HOUSTON--(BUSINESS WIRE)--Magnolia Oil & Gas Corporation (“Magnolia,” “we,” “our,” or the “Company”) (NYSE: MGY) today announced its financial and operational results for the fourth quarter and full year 2021.
Fourth Quarter Summary Financial Results:
(In millions, except per share data) |
For the
|
|
For the
|
||
Production (Mboe/d) |
|
69.4 |
|
|
66.0 |
Net income |
$ |
192.1 |
|
$ |
559.7 |
Diluted earnings per share |
|
0.82 |
|
|
2.36 |
Adjusted EBITDAX(1) |
|
260.6 |
|
|
828.9 |
Capital expenditures - D&C |
|
72.1 |
|
|
231.9 |
Cash balance |
$ |
367.0 |
|
$ |
367.0 |
Diluted weighted average total shares outstanding(2) |
|
231.0 |
|
|
239.3 |
Fourth Quarter and Full Year 2021 Highlights:
-
Magnolia reported fourth quarter and full-year 2021 net income attributable to Class A Common Stock of $150.2 million, or $0.82 per diluted share, and $417.3 million or $2.36 per diluted share, respectively. Fourth quarter and full-year 2021 total net income was $192.1 million and $559.7 million, respectively.
-
Adjusted EBITDAX was $260.6 million during the fourth quarter of 2021, with drilling and completions (“D&C”) capital of $72.1 million, representing just 28% of quarterly adjusted EBITDAX. Adjusted EBITDAX for the full-year 2021 was $828.9 million with total D&C capital of $231.9 million, also representing 28% of adjusted EBITDAX, and well below our annual spending limit of 55% of EBITDAX.
-
Net cash provided by operating activities was $260.5 million during the fourth quarter and $788.5 million during full-year 2021. The Company generated free cash flow(1) of $178.5 million during the fourth quarter and $555.9 million during full-year 2021.
-
Total production in the fourth quarter of 2021 grew 15% from the fourth quarter of 2020 to 69.4 thousand barrels of oil equivalent per day (“Mboe/d”). Production for full-year 2021 averaged 66.0 Mboe/d representing year-over-year volume growth of 7%.
-
Production at Giddings and Other in the fourth quarter of 2021 grew 27% compared to the prior year fourth quarter to 36.0 Mboe/d including year-over-year oil production growth of more than 40%. This was accomplished with asset level D&C spending of around 35% of asset level adjusted EBITDAX, leading to significant free cash flow generation at Giddings. We continue to achieve further operational efficiencies at Giddings including an increase in drilling feet per day, fewer drilling days per well, and an improvement in stimulation stages per day.
-
Magnolia added 31.0 MMboe of proved developed reserves, excluding acquisitions and price-related revisions, representing the reserve additions from our 2021 drilling program. These proved developed additions provide an organic proved developed Finding & Development (“F&D”) cost of $7.48/boe(3).
-
Magnolia repurchased 2.7 million shares during the fourth quarter, reducing the Company’s total diluted shares outstanding by 25.3 million shares(4) or approximately 10% compared to the prior year. Magnolia’s board recently increased the existing share repurchase authorization by an additional 10 million with 15.8 million Class A Common shares remaining on the current authorization. This action accommodates our ongoing share repurchase plan during the year and is specifically allocated toward open market repurchases.
-
Together with the initiation of a dividend payment and our share reduction efforts, Magnolia returned $358 million to its shareholders last year or approximately 65% of full-year 2021 free cash flow and ended the year with $367 million of cash on the balance sheet. The Company remains undrawn on its $450.0 million revolving credit facility, with no debt maturities until 2026 and has no plans to increase its debt levels.
- Magnolia’s board recently declared its final semi-annual dividend for 2021 of $0.20 a share payable on March 1, 2022. This final payment is based on Magnolia’s full-year 2021 financial results recast using oil prices of $55 per barrel.
(1) |
|
Adjusted EBITDAX, and free cash flow are non-GAAP financial measures. For reconciliations to the most comparable GAAP measures, please see “Non-GAAP Financial Measures” at the end of this press release. |
(2) |
|
Weighted average total shares outstanding include diluted weighted average shares of Class A Common Stock outstanding during the period and shares of Class B Common Stock, which are anti-dilutive in the calculation of weighted average number of common shares outstanding. |
(3) |
|
Organic F&D costs per boe means total costs incurred as defined by GAAP excluding property acquisition costs, exploration expenses and asset retirement obligation costs divided by the summation of annual proved developed reserves, on a boe basis, attributable to extensions, revisions of previous estimates (excluding price revisions) and transfers from proved undeveloped reserves at year-end 2021. |
(4) |
|
Includes 3.6 million non-compete shares that were paid in cash in lieu of stock. |
“2021 was a defining year for Magnolia,” said Chairman, President and CEO Steve Chazen. “We achieved several new company records including EBIT margins and earnings per share. We also initiated our first dividend payment during the year and were able to significantly reduce our share count. Perhaps our greatest accomplishment for the year was moving our Giddings asset into full development. The positioning of Giddings toward full development provided a significant improvement in operating efficiencies which resulted in lower overall capital required to grow our total company production. We spent just 28 percent of our EBITDAX on drilling and completing wells, which resulted in year-over-year production growth of 7 percent.
“Our disciplined capital spending and our team’s continued focus on managing our costs provided strong pre-tax margins and generated significant free cash flow. During the year, we returned approximately 65 percent of our free cash flow to our shareholders in the form of significant share repurchases and our dividend. We repurchased more than 25 million shares reducing our diluted share count by 10 percent. Notwithstanding the significant return of cash to shareholders, our year-end cash balance nearly doubled from the prior year resulting in zero net debt.
