Magnolia Oil & Gas Corp

As required by Item 402(v) of Regulation S-K, we are providing the following information:

Fair value amounts included in the table above and in the following footnotes are computed in accordance with FASB ASC 718 and, for any awards subject to market conditions, the fair value as of a given date was calculated based upon the probable outcome of such conditions as of such date. In accordance with Item 402(v) requirements, the fair values of unvested and outstanding equity awards were remeasured as of the end of each fiscal year, and as of each vesting date, during the years displayed in the tables above. For PSUs with a relative TSR metric, the fair values as of each measurement date (prior to the end of the performance period) were determined using a Monte Carlo simulation pricing model, with assumptions and methodologies that are generally consistent with those used to estimate fair value at grant. The range of estimates used in the Monte Carlo calculations are as follows: (a) for PSUs granted in 2019, (i) expected volatility of 87.06 percent and risk-free interest rate of 0.10 percent as of December 31, 2020, and (ii) expected volatility of 35.04 percent and risk-free interest rate of 1.57 percent as of December 31, 2019; (b) for PSUs granted in 2020, (i) expected volatility of 51.94 percent and risk-free interest rate of 0.39 percent as of December 31, 2021, and (ii) expected volatility of 66.73 percent and risk-free interest rate of 0.13 percent as of December 31, 2020; (c) for PSUs granted in 2023, (i) expected volatility of 44.65 percent and risk-free interest rate of 4.13 percent as of December 31, 2023, and (ii) expected volatility of 28.32 percent and risk-free interest rate of 4.08 percent as of December 31, 2024; and (d) for PSUs granted in 2024, expected volatility of 31.22 percent and risk-free interest rate of 4.16 as of December 31, 2024. For a discussion of the assumptions made in the valuation of these awards at grant, see Note 12—Stock Based Compensation to our audited financial statements included in our 2024 Form 10-K and in our Form 10-Ks for prior years, as applicable.

Relationship Between Compensation Actually Paid to PEO 1 and Performance Measures in PvP Table

Our former Chairman, President and Chief Executive Officer, Mr. Chazen (PEO 1 in the table above), invested a portion of his personal net worth in shares of our Class A Common Stock, both prior to and in connection with the completion of our Business Combination, and he continued to make periodic investments in our stock during his tenure. Mr. Chazen also agreed to receive base salary amounts from the Company well below the market median for his position and to not participate in our annual cash incentive and long term equity-based compensation programs. Due to his substantial holdings in our Class A Common Stock, the Compensation Committee believes he was appropriately aligned with stockholder interests and motivated to drive successful performance outcomes for our Company. As of September 20, 2022, when his service as Chairman, President and Chief Executive Officer ended, Mr. Chazen held approximately 3.75 percent of our Class A Common Stock. For these reasons, no amount of the compensation actually paid to Mr. Chazen in 2022 and prior years was designed to be linked to Company performance, and there is no relationship between his compensation and the performance measures set forth in the table above.

Compensation Actually Paid and Company Cumulative TSR; Comparison of Company Cumulative TSR and Peer Group Cumulative TSR

As stated below under “—Tabular List of Performance Measures,” relative total stockholder return is one of the most important performance measures we used to determine compensation actually paid in 2024, although the peer group used to calculate relative TSR for purposes of our PSU awards is different than the industry index included for purposes of the table above. Please see “Compensation Discussion and Analysis—2024 Compensation Decisions—Long Term Equity-Based Compensation” for the description of how we use relative TSR in our executive compensation program.

Compensation Actually Paid and Company Net Income

SEC rules require the comparison of compensation actually paid to net income. Due to the impacts of recorded oil and natural gas property impairments in 2020 and 2023 on our financial results, we do not believe that reported net income is necessarily reflective of our financial performance in any given period. Further, the Company does not use net income to determine compensation or incentive plan payouts.

Compensation Actually Paid and Company Operating Margin

The Company chose operating margin as its Company Selected Measure for purposes of these disclosures, as operating margin has comprised a significant portion of the potential bonus amounts that may be earned by the Named Executive Officers under our annual short term incentive program for fiscal years 2020 through 2024. Specifically:

Magnolia believes this metric is an important indicator of the Company’s overall financial performance and its goal of generating capital efficiency and returns to align with stockholder interests and our communicated strategic priorities. Please refer to our “Compensation Discussion and Analysis—2024 Compensation Decisions—Annual Incentive Program” for a further description of how we use operating margin in our executive compensation program.

Tabular List of Performance Measures

In the Company’s assessment, the financial performance measures set forth in the table below represent the most important financial performance measures used by the Company for 2024 to link compensation actually paid to the Company’s Named Executive Officers to Company performance. Please refer to the “Compensation Discussion and Analysis” for additional information.

​

Most Important Performance Measures to Determine 2024 Compensation Actually Paid

Operating Margin

Free Cash Flow Percentage

Net Debt to EBITDAX

Relative Total Stockholder Return

The forgoing “Pay Versus Performance” disclosures should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporates this “Pay Versus Performance” section by reference therein.