Magnolia Oil & Gas Corp
For the period ended May 7, 2024. Filed Mar 21, 2024.
View on SEC.govAbout this filing
What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
May 7, 2024 · Filed Mar 21, 2024
MGY$23.67+0.6%Stored close · as of Nov 6, 2026
Contents
Commitment to Sustainability
At Magnolia, our mission is to build a winning company that safeguards workers and the environment, enhances careers, strengthens local communities, and increases value for all stakeholders. We believe we are well positioned to deliver sustained value for our investors while operating our business in a safe and environmentally responsible manner. We recognize that with growth comes increased responsibility to share information about our business and our priorities in the areas of environmental stewardship, safety, workforce diversity, community outreach, and corporate governance.
One important step in that process was the release of our inaugural sustainability report in 2021, followed by enhanced sustainability reports in 2022 and 2023. Our 2023 report added disclosure of our Scope 2 greenhouse gas emissions, as well as new discussions and metrics related to reduction in diesel fuel consumption and associated emissions, our efforts to partner with vendors across our supply chain, and our commitment to respecting human rights. We plan to continue to build on the report going forward to keep our stakeholders informed about our efforts to sustainably deliver value and responsibly develop oil and natural gas resources. Our 2023 sustainability report is available for download in the Sustainability—Sustainability Overview section of our website at www.magnoliaoilgas.com. The report is not incorporated
| | | |
|---|---|---|
| Magnolia Oil & Gas | 13 | 2024 Proxy Statement |
by reference into this proxy statement or considered to be part of this document. Highlights of our ESG practices generally include:
| Environmental | |
| Managing Greenhouse Gas Emissions | ■From 2019 to 2022, we reduced our Scope 1 Greenhouse Gas (GHG) intensity rate (our GHG emissions as a percentage of our gross operated production) by more than 9 percent since 2019. We plan to make data regarding our 2023 GHG intensity rate available in our 2024 sustainability report, which we anticipate releasing in June 2024. |
|---|---|
| Efforts to Minimize Flaring | ■From 2019 to 2022, we flared less than 1 percent of our total gross Magnolia operated production each year, and, over the same period, we have reduced our flaring intensity rate (the amount of gas flared as a percentage of our total production) within Magnolia operated assets by nearly 90 percent. We plan to make data regarding our 2023 flaring rate available in our 2024 sustainability report, which we anticipate releasing in June 2024. |
| Reducing Methane and Volatile Organic Compounds (“VOC”) Emissions | ■We have integrated Vapor Recovery Towers and Vapor Recovery Units into our tank battery designs to capture flash gas and tank vapors to minimize fugitive emissions from our storage tanks. We have adopted new blower technology where appropriate to further reduce our tank vapor emissions. We have also begun installing electric Vapor Recovery Units across our operations to replace units driven by natural gas that both reduce fuel consumption and improve runtime efficiency.■We use optical gas-imaging cameras to identify and eliminate natural gas leaks from our equipment. Magnolia’s in-house Leak Detection and Repair team surveys our facilities more frequently than required by regulations, allowing us to minimize the time to find and repair potential issues.■In 2023, we continued to focus our efforts on methods to reduce our direct methane emissions such as converting pneumatic control devices to instrument air.■Magnolia is a member of The Environmental Partnership of the American Petroleum Institute, which consists of oil and natural gas companies committed to improving the industry’s environmental performance, and participates in the Partnership’s Leak Detection and Repair Program to share best practices to identify and reduce fugitive emissions. |
| Lessening Surface Impacts | ■Magnolia does not operate in any areas containing critical habitats, as designated by wildlife protection laws, or known to contain threatened, endangered, or migrating species. ■We use pad drilling to drill multiple wells from a single surface location, which helps reduce our physical footprint and minimize surface impacts, and allows us to produce hydrocarbons more efficiently.■Magnolia continues to make enhancements to its maintenance management program to drive spill reductions through streamlined incident reporting, improved investigative processes, and the implementation of corrective actions. |
| Managing Drilling and Hydraulic Fracturing Operations Responsibly | ■We do not routinely generate hazardous wastes in our operations that could pose a threat to land resources, wildlife, or residents nearby our facilities.■99 percent of what we pump in our hydraulic fracturing operations is water. We do not use diesel or fluids containing benzene, toluene, ethylbenzene, or xylenes (BTEX) in the hydraulic fracturing process.■After every fracturing operation, we work with our service providers to post publicly available information about the chemicals we use on the FracFocus website.■We partner with a vendor to utilize generator management systems to help drilling teams on our sites reduce fuel consumption and emissions and extend equipment maintenance intervals. We also implemented engine standby controls on pumps used in our hydraulic fracturing operations to reduce idle time and the associated fuel consumption and emissions. ■We sourced all proppant we used in our 2023 Giddings fracturing operations from a sand mine operating in a local community. |
| | | |
|---|---|---|
| Magnolia Oil & Gas | 14 | 2024 Proxy Statement |
| Protecting Water Resources | ■Magnolia does not operate in areas where we have identified water scarcity as an issue. Before we begin any new development, we identify any streams, creek beds, or wetlands and take action required by regulation to protect those areas.■We set protective casings to protect usable-quality aquifers where we operate. In all, we routinely install seven alternating layers of steel and cement to create an impermeable barrier between the wellbore and groundwater. Before hydraulic fracturing operations begin, we pressure test the well per industry best practices to ensure long term well integrity.■Produced water is injected into intermediate-depth saltwater disposal wells. The volumes we inject into these wells are within permitted levels.■We seal off inactive wellbores and actively monitor and assess the mechanical integrity of legacy inactive wells. |
|---|---|
| Social | |