“Our plan for 2022 is expected to build on many of last year’s achievements. After adding a second drilling rig during mid-2021, we plan to continue to operate a two-rig drilling program which we expect to generate high single digit full-year production growth. While we continue to limit our capital spending to 55 percent of EBITDAX, our spending percentage would be well-below this level in the current product price environment, providing significant free cash flow. We expect that our free cash flow would be allocated toward areas that would improve the per share value of the company including small, accretive bolt-on oil and gas property acquisitions and repurchasing at least 1 percent of our outstanding shares per quarter. So far this year, we have repurchased 2 million shares. The combination of organic production growth and share reduction is supportive of a growing dividend and Magnolia’s double-digit return investment proposition.”
Operational Update
Fourth quarter total company production averaged 69.4 Mboe/d, a 3% sequential increase from third quarter levels and growth of 15% from the prior year’s fourth quarter. Production grew during the quarter despite spending only 28% of adjusted EBITDAX on drilling and completing wells. Fourth quarter 2021 turn-in lines were more weighted to the Karnes area which resulted in a sequential quarterly production increase of 9% to 33.4 Mboe/d. Giddings and Other production averaged 36.0 Mboe/d which increased 27% from the prior year quarter.
Magnolia continues to operate two drilling rigs and plans to maintain this level of activity for the balance of the year. One rig will continue to drill multi-well development pads in our Giddings area consisting primarily of wells with greater than 7,000-foot laterals and with four wells per pad. The second rig will drill a mix of wells in both the Karnes and Giddings areas, including some appraisal wells in Giddings.
2021 Oil and Gas Reserves Replacement and F&D Costs
Magnolia’s total proved developed reserves at year-end 2021 were 109.8 MMboe. Excluding acquisitions and price related revisions, the company added 31.0 MMboe of proved developed reserves during the year. Total costs incurred excluding property acquisition costs, exploration expenses and asset retirement obligation costs were $231.9 million in 2021 resulting in organic proved developed F&D costs of $7.48 per boe.
Total 2021 proved reserves increased to 135.4 MMboe from 112.3 MMboe at year end 2020 and replaced 196%(5) of 2021 production. Magnolia books only one year of proved undeveloped reserves and as a result, 81% of its 2021 proved reserves were developed. The proved undeveloped reserves represent what we expect to convert to proved developed producing during 2022.
(5) |
|
Calculated as the sum of the 2021 change in total proved reserves of 23.1 MMboe and 2021 production of 24.1 MMboe divided by 2021 production. |
Additional Guidance
Based on our 2-rig drilling plan for full-year 2022, we estimate our D&C capital to be approximately $350 million which is expected to deliver high single-digit, year-over-year production growth. Non-operated capital is expected to be similar to last year’s level. Most of the growth is expected to come from our development program at Giddings, with production at the field expected to average about 40 Mboe/d during the year. Within the current product price environment, we would expect that our full-year 2022 D&C spending to be well-below our limit of 55% of EBITDAX.
For the first quarter of 2022, we expect our D&C capital to be in the range of $85 to $90 million and total production to be approximately 70 to 72 Mboe/d. Oil price differentials are anticipated to be approximately a $3 per barrel discount to Magellan East Houston and Magnolia remains completely unhedged for all its oil and natural gas production. The fully diluted share count for the first quarter of 2022 is expected to be approximately 228 million shares which is 9 percent lower than first quarter 2021 levels.
Annual Report on Form 10-K
Magnolia's financial statements and related footnotes will be available in its Annual Report on Form 10-K for the year ended December 31, 2021, which is expected to be filed with the U.S. Securities and Exchange Commission (“SEC”) on February 17, 2022.
Conference Call and Webcast
Magnolia will host an investor conference call on Thursday, February 17, 2021 at 9:00 a.m. Central (10:00 a.m. Eastern) to discuss these operating and financial results. Interested parties may join the webcast by visiting Magnolia's website at www.magnoliaoilgas.com/investors/events-and-presentations and clicking on the webcast link or by dialing 1-844-701-1059. A replay of the webcast will be posted on Magnolia's website following completion of the call.
About Magnolia Oil & Gas Corporation
Magnolia (MGY) is a publicly traded oil and gas exploration and production company with operations primarily in South Texas in the core of the Eagle Ford Shale and Austin Chalk formations. Magnolia focuses on generating value for shareholders through steady production growth, strong pre-tax margins, and free cash flow. For more information, visit www.magnoliaoilgas.com.
Cautionary Note Regarding Forward-Looking Statements
The information in this press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included in this press release, regarding Magnolia’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward looking statements. When used in this press release, the words could, should, will, may, believe, anticipate, intend, estimate, expect, project, the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events. Except as otherwise required by applicable law, Magnolia disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release. Magnolia cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Magnolia, incident to the development, production, gathering and sale of oil, natural gas and natural gas liquids. In addition, Magnolia cautions you that the forward looking statements contained in this press release are subject to the following factors: (i) the length, scope and severity of the ongoing coronavirus disease 2019 (“COVID-19”) pandemic, including the emergence and spread of variant strains of COVID-19, including the effects of related public health concerns and the impact of continued actions taken by governmental authorities and other third parties in response to the pandemic and its impact on commodity prices and, supply and demand considerations; (ii) the outcome of any legal proceedings that may be instituted against Magnolia; (iii) Magnolia’s ability to realize the anticipated benefits of its acquisitions, which may be affected by, among other things, competition and the ability of Magnolia to grow and manage growth profitably; (iv) changes in applicable laws or regulations; and (v) the possibility that Magnolia may be adversely affected by other economic, business, and/or competitive factors. Should one or more of the risks or uncertainties described in this press release occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Additional information concerning these and other factors that may impact the operations and projections discussed herein can be found in Magnolia’s filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which is expected to be filed with the SEC on February 17, 2022. Magnolia’s SEC filings are available publicly on the SEC’s website at www.sec.gov.
