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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Magnolia Oil and Gas Corporation | NYSE:MGY | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.44 | -1.76% | 24.63 | 25.07 | 24.41 | 24.99 | 1,215,452 | 19:37:05 |
☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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81-5365682
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Nine Greenway Plaza, Suite 1300
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77046
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Houston,
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Texas
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(Address of principal executive offices)
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(Zip Code)
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Securities registered pursuant to section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Class A Common Stock, par value $0.0001
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MGY
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New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Small reporting company
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☐
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Emerging growth company
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☐
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Page
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PART I.
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Items 1 and 2.
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Item 1A.
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Item 1B.
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Item 3.
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Item 4.
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PART II.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV.
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Item 15.
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Item 16.
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•
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the market prices of oil, natural gas, natural gas liquids (“NGLs”), and other products or services;
|
•
|
the supply and demand for oil, natural gas, NGLs, and other products or services;
|
•
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production and reserve levels;
|
•
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drilling risks;
|
•
|
economic and competitive conditions;
|
•
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the availability of capital resources;
|
•
|
capital expenditures and other contractual obligations;
|
•
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weather conditions;
|
•
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inflation rates;
|
•
|
the availability of goods and services;
|
•
|
legislative, regulatory, or policy changes;
|
•
|
cyber attacks;
|
•
|
occurrence of property acquisitions or divestitures;
|
•
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the integration of acquisitions;
|
•
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the securities or capital markets and related risks such as general credit, liquidity, market, and interest-rate risks; and
|
•
|
other factors disclosed under Items 1 and 2 - Business and Properties, Item 1A - Risk Factors, Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 7A - Quantitative and Qualitative Disclosures About Market Risk, and elsewhere in this Annual Report on Form 10-K.
|
|
|
December 31, 2019
|
||||||||||
|
|
Oil (MMBbls)
|
|
Natural Gas (Bcf)
|
|
NGLs (MMBbls)
|
|
Total (MMboe)
|
||||
Proved reserves
|
|
|
|
|
|
|
|
|
||||
Total proved developed
|
|
40.3
|
|
|
165.8
|
|
|
18.9
|
|
|
86.8
|
|
Total proved undeveloped
|
|
12.3
|
|
|
31.4
|
|
|
5.0
|
|
|
22.5
|
|
Total proved reserves
|
|
52.6
|
|
|
197.2
|
|
|
23.9
|
|
|
109.3
|
|
|
|
Total (MMboe)
|
|
Proved undeveloped reserves at January 1, 2019
|
|
24.0
|
|
Conversions into proved developed reserves
|
|
(20.4
|
)
|
Extensions
|
|
15.7
|
|
Acquisitions
|
|
2.6
|
|
Revisions of previous estimates
|
|
0.6
|
|
Proved undeveloped reserves at December 31, 2019
|
|
22.5
|
|
|
|
Successor
|
|
|
Predecessor and Giddings Assets
|
||||||||
|
|
Year Ended
December 31, 2019
|
|
July 31, 2018
Through
December 31, 2018
|
|
|
January 1, 2018 Through
July 30, 2018
|
|
Year Ended
December 31, 2017
|
||||
Net exploratory wells
|
|
|
|
|
|
|
|
|
|
||||
Productive
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
Dry
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
Net development wells
|
|
|
|
|
|
|
|
|
|
||||
Productive
|
|
76
|
|
|
25
|
|
|
|
42
|
|
|
58
|
|
Dry
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
76
|
|
|
25
|
|
|
|
42
|
|
|
58
|
|
Net total wells
|
|
|
|
|
|
|
|
|
|
||||
Productive
|
|
76
|
|
|
25
|
|
|
|
42
|
|
|
58
|
|
Dry
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
Total
|
|
76
|
|
|
25
|
|
|
|
42
|
|
|
58
|
|
|
|
Successor
|
|
|
Predecessor and Giddings Assets
|
||||||||||||
|
|
Year Ended December 31, 2019
|
|
July 31, 2018 Through
December 31, 2018
|
|
|
January 1, 2018
Through
July 30, 2018
|
|
Year Ended
December 31, 2017
|
||||||||
Production
|
|
|
|
|
|
|
|
|
|
||||||||
Crude oil (MMBbls)
|
|
12.9
|
|
|
5.1
|
|
|
|
6.4
|
|
|
7.8
|
|
||||
Natural gas (Bcf)
|
|
41.3
|
|
|
14.1
|
|
|
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13.5
|
|
|
16.8
|
|
||||
Natural gas liquids (MMBbls)
|
|
4.6
|
|
|
1.9
|
|
|
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1.7
|
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2.0
|
|
||||
|
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|
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|
|
||||||||
Average lease operating cost per boe
|
|
$
|
5.28
|
|
|
$
|
4.83
|
|
|
|
$
|
5.42
|
|
|
$
|
5.28
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Average sale price
|
|
|
|
|
|
|
|
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|
||||||||
Crude oil (MMBbls)
|
|
$
|
60.00
|
|
|
$
|
67.37
|
|
|
|
$
|
69.14
|
|
|
$
|
49.03
|
|
Natural gas (Bcf)
|
|
2.27
|
|
|
3.04
|
|
|
|
2.82
|
|
|
2.94
|
|
||||
Natural gas liquids (MMBbls)
|
|
15.17
|
|
|
25.93
|
|
|
|
25.99
|
|
|
21.80
|
|
|
|
December 31, 2019
|
|
Undeveloped acreage
|
|
|
|
Gross
|
|
65,984
|
|
Net
|
|
47,298
|
|
|
|
|
|
Developed acreage
|
|
|
|
Gross
|
|
604,803
|
|
Net
|
|
403,556
|
|
|
|
|
|
Total acreage
|
|
|
|
Gross
|
|
670,787
|
|
Net
|
|
450,854
|
|
•
|
worldwide and regional economic conditions impacting the global supply and demand for oil, natural gas, and NGLs;
|
•
|
the price and quantity of foreign imports of oil, natural gas, and NGLs;
|
•
|
political and economic conditions in or affecting other producing regions or countries, including the Middle East, Africa, South America, and Russia;
|
•
|
actions of the Organization of the Petroleum Exporting Countries, its members, and other state- controlled oil companies relating to oil price and production controls;
|
•
|
the level of global exploration, development, and production;
|
•
|
the level of global inventories;
|
•
|
prevailing prices on local price indexes in the areas in which Magnolia operates;
|
•
|
the proximity, capacity, cost, and availability of gathering and transportation facilities;
|
•
|
localized and global supply, demand fundamentals, and transportation availability; the cost of exploring for, developing, producing, and transporting reserves;
|
•
|
weather conditions and natural disasters;
|
•
|
technological advances affecting energy consumption;
|
•
|
the price and availability of alternative fuels;
|
•
|
expectations about future commodity prices;
|
•
|
events that impact global market demand; and
|
•
|
U.S. federal, state, local, and non-U.S. governmental regulation and taxes.
|
•
|
the prices at which Magnolia’s production is sold;
|
•
|
proved reserves;
|
•
|
the amount of hydrocarbons Magnolia is able to produce from its wells;
|
•
|
Magnolia’s ability to acquire, locate, and produce new reserves;
|
•
|
the amount of Magnolia’s operating expenses;
|
•
|
Magnolia’s ability to borrow under the RBL Facility;
|
•
|
restrictions in the instruments governing Magnolia’s debt, and Magnolia’s ability to incur additional indebtedness; and
|
•
|
Magnolia’s ability to access the capital markets.
|
•
|
landing its wellbore in the desired drilling zone;
|
•
|
staying in the desired drilling zone while drilling horizontally through the formation;
|
•
|
running its casing the entire length of the wellbore; and
|
•
|
being able to run tools and other equipment consistently through the horizontal wellbore.
|
•
|
the ability to fracture stimulate the planned number of stages;
|
•
|
the ability to run tools the entire length of the wellbore during completion operations; and
|
•
|
the ability to successfully clean out the wellbore after completion of the final fracture stimulation stage.
|
•
|
delays imposed by, or resulting from, permitting activities, compliance with regulatory requirements, including limitations on wastewater disposal, emission of greenhouse gases (“GHGs”), and hydraulic fracturing;
|
•
|
pressure or irregularities in geological formations;
|
•
|
sustained periods of low oil and natural gas prices;
|
•
|
shortages of or delays in obtaining equipment and qualified personnel or in obtaining water for hydraulic fracturing activities;
|
•
|
equipment failures, accidents, or other unexpected operational events;
|
•
|
lack of available gathering facilities or delays in construction of gathering facilities;
|
•
|
lack of available capacity on interconnecting transmission pipelines;
|
•
|
adverse weather conditions;
|
•
|
issues related to compliance with environmental regulations;
|
•
|
environmental or safety hazards, such as oil and natural gas leaks, oil spills, pipeline and tank ruptures, and unauthorized discharges of brine, well stimulation and completion fluids, toxic gases, or other pollutants into the surface and subsurface environment;
|
•
|
limited availability of financing on acceptable terms;
|
•
|
title issues; and
|
•
|
other market limitations in Magnolia’s industry.
|
•
|
environmental hazards, such as uncontrollable releases of oil, natural gas, brine, well fluids, toxic gas, or other pollution into the environment, including groundwater, air, and shoreline contamination, or the presence of endangered or threatened species;
|
•
|
abnormally pressured formations;
|
•
|
mechanical difficulties, such as stuck oilfield drilling and service tools and casing collapse;
|
•
|
fires, explosions, and ruptures of pipelines;
|
•
|
personal injuries and death;
|
•
|
natural disasters; and
|
•
|
terrorist attacks targeting oil and natural gas related facilities and infrastructure.
|
•
|
injury or loss of life;
|
•
|
damage to and destruction of property, natural resources, and equipment;
|
•
|
pollution and other environmental damage;
|
•
|
regulatory investigations and penalties; and
|
•
|
repair and remediation costs.
|
•
|
unexpected drilling conditions;
|
•
|
title issues;
|
•
|
pressure or lost circulation in formations;
|
•
|
equipment failures or accidents;
|
•
|
adverse weather conditions;
|
•
|
compliance with environmental and other governmental or contractual requirements; and
|
•
|
increases in the cost of, and shortages or delays in the availability of, electricity, supplies, materials, drilling or workover rigs, equipment, and services.
|
•
|
limitations on the removal of directors;
|
•
|
limitations on the ability of Magnolia’s stockholders to call special meetings;
|
•
|
providing that the board of directors is expressly authorized to adopt, or to alter or repeal Magnolia’s bylaws; and
|
•
|
establishing advance notice and certain information requirements for nominations for election to its board of directors and for proposing matters that can be acted upon by stockholders at stockholder meetings.
