Magnolia Oil & Gas: 2Q26 Post Mortem and Model Update: Back in the Market for Buybacks

研报英文原文证据摘录

J P M O R G A N

North America Equity Research

10 August 2026

Magnolia Oil & Gas

2Q26 Post Mortem and Model Update: Back in the

Market for Buybacks

Neutral

MGY, MGY US

Price (07 Aug 26):$25.08

Price Target (Dec-26):$32.00

JPM View: MGY continues to operate from its front foot, reporting a 5%/6%

EBITDAX beat vs. JPMe/STe in 2Q26 even after pre-announcing key operating

results including oil/total production and capex. The outperformance relative to

expectations was driven by strong oil realizations over the quarter that came in at

$98.13/bbl (+3% vs. JPMe), alongside lower operating costs. As previously

communicated, the company has raised its FY26 standalone guidance to 6% from

5%, with 3Q total volumes expected to be similar to 2Q levels at ~106 MBoe/d.

3Q26 capex is expected to come in at ~$115 MM, and the company reiterated its

FY26 standalone capex guide of $440 - $480 MM. On pricing, the company

expects 3Q oil price differentials to normalize toward typical levels of ~$3 per bbl

below MEH, which is in-line with our modeling heading into the print.

Oil & Gas Exploration & Production

The company’s strong 2Q results follow the announcement of its largest

acquisition to date: an agreement to acquire WildFire Energy for $4.06bn

(including assumed debt), a deal that more than doubles MGY’s position in

Giddings. The transaction, which is expected to close late in 3Q26, adds ~810K net

acres in Giddings, bringing MGY’s pro forma Giddings position to more than 1.25

MM net acres with development opportunities across the Austin Chalk, Eagle

Ford, and Woodbine formations. The acquired assets contribute ~53 MBoe/d of

total production, including ~37 MBo/d of oil volumes (~70% oil mix). Overall, we

view the deal as a natural, in-basin bolt-on that fits neatly within MGY’s acreage

position and aligns with management’s M&A criteria and capital allocation

priorities. MGY expects D&C capex to remain ≤55% of EBITDAX and is targeting

net debt/EBITDA at ≤0.5x, with leverage projected to decline to ~1x or less by

YE27.

Key Changes (FYE Dec)

After updating our model for the print, we forecast pro forma 2026 production of

…