Magnolia Oil & Gas Corporation Operating Highlights |
||||||||||||||||
|
|
For the Quarters Ended |
|
For the Years Ended |
||||||||||||
|
|
December 31, 2021 |
|
December 31, 2020 |
|
December 31, 2021 |
|
December 31, 2020 |
||||||||
Production: |
|
|
|
|
|
|
|
|
||||||||
Oil (MBbls) |
|
|
2,844 |
|
|
|
2,646 |
|
|
|
11,190 |
|
|
|
11,610 |
|
Natural gas (MMcf) |
|
|
11,820 |
|
|
|
10,168 |
|
|
|
43,436 |
|
|
|
39,429 |
|
Natural gas liquids (MBbls) |
|
|
1,572 |
|
|
|
1,237 |
|
|
|
5,669 |
|
|
|
4,449 |
|
Total (Mboe) |
|
|
6,386 |
|
|
|
5,577 |
|
|
|
24,099 |
|
|
|
22,631 |
|
|
|
|
|
|
|
|
|
|
||||||||
Average daily production: |
|
|
|
|
|
|
|
|
||||||||
Oil (Bbls/d) |
|
|
30,913 |
|
|
|
28,756 |
|
|
|
30,659 |
|
|
|
31,722 |
|
Natural gas (Mcf/d) |
|
|
128,475 |
|
|
|
110,522 |
|
|
|
119,003 |
|
|
|
107,728 |
|
Natural gas liquids (Bbls/d) |
|
|
17,085 |
|
|
|
13,440 |
|
|
|
15,532 |
|
|
|
12,156 |
|
Total (boe/d) |
|
|
69,411 |
|
|
|
60,617 |
|
|
|
66,025 |
|
|
|
61,833 |
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues (in thousands): |
|
|
|
|
|
|
|
|
||||||||
Oil revenues |
|
$ |
216,596 |
|
|
$ |
107,373 |
|
|
$ |
747,896 |
|
|
$ |
421,520 |
|
Natural gas revenues |
|
|
59,890 |
|
|
|
23,930 |
|
|
|
172,648 |
|
|
|
70,416 |
|
Natural gas liquids revenues |
|
|
55,667 |
|
|
|
19,487 |
|
|
|
157,807 |
|
|
|
49,367 |
|
Total revenues |
|
$ |
332,153 |
|
|
$ |
150,790 |
|
|
$ |
1,078,351 |
|
|
$ |
541,303 |
|
|
|
|
|
|
|
|
|
|
||||||||
Average sales price: |
|
|
|
|
|
|
|
|
||||||||
Oil (per Bbl) |
|
$ |
76.16 |
|
|
$ |
40.58 |
|
|
$ |
66.83 |
|
|
$ |
36.31 |
|
Natural gas (per Mcf) |
|
|
5.07 |
|
|
|
2.35 |
|
|
|
3.97 |
|
|
|
1.79 |
|
Natural gas liquids (per Bbl) |
|
|
35.41 |
|
|
|
15.75 |
|
|
|
27.84 |
|
|
|
11.10 |
|
Total (per boe) |
|
$ |
52.01 |
|
|
$ |
27.04 |
|
|
$ |
44.75 |
|
|
$ |
23.92 |
|
|
|
|
|
|
|
|
|
|
||||||||
NYMEX WTI (per Bbl) |
|
$ |
77.17 |
|
|
$ |
42.67 |
|
|
$ |
67.96 |
|
|
$ |
39.40 |
|
NYMEX Henry Hub (per Mcf) |
|
$ |
5.84 |
|
|
$ |
2.66 |
|
|
$ |
3.86 |
|
|
$ |
2.08 |
|
Realization to benchmark: |
|
|
|
|
|
|
|
|
||||||||
Oil (% of WTI) |
|
|
99 |
% |
|
|
95 |
% |
|
|
98 |
% |
|
|
92 |
% |
Natural gas (% of Henry Hub) |
|
|
87 |
% |
|
|
88 |
% |
|
|
103 |
% |
|
|
86 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses (in thousands): |
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses |
|
$ |
28,064 |
|
|
$ |
17,917 |
|
|
$ |
93,021 |
|
|
$ |
79,192 |
|
Gathering, transportation, and processing |
|
|
13,466 |
|
|
|
9,622 |
|
|
|
45,535 |
|
|
|
35,442 |
|
Taxes other than income |
|
|
17,177 |
|
|
|
8,376 |
|
|
|
55,834 |
|
|
|
31,250 |
|
Depreciation, depletion and amortization |
|
|
53,420 |
|
|
|
45,080 |
|
|
|
187,688 |
|
|
|
283,353 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating costs per boe: |
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses |
|
$ |
4.39 |
|
|
$ |
3.21 |
|
|
$ |
3.86 |
|
|
$ |
3.50 |
|
Gathering, transportation, and processing |
|
|
2.11 |
|
|
|
1.73 |
|
|
|
1.89 |
|
|
|
1.57 |
|
Taxes other than income |
|
|
2.69 |
|
|
|
1.50 |
|
|
|
2.32 |
|
|
|
1.38 |
|
Depreciation, depletion and amortization |
|
|
8.37 |
|
|
|
8.08 |
|
|
|
7.79 |
|
|
|
12.52 |
|
Magnolia Oil & Gas Corporation Consolidated Statements of Operations (In thousands, except per share data) |
||||||||||||||||
|
|
For the Quarters Ended |
|
For the Years Ended |
||||||||||||
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||
REVENUES |
|
|
|
|
|
|
|
|
||||||||
Oil revenues |
|
$ |
216,596 |
|
|
$ |
107,373 |
|
|
$ |
747,896 |
|
|
$ |
421,520 |
|
Natural gas revenues |
|
|
59,890 |
|
|
|
23,930 |
|
|
|
172,648 |
|
|
|
70,416 |
|
Natural gas liquids revenues |
|
|
55,667 |
|
|
|
19,487 |
|
|
|
157,807 |
|
|
|
49,367 |
|
Total revenues |
|
|
332,153 |
|
|
|
150,790 |
|
|
|
1,078,351 |
|
|
|
541,303 |
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses |
|
|
28,064 |
|
|
|
17,917 |
|
|
|
93,021 |
