items] | ||||
Class B Common Stock purchases and cancellations (in shares) | 7,900,000 | 13,000,000 | ||
Magnolia LLC Units | Magnolia LLC Unit Holders | ||||
Class of Stock [Line Items] | ||||
Stock redeemed (in shares) | 19,500,000 | 23,500,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Dividends and Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||
Dec. 01, 2022 | Sep. 01, 2022 | Mar. 01, 2022 | Sep. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||||||
Dividend/ Distribution Amount per share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.20 | $ 0.08 | |||
Distributions | $ 2,871 | $ 2,871 | $ 8,568 | $ 4,842 | |||
Dividends Declared by the Company | $ 75,198 | $ 14,131 | $ 0 | ||||
Magnolia LLC | |||||||
Class of Stock [Line Items] | |||||||
Distributions | $ 21,867 | $ 21,983 | $ 45,851 | $ 19,078 | |||
Class A Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock, dividends, declared (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.20 | $ 0.08 | |||
Dividends Declared by the Company | $ 18,996 | $ 19,112 | $ 37,283 | $ 14,236 |
Stock Based Compensation - Narr
Stock Based Compensation - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 17, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 13,300,000 | $ 11,700,000 | $ 10,000,000 | |
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate fair value of equity instruments vested during the period | 13,800,000 | 12,600,000 | 3,000,000 | |
Unrecognized compensation expense | $ 7,200,000 | |||
Weighted average period over which unrecognized compensation expense is expected to be recognized | 2 years 6 months | |||
RSUs | Employees | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
RSUs | Employees | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
RSUs | Directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
PRSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Aggregate fair value of equity instruments vested during the period | $ 4,800,000 | |||
Unrecognized compensation expense | $ 9,100,000 | |||
Weighted average period over which unrecognized compensation expense is expected to be recognized | 1 year 10 months 24 days | |||
Number of consecutive trading days required to earn PRSUs | 20 days | |||
Performance period | 5 years | |||
Grant date fair value | $ 9,900,000 | 9,500,000 | ||
PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Aggregate fair value of equity instruments vested during the period | $ 5,500,000 | $ 4,000,000 | 300,000 | |
Unrecognized compensation expense | $ 1,600 | |||
Weighted average period over which unrecognized compensation expense is expected to be recognized | 1 month 6 days | |||
Vesting percentage | 150% | |||
Settlement date, period following performance period | 60 days | |||
Grant date fair value | $ 2,500,000 | |||
Class A Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized for issuance (in shares) | 16,800,000 | |||
Class A Common Stock | PRSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contingent right to receive common stock, number of shares receivable for each PSU (in shares) | 1 | |||
Class A Common Stock | PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contingent right to receive common stock, number of shares receivable for each PSU (in shares) | 1 | |||
Class A Common Stock | PSUs | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 0% | |||
Class A Common Stock | PSUs | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 150% |
Stock Based Compensation - Sche
Stock Based Compensation - Schedule of Unvested RSU, PSU, and PRSU Activity (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Restricted Stock Units | |
Units | |
Unvested stock units, beginning of period (in shares) | shares | 1,187,509 |
Granted (in shares) | shares | 315,939 |
Granted for performance multiple (in shares) | shares | 0 |
Vested (in shares) | shares | (555,764) |
Forfeited (in shares) | shares | (36,398) |
Unvested stock units, end of period (in shares) | shares | 911,286 |
Weighted Average Grant Date Fair Value | |
Unvested stock units, beginning of period (in dollars per share) | $ / shares | $ 8.94 |
Granted (in dollars per share) | $ / shares | 21.14 |
Granted for performance multiple (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 9.15 |
Forfeited (in dollars per share) | $ / shares | 13.67 |
Unvested stock units, end of period (in dollars per share) | $ / shares | $ 12.89 |
Performance Restricted Stock Units | |
Units | |
Unvested stock units, beginning of period (in shares) | shares | 968,654 |
Granted (in shares) | shares | 515,405 |
Granted for performance multiple (in shares) | shares | 0 |
Vested (in shares) | shares | (215,197) |
Forfeited (in shares) | shares | (11,279) |
Unvested stock units, end of period (in shares) | shares | 1,257,583 |
Weighted Average Grant Date Fair Value | |
Unvested stock units, beginning of period (in dollars per share) | $ / shares | $ 9.36 |
Granted (in dollars per share) | $ / shares | 19.22 |
Granted for performance multiple (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 9.36 |