|
•
|
changes in the valuation of Magnolia’s deferred tax assets and liabilities;
|
•
|
expected timing and amount of the release of any tax valuation allowances;
|
•
|
tax effects of stock based compensation;
|
•
|
costs related to intercompany restructurings; or
|
•
|
changes in tax laws, regulations, or interpretations thereof.
|
Name
|
Age
|
Position
|
Stephen I. Chazen
|
73
|
Chairman, President and Chief Executive Officer
|
Christopher G. Stavros
|
56
|
Executive Vice President and Chief Financial Officer
|
Timothy D. Yang
|
48
|
Executive Vice President, General Counsel, and Corporate Secretary
|
Steve F. Millican
|
44
|
Senior Vice President, Operations
|
Arcilia C. Acosta
|
54
|
Director
|
Angela M Busch
|
53
|
Director
|
Edward P. Djerejian
|
80
|
Director
|
James R. Larson
|
70
|
Director
|
Michael G. MacDougall
|
49
|
Director
|
Dan F. Smith
|
73
|
Director
|
John B. Walker
|
74
|
Director
|
Period
|
Number of Shares of Class A Common Stock Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Common Shares Purchased as Part of Publicly Announced Program (1)
|
|
Maximum Number of Common Shares that May Yet be Purchased Under the Program
|
|||||
October 1, 2019 - October 31, 2019
|
50,000
|
|
|
$
|
11.10
|
|
|
50,000
|
|
|
9,000,000
|
|
November 1, 2019 - November 30, 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
9,000,000
|
|
|
December 1, 2019 - December 31, 2019 (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
9,000,000
|
|
|
Total
|
50,000
|
|
|
$
|
11.10
|
|
|
50,000
|
|
|
9,000,000
|
|
(1)
|
In August 2019, the Company’s board of directors authorized a share repurchase program of up to 10 million shares of Class A Common Stock. The program does not require purchases to be made within a particular time frame.
|
(2)
|
On December 18, 2019, outside of the share repurchase program, Magnolia LLC repurchased and subsequently canceled 6.0 million units representing limited liability company interests in Magnolia LLC with an equal number of shares of corresponding Class B Common Stock for a cash consideration of $69.1 million at an average price of $11.52 per share. There is no public market for the Class B Common Stock. For further detail, see Note 13 - Stockholders’ Equity in the Notes to the Consolidated and Combined Financial Statements in this Annual Report on Form 10-K.
|
|
|
Successor
|
|
Predecessor
|
|
AM Assets
|
|||||||||||||||||||||||
(In thousands, except per share data)
|
|
Year Ended December 31, 2019
|
|
July 31, 2018 Through
December 31, 2018 |
|
|
January 1, 2018
Through
July 30, 2018 |
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
October 1, 2015
Through December 31, 2015
|
|
January 1, 2015
Through September 30, 2015
|
||||||||||||||
Income Statement Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Revenues
|
|
$
|
936,142
|
|
|
$
|
433,218
|
|
|
|
$
|
449,186
|
|
|
$
|
403,194
|
|
|
$
|
110,926
|
|
|
$
|
6,187
|
|
|
$
|
20,177
|
|
Operating expenses
|
|
808,640
|
|
|
319,260
|
|
|
|
211,382
|
|
|
213,183
|
|
|
82,067
|
|
|
5,432
|
|
|
23,031
|
|
|||||||
Operating income
|
|
127,502
|
|
|
113,958
|
|
|
|
237,804
|
|
|
190,011
|
|
|
28,859
|
|
|
755
|
|
|
(2,854
|
)
|
|||||||
Other income (expense)
|
|
(27,737
|
)
|
|
(20,055
|
)
|
|
|
(17,466
|
)
|
|
(8,396
|
)
|
|
(6,715
|
)
|
|
1,558
|
|
|
(41
|
)
|
|||||||
Income tax expense
|
|
14,760
|
|
|
11,455
|
|
|
|
1,785
|
|
|
2,741
|
|
|
673
|
|
|
58
|
|
|
32
|
|
|||||||
NET INCOME
|
|
85,005
|
|
|
82,448
|
|
|
|
$
|
218,553
|
|
|
$
|
178,874
|
|
|
$
|
21,471
|
|
|
$
|
2,255
|
|
|
$
|
(2,927
|
)
|
||
LESS: Net income attributable to noncontrolling interest
|
|
34,809
|
|
|
43,353
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
NET INCOME ATTRIBUTABLE TO MAGNOLIA
|
|
50,196
|
|
|
39,095
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
LESS: Non-cash deemed dividend related to warrant exchange
|
|
2,763
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK
|
|
$
|
47,433
|
|
|
$
|
39,095
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.29
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted
|
|
$
|
0.28
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Basic
|
|
161,886
|
|
|
154,527
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted
|
|
167,047
|
|
|
158,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||||
(In thousands)
|
|
December 31, 2019
|
|
December 31, 2018
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
3,466,406
|
|
|
$
|
3,433,523
|
|
|
|
$
|
1,688,974
|
|
|
$
|
1,427,368
|
|
|
$
|
125,995
|
|
Long-term debt
|
|
389,835
|
|
|
388,635
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total equity
|
|
$
|
2,728,529
|
|
|
$
|
2,707,955
|
|
|
|
$
|
1,597,838
|
|
|
$
|
1,361,918
|
|
|
$
|
121,485
|
|
•
|
For the periods prior to July 31, 2018, the results of operations reflect the results of solely the Predecessor, which, as described above, consists of only the results of the Karnes County Business, including, as applicable, its ownership of the Ironwood Interests, when the Predecessor was not owned by the Company, and do not include the results of the Giddings Assets;
|
•
|
The results of operations of the Predecessor were not previously accounted for as the results of operations of a stand-alone legal entity, and accordingly have been carved out, as appropriate, for the periods presented. The results of operations of the Predecessor therefore include a portion of indirect costs for salaries and benefits, depreciation, rent, accounting, legal services, and other expenses. In addition to the allocation of indirect costs, the results of operations reflect certain agreements executed by the Karnes County Contributors for the benefit of the Predecessor, including price risk management instruments. For more information, please see Note 1 - Description of Business and Basis of Presentation in the Notes to the Consolidated and Combined Financial Statements in this Annual Report on Form 10-K. These allocations may not be indicative of the cost of future operations or the amount of future allocations;
|
•
|
The Predecessor completed the acquisition of certain assets from GulfTex Energy III, L.P. and GulfTex Energy IV, L.P. on March 1, 2018 during the Predecessor Period, and accordingly the results of operations of the Predecessor reflect the impact of the assets acquired in that acquisition only from their respective acquisition date;
|
•
|
As a corporation, the Company is subject to U.S. federal income taxes at a statutory rate of 21% of pretax earnings whereas the Karnes County Contributors were treated as partnerships for income tax purposes. As a result, items of income, expense, gains, and losses flowed through to the owners of the Karnes County Contributors and were taxed at the owner level. Accordingly, no U.S. tax provision for federal income taxes is included in the financial statements of the Predecessor;
|
•
|
On August 31, 2018, the Company acquired substantially all of the South Texas assets of Harvest Oil & Gas Corporation (the “Harvest Acquisition”) for approximately $133.3 million in cash and 4.2 million shares of the Company’s Class A Common Stock. The Harvest Acquisition added an undivided working interest across a portion of the Karnes County Assets and all of the Giddings Assets;
|
•
|
On February 5, 2019, Magnolia Operating formed a joint venture, Highlander Oil & Gas Holdings LLC, to complete the acquisition of a 72% working interest in the Eocene-Tuscaloosa Zone, Ultra Deep Structure gas well located in St. Martin Parish, Louisiana (the “Highlander Well”); and
|
•
|
The financial results for the 2019 Successor Period and the 2018 Successor Period reflect the adoption of ASU No. 2014-09, Revenue from Contracts with Customers, which the Company adopted on December 31, 2018 and applied to all periods presented in the 2019 Successor Period and the 2018 Successor Period. The Predecessor Period continues to be reported under the accounting standards in effect for that period.
