Magnolia Oil & Gas Corporation Class A

Good morning, everyone, and thank you for participating in the Magnolia Oil and Gas Corporation Second Quarter 2025 earnings conference call. My name is Kim, and I will be your moderator for today's call. At this time, all participants will be placed in a listen-only mode as our call is being recorded. I will now turn the call over to Magnolia's management for their prepared remarks, which will be followed by a brief question and answer session.

Thank you, Kim, and good morning, everyone. Welcome to Magnolia Oil and Gas's Second Quarter earnings conference call. Participating on the call today are Chris Stavros, Magnolia's chairman, president, and chief executive officer, and Brian Corrales, senior vice president and chief financial officer. As a reminder, today's conference call contains certain projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements. Additional information on risk factors that could cause results to differ is available in the company's annual report on Form 10-K filed with the SEC. A full safe harbor can be found on slide 2 of the conference call slide presentation with the supplemental data on our website. You can download Magnolia's Second Quarter 2025 earnings press release as well as the conference call slides from the investor section of the company's website at .magnolioilgas.com. I will now turn the call over to Mr. Chris Stavros.

Thank you, Tom, and good morning, everyone. We appreciate you joining us today for a discussion of our Second Quarter 2025 financial and operating results. I plan to highlight our Second Quarter results which define another strong quarter of consistent execution from Magnolia and one that has delivered an even more capital-efficient program than what we outlined earlier this year. In addition to our strong results, Second Quarter results, I'll point out some small bolt-on acquisitions that we completed within the last month and emphasize how this continues to benefit both our operational and financial performance, even through periods of product price volatility. Brian will then review our Second Quarter financial results in greater detail and provide some additional guidance before we take your questions. Turning to slide 3 of the investor presentation, Magnolia delivered strong results across all financial and operational metrics during the Second Quarter. Our total adjusted net income for the quarter was $81 million with adjusted EBITDAX of $222 million. BNC capital was only $95 million during the Second Quarter, providing a reinvestment rate of just 43%, highlighting our asset quality and the efficiency of our capital program. Pre-tax operating margins were 34% in the quarter and our annualized return on capital employed was 18%. Magnolia generated free cash flow of $107 million and we returned 72% or approximately $78 million of that free cash flow to our shareholders through our growing-based dividend and ongoing share repurchase program. The company achieved another record quarterly production rate with total volumes of 98.2 thousand barrels of oil equivalent per day during the quarter, which was above our earlier guidance and the result of continued strong well performance from both earlier wells and some newer completions. This represents -over-year production growth of 9% with total production at Giddings showing growth of 11%. Second quarter total production of 40,000 barrels per day also set a new company record and remained resilient representing 5% -over-year growth. As a result of the continued strong well performance throughout our asset base, we have raised our full year 2025 production growth guidance to approximately 10% from the prior range of 7% to 9% growth. Notably and because of the additional operational flexibility and higher growth afforded to us by the better well performance and capital efficiencies, we are continuing with our plan to defer and preserve several well completions into 2026 and maintaining our estimate of 2025 capital spending in the range of $430 to $470 million. Simply put, our better than expected results seen during the first half of the year allows us to spend less capital in 2025 while generating higher than expected production and advances our goal of being the most efficient operator best in class oil and gas assets and generating high returns on those assets while employing the least amount of capital. Second quarter results are an ideal example of our team's success in executing this strategy and with our recent financial results exhibiting this principle. We were able to use some of the excess cash generated by the business to close on multiple oil and gas property acquisitions from several small private operators during late June and early July totaling about $40 million. These bolt on transactions are shown on slide four added approximately 18,000 net acres and gettings including roughly 500 barrels of oil equivalent per day of production. This acreage is contiguous to our current gettings position and adds new leases, increases our working interest in existing leases while also adding new royalty acreage. These acquisitions further strengthen Magnolia and not simply by adding a small amount of oil and gas production but more importantly by expanding our prospects and extending the durability of our high return business. We have regularly deployed this similar approach in gettings of appraise, acquire, grow and further exploit since the company's inception and leveraging off the significant subsurface knowledge and experience we have gained while operating in the gettings field. Our pursuit of this strategy has allowed us to increase the extent of our development in gettings by an additional 20% to 240,000 net acres which now represents more than 40% of our net acreage position in the area. This increase includes approximately 30,000 net acres from organic appraisal efforts within our existing acreage and roughly 10,000 net acres from the recent bolt on deals. The gettings area has a large amount of oil and gas in place and we will continue to appraise and learn more about this asset over time, feeling confident that our development acreage in the area will continue to grow. Strong wealth productivity, capital efficiencies and high operating margins are all features that are prevalent in our gettings asset area. These high quality attributes along with our continued focus, capital discipline and competitive advantages gained throughout our accumulated knowledge in the field are responsible for much of Magnolia's overall success. A core competency of Magnolia is acquiring bolt on oil and gas properties that have similar attractive operational and financial characteristics to our existing core assets. We will continue to look for additional opportunities over time to expand our presence and footprint within the field. For Magnolia, the crucial aspect around any acquisition is that it continues to provide us with the ability to execute our proven business model while maintaining the same recipe of balance sheet strength, capital discipline, realizing high pre-tax operating margins, generating mid single-digit production growth and returning a significant portion of our free cash flow to our shareholders for ongoing share of purchases and a safe, sustainable and growing based dividend. Magnolia's operations remain consistent and steady and we continue to execute a differentiated focus and investible EMP business model that is enduring. Solid well performance continues to drive our overall production higher while supporting our discipline capital spend that has been well below our self-imposed 55% reinvestment ceiling. Ongoing capital efficiencies has allowed us to generate consistent free cash flow throughout periods of product price volatility. Our top tier assets and focused strategy centered on prudent reinvestment, steady production growth and reliable free cash flow should continue to drive shareholder returns over the long term. I'll now turn the call over to Brian to provide some further details on our second quarter 2025 results and some additional guidance for the third quarter of this year.