Magnolia Oil & Gas 2Q26 Flash: Executing on the Standalone Business as Eyes Shift to Pending WildFire Acquisition

Research evidence excerpt

J P M O R G A N

North America Equity Research

05 August 2026

Magnolia Oil & Gas

2Q26 Flash: Executing on the Standalone Business as

Eyes Shift to Pending WildFire Acquisition

Neutral

MGY, MGY US

Price (05 Aug 26):$23.72

Oil & Gas Exploration & Production

JPM View: Stock Reaction – Positive. MGY posted a strong 2Q update, with

EBITDAX exceeding JPMe/STe by 5%/6% even after having pre-announced key

operating results including oil/total production and capex. The outperformance

relative to our model was primarily attributable to stronger-than-expected

realizations, with oil pricing coming in at $98.13/bbl (+3% vs. JPMe), alongside lower

operating costs. As previously communicated, the company is raising its FY26

standalone guidance to 6% from 5%. MGY expects 3Q total volumes to be similar to

2Q levels, which implies total production of ~106 MBoe/d, in-line with JPMe/STe at

106 MBo/d. 3Q26 capex is expected to come in at ~$115 MM (vs. JPMe at $115 MM

and the STe at $112 MM), and the company reiterated its FY26 standalone capex

guide of $440 - $480 MM. For 3Q, the company expects oil price differentials to

normalize toward typical levels of ~$3 per bbl below MEH, which is in-line with our

modeling. That said, we suspect that much of the focus on tomorrow’s call will

surround the company’s recently announced acquisition of WildFire Energy, which

is poised to more than double MGY’s Giddings acreage. The acquisition is expected

to close in late 3Q26.

Arun Jayaram AC

(1-212) 622-8541

Pankaj Bhatter, CFA

(1-212) 622-3795

Jack Jerusalmi

(1-212) 622-6552

J.P. Morgan Securities LLC

Taking a closer look at the quarter, MGY reported EBITDAX of $370 MM which was

5%/6% above JPMe/STe at $354/$351 MM. CFPS of $1.96 was 9%/8% above JPMe/

STe at $1.80/$1.81. The company pre-announced 2Q total and oil production of 106.1

MBoe/d and 41.9 MBo/d, respectively, with $125 MM of capex, and noted that total

production in Giddings increased 10% YoY to 85.5 MBoe/d, with oil volumes

growing by 7% YoY. 2Q FCF came in at $237 MM, which was 14%/12% above JPMe

at $208 MM and the STe at $211 MM. MGY repurchased 1.7 MM shares in 2Q for

$49.3 MM, which compares to our estimate of $53 MM of buybacks.

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