|
|
|
79,192 |
|
Gathering, transportation and processing |
|
|
13,466 |
|
|
|
9,622 |
|
|
|
45,535 |
|
|
|
35,442 |
|
Taxes other than income |
|
|
17,177 |
|
|
|
8,376 |
|
|
|
55,834 |
|
|
|
31,250 |
|
Exploration expenses |
|
|
1,685 |
|
|
|
3,744 |
|
|
|
4,125 |
|
|
|
567,333 |
|
Impairment of oil and natural gas properties |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,381,258 |
|
Asset retirement obligations accretion |
|
|
864 |
|
|
|
1,315 |
|
|
|
4,929 |
|
|
|
5,718 |
|
Depreciation, depletion and amortization |
|
|
53,420 |
|
|
|
45,080 |
|
|
|
187,688 |
|
|
|
283,353 |
|
Amortization of intangible assets |
|
|
— |
|
|
|
3,626 |
|
|
|
9,346 |
|
|
|
14,505 |
|
General and administrative expenses |
|
|
15,463 |
|
|
|
18,445 |
|
|
|
75,279 |
|
|
|
68,918 |
|
Total operating costs and expenses |
|
|
130,139 |
|
|
|
108,125 |
|
|
|
475,757 |
|
|
|
2,466,969 |
|
|
|
|
|
|
|
|
|
|
||||||||
OPERATING INCOME (LOSS) |
|
|
202,014 |
|
|
|
42,665 |
|
|
|
602,594 |
|
|
|
(1,925,666 |
) |
|
|
|
|
|
|
|
|
|
||||||||
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
||||||||
Income from equity method investee |
|
|
— |
|
|
|
54 |
|
|
|
— |
|
|
|
2,113 |
|
Interest expense, net |
|
|
(7,483 |
) |
|
|
(7,353 |
) |
|
|
(31,002 |
) |
|
|
(28,698 |
) |
Gain (loss) on derivatives, net |
|
|
— |
|
|
|
2,774 |
|
|
|
(3,110 |
) |
|
|
565 |
|
Other income, net |
|
|
37 |
|
|
|
3,872 |
|
|
|
85 |
|
|
|
3,363 |
|
Total other expense, net |
|
|
(7,446 |
) |
|
|
(653 |
) |
|
|
(34,027 |
) |
|
|
(22,657 |
) |
|
|
|
|
|
|
|
|
|
||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
|
|
194,568 |
|
|
|
42,012 |
|
|
|
568,567 |
|
|
|
(1,948,323 |
) |
Income tax expense (benefit) |
|
|
2,423 |
|
|
|
— |
|
|
|
8,851 |
|
|
|
(79,340 |
) |
NET INCOME (LOSS) |
|
|
192,145 |
|
|
|
42,012 |
|
|
|
559,716 |
|
|
|
(1,868,983 |
) |
LESS: Net income (loss) attributable to noncontrolling interest |
|
|
41,916 |
|
|
|
14,267 |
|
|
|
142,434 |
|
|
|
(660,593 |
) |
NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCK |
|
$ |
150,229 |
|
|
$ |
27,745 |
|
|
$ |
417,282 |
|
|
$ |
(1,208,390 |
) |
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME (LOSS) PER SHARE OF CLASS A COMMON STOCK |
|
|
|
|
||||||||||||
Basic |
|
$ |
0.83 |
|
|
$ |
0.17 |
|
|
$ |
2.38 |
|
|
$ |
(7.27 |
) |
Diluted |
|
$ |
0.82 |
|
|
$ |
0.16 |
|
|
$ |
2.36 |
|
|
$ |
(7.27 |
) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING |
|
|
|
|
||||||||||||
Basic |
|
|
180,655 |
|
|
|
164,907 |
|
|
|
174,364 |
|
|
|
166,270 |
|
Diluted |
|
|
181,411 |
|
|
|
169,326 |
|
|
|
175,360 |
|
|
|
166,270 |
|
WEIGHTED AVERAGE NUMBER OF CLASS B SHARES OUTSTANDING(1) |
|
|
49,568 |
|
|
|
85,790 |
|
|
|
63,973 |
|
|
|
85,790 |
|
(1) Shares of Class B Common Stock, and corresponding Magnolia LLC Units, are anti-dilutive in the calculation of weighted average number of common shares outstanding. |
||||||||||||||||
Magnolia Oil & Gas Corporation Summary Cash Flow Data (In thousands) |
||||||||||||||||
|
|
For the Quarters Ended |
|
For the Years Ended |
||||||||||||
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||||||||||
NET INCOME (LOSS) |
|
$ |
192,145 |
|
|
$ |
42,012 |
|
|
$ |
559,716 |
|
|
$ |
(1,868,983 |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
||||||||
Depreciation, depletion and amortization |
|
|
53,420 |
|
|
|
45,080 |
|
|
|
187,688 |
|
|
|
283,353 |
|
Amortization of intangible assets |
|
|
— |
|
|
|
3,626 |
|
|
|
9,346 |
|
|
|
14,505 |
|
Exploration expenses, non-cash |
|
|
888 |
|
|
|
2,370 |
|
|
|
888 |
|
|
|
563,999 |
|
Impairment of oil and natural gas properties |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,381,258 |
|
Asset retirement obligations accretion |
|
|
864 |
|
|
|
1,315 |
|
|
|
4,929 |
|
|
|
5,718 |
|
Amortization of deferred financing costs |
|
|
1,140 |
|
|
|
918 |
|
|
|
4,290 |
|
|
|
3,628 |
|
Unrealized (gain) on derivatives, net |
|
|
— |
|
|
|
(2,485 |
) |
|
|
277 |
