It has been about a month since the last earnings report for Magnolia Oil & Gas Corp (MGY). Shares have added about 4.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Magnolia Oil & Gas Corp due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Magnolia Oil & Gas Corp before we dive into how investors and analysts have reacted as of late.
Magnolia Q2 Earnings & Revenues Beat Estimates on Strong Production
Magnolia Oil & Gasreported a second-quarter 2025 net profit of 43 cents per share, which beat the Zacks Consensus Estimate of 40 cents. This outperformance can be attributed to a healthy increase in production volumes driven by strong well productivity in the company’s Giddings asset. However, the bottom line decreased from the year-ago quarter’s 56 cents.
The oil and gas exploration and production company’s total revenues were $319 million, which beat the Zacks Consensus Estimate of $314 million, driven by higher revenues from natural gas and natural gas liquids (“NGL”). However, the top line decreased 5.3% from $337 million recorded in the year-ago period, caused by lower oil revenues.
The company reported $226.3 million in revenues from oil, which decreased 17.8% from the year-ago quarter’s $275.3 million. however, it beat the consensus estimate of $221 million. The natural gas revenues of $42.9 million more than doubled from the year-ago quarter’s $18.6 million, missing the consensus estimate of $46.3 million. The natural gas liquids revenues of $49.8 million increased from the year-ago quarter’s $42.8 million, beating the consensus estimate of $46.4 million.
In the quarter under review, the company recorded $198.7 million in net cash from operating activities and achieved a free cash flow of $107.5 million.
On July 29, South Texas-focused Magnolia declared a cash dividend of 15 cents per share of Class A Common stock and a cash distribution of 15 cents per Class B unit, payable on Sept. 2 to its shareholders of record as of Aug. 11, 2025.
In the second quarter, Magnolia repurchased 2.2 million Class A Common shares for $48.7 million. The company has 7.4 million Class A Common shares still available under its current repurchase authorization, specifically allocated for open market share buybacks. During the quarter, Magnolia returned 72% of free cash flow to its shareholders through a combination of share repurchases and dividends.
Production & Prices
Magnolia reported the average daily total output of 98,229 barrels of oil equivalent per day (boe/d), increasing 8.9% from the year-ago quarter’s 90,207 boe/d. The figure also beat the Zacks Consensus Estimate of 96,517 boe/d.
Oil volumes totaled 39,990 barrels per day (bpd), up 5.4% from the year-ago quarter’s level. Moreover, the figure exceeded our estimate of 39,804 bpd.
Natural gas volumes reached 184,840 thousand cubic feet per day (Mcf/d), up 12.3% from the second quarter of 2024. The figure also surpassed our expectation of 178,147 Mcf/d.
Natural Gas Liquids volumes totaled 27,432 bpd, up 10.5% from the year-ago quarter’s level. Moreover, the figure exceeded our estimate of 26,959 bpd.
The average realized crude oil price was $62.20 per barrel, indicating a 22% decrease from the year-ago period’s $79.74. However, the figure surpassed our expectation of $61 per barrel.
The average realized natural gas price of $2.55 per Mcf increased significantly from the year-ago period’s $1.24. However, the figure was below our expectation of $2.82 per Mcf. Additionally, the average realized natural gas liquids price was $19.94 per barrel, implying a 5.2% increase from the year-ago period’s figure, surpassing our estimate of $19.35.
MGY recorded an average sales price of $35.68 per boe compared with $41.02 a year ago.
Balance Sheet & Capital Expenditure
As of June 30, 2025, Magnolia had cash and cash equivalents of $251.8 million. The company had long-term debt of $392.9 million, reflecting a debt-to-capitalization of 16.4%.
MGY spent $95.2 million on its capital program in the reported quarter. Operating expenses increased to $211.2 million from $202.4 million in the year-ago period.
Q3 & 2025 Guidance
During 2025, Magnolia raised its year-over-year production growth guidance from the initial 7-9% to 10%, driven by strong well performance. The company expects its drilling and completion (D&C) 2025 capital spending to be in the range of $430-$470 million.
For the third quarter of 2025, Magnolia anticipates its D&C capital spending to be about $115 million. The production volume for the upcoming quarter is anticipated to be around 99 Mboe/d, inclusive of the volume associated with the recent bolt-on acquisitions.
Total company lease operating expenses ("LOE") averaged $4.88 per boe in second-quarter 2025, down notably from $5.40 in first-quarter 2025 and second-quarter 2024. The decline was mainly due to reduced workover costs. In the third quarter of 2025, LOE is expected to normalize to around $5.25 per boe, approximately 5% lower than 2024 levels.
Oil price differentials are expected to reflect a $3 per bbl discount to Magellan East Houston, and Magnolia remains fully unhedged across its oil and gas production. The fully diluted share count for the upcoming quarter is estimated at 191 million, marking a 4% decline year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted -5.45% due to these changes.
VGM Scores
At this time, Magnolia Oil & Gas Corp has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Magnolia Oil & Gas Corp has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Magnolia Oil & Gas Corp (MGY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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