Magnolia Beats Q4 Earnings & Revenue Estimates on Strong Production

Magnolia Oil & Gas Corporation MGY reported a fourth-quarter 2025 net profit of 37 cents per share, which beat the Zacks Consensus Estimate of 36 cents. This outperformance can be attributed to record quarterly production volumes driven by strong well productivity in the company’s Giddings asset. However, the bottom line decreased from the year-ago quarter’s 49 cents.

The oil and gas exploration and production company’s total revenues were $318 million, which beat the Zacks Consensus Estimate of $312 million, driven by higher revenues from natural gas. However, the top line decreased 2.7% from $327 million recorded in the year-ago period, caused by lower oil and natural gas liquids (NGL) revenues.

Insight Into Magnolia’s Q4 Results

MGY reported $215.6 million in revenues from oil, which decreased 12.5% from the year-ago quarter’s $246.5 million. However, it marginally beat the consensus estimate of $215 million. The natural gas revenues of $52.9 million increased significantly from the year-ago quarter’s $28.4 million, beating the consensus estimate of $49.6 million. The natural gas liquids revenues of $49.1 million decreased from the year-ago quarter’s $51.7 million, beating the consensus estimate of $47.4 million.

In the quarter under review, the company recorded $208.4 million in net cash from operating activities and achieved a free cash flow of $74.7 million.

On Jan. 29, South Texas-focused Magnolia declared a cash dividend of 16.5 cents per share of Class A Common stock and a cash distribution of 15 cents per Class B unit, payable on March 2, 2026, to its shareholders of record as of Feb. 10. This marks a 10% increase to the company’s quarterly dividend rate, providing an annualized dividend of 66 cents per share.

In the fourth quarter, Magnolia repurchased 2.4 million Class A Common shares for $53.4 million. The company has increased its existing share repurchase authorization by an additional 10 million shares, bringing the total remaining authorization to 12.9 million Class A Common shares, specifically designated toward open market share repurchases. During the quarter, Magnolia returned 110% of free cash flow to its shareholders through a combination of share repurchases and dividends.

MGY’s Production & Prices

Magnolia reported the average daily total output of 103,799 barrels of oil equivalent per day (boe/d), increasing 11.5% from the year-ago quarter’s 93,096 boe/d. The figure also beat the Zacks Consensus Estimate of 101,173 boe/d.

Oil volumes totaled 40,730 barrels per day (bpd), up 4.9% from the year-ago quarter’s level. Moreover, the figure topped our estimate of 40,262 bpd.

Natural gas volumes reached 196,618 thousand cubic feet per day (Mcf/d), up 17.7% from the fourth quarter of 2024. The figure also surpassed our estimate of 192,400 Mcf/d.

Natural Gas Liquids volumes totaled 30,299 bpd, up 14.6% from the year-ago quarter’s level. Moreover, the figure beat our estimate of 28,845 bpd.

The average realized crude oil price was $57.54 per barrel, indicating a 16.6% decrease from the year-ago period’s $69.01.

The average realized natural gas price of $2.92 per Mcf increased significantly from the year-ago period’s $1.85, beating our estimate of $2.83.

Additionally, the average realized natural gas liquids price was $17.63 per barrel, implying a 17.1% decrease from the year-ago period’s figure, missing our estimate of $18.

MGY recorded an average sales price of $33.26 per boe compared with $38.13 a year ago.

MGY’s Balance Sheet & Capital Expenditure

As of Dec. 31, 2025, Magnolia had cash and cash equivalents of $266.8 million. The company had long-term debt of $393.2 million, reflecting a debt-to-capitalization of 16.8%.

MGY spent $116.5 million on its capital program in the reported quarter. Operating expenses increased to $223.5 million from $202.5 million in the year-ago period.

MGY’s Q1 & 2026 Guidance

For the first quarter of 2026, Magnolia expects its D&C capital spending to be about $125 million, marking the highest quarterly outlay of the year. Total production is estimated at roughly 102 Mboe/d, including around 1.5 Mboe/d of temporary downtime from a recent winter storm, which has since been fully restored. The fully diluted share count for the first quarter of 2026 is expected to be approximately 187 million shares, representing a 4% reduction compared with the year-ago levels.

For the full year of 2026, Magnolia estimates its total D&C capital spending to range between $440 million and $480 million, broadly in line with last year’s levels, including a non-operated capital component comparable to 2025. The company expects this year’s capital program and activity to support approximately 5% total production growth for the full year 2026.

Oil price differentials are expected to average about a $3 per barrel discount to Magellan East Houston, and Magnolia continues to remain fully unhedged across all of its oil and natural gas production.

Magnolia’s Zacks Rank

MGY currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Important Earnings at a Glance

While we have discussed MGY’s fourth-quarter results in detail, let us take a look at three other key reports in this space.

Alberta-based, integrated energy company, Suncor Energy Inc. SU reported fourth-quarter 2025 adjusted operating earnings of 79 cents per share, which beat the Zacks Consensus Estimate of 77 cents. This outperformance can be attributed to strong production growth in its upstream segment. However, the bottom line declined from the year-ago quarter’s reported figure of 89 cents due to lower upstream price realizations.

Suncor Energy’s operating revenues of $8.8 billion beat the Zacks Consensus Estimate by 4%, primarily driven by increased sales volumes in both the upstream and downstream segments. However, the top line decreased approximately 1.3% year over year.

As of Dec. 31, 2025, SU had cash and cash equivalents of C$3.65 billion and long-term debt of C$9 billion. Its debt-to-capitalization was 16.7%.

One of the largest oil field service companies, Patterson-UTI Energy, Inc. PTEN, reported a fourth-quarter 2025 adjusted net loss of 2 cents per share, narrower than the Zacks Consensus Estimate of an 11-cent loss, and an improvement from the year-ago quarter's loss of 12 cents. The better-than-expected performance was primarily backed by improvement in the company’s Completions Services segment and a reduction in operating costs and expenses.

Patterson-UTI Energy’s total revenues of $1.2 billion beat the Zacks Consensus Estimate by 5%. This was driven by higher-than-expected revenues from Completion Services. The Completion Services segment reported revenues of $701.6 million, which beat the consensus mark of $647 million. However, the top line decreased about 1% year over year. This underperformance can be attributed to the decrease in year-over-year revenue contribution from the Drilling Services, Drilling Products and Other Services segments.

As of Dec. 31, 2025, PTEN had cash and cash equivalents worth $420.6 million and long-term debt of $1.2 billion. Its debt-to-capitalization was 27.5%.

Another oil field service company, Liberty Energy Inc. LBRT, reported a fourth-quarter 2025 adjusted net profit of 5 cents per share, beating the Zacks Consensus Estimate of a loss of 16 cents by a considerable margin. The outperformance was driven by the company’s focus on technological innovation and strong operational execution. However, the bottom line decreased from the year-ago quarter’s profit of 10 cents.

LBRT's revenues totaled $1 billion, which beat the Zacks Consensus Estimate of $862 million. The top line also increased from the prior-year quarter’s $944 million by 10%, driven by higher activity levels that meaningfully exceeded the industry.

As of Dec. 31, Liberty Energy had approximately $28 million in cash and cash equivalents. The pressure pumper’s long-term debt of $241.5 million represented a debt-to-capitalization of 10.4%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research