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
(In thousands, except per unit data)
|
|
Year Ended
December 31, 2019 |
|
July 31, 2018
Through December 31, 2018 |
|
|
January 1, 2018
Through July 30, 2018 |
||||||
Production:
|
|
|
|
|
|
|
|
||||||
Oil (MBbls)
|
|
12,867
|
|
|
5,078
|
|
|
|
5,755
|
|
|||
Natural gas (MMcf)
|
|
41,272
|
|
|
14,136
|
|
|
|
7,595
|
|
|||
NGLs (MBbls)
|
|
4,643
|
|
|
1,857
|
|
|
|
1,097
|
|
|||
Total (Mboe)
|
|
24,389
|
|
|
9,291
|
|
|
|
8,118
|
|
|||
|
|
|
|
|
|
|
|
||||||
Average daily production:
|
|
|
|
|
|
|
|
||||||
Oil (Bbls/d)
|
|
35,252
|
|
|
33,190
|
|
|
|
27,146
|
|
|||
Natural gas (Mcf/d)
|
|
113,074
|
|
|
92,392
|
|
|
|
35,825
|
|
|||
NGLs (Bbls/d)
|
|
12,721
|
|
|
12,137
|
|
|
|
5,175
|
|
|||
Total (boe/d)
|
|
66,819
|
|
|
60,725
|
|
|
|
38,292
|
|
|||
|
|
|
|
|
|
|
|
||||||
Revenues:
|
|
|
|
|
|
|
|
||||||
Oil revenues
|
|
$
|
771,981
|
|
|
$
|
342,093
|
|
|
|
$
|
399,124
|
|
Natural gas revenues
|
|
93,745
|
|
|
42,979
|
|
|
|
22,135
|
|
|||
Natural gas liquids revenues
|
|
70,416
|
|
|
48,146
|
|
|
|
27,927
|
|
|||
Total revenues
|
|
$
|
936,142
|
|
|
$
|
433,218
|
|
|
|
$
|
449,186
|
|
|
|
|
|
|
|
|
|
||||||
Average Price:
|
|
|
|
|
|
|
|
||||||
Oil (per barrel)
|
|
$
|
60.00
|
|
|
$
|
67.37
|
|
|
|
$
|
69.35
|
|
Natural gas (per Mcf)
|
|
2.27
|
|
|
3.04
|
|
|
|
2.91
|
|
|||
NGLs (per barrel)
|
|
15.17
|
|
|
25.93
|
|
|
|
25.46
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
(In thousands, except per unit data)
|
|
Year Ended
December 31, 2019 |
|
July 31, 2018
Through December 31, 2018 |
|
|
January 1, 2018
Through July 30, 2018 |
||||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||
Lease operating expenses
|
|
$
|
93,788
|
|
|
$
|
30,753
|
|
|
|
$
|
23,513
|
|
Gathering, transportation, and processing
|
|
34,924
|
|
|
14,445
|
|
|
|
12,929
|
|
|||
Taxes other than income
|
|
53,728
|
|
|
23,170
|
|
|
|
23,763
|
|
|||
Exploration expenses
|
|
12,741
|
|
|
11,882
|
|
|
|
492
|
|
|||
Asset retirement obligations accretion
|
|
5,512
|
|
|
1,668
|
|
|
|
104
|
|
|||
Depreciation, depletion and amortization
|
|
523,572
|
|
|
177,890
|
|
|
|
137,871
|
|
|||
Amortization of intangible assets
|
|
14,505
|
|
|
6,044
|
|
|
|
—
|
|
|||
General and administrative expenses
|
|
69,432
|
|
|
28,801
|
|
|
|
12,710
|
|
|||
Transaction related costs
|
|
438
|
|
|
24,607
|
|
|
|
—
|
|
|||
Total operating costs and expenses
|
|
$
|
808,640
|
|
|
$
|
319,260
|
|
|
|
$
|
211,382
|
|
|
|
|
|
|
|
|
|
||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
||||||
Income from equity method investee
|
|
$
|
857
|
|
|
$
|
773
|
|
|
|
$
|
711
|
|
Interest expense, net
|
|
(28,356
|
)
|
|
(12,454
|
)
|
|
|
—
|
|
|||
Loss on derivatives, net
|
|
—
|
|
|
—
|
|
|
|
(18,127
|
)
|
|||
Other expense, net
|
|
(238
|
)
|
|
(8,374
|
)
|
|
|
(50
|
)
|
|||
Total other expense
|
|
$
|
(27,737
|
)
|
|
$
|
(20,055
|
)
|
|
|
$
|
(17,466
|
)
|
|
|
|
|
|
|
|
|
||||||
Average Operating Costs per boe:
|
|
|
|
|
|
|
|
||||||
Lease operating expenses
|
|
$
|
3.85
|
|
|
$
|
3.31
|
|
|
|
$
|
2.90
|
|
Gathering, transportation, and processing
|
|
1.43
|
|
|
1.55
|
|
|
|
1.59
|
|
|||
Taxes other than income
|
|
2.20
|
|
|
2.49
|
|
|
|
2.93
|
|
|||
Exploration costs
|
|
0.52
|
|
|
1.28
|
|
|
|
0.06
|
|
|||
Asset retirement obligation accretion
|
|
0.23
|
|
|
0.18
|
|
|
|
0.01
|
|
|||
Depreciation, depletion and amortization
|
|
21.47
|
|
|
19.15
|
|
|
|
16.98
|
|
|||
Amortization of intangible assets
|
|
0.59
|
|
|
0.65
|
|
|
|
—
|
|
|||
General and administrative expenses
|
|
2.85
|
|
|
3.10
|
|
|
|
1.57
|
|
|||
Transaction related costs
|
|
0.02
|
|
|
2.65
|
|
|
|
—
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In thousands)
|
|
Year Ended
December 31, 2019
|
|
July 31, 2018
Through
December 31, 2018
|
|
|
January 1, 2018 Through
July 30, 2018
|
|
Year Ended
December 31, 2017
|
||||||||
Sources of cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
|
$
|
647,619
|
|
|
$
|
305,470
|
|
|
|
$
|
284,812
|
|
|
$
|
257,371
|
|
Issuance of common stock
|
|
—
|
|
|
355,000
|
|
|
|
—
|
|
|
—
|
|
||||
Proceeds from issuance of debt
|
|
—
|
|
|
400,000
|
|
|
|
—
|
|
|
—
|
|
||||
Proceeds withdrawn from Trust Account
|
|
—
|
|
|
656,078
|
|
|
|
—
|
|
|
—
|
|
||||
Other
|
|
7,301
|
|
|
—
|
|
|
|
62,641
|
|
|
57,046
|
|
||||
|
|
$
|
654,920
|
|
|
$
|
1,716,548
|
|
|
|
$
|
347,453
|
|
|
$
|
314,417
|
|
Uses of cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
||||||||
Acquisition of EnerVest properties
|
|
$
|
4,250
|
|
|
$
|
(1,219,217
|
)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquisitions, other
|
|
(93,221
|
)
|
|
(146,532
|
)
|
|
|
(150,139
|
)
|
|
(58,653
|
)
|
||||
Additions to oil and natural gas properties
|
|
(435,035
|
)
|
|
(141,619
|
)
|
|
|
(197,314
|
)
|
|
(247,426
|
)
|
||||
Payment of Contingent Consideration
|
|
—
|
|
|
(26,000
|
)
|
|
|
—
|
|
|
—
|
|
||||
Repayments of deferred underwriting compensation
|
|
—
|
|
|
(22,750
|
)
|
|
|
—
|
|
|
—
|
|
||||
Cash paid for debt issuance costs
|
|
—
|
|
|
(23,336
|
)
|
|
|
—
|
|
|
—
|
|
||||
Class A Common Stock repurchase
|
|
(10,277
|
)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Class B Common Stock repurchase
|
|
(69,093
|
)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Other
|
|
(4,669
|
)
|
|
(1,359
|
)
|
|
|
—
|
|
|
(8,338
|
)
|
||||
|
|
(608,045
|
)
|
|
(1,580,813
|
)
|
|
|
(347,453
|
)
|
|
(314,417
|
)
|
||||
Increase in cash and cash equivalents
|
|
$
|
46,875
|
|
|
$
|
135,735
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(In thousands)
|
|
Year Ended
December 31, 2019
|
||
Drilling and completion
|
|
$
|
416,353
|
|
Leasehold acquisition costs
|
|
10,003
|
|
|
Total capital expenditures
|
|
$
|
426,356
|
|
Contractual Obligations
(In thousands)
|
Total
|
Less than 1 Year
|
2021-2022
|
2023-2024
|
More than 5 years
|
||||||||||
On-balance Sheet:
|
|
|
|
|
|
||||||||||
Debt, at face value
|
$
|
400,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
400,000
|
|
Interest payments (1)
|
175,494
|
|
26,097
|
|
52,182
|
|
49,215
|
|
48,000
|
|
|||||
Off-balance sheet:
|
|
|
|
|
|
||||||||||
Purchase obligation (2)
|
3,417
|
|
1,060
|
|
1,474
|
|
883
|
|
—
|
|
|||||
Operating lease obligations (3)
|
9,851
|
|
2,647
|
|
3,159
|
|
2,310
|
|
1,735
|
|
|||||
Service fee commitment (4)
|
19,636
|
|
19,636
|
|
—
|
|
—
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
608,398
|
|
$
|
49,440
|
|
$
|
56,815
|
|
$
|
52,408
|
|
$
|
449,735
|
|
(1)
|
Interest payments include cash payments and estimated commitment fees on long-term debt obligations.
|
(2)
|
Amounts represent any agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms. These include minimum commitments associated with firm transportation contracts and IT-related service commitments.
|
(3)
|
Amounts include long-term lease payments for office space, vehicles, equipment related to exploration, development, and production activities, as well as long-term obligations expected to be incurred for leases commencing in 2020.
|
(4)
|
Represents amounts due under the Company’s Service Agreement with EVOC. The annual services fee may be (a) increased or decreased to account for asset acquisitions and dispositions of assets, (b) increased to account for an increase in the rig count attributable to the assets and (c) decreased if the Company must perform any of such services itself because EVOC is unable or fails to do so. The term of the Services Agreement is through July 30, 2023, but the Services Agreement is subject to termination by either party after October 29, 2020.
|
|
|
Successor
|
||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
|
||||
CURRENT ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
182,633
|
|
|
$
|
135,758
|
|
Accounts receivable
|
|
105,775
|
|
|
140,284
|
|
||
Drilling advances
|
|
299
|
|
|
12,259
|
|
||
Other current assets
|
|
4,511
|
|
|
4,058
|
|
||
Total current assets
|
|
293,218
|
|
|
292,359
|
|
||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
||||
Oil and natural gas properties
|
|
3,815,221
|
|
|
3,250,742
|
|
||
Other
|
|
3,087
|
|
|
360
|
|
||
Accumulated depreciation, depletion and amortization
|
|
(701,551
|
)
|
|
(177,898
|
)
|
||
Total property, plant and equipment, net
|
|
3,116,757
|
|
|
3,073,204
|
|
||
OTHER ASSETS
|
|
|
|
|
||||
Deferred financing costs, net
|
|
8,390
|
|
|
10,731
|
|
||
Equity method investment
|
|
19,730
|
|
|
18,873
|
|
||
Intangible assets, net
|
|
23,851
|
|
|
38,356
|
|
||
Other long-term assets
|
|
4,460
|
|
|
—
|
|
||
TOTAL ASSETS
|
|
$
|
3,466,406
|
|
|
$
|
3,433,523
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
CURRENT LIABILITIES
|
|
|
|
|
||||
Accounts payable
|
|
$
|
79,428
|
|
|
$
|
76,302
|
|
Other current liabilities (Note 7)
|
|
95,780
|
|
|
121,059
|
|
||
Total current liabilities
|
|
175,208
|
|
|
197,361
|
|
||
LONG-TERM LIABILITIES
|
|
|
|
|
||||
Long-term debt, net
|
|
389,835
|
|
|
388,635
|
|
||
Asset retirement obligations, net of current
|
|
93,524
|
|
|
84,979
|
|
||
Deferred taxes, net
|
|
77,834
|
|
|
54,593
|
|
||
Other long-term liabilities
|
|
1,476
|
|
|
—
|
|
||
Total long-term liabilities
|
|
562,669
|
|
|
528,207
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 11)
|
|
|
|
|
|
|
||
STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Class A Common Stock, $0.0001 par value, 1,300,000 shares authorized, 168,318 shares issued and 167,318 shares outstanding in 2019 and 156,333 shares issued and outstanding in 2018
|
|
17
|
|
|
16
|
|
||
Class B Common Stock, $0.0001 par value, 225,000 shares authorized, 85,790 and 93,346 shares issued and outstanding in 2019 and 2018, respectively
|
|
9
|
|
|
9
|
|
||
Additional paid-in capital
|
|
1,703,362
|
|
|
1,641,237
|
|
||
Treasury Stock, at cost, 1,000 shares in 2019
|
|
(10,277
|
)
|
|
—
|
|
||
Retained earnings
|
|
82,940
|
|
|
35,507
|
|
||
Noncontrolling interest
|
|
952,478
|
|
|
1,031,186
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
3,466,406
|
|
|
$
|
3,433,523
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
Year Ended
December 31, 2019
|
|
July 31, 2018 Through
December 31, 2018
|
|
|
January 1, 2018 Through
July 30, 2018
|
|
Year Ended
December 31, 2017 |
||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
||||||||
Oil revenues
|
|
$
|
771,981
|
|
|
$
|
342,093
|
|
|
|
$
|
399,124
|
|
|
$
|
350,204
|
|
Natural gas revenues
|
|
93,745
|
|
|
42,979
|
|
|
|
22,135
|
|
|
25,916
|
|
||||
Natural gas liquids revenues
|
|
70,416
|
|
|
48,146
|
|
|
|
27,927
|
|
|
27,074
|
|
||||
Total revenues
|
|
936,142
|
|
|
433,218
|
|
|
|
449,186
|
|
|
403,194
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses
|
|
93,788
|
|
|
30,753
|
|
|
|
23,513
|
|
|
27,520
|
|
||||
Gathering, transportation, and processing
|
|
34,924
|
|
|
14,445
|
|
|
|
12,929
|
|
|
16,259
|
|
||||
Taxes other than income
|
|
53,728
|
|
|
23,170
|
|
|
|
23,763
|
|
|
20,193
|
|
||||
Exploration expense
|
|
12,741
|
|
|
11,882
|
|
|
|
492
|
|
|
700
|
|
||||
Asset retirement obligation accretion
|
|
5,512
|
|
|
1,668
|
|
|
|
104
|
|
|
232
|
|
||||
Depreciation, depletion and amortization
|
|
523,572
|
|
|
177,890
|
|
|
|
137,871
|
|
|
129,711
|
|
||||
Amortization of intangible assets
|
|
14,505
|
|
|
6,044
|
|
|
|
—
|
|
|
—
|
|
||||
General and administrative expenses
|
|
69,432
|
|
|
28,801
|
|
|
|
12,710
|
|
|
18,568
|
|
||||
Transaction related costs
|
|
438
|
|
|
24,607
|
|
|
|
—
|
|
|
—
|
|
||||
Total operating costs and expenses
|
|
808,640
|
|
|
319,260
|
|
|
|
211,382
|
|
|
213,183
|
|
||||
OPERATING INCOME
|
|
127,502
|
|
|
113,958
|
|
|
|
237,804
|
|
|
190,011
|
|
||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
||||||||
Income from equity method investee
|
|
857
|
|
|
773
|
|
|
|
711
|
|
|
113
|
|
||||
Interest expense, net
|
|
(28,356
|
)
|
|
(12,454
|
)
|
|
|
—
|
|
|
—
|
|
||||
Loss on derivatives, net
|
|
—
|
|
|
—
|
|
|
|
(18,127
|
)
|
|
(8,488
|
)
|
||||
Other income (expense), net
|
|
(238
|
)
|
|
(8,374
|
)
|
|
|
(50
|
)
|
|
(21
|
)
|
||||
Total other income (expense)
|
|
(27,737
|
)
|
|
(20,055
|
)
|
|
|
(17,466
|
)
|
|
(8,396
|
)
|
||||
INCOME BEFORE INCOME TAXES
|
|
99,765
|
|
|
93,903
|
|
|
|
220,338
|
|
|
181,615
|
|
||||
Income tax expense
|
|
14,760
|
|
|
11,455
|
|
|
|
1,785
|
|
|
2,741
|
|
||||
NET INCOME
|
|
85,005
|
|
|
82,448
|
|
|
|
$
|
218,553
|
|
|
$
|
178,874
|
|
||
LESS: Net income attributable to noncontrolling interest
|
|
34,809
|
|
|
43,353
|
|
|
|
|
|
|
||||||
NET INCOME ATTRIBUTABLE TO MAGNOLIA
|
|
50,196
|
|
|
39,095
|
|
|
|
|
|
|
||||||
LESS: Non-cash deemed dividend related to warrant exchange
|
|
2,763
|
|
|
—
|
|
|
|
|
|
|
||||||
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK
|
|
$
|
47,433
|
|
|
$
|
39,095
|
|
|
|
|
|
|
||||
NET INCOME PER SHARE OF CLASS A COMMON STOCK
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.29
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|||
Diluted
|
|
$
|
0.28
|
|
|
$
|
0.25
|
|
|
|
|
|
|
||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
161,886
|
|
|
154,527
|
|
|
|
|
|
|
|
|||||
Diluted
|
|
167,047
|
|
|
158,232
|
|
|
|
|
|
|
|
Predecessor
|
||
BALANCE, January 1, 2017
|
$
|
1,361,918
|
|
Parents’ contribution, net
|
57,046
|
|
|
Net income
|
178,874
|
|
|
Balance – December 31, 2017
|
$
|
1,597,838
|
|
Parents’ contribution, net
|
62,641
|
|
|
Net income
|
218,553
|
|
|
Balance – July 30, 2018
|
$
|
1,879,032
|
|
|
Successor
|
|||||||||||||||||||||||||||||
|
Class A Common Stock
|
Class B Common Stock
|
Class F Common Stock
|
Additional Paid In Capital
|
Retained Earnings
|
Total Stockholders’ Equity
|
Noncontrolling Interest
|
Total Equity
|
||||||||||||||||||||||
|
Shares
|
Value
|
Shares
|
Value
|
Shares
|
Value
|
|
|
|
|
|
|||||||||||||||||||
Balance, July 30, 2018
|
3,052
|
|
$
|
—
|
|
—
|
|
$
|
—
|
|
16,250
|
|
$
|
2
|
|
$
|
8,370
|
|
$
|
(3,588
|
)
|
$
|
4,784
|
|
$
|
—
|
|
$
|
4,784
|
|
Class A Common Stock released from possible redemption
|
61,948
|
|
6
|
|
—
|
|
—
|
|
—
|
|
—
|
|
619,473
|
|
—
|
|
619,479
|
|
—
|
|
619,479
|
|
||||||||
Class A Common Stock redeemed
|
(1
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(9
|
)
|
—
|
|
(9
|
)
|
—
|
|
(9
|
)
|
||||||||
Conversion of Common Stock from Class F to Class A at closing of Business Combination
|
16,250
|
|
2
|
|
—
|
|
—
|
|
(16,250
|
)
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Common stock issued as part of the Business Combination
|
31,791
|
|
3
|
|
83,939
|
|
9
|
|
—
|
|
—
|
|
391,017
|
|
—
|
|
391,029
|
|
1,032,455
|
|
1,423,484
|
|
||||||||
Common stock issued in private placement
|
35,500
|
|
4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
354,996
|
|
—
|
|
355,000
|
|
—
|
|
355,000
|
|
||||||||
Earnout consideration issued as part for the Business Combination
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
41,371
|
|
—
|
|
41,371
|
|
108,329
|
|
149,700
|
|
||||||||
Non-compete consideration
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
44,400
|
|
—
|
|
44,400
|
|
—
|
|
44,400
|
|
||||||||
Changes in ownership interest adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
206,966
|
|
—
|
|
206,966
|
|
(206,966
|
)
|
—
|
|
||||||||
Changes in deferred tax liability
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(52,787
|
)
|
—
|
|
(52,787
|
)
|
—
|
|
(52,787
|
)
|
||||||||
Balance, July 31, 2018
|
148,540
|
|
$
|
15
|
|
83,939
|
|
$
|
9
|
|
—
|
|
$
|
—
|
|
$
|
1,613,797
|
|
$
|
(3,588
|
)
|
$
|
1,610,233
|
|
$
|
933,818
|
|
$
|
2,544,051
|
|
Issuance of earnout share consideration Tranche I
|
1,244
|
|
—
|
|
3,256
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Issuance of earnout share consideration Tranche II
|
1,244
|
|
—
|
|
3,256
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Issuance of earnout share consideration Tranche III
|
1,105
|
|
—
|
|
2,895
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Common stock issued in connection with Harvest Acquisition
|
4,200
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
58,211
|
|
—
|
|
58,212
|
|
—
|
|
58,212
|
|
||||||||
Stock based compensation expense
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,851
|
|
—
|
|
1,851
|
|
—
|
|
1,851
|
|
||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
39,095
|
|
39,095
|
|
43,353
|
|
82,448
|
|
||||||||
Changes in ownership interest adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(54,015
|
)
|
—
|
|
(54,015
|
)
|
54,015
|
|
—
|
|
||||||||
Changes in deferred tax liability
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
21,393
|
|
—
|
|
21,393
|
|
—
|
|
21,393
|
|
||||||||
Balance, December 31, 2018
|
156,333
|
|
$
|
16
|
|
93,346
|
|
$
|
9
|
|
—
|
|
$
|
—
|
|
$
|
1,641,237
|
|
$
|
35,507
|
|
$
|
1,676,769
|
|
$
|
1,031,186
|
|
$
|
2,707,955
|
|
|
Successor
|
|||||||||||||||||||||||||||||
|
Class A Common Stock
|
Class B Common Stock
|
Additional Paid In Capital
|
Treasury Stock
|
Retained Earnings
|
Total Stockholders’ Equity
|
Noncontrolling Interest
|
Total Equity
|
||||||||||||||||||||||
|
Shares
|
Value
|
Shares
|
Value
|
|
Shares
|
Value
|
|
|
|
|
|||||||||||||||||||
Balance, December 31, 2018
|
156,333
|
|
$
|
16
|
|
93,346
|
|
$
|
9
|
|
$
|
1,641,237
|
|
—
|
|
$
|
—
|
|
$
|
35,507
|
|
$
|
1,676,769
|
|
$
|
1,031,186
|
|
$
|
2,707,955
|
|
Stock based compensation expense, net of forfeitures
|
—
|
|
—
|
|
—
|
|
—
|
|
11,089
|
|
—
|
|
—
|
|
—
|
|
11,089
|
|
—
|
|
11,089
|
|
||||||||
Changes in ownership interest adjustment and in deferred tax liability
|
—
|
|
—
|
|
—
|
|
—
|
|
23,679
|
|
—
|
|
—
|
|
—
|
|
23,679
|
|
(32,659
|
)
|
(8,980
|
)
|
||||||||
Common stock issued in connection with acquisition
|
3,055
|
|
—
|
|
—
|
|
—
|
|
33,693
|
|
—
|
|
—
|
|
—
|
|
33,693
|
|
—
|
|
33,693
|
|
||||||||
Final settlement adjustment related to Business Combination
|
(496
|
)
|
—
|
|
(1,556
|
)
|
—
|
|
(6,095
|
)
|
—
|
|
—
|
|
—
|
|
(6,095
|
)
|
(19,150
|
)
|
(25,245
|
)
|
||||||||
Common stock issued in connection with warrants exchange
|
9,179
|
|
1
|
|
—
|
|
—
|
|
530
|
|
—
|
|
—
|
|
(2,763
|
)
|
(2,232
|
)
|
—
|
|
(2,232
|
)
|
||||||||
Common stock issued related to stock based compensation, net
|
248
|
|
—
|
|
—
|
|
—
|
|
(771
|
)
|
—
|
|
—
|
|
—
|
|
(771
|
)
|
—
|
|
(771
|
)
|
||||||||
Class A Common Stock repurchase
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,000
|
|
(10,277
|
)
|
—
|
|
(10,277
|
)
|
—
|
|
(10,277
|
)
|
||||||||
Class B Common Stock repurchase
|
—
|
|
—
|
|
(6,000
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(69,093
|
)
|
(69,093
|
)
|
||||||||
Contributions from noncontrolling interest owners
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,809
|