| Valuing Safety | ■Our health, safety, environmental and regulatory (“HSER”) team is led by a seasoned industry executive who directs our work in process and field-based safety and regulatory relations, and we employ a HSER representative to our field organization who is tasked with supporting our drilling and completion operations.■In order to support safe conditions for our contractors, we use Safety Coaches and mentorship programs to help train new-to-industry personnel, and we hold bi-weekly safety round-ups to raise awareness of recent industry safety incidents and encourage accountability across our drilling operations.■The Magnolia Good Catch Program and Great Catch Awards recognize and reward employees who identify and submit potential safety or environmental issues before they arise. This program has been extended to our contract workforce in the form of the “Partner in Safety” program. ■We maintain field level and corporate emergency response and crisis communication plans, conduct drills to test those plans, and work to continuously improve incident response times. ■In 2023, Magnolia enhanced our Management of Change process to better assess and confirm that changes made to process equipment meet safety and regulatory requirements. ■As employees and as a company, we respect and support the protection and advancement of universally recognized human rights. Our employees are prohibited from engaging in any activity that is in any way linked to forced labor, modern slavery, or human trafficking. |
| Fostering Workforce Diversity | ■One of our key priorities is to hire the most qualified individuals while fostering workforce diversity. As of December 31, 2023: o24 percent of our total employee population was female and 30 percent identified as a member of a minority group, as defined by the U.S. Equal Employment Opportunity Commission. oAt our headquarters in Houston, 39 percent of employees were female and 36 percent identified as a member of a minority group. oAt our field offices in Giddings and Gillett combined, 5 percent of employees were female and 22 percent identified as a member of a minority group. oWithin our officer team, three of our 13 officers were female and two of our 13 officers identified as a member of a minority group. |
| | | |
|---|---|---|
| Magnolia Oil & Gas | 15 | 2024 Proxy Statement |
| Developing a Winning Team and an Ownership Culture | ■At Magnolia, all employees receive Company shares as part of their overall compensation. As owners, our employees use their diverse experience and expertise to create value for investors by growing our assets, generating free cash flow, maintaining financial flexibility and ensuring thoughtful capital allocation.■For 2023, Magnolia was recognized as a top workplace in the Houston Chronicle Top Workplaces survey, placing sixth among participating mid-sized companies in the greater Houston area based on employee feedback on workplace satisfaction in several areas. It was our first year to participate in the survey. ■We provide several training initiatives focused on areas such as leadership development and computer skills, as well as our Magnolia Insights business education seminars designed to help our team better understand our business and the roles various groups within the Company play in executing our strategy. Our CyberStrong cybersecurity awareness program is designed to make our team aware of the cyberthreats we face as a company and provide them tools necessary to understand and counter cyberthreats. ■In 2023, we instituted our Think Like a Magnolia Owner CEO Award to recognize individuals or teams across the company who delivered projects or initiatives that generated stockholder value, improved company performance and/or resulted in increased efficiencies or cost reductions. ■Magnolia offers a workplace flexibility program designed to support its business operations while giving eligible employees flexibility to work where they can be most productive. |
|---|---|
| Supporting Our Communities | ■We make a $1,000 donation annually on each employee’s behalf to the charitable organization of their choice, and in 2023 donated $194,000 to local and national non-profits, including a variety of health and human services organizations, faith-based groups, educational institutions, and charities providing services to children and young adults. ■As part of Magnolia’s Field Giving Program, our field operations teams make donations on our behalf to support volunteer fire departments, school districts, food banks, community scholarship funds, historic preservation organizations, and other non-profits in the areas where we operate. In 2023, our field teams donated more than $42,000 to 25 organizations.■In 2023, over 95 percent of the new hires in our field locations came from the communities where they work or nearby locations and most continue to live in those communities. ■In 2023, we helped cover the cost of several road repairs in Lee and Washington Counties. ■In 2023, we fully transitioned our outsourced owner relations function to a dedicated in-house team of owner relations professionals in our Houston location. |
| Governance | |
| Valuing Diversity and Independence | ■Six of our eight Board members (or 75 percent of our Board) are independent. All members of our Board committees are independent directors.■An independent, non-executive director serves as Chairman of the Board.■Two of our directors are women. One of our three Board committees is chaired by a woman.■One of our directors, Ms. Acosta, is Hispanic, and one of our directors, Mr. Khani, is of Middle Eastern descent. |
| Promoting Strong Corporate Governance Practices | ■All of our directors are elected on an annual basis.■We do not have any super-voting shares, meaning each share of our Class A and Class B Common Stock is entitled to one vote.■We do not have a shareholder rights (poison pill) or similar plan.■We regularly refresh our Board committee charters, Corporate Governance Guidelines, Code of Business Conduct and Ethics, and other governance documents.■The Board and its committees conduct annual self-evaluations.■We have adopted clawback, insider trading, anti-hedging, and anti-pledging policies and have implemented stock ownership guidelines for our officers and directors.■We have an active stockholder engagement program. We recognize the importance of listening to and seeking feedback from our stakeholders as we make decisions about how we manage ESG risks and opportunities facing our business. During 2023, we met with stockholders representing more than 60 percent of Magnolia’s outstanding shares. |
| | | |
|---|---|---|
| Magnolia Oil & Gas | 16 | 2024 Proxy Statement |
The duties and responsibilities of our Governance Committee pursuant to its charter include oversight over our ESG policies and practices. The Governance Committee meets at least twice per year to understand and monitor climate-related trends and issues, environmental and safety policies, potential ESG governance risks, legislative and regulatory developments, and social responsibility and safety matters. In addition, the Governance Committee oversees the preparation of our sustainability reports. We also have an ESG working group, consisting of select individuals across the Company, to manage our ESG initiatives and regularly report to the Governance Committee.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.