|
|
|
(277 |
) |
(Gain) on sale of equity method investment |
|
|
— |
|
|
|
(5,071 |
) |
|
|
— |
|
|
|
(5,071 |
) |
Deferred taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(77,834 |
) |
Stock based compensation |
|
|
2,593 |
|
|
|
1,158 |
|
|
|
11,736 |
|
|
|
10,029 |
|
Other |
|
|
— |
|
|
|
1,332 |
|
|
|
(84 |
) |
|
|
(728 |
) |
Net change in operating assets and liabilities |
|
|
9,492 |
|
|
|
(11,133 |
) |
|
|
9,691 |
|
|
|
524 |
|
Net cash provided by operating activities |
|
|
260,542 |
|
|
|
79,122 |
|
|
|
788,477 |
|
|
|
310,121 |
|
|
|
|
|
|
|
|
|
|
||||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
||||||||
Acquisitions |
|
|
(7,529 |
) |
|
|
— |
|
|
|
(18,345 |
) |
|
|
(73,702 |
) |
Proceeds from sale of equity method investment |
|
|
— |
|
|
|
27,074 |
|
|
|
— |
|
|
|
27,074 |
|
Additions to oil and natural gas properties |
|
|
(73,682 |
) |
|
|
(40,532 |
) |
|
|
(236,426 |
) |
|
|
(197,858 |
) |
Changes in working capital associated with additions to oil and natural gas properties |
|
|
1,133 |
|
|
|
(5,382 |
) |
|
|
13,568 |
|
|
|
(24,354 |
) |
Other investing |
|
|
78 |
|
|
|
(307 |
) |
|
|
(2,239 |
) |
|
|
(1,148 |
) |
Net cash used in investing activities |
|
|
(80,000 |
) |
|
|
(19,147 |
) |
|
|
(243,442 |
) |
|
|
(269,988 |
) |
|
|
|
|
|
|
|
|
|
||||||||
CASH FLOW FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
||||||||
Class A Common Stock repurchases |
|
|
(55,325 |
) |
|
|
(15,718 |
) |
|
|
(125,641 |
) |
|
|
(28,681 |
) |
Class B Common Stock purchases and cancellations |
|
|
— |
|
|
|
— |
|
|
|
(171,671 |
) |
|
|
— |
|
Non-compete settlement |
|
|
— |
|
|
|
— |
|
|
|
(42,073 |
) |
|
|
— |
|
Dividends paid |
|
|
(27 |
) |
|
|
— |
|
|
|
(14,131 |
) |
|
|
— |
|
Distributions to noncontrolling interest owners |
|
|
(1,501 |
) |
|
|
(85 |
) |
|
|
(7,207 |
) |
|
|
(680 |
) |
Cash paid for debt modification |
|
|
— |
|
|
|
— |
|
|
|
(4,976 |
) |
|
|
— |
|
Other financing activities |
|
|
(1,730 |
) |
|
|
(144 |
) |
|
|
(4,915 |
) |
|
|
(844 |
) |
Net cash used in financing activities |
|
|
(58,583 |
) |
|
|
(15,947 |
) |
|
|
(370,614 |
) |
|
|
(30,205 |
) |
|
|
|
|
|
|
|
|
|
||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
|
121,959 |
|
|
|
44,028 |
|
|
|
174,421 |
|
|
|
9,928 |
|
Cash and cash equivalents – Beginning of period |
|
|
245,023 |
|
|
|
148,533 |
|
|
|
192,561 |
|
|
|
182,633 |
|
Cash and cash equivalents – End of period |
|
$ |
366,982 |
|
|
$ |
192,561 |
|
|
$ |
366,982 |
|
|
$ |
192,561 |
|
Magnolia Oil & Gas Corporation Summary Balance Sheet Data (In thousands) |
||||||||
|
|
December 31,
|
|
December 31,
|
||||
Cash and cash equivalents |
|
$ |
366,982 |
|
|
$ |
192,561 |
|
Other current assets |
|
|
151,811 |
|
|
|
88,965 |
|
Property, plant and equipment, net |
|
|
1,216,087 |
|
|
|
1,149,527 |
|
Other assets |
|
|
11,862 |
|
|
|
22,367 |
|
Total assets |
|
$ |
1,746,742 |
|
|
$ |
1,453,420 |
|
|
|
|
|
|
||||
Current liabilities |
|
$ |
218,545 |
|
|
$ |
128,949 |
|
Long-term debt, net |
|
|
388,087 |
|
|
|
391,115 |
|
Other long-term liabilities |
|
|
94,861 |
|
|
|
93,934 |
|
Common stock |
|
|
24 |
|
|
|
26 |
|
Additional paid in capital |
|
|
1,689,500 |
|
|
|
1,712,544 |
|
Treasury stock |
|
|
(164,599 |
) |
|
|
(38,958 |
) |
Accumulated deficit |
|
|
(708,168 |
) |
|
|
(1,125,450 |
) |
Noncontrolling interest |
|
|
228,492 |
|
|
|
291,260 |
|
Total liabilities and equity |
|
$ |
1,746,742 |
|
|
$ |
1,453,420 |
|
Magnolia Oil & Gas Corporation
Costs Incurred, Proved Developed Reserves, Organic F&D Cost Per Boe and Reserve Replacement Ratio
The following tables summarize the Company's costs incurred in oil and gas property acquisition, exploration and development activities, reconciliation of changes in proved developed reserves, calculation of organic proved developed F&D cost per boe and calculation of proved developed reserve replacement ratio for the years ended December 31, 2021 and 2020.
