Magnolia Oil & Gas Corp

Current report

Risks Related to the WildFire Acquisition

Current report

The WildFire Acquisition is subject to a number of conditions to the obligations of Magnolia and WildFire Energy I LLC (the “WildFire Seller”) to complete such acquisition, which, if not fulfilled, or not fulfilled in a timely manner, may result in termination of the WildFire Purchase Agreement.

Current report

The WildFire Purchase Agreement contains a number of conditions to the consummation of the WildFire Acquisition, including, among others:

Current report

•the expiration or termination of the applicable waiting period under the HSR Act (“HSR Approval”);

Current report

•the absence of orders or injunctions that prohibit the consummation of the applicable acquisition;

Current report

•subject to certain exceptions, the accuracy of representations and warranties with respect to Magnolia’s businesses and the WildFire Seller’s business, including, with respect to the WildFire Seller, representations and warranties regarding ownership and operation of the Seller, which generally must be true and correct as of the closing of the WildFire Purchase Agreement except for inaccuracies that would not, in the aggregate, have a material adverse effect; and

Current report

•subject to specified materiality thresholds in the WildFire Purchase Agreement, the aggregate values of title defects (less any offsetting title benefits), environmental defects, casualty losses, and exclusions related to the exercise of third-party consents or preferential purchase rights applicable to the WildFire Seller shall not exceed 15% of the unadjusted aggregate purchase price.

Current report

If any of these conditions are not satisfied or waived prior to October 13, 2026 (or if all such conditions other than the HSR Approval are satisfied or waived by October 13, 2026, prior to March 12, 2027), it is possible that the WildFire Purchase Agreement may be terminated. The WildFire Purchase Agreement may also be subject to termination if at any time a final, non-appealable order or injunction prohibits the consummation of the WildFire Acquisition. In addition, satisfying the conditions to and the consummation of the WildFire Acquisition may take longer and could cost more than Magnolia or the WildFire Seller expects. Many of the conditions to the consummation of the WildFire Acquisition are not within Magnolia’s control or the WildFire Seller’s control, and the parties cannot predict when or if these conditions will be satisfied. Any delay in completing the WildFire Acquisition may adversely affect the cost savings and other benefits that Magnolia expects to achieve if the WildFire Acquisition and the integration of the parties’ respective businesses are completed within the expected timeframe.

Current report

If the WildFire Acquisition is consummated, Magnolia may be unable to successfully integrate WildFire into the business or achieve the anticipated benefits of the WildFire Acquisition.

Current report

Magnolia’s ability to achieve the anticipated benefits of the WildFire Acquisition will depend in part upon whether the Company can integrate WildFire into the existing business in an efficient and effective manner. Magnolia may not be able to accomplish this integration process successfully. The successful acquisition of producing properties, including WildFire, requires an assessment of several factors, including:

Current report

•recoverable reserves;

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•future natural gas and oil prices and their appropriate differentials;

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•availability and cost of transportation of production to markets;

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•availability and cost of drilling equipment and of skilled personnel;

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•development and operating costs including access to water and potential environmental and other liabilities; and

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•regulatory, permitting and similar matters.

Current report

The accuracy of these assessments is inherently uncertain. In connection with these assessments, Magnolia has performed a review of the subject properties that the Company believes to be generally consistent with industry practices. The review was based on the Company’s analysis of historical production data, assumptions regarding capital expenditures and anticipated production declines. Data used in such review was furnished by the WildFire Seller or obtained from publicly available sources. Magnolia’s review may not reveal all existing or potential problems or permit the Company to fully assess the deficiencies and potential recoverable reserves for all of the acquired properties, and the reserves and production related to the WildFire Seller may differ materially after such data is reviewed further by Magnolia. Inspections will not always be performed on every well, and environmental conditions or issues are not necessarily observable even when an inspection is undertaken. Even when issues are identified, the WildFire Seller may be unwilling or unable to provide effective contractual protection against all or a portion of the underlying deficiencies. Magnolia is often not entitled to contractual indemnification for environmental liabilities and acquire properties on an “as is” basis, and, as is the case with certain liabilities associated with WildFire, Magnolia is entitled to indemnification for only certain environmental liabilities. The integration process may be subject to delays or changed circumstances, and Magnolia can give no assurance that WildFire will perform in accordance with the Company’s expectations or that the Company’s expectations with respect to integration or cost savings as a result of the WildFire Acquisition will materialize.