|
8,809
|
|
||||||||
Distributions to noncontrolling interest owners
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,424
|
)
|
(1,424
|
)
|
||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
50,196
|
|
50,196
|
|
34,809
|
|
85,005
|
|
||||||||
Balance, December 31, 2019
|
168,319
|
|
$
|
17
|
|
85,790
|
|
$
|
9
|
|
$
|
1,703,362
|
|
1,000
|
|
$
|
(10,277
|
)
|
$
|
82,940
|
|
$
|
1,776,051
|
|
$
|
952,478
|
|
$
|
2,728,529
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Year Ended
December 31, 2019
|
|
July 31, 2018 Through
December 31, 2018
|
|
|
January 1, 2018 Through
July 30, 2018 |
|
Year Ended
December 31, 2017
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
85,005
|
|
|
$
|
82,448
|
|
|
|
$
|
218,553
|
|
|
$
|
178,874
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
||||||||
Depreciation, depletion and amortization
|
523,572
|
|
|
177,890
|
|
|
|
137,871
|
|
|
129,711
|
|
||||
Amortization of intangible assets
|
14,505
|
|
|
6,044
|
|
|
|
—
|
|
|
—
|
|
||||
Exploration expense, non-cash
|
1,154
|
|
|
567
|
|
|
|
—
|
|
|
—
|
|
||||
Asset retirement obligations accretion expense
|
5,512
|
|
|
1,668
|
|
|
|
104
|
|
|
232
|
|
||||
Amortization of deferred financing costs
|
3,541
|
|
|
1,461
|
|
|
|
—
|
|
|
—
|
|
||||
Loss on derivatives, net
|
—
|
|
|
—
|
|
|
|
18,127
|
|
|
8,488
|
|
||||
Cash settlements of matured derivative contracts
|
—
|
|
|
—
|
|
|
|
(27,617
|
)
|
|
(1,097
|
)
|
||||
Deferred taxes
|
14,261
|
|
|
12,128
|
|
|
|
324
|
|
|
2,052
|
|
||||
Contingent consideration change in fair value
|
—
|
|
|
6,700
|
|
|
|
—
|
|
|
—
|
|
||||
Stock based compensation
|
11,089
|
|
|
1,851
|
|
|
|
—
|
|
|
—
|
|
||||
Other
|
(677
|
)
|
|
(773
|
)
|
|
|
(796
|
)
|
|
(397
|
)
|
||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
7,952
|
|
|
(50,610
|
)
|
|
|
(61,405
|
)
|
|
(70,822
|
)
|
||||
Prepaid expenses and other assets
|
357
|
|
|
(2,533
|
)
|
|
|
—
|
|
|
—
|
|
||||
Accounts payable
|
(6,834
|
)
|
|
25,041
|
|
|
|
36
|
|
|
10,522
|
|
||||
Drilling advances
|
11,960
|
|
|
(9,559
|
)
|
|
|
—
|
|
|
—
|
|
||||
Other assets and liabilities, net
|
(23,778
|
)
|
|
53,147
|
|
|
|
(385
|
)
|
|
(192
|
)
|
||||
Net cash provided by operating activities
|
647,619
|
|
|
305,470
|
|
|
|
284,812
|
|
|
257,371
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
||||||||
Proceeds withdrawn from Trust Account
|
—
|
|
|
656,078
|
|
|
|
—
|
|
|
—
|
|
||||
Acquisition of EnerVest properties
|
4,250
|
|
|
(1,219,217
|
)
|
|
|
—
|
|
|
—
|
|
||||
Acquisitions, other
|
(93,221
|
)
|
|
(146,532
|
)
|
|
|
(150,139
|
)
|
|
(58,653
|
)
|
||||
Additions to oil and natural gas properties
|
(435,035
|
)
|
|
(141,619
|
)
|
|
|
(197,314
|
)
|
|
(247,426
|
)
|
||||
Purchase of and contributions to equity method investment
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(8,338
|
)
|
||||
Payment of Contingent Consideration
|
—
|
|
|
(26,000
|
)
|
|
|
—
|
|
|
—
|
|
||||
Other investing
|
(242
|
)
|
|
(350
|
)
|
|
|
—
|
|
|
—
|
|
||||
Net cash used in investing activities
|
(524,248
|
)
|
|
(877,640
|
)
|
|
|
(347,453
|
)
|
|
(314,417
|
)
|
||||
CASH FLOW FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
||||||||
Parents’ contribution, net
|
—
|
|
|
—
|
|
|
|
62,641
|
|
|
57,046
|
|
||||
Contributions from noncontrolling interest owners
|
7,301
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Distributions to noncontrolling interest owners
|
(1,424
|
)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Issuance of common stock
|
—
|
|
|
355,000
|
|
|
|
—
|
|
|
—
|
|
||||
Proceeds from issuance of long term debt
|
—
|
|
|
400,000
|
|
|
|
—
|
|
|
—
|
|
||||
Repayments of deferred underwriting compensation
|
—
|
|
|
(22,750
|
)
|
|
|
—
|
|
|
—
|
|
||||
Cash paid for debt issuance costs
|
—
|
|
|
(23,336
|
)
|
|
|
—
|
|
|
—
|
|
||||
Class A Common Stock repurchase
|
(10,277
|
)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Class B Common Stock repurchase
|
(69,093
|
)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Other financing activities
|
(3,003
|
)
|
|
(1,009
|
)
|
|
|
—
|
|
|
—
|
|
||||
Net cash provided by (used in) financing activities
|
(76,496
|
)
|
|
707,905
|
|
|
|
62,641
|
|
|
57,046
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
46,875
|
|
|
135,735
|
|
|
|
—
|
|
|
—
|
|
||||
Cash and cash equivalents – Beginning of period
|
135,758
|
|
|
23
|
|
|
|
—
|
|
|
—
|
|
||||
Cash and cash equivalents – End of period
|
$
|
182,633
|
|
|
$
|
135,758
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
certain right, title, and interest in certain oil and natural gas assets located primarily in the Karnes County portion of the Eagle Ford Shale in South Texas (the “Karnes County Assets” and, such business the “Karnes County Business”) pursuant to that certain Contribution and Merger Agreement (as subsequently amended, the “Karnes County Contribution Agreement”), by and among the Company, Magnolia LLC, and certain affiliates (the “Karnes County Contributors”) of EnerVest Ltd. (“EnerVest”);
|
•
|
certain right, title, and interest in certain oil and natural gas assets located primarily in the Giddings Field of the Austin Chalk (the “Giddings Assets”) pursuant to that certain Purchase and Sale Agreement (the “Giddings Purchase Agreement”) by and among Magnolia LLC and certain affiliates of EnerVest (the “Giddings Sellers”); and
|
•
|
a 35% membership interest (the “Ironwood Interests”) in Ironwood Eagle Ford Midstream LLC (“Ironwood”), a Texas limited liability company, which owns an Eagle Ford gathering system, pursuant to that certain Membership Interest Purchase Agreement (together with the transactions contemplated by the Karnes County Contribution Agreement and the Giddings Purchase Agreement, the “Business Combination Agreements,” and the transactions contemplated thereby, the “Business Combination”), by and among Magnolia LLC and certain affiliates of EnerVest (the “Ironwood Sellers”).
|
(1)
|
At closing of the Business Combination, the Karnes County Contributors received 83.9 million shares of Class B Common Stock (and a corresponding number of Magnolia LLC Units) and 31.8 million shares of Class A Common Stock. On March 29, 2019, Magnolia and EnerVest consummated the final settlement pursuant to the Karnes County Contribution Agreement as agreed to by the parties, with the Karnes County Contributors forfeiting an aggregate of 2.1 million shares of Class A and Class B Common Stock to Magnolia (and a corresponding number of Magnolia LLC Units).
|
(2)
|
Pursuant to ASC 805, ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815, “Derivatives and Hedging,” the Karnes County earnout consideration was valued at fair value as of the Closing Date and was classified in stockholders’ equity. The Giddings earnout was valued at fair value as of the Closing Date and was classified as a liability. The fair value of the earnouts was determined using the Monte Carlo simulation valuation method based on Level 3 inputs in the fair value hierarchy.
|
(1)
|
The fair value measurements of oil and natural gas properties and asset retirement obligations are based on inputs that are not observable in the market and therefore represent Level 3 inputs. The fair values of oil and natural gas properties and asset retirement obligations were measured using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation of oil and natural gas properties included estimates of: (i) recoverable reserves; (ii) production rates; (iii) future operating and development costs; (iv) future commodity prices; and (v) a market-based weighted average cost of capital rate.
|
(1)
|
The fair value measurements of oil and natural gas properties and asset retirement obligations are based on inputs that are not observable in the market and therefore represent Level 3 inputs. The fair values of oil and natural gas properties and asset retirement obligations were measured using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation of oil and natural gas properties included estimates of: (i) recoverable reserves; (ii) production rates; (iii) future operating and development costs; (iv) future commodity prices; and (v) a market-based weighted average cost of capital rate. These inputs required significant judgments and estimates by management at the time of the valuation.
|
•
|
On May 31, 2019, the Company completed the acquisition of certain oil and gas assets located in the Company’s Karnes County Assets for approximately $36.3 million in cash, subject to customary closing adjustments, and approximately 3.1 million shares of the Company’s Class A Common Stock. The transaction was accounted for as an asset acquisition.
|
•
|
On February 5, 2019, Magnolia Operating formed a joint venture, Highlander Oil & Gas Holdings LLC (“Highlander”), to complete the acquisition of a 72% working interest in the Eocene-Tuscaloosa Zone, Ultra Deep Structure gas well located in St. Martin Parish, Louisiana and 31.1 million royalty trust units in the Gulf Coast Ultra Deep Royalty Trust from McMoRan Oil & Gas, LLC. Highlander paid cash consideration of $50.9 million, for such interests. MGY Louisiana LLC, a wholly owned subsidiary of Magnolia Operating, holds approximately 85% of the units in Highlander. The transaction was accounted for as an asset acquisition.