|
|
For the Years Ended |
||||||
(In thousands) |
|
December 31, 2021 |
|
December 31, 2020 |
||||
Costs incurred: |
|
|
|
|
||||
Proved property acquisition costs |
|
$ |
12,354 |
|
|
$ |
49,246 |
|
Unproved properties acquisition costs |
|
|
10,483 |
|
|
|
25,966 |
|
Total acquisition costs |
|
|
22,837 |
|
|
|
75,212 |
|
Exploration and development costs |
|
|
240,815 |
|
|
|
188,352 |
|
Total costs incurred |
|
|
263,652 |
|
|
|
263,564 |
|
Less: Total acquisition costs |
|
|
(22,837 |
) |
|
|
(75,212 |
) |
Less: Asset retirement obligations |
|
|
(1,153 |
) |
|
|
12,839 |
|
Less: Exploration expenses |
|
|
(3,237 |
) |
|
|
(3,334 |
) |
Less: Leasehold acquisition costs |
|
|
(4,521 |
) |
|
|
(2,966 |
) |
Drilling and completions capital |
(A) |
$ |
231,904 |
|
|
$ |
194,891 |
|
|
|
For the Years Ended |
||||
(In MMboe) |
|
December 31, 2021 |
|
December 31, 2020 |
||
Proved developed reserves: |
|
|
|
|
||
Beginning of period |
|
85.8 |
|
|
86.8 |
|
End of period |
|
109.8 |
|
|
85.8 |
|
Increase (decrease) in proved developed reserves |
|
24.0 |
|
|
(1.0 |
) |
Production |
(B) |
24.1 |
|
|
22.6 |
|
Increase in proved developed reserves plus production |
|
48.1 |
|
|
21.6 |
|
Less: Purchases of reserves in place |
|
(0.4 |
) |
|
(2.0 |
) |
Increase in proved developed reserves, excluding acquisitions |
(C) |
47.7 |
|
|
19.6 |
|
Less: Price-related revisions |
|
(16.7 |
) |
|
10.8 |
|
Increase in proved developed reserves, excluding acquisitions and price-related revisions |
(D) |
31.0 |
|
|
30.4 |
|
|
|
For the Years Ended |
||||||
|
|
December 31, 2021 |
|
December 31, 2020 |
||||
Organic proved developed F&D cost per boe |
(A)/(D) |
$ |
7.48 |
|
|
$ |
6.41 |
|
Reserve replacement ratio |
(C)/(B) |
|
198 |
% |
|
|
87 |
% |
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of net income (loss) to adjusted EBITDAX
In this press release, we refer to adjusted EBITDAX, a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders, and rating agencies. We define adjusted EBITDAX as net income (loss) before interest expense, income taxes, depreciation, depletion and amortization, amortization of intangible assets, exploration expenses, and accretion of asset retirement obligations, adjusted to exclude the effect of certain items included in net income (loss).
Our management believes that adjusted EBITDAX is useful because it allows them to more effectively evaluate our operating performance and compare the results of our operations from period to period and against our peers without regard to our financing methods or capital structure. We also believe that securities analysts, investors, and other interested parties may use adjusted EBITDAX in the evaluation of our Company. We exclude the items listed above from net income (loss) in arriving at adjusted EBITDAX because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from adjusted EBITDAX are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of adjusted EBITDAX. Our presentation of adjusted EBITDAX should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of adjusted EBITDAX may not be comparable to other similarly titled measures of other companies.
The following table presents a reconciliation of net income (loss) to adjusted EBITDAX, our most directly comparable financial measure, calculated and presented in accordance with GAAP:
|
|
For the Quarters Ended |
|
For the Years Ended |
||||||||||
(In thousands) |
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||
NET INCOME (LOSS) |
|
$ |
192,145 |
|
$ |
42,012 |
|
|
$ |
559,716 |
|
$ |
(1,868,983 |
) |
Exploration expenses |
|
|
1,685 |
|
|
3,744 |
|
|
|
4,125 |
|
|
567,333 |
|
Asset retirement obligations accretion |
|
|
864 |
|
|
1,315 |
|
|
|
4,929 |
|
|
5,718 |
|
Depreciation, depletion and amortization |
|
|
53,420 |
|
|
45,080 |
|
|
|
187,688 |
|
|
283,353 |
|
Amortization of intangible assets |
|
|
— |
|
|
3,626 |
|
|
|
9,346 |
|
|
14,505 |
|
Interest expense, net |
|
|
7,483 |
|
|
7,353 |
|
|
|
31,002 |
|
|
28,698 |
|
Income tax expense (benefit) |
|
|
2,423 |
|
|
— |
|
|
|
8,851 |
|
|
(79,340 |
) |
EBITDAX |
|
|
258,020 |
|
|
103,130 |
|
|
|
805,657 |
|
|
(1,048,716 |
) |
Impairment of oil and natural gas properties |
|
|
— |
|
|
— |
|
|
|
— |
|
|
1,381,258 |
|
Service agreement transition costs(1) |
|
|
— |
|
|
— |
|
|
|
11,189 |
|
|
— |
|
Non-cash stock based compensation expense |
|
|
2,593 |
|
|
1,158 |
|
|
|
11,736 |
|
|
10,029 |
|
Unrealized (gain) loss on derivatives, net |
|
|
— |
|
|
(2,485 |
) |
|
|
277 |
|
|
(277 |
) |
(Gain) on sale of equity method investment |
|
|
— |
|
|
(5,071 |
) |
|
|
— |
|
|
(5,071 |
) |
Inventory write down |
|
|
— |
|
|
1,386 |
|
|
|
— |
|
|
1,386 |
|
Adjusted EBITDAX |
|
$ |
260,613 |
|
$ |
98,118 |
|
|
$ |
828,859 |
|
$ |
338,609 |
|
(1) Costs incurred during the transition period related to the termination of the Services Agreement with EnerVest Operating L.L.C. included within “General and administrative expenses” on the Company's consolidated statements of operations. |
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of net income (loss) attributable to Class A Common Stock to adjusted earnings
Our presentation of adjusted earnings and adjusted earnings per share are non-GAAP measures because they exclude the effect of certain items included in net income (loss) attributable to Class A Common Stock. Management uses adjusted earnings and adjusted earnings per share to evaluate our operating and financial performance because it eliminates the impact of certain items that management does not consider to be representative of the Company’s on-going business operations. As a performance measure, adjusted earnings may be useful to investors in facilitating comparisons to others in the Company’s industry because certain items can vary substantially in the oil and gas industry from company to company depending upon accounting methods, book value of assets, and capital structure, among other factors. Management believes excluding these items facilitates investors and analysts in evaluating and comparing the underlying operating and financial performance of our business from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted earnings and adjusted earnings per share may not be comparable to similar measures of other companies in our industry.