Forfeited (in dollars per share) | $ / shares | 14.15 |
Unvested stock units, end of period (in dollars per share) | $ / shares | $ 13.36 |
Performance Stock Units | |
Units | |
Unvested stock units, beginning of period (in shares) | shares | 460,414 |
Granted (in shares) | shares | 0 |
Granted for performance multiple (in shares) | shares | 90,965 |
Vested (in shares) | shares | (272,893) |
Forfeited (in shares) | shares | 0 |
Unvested stock units, end of period (in shares) | shares | 278,486 |
Weighted Average Grant Date Fair Value | |
Unvested stock units, beginning of period (in dollars per share) | $ / shares | $ 9.20 |
Granted (in dollars per share) | $ / shares | 0 |
Granted for performance multiple (in dollars per share) | $ / shares | 13.88 |
Vested (in dollars per share) | $ / shares | 13.88 |
Forfeited (in dollars per share) | $ / shares | 0 |
Unvested stock units, end of period (in dollars per share) | $ / shares | $ 6.14 |
Vesting percentage | 150% |
Stock Based Compensation - Sc_2
Stock Based Compensation - Schedule of Assumptions Used to Calculate Grant Date Fair Value of PSUs and PRSUs (Details) - Performance Restricted Stock Units (PRSU) and Performance Shares (PSU) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 3 years 6 months 18 days | 3 years 7 months 20 days | 2 years 10 months 6 days |
Expected volatility | 59.58% | 55.18% | 33.50% |
Risk-free interest rate | 1.89% | 0.56% | 1.16% |
Dividend yield | 1.97% | 0% | 0% |
Earnings (Loss) Per Share - Rec
Earnings (Loss) Per Share - Reconciliation of Numerators and Denominators for Basic and Diluted Per Share Computation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic: | |||
Net income (loss) attributable to Class A Common Stock | $ 893,837 | $ 417,282 | $ (1,208,390) |
Less: Dividends and net income allocated to participating securities | 8,204 | 2,789 | 0 |
Net income (loss), net of participating securities | $ 885,633 | $ 414,493 | $ (1,208,390) |
Weighted average number of common shares outstanding during the period - basic (in shares) | 187,433 | 174,364 | 166,270 |
Diluted: | |||
Net income (loss) attributable to Class A Common Stock | $ 893,837 | $ 417,282 | $ (1,208,390) |
Less: Dividends and net income allocated to participating securities | 8,185 | 2,775 | 0 |
Net income (loss), net of participating securities | $ 885,652 | $ 414,507 | $ (1,208,390) |
Weighted average number of common shares outstanding during the period - basic (in shares) | 187,433 | 174,364 | 166,270 |
Add: Dilutive effect stock based compensation and other (in shares) | 468 | 996 | 0 |
Weighted average number of common shares outstanding during the period - diluted (in shares) | 187,901 | 175,360 | 166,270 |
Class A Common Stock | |||
Basic: | |||
Net income (loss) per share of Class A Common Stock - basic (in dollars per share) | $ 4.73 | $ 2.38 | $ (7.27) |
Diluted: | |||
Net income (loss) per share of Class A Common Stock - diluted (in dollars per share) | $ 4.71 | $ 2.36 | $ (7.27) |
Earnings (Loss) Per Share - Nar
Earnings (Loss) Per Share - Narrative (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Shares excluded due to antidilutive effect (in shares) | 32.8 | 64 | 85.8 |
Contingent Shares of Class A Common Stock Issuable to EnerVest | |||
Class of Stock [Line Items] | |||
Shares excluded due to antidilutive effect (in shares) | 4 | ||
RSUs and PSUs | |||
Class of Stock [Line Items] | |||
Shares excluded due to antidilutive effect (in shares) | 0.3 |
Major Customers (Details)
Major Customers (Details) - Oil, Natural Gas and Natural Gas Liquids Revenue - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Customer 1 | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 19% | 22% | 40% |
Customer 2 | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 17% | 15% | 17% |
Customer 3 | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 14% | 15% | 12% |
Customer 4 | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 11% | 11% |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental cash items: | |||
Cash paid (received) for income taxes | $ 72,230 | $ 3,157 | $ (724) |
Cash paid for interest | 26,648 | 26,933 | 25,895 |
Supplemental non-cash investing and financing activity: | |||
Accruals or liabilities for capital expenditures | 67,923 | 29,936 | 16,368 |
Supplemental non-cash lease operating activity: | |||
Right-of-use assets obtained in exchange for operating lease obligations | $ 4,578 | $ 4,668 | $ 5,923 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | 12 Months Ended | ||
Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | |||
Common stock, dividends, declared (in dollars per share) | $ 0.40 | $ 0.08 | |
Class A Common Stock | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Common stock, dividends, declared (in dollars per share) | $ 0.115 | ||
Magnolia LLC Units | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Distribution made to LLC member, distributions declared (in dollars per share) | $ 0.115 |