|
(In thousands)
|
|
|
||
Purchase price allocation:
|
|
|
||
Accounts receivable
|
|
$
|
2,193
|
|
Proved oil and natural gas properties
|
|
57,263
|
|
|
Unproved oil and natural gas properties
|
|
1,552
|
|
|
Accounts payable and accrued liabilities
|
|
(2,244
|
)
|
|
Asset retirement obligations
|
|
(111
|
)
|
|
|
|
$
|
58,653
|
|
|
|
December 31, 2019
|
||||||
(In thousands)
|
|
Carrying Value
|
|
Fair Value
|
||||
Long-term debt
|
|
$
|
389,835
|
|
|
$
|
412,000
|
|
(In thousands)
|
December 31, 2019
|
||
Non-compete intangible assets
|
$
|
44,400
|
|
Accumulated amortization
|
(20,549
|
)
|
|
Intangible assets, net
|
$
|
23,851
|
|
Weighted average amortization period (in years)
|
3.25
|
|
(In thousands)
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Accrued capital expenditures
|
|
$
|
40,722
|
|
|
$
|
50,633
|
|
Accrued general and administrative expenditures
|
|
9,753
|
|
|
17,551
|
|
||
Accrued interest
|
|
10,000
|
|
|
10,067
|
|
||
Other
|
|
35,305
|
|
|
42,808
|
|
||
Total other current liabilities
|
|
$
|
95,780
|
|
|
$
|
121,059
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In thousands)
|
|
Year Ended
December 31, 2019
|
|
July 31, 2018 Through
December 31, 2018
|
|
|
January 1, 2018 Through
July 30, 2018
|
|
Year Ended December 31, 2017
|
||||||||
Asset retirement obligations, beginning of period
|
|
$
|
85,983
|
|
|
$
|
—
|
|
|
|
$
|
3,929
|
|
|
$
|
2,421
|
|
Revisions to estimates
|
|
69
|
|
|
39,584
|
|
|
|
—
|
|
|
805
|
|
||||
Liabilities incurred and assumed
|
|
7,082
|
|
|
44,897
|
|
|
|
553
|
|
|
774
|
|
||||
Liabilities settled
|
|
(3,104
|
)
|
|
(166
|
)
|
|
|
(85
|
)
|
|
(303
|
)
|
||||
Accretion expense
|
|
5,512
|
|
|
1,668
|
|
|
|
104
|
|
|
232
|
|
||||
Asset retirement obligations, end of period
|
|
$
|
95,542
|
|
|
$
|
85,983
|
|
|
|
$
|
4,501
|
|
|
$
|
3,929
|
|
(In thousands)
|
|
December 31, 2019
|
||
Revolving credit facility
|
|
$
|
—
|
|
6.0% Senior Notes due 2026
|
|
400,000
|
|
|
Total long-term debt
|
|
400,000
|
|
|
|
|
|
||
Less: Unamortized deferred financing cost
|
|
(10,165
|
)
|
|
Total debt, net
|
|
$
|
389,835
|
|
(In thousands)
|
December 31, 2019
|
||
Operating Leases
|
|
||
Operating lease assets
|
$
|
4,035
|
|
|
|
||
Operating lease liabilities - current
|
$
|
2,550
|
|
Operating lease liabilities - long-term
|
1,476
|
|
|
Total operating lease liabilities
|
$
|
4,026
|
|
|
|
||
Weighted average remaining lease term (in years)
|
1.9
|
|
|
Weighted average discount rate
|
3.8
|
%
|
(1)
|
As of December 31, 2018, minimum future contractual payments for long-term operating leases under the scope of ASC 840 were $881 thousand in 2019, $646 thousand in 2020, $198 thousand in 2021, $14 thousand in 2022, $15 thousand in 2023 and $63 thousand thereafter.
|
Net Minimum Commitments
(In thousands)
|
Total
|
2020
|
2021-2022
|
2023-2024
|
2025 & Beyond
|
||||||||||
Purchase obligations (1)
|
$
|
3,417
|
|
$
|
1,060
|
|
$
|
1,474
|
|
$
|
883
|
|
$
|
—
|
|
Operating lease obligations (2)
|
9,851
|
|
2,647
|
|
3,159
|
|
2,310
|
|
1,735
|
|
|||||
Total Net Minimum Commitments
|
$
|
13,268
|
|
$
|
3,707
|
|
$
|
4,633
|
|
$
|
3,193
|
|
$
|
1,735
|
|
(1)
|
Amounts represent any agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms. These include minimum commitments associated with firm transportation contracts and IT-related service commitments. The costs incurred under these obligations were $1.5 million, $0.7 million, and $0.5 million for the 2019 Successor Period, the combined 2018 Successor Period and 2018 Predecessor Period, and the 2017 Predecessor Period, respectively.
|
(2)
|
Amounts include long-term lease payments for office space, vehicles, equipment related to exploration, development, and production activities, as well as long-term obligations expected to be incurred for leases commencing in 2020. Refer to Note 10 - Leases for additional information.
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In thousands)
|
|
Year Ended
December 31, 2019 |
|
July 31, 2018
Through December 31, 2018 |
|
|
January 1, 2018 Through
July 30, 2018 |
|
Year Ended December 31, 2017
|
||||||||
Current:
|
|
|
|
|
|
|
|
|
|
||||||||
Federal
|
|
$
|
—
|
|
|
$
|
(1,054
|
)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
|
499
|
|
|
381
|
|
|
|
1,461
|
|
|
689
|
|
||||
|
|
499
|
|
|
(673
|
)
|
|
|
1,461
|
|
|
689
|
|
||||
Deferred:
|
|
|
|
|
|
|
|
|
|
||||||||
Federal
|
|
13,817
|
|
|
11,431
|
|
|
|
—
|
|
|
—
|
|
||||
State
|
|
444
|
|
|
697
|
|
|
|
324
|
|
|
2,052
|
|
||||
|
|
14,261
|
|
|
12,128
|
|
|
|
324
|
|
|
2,052
|
|
||||
Total provision
|
|
$
|
14,760
|
|
|
$
|
11,455
|
|
|
|
$
|
1,785
|
|
|
$
|
2,741
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In thousands)
|
|
Year Ended December 31, 2019
|
|
July 31, 2018 Through
December 31, 2018
|
|
|
January 1, 2018
Through July 30, 2018 |
|
Year Ended December 31, 2017
|
||||||||
Income tax expense at the federal statutory rate
|
|
$
|
20,966
|
|
|
$
|
19,706
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State income tax expense, net of federal income tax benefits
|
|
847
|
|
|
1,028
|
|
|
|
1,785
|
|
|
2,741
|
|
||||
Noncontrolling interest in partnerships
|
|
(7,309
|
)
|
|
(9,103
|
)
|
|
|
—
|
|
|
—
|
|
||||
Other
|
|
256
|
|
|
(176
|
)
|
|
|
—
|
|
|
—
|
|
||||
Income tax expense
|
|
$
|
14,760
|
|
|
$
|
11,455
|
|
|
|
$
|
1,785
|
|
|
$
|
2,741
|
|
|
|
Successor
|
||||||
(In thousands)
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating loss carryforwards
|
|
$
|
1,274
|
|
|
$
|
7,336
|
|
Capitalized transaction costs
|
|
3,185
|
|
|
6,677
|
|
||
Other assets
|
|
—
|
|
|
102
|
|
||
Total deferred tax assets
|
|
4,459
|
|
|
14,115
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Investment in partnership
|
|
(76,260
|
)
|
|
(63,110
|
)
|
||
Oil and natural gas properties
|
|
(6,033
|
)
|
|
(5,598
|
)
|
||
Total deferred tax liabilities
|
|
(82,293
|
)
|
|
(68,708
|
)
|
||
|
|
|
|
|
||||
Net deferred tax asset liabilities
|
|
$
|
(77,834
|
)
|
|
$
|
(54,593
|
)
|
|
Restricted Stock Units
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested RSUs, beginning of period
|
807,431
|
|
|
$
|
13.97
|
|
Granted
|
604,328
|
|
|
12.28
|
|
|
Vested
|
(310,225
|
)
|
|
14.25
|
|
|
Forfeited
|
(1,633
|
)
|
|
11.05
|
|
|
Unvested RSUs, end of period
|
1,099,901
|
|
|
$
|
12.97
|
|
|
Performance Stock Units
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested PSUs, beginning of period
|
475,312
|
|
|
$
|
14.58
|
|
Granted
|
267,482
|
|
|
13.87
|
|
|
Vested
|
(41,666
|
)
|
|
14.58
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Unvested PSUs, end of period
|
701,128
|
|
|
$
|
14.31
|
|
|
Grant Date Fair Value Assumptions
|
Expected term (in years)
|
2.85 - 2.67
|
Expected volatility
|
33.61% - 31.58%
|
Risk-free interest rate
|
2.48% - 2.29%
|
(In thousands, except per share data)
|
|
Year Ended
December 31, 2019 |
|
July 31, 2018
Through
December 31, 2018
|
||||
Basic:
|
|
|
|
|
||||
Net income attributable to Class A Common Stock
|
|
$
|
47,433
|
|
|
$
|
39,095
|
|
Weighted average number of common shares outstanding during the period - basic
|
|
161,886
|
|
|
154,527
|
|
||
Net income per share of Class A Common Stock - basic
|
|
$
|
0.29
|
|
|
$
|
0.25
|
|
|
|
|
|
|
||||
Diluted:
|
|
|
|
|
||||
Net income attributable to Class A Common Stock
|
|
$
|
47,433
|
|
|
$
|
39,095
|
|
Weighted average number of common shares outstanding during the period - basic
|
|
161,886
|
|
|
154,527
|
|
||
Add: Dilutive effect warrants, stock based compensation, and other
|
|
5,161
|
|
|
3,705
|
|
||
Weighted average number of common shares outstanding during the period - diluted
|
|
167,047
|
|
|
158,232
|
|
||
Net income per share of Class A Common Stock - diluted
|
|
$
|
0.28
|
|
|
$
|
0.25
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In thousands)
|
Year Ended
December 31, 2019 |
|
July 31, 2018
Through
December 31, 2018
|
|
|
January 1, 2018 Through
July 30, 2018 |
|
Year Ended December 31, 2017
|
||||||||
Supplemental non-cash operating activity:
|
|
|
|
|
|
|
|
|
||||||||
Cash paid for income taxes
