Magnolia (MGY) Declines 8.5% Regardless of Beating on Q3 Earnings

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Magnolia (MGY) Declines 8.5% Despite Beating on Q3 Earnings

This story originally appeared on Zacks

Shares in Magnolia Oil & Gas Corporation The MGY has fallen 8.5% since the third quarter 2021 results were announced on November 1.

– Zacks

The stock declined despite impressive final and sales developments as well as an optimistic production forecast for the fourth quarter, which points to growth from the reported value for the sequential quarter. This downtrend could be attributed to higher spending on MGY’s capital program and weaker than expected oil production.

Immerse yourself deeper

Magnolia reported adjusted net earnings per share of 67 cents for the third quarter, beating Zack’s consensus estimate of 60 cents and the year-ago quarter end result of 6 cents.

This outperformance is primarily due to better than expected production volumes. MGY’s average total daily production, focused on South Texas, of 67,385 barrels of oil equivalent per day (boe / d) exceeded Zacks’ consensus estimate of 66,418 boe / d.

Total sales were $ 283.58 million, ahead of Zacks’ consensus estimate of $ 277 million. In addition, revenue increased 134.2% from the prior year’s $ 121.07 million.

Production & prices

Magnolia’s oil and gas production grew 24.1% year over year to 67,385 boe / d (contains 69.3% liquids). Oil volume was 30,989 barrels per day, 14.7% above the level of the third quarter of 2020. However, the same missed the Zacks Consensus Estimate of 31,678 barrels per day.

Average realized crude oil price for the third quarter was $ 68.44 per barrel, up 77.8% from the prior-year figure of $ 38.5. The average realized price of liquefied natural gas was $ 31.6 per barrel, 182.1% more than the same period last year, while natural gas prices rose 137.3% year over year to $ 3.75 per thousand cubic feet. Overall, MGY fetched $ 45.74 per boe, compared to $ 24.23 a year ago.

Balance sheet & investments

As of September 30, Magnolia had $ 245.02 million in cash and cash equivalents. The oil explorer’s long-term debt of $ 387.5 million was a capitalization of 30%. During the quarter, MGY spent $ 67.2 million on its capital program.

Orientation aid

Magnolia plans to spend approximately $ 80 million on drilling and completion activities in the fourth quarter of this year.

Total production in the fourth quarter of 2021 is expected to be in the range of 68,000 to 70,000 boe / d.

Zacks Rank and Other Important Tips

Magnolia currently has a Zacks Rank # 1 (Strong Buy). Other senior players in the energy sector are EOG resources EOG, Diamondback energy CATCH and ConocoPhillips COP, each currently displaying a Zacks rank of 1. you can see the full list of current Zacks # 1 Rank stocks here.

EOG Resources reported adjusted earnings per share of $ 2.16 for the third quarter of 2021, beating Zacks’ consensus estimate of $ 2.01. The strong result was driven by increased production volumes and higher raw material prices.

EOG announced a quarterly dividend of 75 cents per share, an 82% increase from previous levels. The dividend will be paid out on January 28, 2022 to shareholders of record since January 14, 2022. EOG Resources has also announced a special dividend of $ 2 per share. In addition, the Board of Directors updated its stock buyback authorization to $ 5 billion.

Diamondback Energy reported adjusted earnings of $ 2.94 per share for the third quarter of 2021, beating Zacks’ consensus estimate of $ 2.81 and earnings for the year-ago quarter of 62 cents. FANG’s bottom line was supported by better than expected production.

The board of directors announced a dividend of 50 cents per share for the third quarter, an increase of 11.1% in the quarterly payout compared to the previous value of 45 cents. The amount will be paid out on November 18, 2021 to the shareholders of record as of November 11. FANG also generated free cash flow of $ 740 million for the third quarter.

ConocoPhillips reported adjusted earnings per share of $ 1.77 for the third quarter of 2021, beating Zacks’ consensus estimate of $ 1.53. This outperformance is led by increased production volumes due to the Concho acquisition and the increasing realized raw material prices.

Based in Houston, TX, the capital expenditures and investments of this world’s largest independent oil and gas producer were $ 1.3 billion and dividend payments of $ 579 million. ConocoPhillips net cash from operating activities was $ 4.8 billion, compared to $ 868 million a year ago. COP generated $ 2.8 billion in free cash flow in the third quarter.

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