|
For the
|
|
Per Share Diluted EPS |
|
For the
|
|
Per Share Diluted EPS |
||||||||
(In thousands, except per share data) |
|||||||||||||||
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK |
$ |
150,229 |
|
|
$ |
0.82 |
|
|
$ |
27,745 |
|
|
$ |
0.16 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Impairment of unproved properties(1) |
|
— |
|
|
|
— |
|
|
|
2,370 |
|
|
|
0.01 |
|
Unrealized (gain) on derivatives, net |
|
— |
|
|
|
— |
|
|
|
(2,485 |
) |
|
|
(0.01 |
) |
(Gain) on sale of equity method investment |
|
— |
|
|
|
— |
|
|
|
(5,071 |
) |
|
|
(0.03 |
) |
Inventory write down |
|
— |
|
|
|
— |
|
|
|
1,386 |
|
|
|
0.01 |
|
Seismic purchases |
|
— |
|
|
|
— |
|
|
|
1,100 |
|
|
|
0.01 |
|
Noncontrolling interest impact of adjustments |
|
— |
|
|
|
— |
|
|
|
917 |
|
|
|
— |
|
ADJUSTED NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK |
$ |
150,229 |
|
|
$ |
0.82 |
|
|
$ |
25,962 |
|
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
||||||||
|
For the
|
|
Per Share Diluted EPS |
|
For the
|
|
Per Share Diluted EPS |
||||||||
(In thousands, except per share data) |
|||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCK |
$ |
417,282 |
|
|
$ |
2.36 |
|
|
$ |
(1,208,390 |
) |
|
$ |
(7.27 |
) |
Adjustments: |
|
|
|
|
|
|
|
||||||||
Impairment of proved oil and natural gas properties |
|
— |
|
|
|
— |
|
|
|
1,381,258 |
|
|
|
8.31 |
|
Impairment of unproved properties(1) |
|
— |
|
|
|
— |
|
|
|
563,999 |
|
|
|
3.39 |
|
Service agreement transition costs(2) |
|
11,189 |
|
|
|
0.06 |
|
|
|
— |
|
|
|
— |
|
Accelerated amortization of intangible |
|
5,877 |
|
|
|
0.03 |
|
|
|
— |
|
|
|
— |
|
Unrealized (gain) loss on derivatives, net |
|
277 |
|
|
|
— |
|
|
|
(277 |
) |
|
|
— |
|
(Gain) on sale of equity method investment |
|
— |
|
|
|
— |
|
|
|
(5,071 |
) |
|
|
(0.03 |
) |
Inventory write down |
|
— |
|
|
|
— |
|
|
|
1,386 |
|
|
|
0.01 |
|
Seismic purchases |
|
1,841 |
|
|
|
0.01 |
|
|
|
1,100 |
|
|
|
0.01 |
|
Interest expense costs related to debt modification |
|
1,147 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
Noncontrolling interest impact of adjustments |
|
(5,093 |
) |
|
|
(0.03 |
) |
|
|
(658,210 |
) |
|
|
(3.96 |
) |
Change in estimated income tax |
|
(3,291 |
) |
|
|
(0.02 |
) |
|
|
(78,327 |
) |
|
|
(0.48 |
) |
ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCK |
$ |
429,229 |
|
|
$ |
2.42 |
|
|
$ |
(2,532 |
) |
|
$ |
(0.02 |
) |
(1) Impairment of unproved properties is included within “Exploration expenses” on the consolidated statements of operations. |
|||||||||||||||
(2) Costs incurred during the transition period related to the termination of the Services Agreement with EnerVest Operating L.L.C. included within “General and administrative expenses” on the Company's consolidated statements of operations. |
|||||||||||||||
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of net income (loss) to adjusted net income (loss)
Our presentation of adjusted net income (loss) is a non-GAAP measures because it excludes the effect of certain items included in net income (loss). Management uses adjusted net income (loss) to evaluate our operating and financial performance because it eliminates the impact of certain items that management does not consider to be representative of the Company’s on-going business operations. As a performance measure, adjusted net income (loss) may be useful to investors in facilitating comparisons to others in the Company’s industry because certain items can vary substantially in the oil and gas industry from company to company depending upon accounting methods, book value of assets, and capital structure, among other factors. Management believes adjusting these items facilitates investors and analysts in evaluating and comparing the underlying operating and financial performance of our business from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted net income (loss) may not be comparable to similar measures of other companies in our industry.
|
For the Quarters Ended |
|
For the Years Ended |
||||
(In thousands) |
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
NET INCOME (LOSS) |
$ 192,145 |
|
$ 42,012 |
|
$ 559,716 |
|
$ (1,868,983) |
Adjustments: |
|
|
|
|
|
|
|
Impairment of proved oil and natural gas properties |
— |
|
— |
|
— |
|
1,381,258 |
Impairment of unproved properties(1) |
— |
|
2,370 |
|
— |
|
563,999 |
Service agreement transition costs(2) |
— |
|
— |
|
11,189 |
|
— |
Accelerated amortization of intangible |
— |
|
— |
|
5,877 |
|
— |
Unrealized (gain) loss on derivatives, net |
— |
|
(2,485) |
|
277 |
|
(277) |
(Gain) on sale of equity method investment |
— |
|
(5,071) |
|
— |
|
(5,071) |
Inventory write down |
— |
|
1,386 |
|
— |
|
1,386 |
Interest expense costs related to debt modification |
— |
|
— |
|
1,147 |
|
— |
Seismic purchases |
— |
|
1,100 |
|
1,841 |
|
1,100 |
Change in estimated income tax(3) |
— |
|
— |
|
(192) |
|
(78,047) |
ADJUSTED NET INCOME (LOSS) |
$ 192,145 |
|
$ 39,312 |
|
$ 579,855 |
|
$ (4,635) |
|
|
|
|
|
|
|
|
Diluted weighted average shares of Class A Common Stock outstanding during the period |
181,411 |
|
169,326 |
|
175,360 |
|
166,270 |
Weighted average shares of Class B Common Stock outstanding during the period(4) |
49,568 |
|
85,790 |
|
63,973 |
|
85,790 |
Total weighted average shares of Class A and B Common Stock, including dilutive impact of other securities(4) |
230,979 |
|
255,116 |
|
239,333 |
|
252,060 |
(1) |
|
Impairment of unproved properties is included within “Exploration expenses” on the consolidated statements of operations. |
(2) |
|
Costs incurred during the transition period related to the termination of the Services Agreement with EnerVest Operating L.L.C. included within “General and administrative expenses” on the Company's consolidated statements of operations. |
(3) |
|
Represents corporate income taxes at an assumed effective tax rate of 2% and 22% for the years ended December 31, 2021 and 2020, respectively. |
(4) |
|
Shares of Class B Common Stock, and corresponding Magnolia LLC Units, are anti-dilutive in the calculation of weighted average number of common shares outstanding. |
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of revenue to adjusted cash operating margin and to operating income margin
Our presentation of adjusted cash operating margin and total adjusted cash operating costs are supplemental non-GAAP financial measures that are used by management. Total adjusted cash operating costs exclude the impact of non-cash activity. We define adjusted cash operating margin per boe as total revenues per boe less operating expenses per boe. Management believes that total adjusted cash operating costs per boe and adjusted cash operating margin per boe provide relevant and useful information, which is used by our management in assessing the Company’s profitability and comparability of results to our peers.