|
$
|
390
|
|
|
$
|
—
|
|
|
|
$
|
336
|
|
|
$
|
43
|
|
Cash paid for interest
|
26,226
|
|
|
889
|
|
|
|
—
|
|
|
—
|
|
||||
Supplemental non-cash investing and financing activity:
|
|
|
|
|
|
|
|
|
||||||||
Accruals or liabilities for capital expenditures
|
$
|
40,722
|
|
|
$
|
50,633
|
|
|
|
$
|
38,028
|
|
|
$
|
53,274
|
|
Contributions of assets to purchase equity method investment
|
—
|
|
|
—
|
|
|
|
—
|
|
|
450
|
|
||||
Contingent Consideration issued in Business Combination
|
—
|
|
|
149,700
|
|
|
|
—
|
|
|
—
|
|
||||
Non-Compete agreement entered into in Business Combination
|
—
|
|
|
44,400
|
|
|
|
—
|
|
|
—
|
|
||||
Equity issuances in connection with acquisitions
|
33,693
|
|
|
1,481,692
|
|
|
|
—
|
|
|
—
|
|
||||
Non-cash deemed dividend related to warrant exchange
|
2,763
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Supplemental non-cash lease operating activity:
|
|
|
|
|
|
|
|
|
||||||||
Right-of-use assets obtained in exchange for operating lease obligations
|
$
|
6,720
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Successor
|
||||||
(In thousands)
|
December 31, 2019
|
|
December 31, 2018
|
||||
Proved properties
|
$
|
2,863,666
|
|
|
$
|
2,054,285
|
|
Unproved properties
|
951,555
|
|
|
1,196,457
|
|
||
Total proved and unproved properties
|
3,815,221
|
|
|
3,250,742
|
|
||
Accumulated depreciation, depletion and amortization
|
(701,155
|
)
|
|
(177,897
|
)
|
||
Net capitalized costs
|
$
|
3,114,066
|
|
|
$
|
3,072,845
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In thousands)
|
Year Ended December 31, 2019
|
|
July 31, 2018
Through
December 31, 2018
|
|
|
January 1, 2018
Through July 30, 2018 |
|
Year Ended December 31, 2017
|
||||||||
Acquisition costs:
|
|
|
|
|
|
|
|
|
|
|||||||
Proved properties
|
$
|
106,489
|
|
|
$
|
1,617,131
|
|
|
|
$
|
118,572
|
|
|
$
|
57,263
|
|
Unproved properties
|
29,208
|
|
|
1,400,302
|
|
|
|
22,802
|
|
|
1,552
|
|
||||
Exploration and development costs
|
441,482
|
|
|
245,017
|
|
|
|
183,130
|
|
|
251,454
|
|
||||
Total
|
$
|
577,179
|
|
|
$
|
3,262,450
|
|
|
|
$
|
324,504
|
|
|
$
|
310,269
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Year Ended December 31, 2019
|
|
July 31, 2018
Through December 31, 2018 |
|
|
January 1, 2018
Through July 30, 2018 |
|
Year Ended December 31, 2017
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Oil (per Bbl)
|
$
|
59.99
|
|
|
$
|
67.61
|
|
|
|
$
|
63.37
|
|
|
$
|
51.34
|
|
Gas (per Mcf)
|
2.25
|
|
|
2.78
|
|
|
|
2.84
|
|
|
2.98
|
|
||||
NGLs (per Bbl)
|
15.73
|
|
|
26.25
|
|
|
|
23.74
|
|
|
27.32
|
|
|
Successor
|
||||||||||||||||||||||
|
Year Ended December 31, 2019
|
|
July 31, 2018 Through December 31, 2018
|
||||||||||||||||||||
|
Crude Oil (MMBbls)
|
|
Natural Gas
(Bcf) |
|
Natural Gas Liquids (MMBbls)
|
|
Total (MMboe)
|
|
Crude Oil (MMBbls)
|
|
Natural Gas
(Bcf)
|
|
Natural Gas Liquids (MMBbls)
|
|
Total (MMboe)
|
||||||||
Total proved reserves:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Beginning of period
|
50.6
|
|
|
176.1
|
|
|
20.6
|
|
|
100.5
|
|
|
44.2
|
|
|
136.8
|
|
|
17.4
|
|
|
84.3
|
|
Extensions and discoveries
|
12.6
|
|
|
40.4
|
|
|
6.9
|
|
|
26.3
|
|
|
12.9
|
|
|
25.6
|
|
|
3.8
|
|
|
21.0
|
|
Revisions of previous estimates
|
(1.9
|
)
|
|
(0.3
|
)
|
|
0.3
|
|
|
(1.7
|
)
|
|
(4.9
|
)
|
|
2.6
|
|
|
(1.4
|
)
|
|
(5.9
|
)
|
Purchases of reserves in place
|
4.2
|
|
|
22.3
|
|
|
0.7
|
|
|
8.6
|
|
|
3.5
|
|
|
25.2
|
|
|
2.7
|
|
|
10.4
|
|
Production
|
(12.9
|
)
|
|
(41.3
|
)
|
|
(4.6
|
)
|
|
(24.4
|
)
|
|
(5.1
|
)
|
|
(14.1
|
)
|
|
(1.9
|
)
|
|
(9.3
|
)
|
End of period
|
52.6
|
|
|
197.2
|
|
|
23.9
|
|
|
109.3
|
|
|
50.6
|
|
|
176.1
|
|
|
20.6
|
|
|
100.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Proved developed reserves:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Beginning of period
|
35.2
|
|
|
149.0
|
|
|
16.5
|
|
|
76.5
|
|
|
34.3
|
|
|
117.8
|
|
|
14.4
|
|
|
68.3
|
|
End of period
|
40.3
|
|
|
165.8
|
|
|
18.9
|
|
|
86.8
|
|
|
35.2
|
|
|
149.0
|
|
|
16.5
|
|
|
76.5
|
|
Proved undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Beginning of period
|
15.4
|
|
|
27.1
|
|
|
4.1
|
|
|
24.0
|
|
|
9.9
|
|
|
19.0
|
|
|
3.0
|
|
|
16.1
|
|
End of period
|
12.3
|
|
|
31.4
|
|
|
5.0
|
|
|
22.5
|
|
|
15.4
|
|
|
27.1
|
|
|
4.1
|
|
|
24.0
|
|
|
|
|
|||||||||||||||||||||
|
Predecessor
|
||||||||||||||||||||||
|
January 1, 2018 Through July 30, 2018
|
|
Year Ended December 31, 2017
|
||||||||||||||||||||
|
Crude Oil (MMBbls)
|
|
Natural Gas
(Bcf)
|
|
Natural Gas Liquids (MMBbls)
|
|
Total (MMboe)
|
|
Crude Oil (MMBbls)
|
|
Natural Gas
(Bcf)
|
|
Natural Gas Liquids (MMBbls)
|
|
Total (MMboe)
|
||||||||
Total proved reserves:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Beginning of period
|
91.7
|
|
|
148.2
|
|
|
21.4
|
|
|
137.8
|
|
|
87.2
|
|
|
165.3
|
|
|
23.4
|
|
|
138.2
|
|
Extensions and discoveries
|
3.9
|
|
|
8.7
|
|
|
1.3
|
|
|
6.7
|
|
|
27.6
|
|
|
53.4
|
|
|
7.6
|
|
|
44.1
|
|
Revisions of previous estimates
|
(14.5
|
)
|
|
(22.2
|
)
|
|
(2.7
|
)
|
|
(20.9
|
)
|
|
(20.3
|
)
|
|
(69.6
|
)
|
|
(9.5
|
)
|
|
(41.4
|
)
|
Purchases of reserves in place
|
6.1
|
|
|
7.9
|
|
|
1.2
|
|
|
8.6
|
|
|
4.4
|
|
|
7.7
|
|
|
1.2
|
|
|
6.8
|
|
Production
|
(5.8
|
)
|
|
(7.6
|
)
|
|
(1.1
|
)
|
|
(8.2
|
)
|
|
(7.2
|
)
|
|
(8.6
|
)
|
|
(1.3
|
)
|
|
(9.9
|
)
|
End of period
|
81.4
|
|
|
135.0
|
|
|
20.1
|
|
|
124.0
|
|
|
91.7
|
|
|
148.2
|
|
|
21.4
|
|
|
137.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Proved developed reserves:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Beginning of period
|
28.0
|
|
|
52.3
|
|
|
7.5
|
|
|
44.2
|
|
|
21.1
|
|
|
46.8
|
|
|
6.6
|
|
|
35.4
|
|
End of period
|
29.5
|
|
|
57.1
|
|
|
8.5
|
|
|
47.5
|
|
|
28.0
|
|
|
52.3
|
|
|
7.5
|
|
|
44.2
|
|
Proved undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Beginning of period
|
63.7
|
|
|
95.9
|
|
|
13.9
|
|
|
93.6
|
|
|
66.1
|
|
|
118.5
|
|
|
16.8
|
|
|
102.8
|
|
End of period
|
51.9
|
|
|
77.9
|
|
|
11.6
|
|
|
76.5
|
|
|
63.7
|
|
|
95.9
|
|
|
13.9
|
|
|
93.6
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In thousands)
|
December 31, 2019
|
|
December 31, 2018
|
|
|
July 30, 2018
|
|
December 31, 2017
|
||||||||
Future cash inflows
|
$
|
3,983,118
|
|
|
$
|
4,451,628
|
|
|
|
$
|
6,020,768
|
|
|
$
|
5,410,210
|
|
Future production costs
|
(1,365,745
|
)
|
|
(1,463,023
|
)
|
|
|
(1,773,608
|
)
|
|
(1,510,903
|
)
|
||||
Future development costs
|
(254,211
|
)
|
|
(260,057
|
)
|
|
|
(835,632
|
)
|
|
(1,009,922
|
)
|
||||
Future income tax expenses
|
(88,566
|
)
|
|
(96,311
|
)
|
|
|
(31,609
|
)
|
|
(28,404
|
)
|
||||
Future net cash flows
|
2,274,596
|
|
|
2,632,237
|
|
|
|
3,379,919
|
|
|
2,860,981
|
|
||||
10% discount to reflect timing of cash flows
|
(649,128
|
)
|
|
(754,709
|
)
|
|
|
(1,122,055
|
)
|
|
(1,096,819
|
)
|
||||
Standardized measure of discounted future net cash flows
|
$
|
1,625,468
|
|
|
$
|
1,877,528
|
|
|
|
$
|
2,257,864
|
|
|
$
|
1,764,162
|
|
|
Successor
|
||||||
(In thousands)
|
Year Ended December 31, 2019
|
|
July 31, 2018
Through
December 31, 2018
|
||||
Standardized measure of discounted future net cash flows, beginning of period
|
$
|
1,877,528
|
|
|
$
|
1,457,656
|
|
Sales of oil, natural gas, and NGLs produced during the period
|
(753,740
|
)
|
|
(364,850
|
)
|
||
Purchases of minerals in place
|
145,076
|
|
|
141,585
|
|
||
Extensions, discoveries, and improved recovery
|
463,101
|
|
|
429,295
|
|
||
Changes in estimated future development costs
|
14,749
|
|
|
1,372
|
|
||
Net change in prices and production costs
|
(356,055
|
)
|
|
223,177
|
|
||
Development costs incurred during the period
|
162,350
|
|
|
98,407
|
|
||
Revisions in quantity estimates
|
(21,157
|
)
|
|
(87,852
|
)
|
||
Accretion of discount
|
195,457
|
|
|
61,237
|
|
||
Net change in income taxes
|
21,547
|
|
|
(65,004
|
)
|
||
Net change in timing of production and other
|
(123,388
|
)
|
|
(17,495
|
)
|
||
Standardized measure of discounted future net cash flows, end of period
|
$
|
1,625,468
|
|
|
$
|
1,877,528
|
|
|
|
|
|
||||
|
|
|
|
||||
|
Predecessor
|
||||||