Current report

In addition, to the extent the WildFire Acquisition is not consummated, the proceeds from this offering will be applied to reduce indebtedness which may ultimately be reborrowed.

Current report

Magnolia will incur significant transaction costs in connection with the WildFire Acquisition.

Current report

Magnolia has incurred and is expected to continue to incur a number of non-recurring costs associated with the WildFire Acquisition, combining the operations of WildFire with the Company and realizing the expected benefits. A substantial majority of non-recurring expenses will consist of transaction costs and include, among others, fees paid to financial, legal, accounting and other advisors. Although the Company expects that the elimination of duplicative costs, as well as the realization of expected benefits related to the integration of WildFire, should allow Magnolia to offset these transaction costs over time, this net benefit may not be achieved in the near term or at all.

Current report

Securities class action and derivative lawsuits may be brought against us in connection with the WildFire Acquisition, which could result in substantial costs.

Current report

The pendency of the WildFire Acquisition could adversely affect Magnolia’s business, results of operations and financial condition.

Current report

The pendency of the WildFire Acquisition could cause disruptions in Magnolia’s business, which could have an adverse effect on Magnolia’s business, results of operations and financial condition. In particular, the attention of Magnolia’s management may be directed towards the WildFire Acquisition, including obtaining required approvals and other transaction-related considerations and may be diverted from our day-to-day business operations, and matters related to the WildFire Acquisition may require commitments of time and resources that could otherwise have been devoted to other opportunities that might have been beneficial to the Company. Any of these matters could adversely affect Magnolia’s business, or harm our results of operations, financial condition or cash flows, even after the WildFire Acquisition is consummated.

Current report

The benefits attributable to the WildFire Acquisition may vary from expectations.

Current report

Magnolia may fail to realize the anticipated benefits expected from the WildFire Acquisition. The success of the WildFire Acquisition will depend, in significant part, on Magnolia’s ability to successfully integrate WildFire, grow the Company’s revenue and realize the anticipated strategic benefits from the WildFire Acquisition. Magnolia believes that the addition of WildFire will complement the Company’s strategy by developing high-quality, low-cost assets. This growth and the anticipated benefits of the WildFire Acquisition may not be realized fully or at all or may take longer to realize than expected. Actual operating, technological, strategic and revenue opportunities, if achieved at all, may be less significant than expected or may take longer to achieve than anticipated. Additionally, the integration process may result in the disruption of ongoing business and there could be potential unknown liabilities and unforeseen expenses associated with the WildFire Acquisition that were not discovered in the course of performing due diligence. The integration may also require significant time and focus from management following the WildFire Acquisition which may disrupt Magnolia’s business and results of operations. If the Company is not able to realize the anticipated benefits expected from the WildFire Acquisition within the anticipated timing or at all, its business and operating results may be adversely affected.

Current report

The market price for Magnolia’s Class A Common Stock following the closing of the WildFire Acquisition may be affected by factors different from those that historically have affected or currently affect Magnolia’s Class A Common Stock.

Current report

Magnolia’s financial position may differ from the Company’s financial position before the completion of the WildFire Acquisition, and the results of operations of the Company following the consummation of the WildFire Acquisition may be affected by some factors that are different from those currently affecting the Company’s results of operations. Accordingly, the market price and performance of Magnolia’s Class A Common Stock is likely to be different from the performance of Magnolia’s Class A Common Stock in the absence of the WildFire Acquisition. In addition, general fluctuations in stock markets could have a material adverse effect on the market for, or liquidity of, Magnolia’s Class A Common Stock, regardless of the Company’s actual operating performance.