As a performance measure, total adjusted cash operating costs and adjusted cash operating margin may be useful to investors in facilitating comparisons to others in the Company’s industry because certain items can vary substantially in the oil and gas industry from company to company depending upon accounting methods, book value of assets, and capital structure, among other factors. Management believes excluding these items facilitates investors and analysts in evaluating and comparing the underlying operating and financial performance of our business from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted cash operating margin may not be comparable to similar measures of other companies in our industry.
|
For the Quarters Ended |
||||||
(In $/boe) |
December 31, 2021 |
|
December 31, 2020 |
||||
Revenue |
$ |
52.01 |
|
|
$ |
27.04 |
|
Total cash operating costs: |
|
|
|
||||
Lease operating expenses (1) |
|
(4.37 |
) |
|
|
(3.20 |
) |
Gathering, transportation and processing |
|
(2.11 |
) |
|
|
(1.73 |
) |
Taxes other than income |
|
(2.69 |
) |
|
|
(1.50 |
) |
Exploration expenses (2) |
|
(0.12 |
) |
|
|
(0.25 |
) |
General and administrative expenses (3) |
|
(2.03 |
) |
|
|
(3.11 |
) |
Total adjusted cash operating costs |
|
(11.32 |
) |
|
|
(9.79 |
) |
Adjusted cash operating margin |
$ |
40.69 |
|
|
$ |
17.25 |
|
Margin (%) |
|
78 |
% |
|
|
64 |
% |
Non-cash costs: |
|
|
|
||||
Depreciation, depletion and amortization |
$ |
(8.37 |
) |
|
$ |
(8.08 |
) |
Asset retirement obligations accretion |
|
(0.14 |
) |
|
|
(0.24 |
) |
Amortization of intangible assets |
|
— |
|
|
|
(0.65 |
) |
Non-cash stock based compensation |
|
(0.41 |
) |
|
|
(0.21 |
) |
Exploration expenses, non-cash |
|
(0.14 |
) |
|
|
(0.42 |
) |
Total non-cash costs |
|
(9.06 |
) |
|
|
(9.60 |
) |
Operating income margin |
$ |
31.63 |
|
|
$ |
7.65 |
|
Margin (%) |
|
61 |
% |
|
|
28 |
% |
(1) |
|
Lease operating expenses exclude non-cash stock based compensation of $0.2 million, or $0.02 per boe, and $0.05 million, or $0.01 per boe, for the quarters ended December 31, 2021 and 2020, respectively. |
(2) |
|
Exploration expenses exclude non-cash exploration activity of $0.9 million, or $0.14 per boe, and $2.4 million, or $0.42 per boe, for the quarters ended December 31, 2021 and 2020, respectively. |
(3) |
|
General and administrative expenses exclude non-cash stock based compensation of $2.4 million, or $0.39 per boe, and $1.1 million, or $0.20 per boe, for the quarters ended December 31, 2021 and 2020, respectively. |
Magnolia Oil & Gas Corporation
Non-GAAP Financial Measures
Reconciliation of net cash provided by operating activities to free cash flow
Free cash flow is a non-GAAP financial measure. Free cash flow is defined as cash flows from operations before net change in operating assets and liabilities less additions to oil and natural gas properties and changes in working capital associated with additions to oil and natural gas properties. Management believes free cash flow is useful for investors and widely accepted by those following the oil and gas industry as financial indicators of a company’s ability to generate cash to internally fund drilling and completion activities, fund acquisitions, and service debt. It is also used by research analysts to value and compare oil and gas exploration and production companies and is frequently included in published research when providing investment recommendations. Free cash flow, therefore, is an additional measure of liquidity, but is not a measure of financial performance under GAAP and should not be considered an alternative to cash flows from operating, investing, or financing activities.
|
|
For the Quarters Ended |
|
For the Years Ended |
||||||||||||
(In thousands) |
|
December 31, 2021 |
|
December 31, 2020 |
|
December 31, 2021 |
|
December 31, 2020 |
||||||||
Net cash provided by operating activities |
|
$ |
260,542 |
|
|
$ |
79,122 |
|
|
$ |
788,477 |
|
|
$ |
310,121 |
|
Add back: net change in operating assets and liabilities |
|
|
(9,492 |
) |
|
|
11,133 |
|
|
|
(9,691 |
) |
|
|
(524 |
) |
Cash flows from operations before net change in operating assets and liabilities |
|
|
251,050 |
|
|
|
90,255 |
|
|
|
778,786 |
|
|
|
309,597 |
|
Additions to oil and natural gas properties |
|
|
(73,682 |
) |
|
|
(40,532 |
) |
|
|
(236,426 |
) |
|
|
(197,858 |
) |
Changes in working capital associated with additions to oil and natural gas properties |
|
|
1,133 |
|
|
|
(5,382 |
) |
|
|
13,568 |
|
|
|
(24,354 |
) |
Free cash flow |
|
$ |
178,501 |
|
|
$ |
44,341 |
|
|
$ |
555,928 |
|
|
$ |
87,385 |
|