(In thousands)
|
January 1, 2018
Through
July 30, 2018
|
|
Year Ended December 31, 2017
|
||||
Standardized measure of discounted future net cash flows, beginning of period
|
$
|
1,764,162
|
|
|
$
|
1,250,553
|
|
Sales of oil, natural gas, and NGLs produced during the period
|
(388,982
|
)
|
|
(339,222
|
)
|
||
Purchases of minerals in place
|
150,622
|
|
|
71,822
|
|
||
Extensions, discoveries, and improved recovery
|
125,067
|
|
|
565,171
|
|
||
Development costs incurred during the period
|
144,273
|
|
|
234,100
|
|
||
Net change in prices and production costs
|
552,761
|
|
|
668,850
|
|
||
Changes in estimated future development costs
|
(39,154
|
)
|
|
(11,136
|
)
|
||
Revisions in quantity estimates
|
(201,417
|
)
|
|
(797,957
|
)
|
||
Accretion of discount
|
103,931
|
|
|
126,368
|
|
||
Net change in income taxes
|
(2,817
|
)
|
|
(4,387
|
)
|
||
Net change in timing of production and other
|
49,418
|
|
|
—
|
|
||
Standardized measure of discounted future net cash flows, end of period
|
$
|
2,257,864
|
|
|
$
|
1,764,162
|
|
|
|
Successor
|
||||||||||||||
|
|
Quarter Ended
|
||||||||||||||
(In thousands)
|
|
March 31, 2019
|
|
June 30, 2019
|
|
September 30, 2019
|
|
December 31, 2019
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
218,674
|
|
|
$
|
242,958
|
|
|
$
|
244,799
|
|
|
$
|
229,709
|
|
Operating expenses
|
|
185,159
|
|
|
199,326
|
|
|
217,130
|
|
|
207,025
|
|
||||
Operating income
|
|
33,515
|
|
|
43,632
|
|
|
27,669
|
|
|
22,684
|
|
||||
Other income (expense)
|
|
(7,027
|
)
|
|
(7,184
|
)
|
|
(6,783
|
)
|
|
(6,742
|
)
|
||||
Income tax expense
|
|
3,775
|
|
|
5,145
|
|
|
3,529
|
|
|
2,311
|
|
||||
NET INCOME
|
|
22,713
|
|
|
31,303
|
|
|
17,357
|
|
|
13,631
|
|
||||
LESS: Net income attributable to noncontrolling interest
|
|
9,687
|
|
|
12,797
|
|
|
6,810
|
|
|
5,516
|
|
||||
NET INCOME ATTRIBUTABLE TO MAGNOLIA
|
|
13,026
|
|
|
18,506
|
|
|
10,547
|
|
|
8,115
|
|
||||
LESS: Non-cash deemed dividend related to warrant exchange
|
|
—
|
|
|
—
|
|
|
2,763
|
|
|
—
|
|
||||
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK
|
|
$
|
13,026
|
|
|
$
|
18,506
|
|
|
$
|
7,784
|
|
|
$
|
8,115
|
|
NET INCOME PER SHARE OF CLASS A COMMON STOCK
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.08
|
|
|
$
|
0.12
|
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
Diluted
|
|
$
|
0.08
|
|
|
$
|
0.12
|
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
|
Predecessor
|
|
|
Successor
|
||||||||||||||||
(In thousands)
|
|
Quarter Ended March 31, 2018
|
|
Quarter Ended June 30, 2018
|
|
July 1, 2018 Through
July 30, 2018
|
|
|
July 31, 2018
Through
September 30, 2018
|
|
Quarter Ended December 31, 2018
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
172,312
|
|
|
$
|
199,987
|
|
|
$
|
76,887
|
|
|
|
$
|
178,163
|
|
|
$
|
255,055
|
|
Operating expenses
|
|
79,800
|
|
|
98,655
|
|
|
32,927
|
|
|
|
138,315
|
|
|
180,945
|
|
|||||
Operating income
|
|
92,512
|
|
|
101,332
|
|
|
43,960
|
|
|
|
39,848
|
|
|
74,110
|
|
|||||
Other income (expense)
|
|
(6,700
|
)
|
|
(14,310
|
)
|
|
3,544
|
|
|
|
(11,671
|
)
|
|
(8,384
|
)
|
|||||
Income tax expense
|
|
446
|
|
|
573
|
|
|
766
|
|
|
|
3,537
|
|
|
7,918
|
|
|||||
NET INCOME
|
|
$
|
85,366
|
|
|
$
|
86,449
|
|
|
$
|
46,738
|
|
|
|
24,640
|
|
|
57,808
|
|
||
LESS: Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
18,466
|
|
|
24,887
|
|
||||||||
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK
|
|
|
|
|
|
|
|
|
$
|
6,174
|
|
|
$
|
32,921
|
|
||||||
NET INCOME PER SHARE OF CLASS A COMMON STOCK
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
|
|
|
|
$
|
0.04
|
|
|
$
|
0.21
|
|
||||||
Diluted
|
|
|
|
|
|
|
|
|
$
|
0.04
|
|
|
$
|
0.21
|
|
(a)(1) The following financial statements are included in Part II, Item 8 of this Annual Report on Form 10-K:
|
|
Page
|
|
|
|
Consolidated Balance Sheets as of December 31, 2019 and 2018
|
|
|
Consolidated and Combined Statements of Operations for the year ended December 31, 2019, the periods July 31, 2018 through December 31, 2018 and January 1, 2018 through July 30, 2018, and the year ended December 31, 2017
|
|
|
Combined Statement of Changes in Parents’ Net Investment for the year ended December 31, 2017 and the period January 1, 2018 through July 30, 2018
|
|
|
Consolidated Statements of Changes in Stockholders’ Equity for the period July 30, 2018 through December 31, 2018 and the year ended December 31, 2019
|
|
|
Consolidated and Combined Statements of Cash Flows for the year ended December 31, 2019, the periods July 31, 2018 through December 31, 2018 and January 1, 2018 through July 30, 2018, and the year ended December 31, 2017.
|
|
|
Notes to Consolidated and Combined Financial Statements for the year ended December 31, 2019, the periods July 31, 2018 through December 31, 2018 and January 1, 2018 through July 30, 2018, and the year ended December 31, 2017.
|
|
|
|
|
|
(2) Financial Statement Schedules
|
|
|
Financial statement schedules have been omitted because they either are not required, not applicable, or the information required to be presented is including in the Company’s financial statements and related notes.
|
|
|
(3) Exhibits
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
2.1*†
|
|
|
|
|
|
2.2*†
|
|
|
|
|
|
2.3*†
|
|
|
|
|
|
2.4*†
|
|
|
|
|
|
2.5*†
|
|
|
|
|
|
2.6*†
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1*
|
|
|
|
|
|
3.2*
|
|
|
|
|
|
4.1*
|
|
|
|
|
|
4.2*
|
|
|
|
|
|
4.3*
|
|
|
|
|
|
4.4*
|
|
|
|
|
|
4.5*
|
|
|
|
|
|
4.6*
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
10.4*
|
|
|
|
|
|
10.5*††
|
|
|
|
|
|
10.6*††
|
|
|
|
|
|
10.7*††
|
|
|
|
|
|
10.8*††
|
|
|
|
|
|
10.9*††
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
10.10*††
|
|
|
|
|
|
10.11*††
|
|
|
|
|
|
10.12*††
|
|
|
|
|
|
10.13*††
|
|
|
|
|
|
10.14*††
|
|
|
|
|
|
10.15*††
|
|
|
|
|
|
10.16*††
|
|
|
|
|
|
10.17**††
|
|
|
|
|
|
10.18**††
|
|
|
|
|
|
21.1**
|
|
|
|
|
|
23.1**
|
|
|
|
|
|
23.2**
|
|
|
|
|
|
23.3**
|
|
|
|
|
|
24.1**
|
|
|
|
|
|
31.1**
|
|
|
|
|
|
31.2**
|
|
|
|
|
|
32.1***
|
|
|
|
|
|
99.1**
|
|
|
|
|
|
101.INS**
|
|
XBRL Instance Document.
|
|
|
|
101.SCH**
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL**
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF**
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB**
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE**
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
104**
|
|
Cover Page Interactive Data File (embedded within the Inline XBRL document).
|
*
|
Incorporated herein by reference as indicated.
|
**
|
Filed herewith.
|
***
|
Furnished herewith.
|
†
|
Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplemental to the SEC upon request.
|
††
|
Management contract of compensatory plan or agreement.
|
|
|
MAGNOLIA OIL & GAS CORPORATION
|
|
|
|
|
|
Date: February 26, 2020
|
|
By:
|
/s/ Stephen Chazen
|
|
|
|
Stephen Chazen
|
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
|
||
Name
|
|
Title
|
|
Date
|
||
|
|
|
||||
/s/ Stephen Chazen
Stephen Chazen
|
|
President, Chief Executive Officer
and Chairman
(Principal Executive Officer)
|
|
February 26, 2020
|
||
|
|
|
||||
/s/ Christopher Stavros
Christopher Stavros
|
|
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
February 26, 2020
|
||
|
|
|
||||
|
|
|
||||
/s/ Arcilia Acosta*
Arcilia Acosta
|
|
Director
|
|
February 26, 2020
|
||
|
|
|
||||
/s/ Edward Djerejian*
Edward Djerejian
|
|
Director
|
|
February 26, 2020
|
||
|
|
|
||||
/s/ Michael MacDougall*
Michael MacDougall
|
|
Director
|
|
February 26, 2020
|
||
|
|
|
||||
/s/ Dan F. Smith*
Dan F. Smith
|
|
Director
|
|
February 26, 2020
|
||
|
|
|
||||
/s/ James R. Larson*
James R. Larson
|
|
Director
|
|
February 26, 2020
|
||
|
|
|
||||
/s/ John B. Walker*
John B. Walker
|
|
Director
|
|
February 26, 2020
|
||
|
|
|
||||
/s/ Angela Busch*
Angela Busch
|
|
Director
|
|
February 26, 2020
|
||
|
|
|
|
|
||
By* /s/ Valerie Chase
Valerie Chase
as Attorney-in-fact
|
|
|
|
|
1 Year Magnolia Oil and Gas Chart |
1 Month Magnolia Oil and Gas Chart |
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