Magnolia Oil & Gas Corp
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
MGY$23.67+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001698990-26-000019
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001698990-26-000030
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 77 previous paragraphs and 99 current paragraphs.
47 unchanged; 28 reworded; 23 added; 2 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
Factors Affecting the Comparability of the Historical Financial Results
Current report
Magnolia’s historical financial condition and results of operations for the periods presented may not be comparable, either from period to period or going forward, as a result of the following factors:
Current report
•In August 2026, Magnolia Operating and Magnolia Oil & Gas Finance Corp. issued $500.0 million of 6.625% Senior Notes due 2034.
Current report
•In September 2026, the Company completed the WildFire Acquisition for approximately $2.6 billion cash consideration, and the assumption of $600 million of WildFire’s 7.500% Senior Notes due 2029.
Current report
•The Company amended and restated its revolving credit facility to increase its borrowing capacity from $450 million to $1.75 billion. In September 2026, the Company drew $535 million on the RBL Facility in association with the WildFire Acquisition.
Current report
•During the three months ended September 30, 2026, the Company entered into costless collar contracts to hedge a portion of its oil production and assumed derivative liabilities in connection with the WildFire Acquisition.
Current report
As a result of the factors listed above, the historical results of operations and period-to-period comparisons of these results and certain financial data may not be comparable or indicative of future results.
Current report
Exploration expenses for the three months ended September 30, 2026 were $13.6 million, or $1.26 per boe, higher than the three months ended September 30, 2025. Exploration expenses for the nine months ended September 30, 2026 were $14.8 million, or $0.50 per boe, higher than the nine months ended September 30, 2025. The increase in exploration expenses was primarily due to the purchase of seismic licenses.
Current report
Interest expense, net, during the three months ended September 30, 2026 was $3.2 million higher than the three months ended September 30, 2025. Interest expense, net, during the nine months ended September 30, 2026 was $5.0 million higher than the nine months ended September 30, 2025. The increase in interest expense, net, was primarily due to the issuance of additional debt, including the 2034 Senior Notes, the assumption of the WildFire Senior Notes, and a draw on the RBL Facility, partially offset by higher interest income.
Current report
Loss on derivatives, net, was $41.3 million during the three and nine months ended September 30, 2026. There was no derivative activity in the corresponding 2025 periods. The derivative activity in 2026 was comprised of oil costless collars Magnolia entered into during the three months ended September 30, 2026, and derivative liabilities assumed as part of the WildFire Acquisition.
Current report
Material Cash Requirements
Current report
The WildFire Acquisition and related financing transactions significantly increased the Company’s material cash requirements. As of September 30, 2026, these included $1.9 billion of debt principal and approximately $105.6 million of annual interest on the Senior Notes, plus variable-rate interest on RBL Facility borrowings. The Company also expects to pay approximately $170.8 million over the next twelve months to settle commodity derivative contracts, based on forward prices as of September 30, 2026, which would be partially offset by higher realized prices on hedged production. The Company believes cash flows from operations and availability under the RBL Facility will be sufficient to fund these requirements, its capital program, and its dividends over the next twelve months and beyond.
Current report
Debt and Equity Issuances
Current report
During the nine months ended September 30, 2026, the Company received $1.2 billion from the issuance of 53.3 million shares of Class A Common Stock, $535.0 million of proceeds from the RBL Facility, and $500.0 million of proceeds from the issuance of the 2034 Senior Notes. These funds were used to fund the WildFire Acquisition.
Current report
Other investing activities
Current report
During the nine months ended September 30, 2026 and 2025, the Company received $43.7 million and $5.8 million, respectively, primarily comprised of the sale of oil and natural gas properties.
Current report
In September 2026, the Company completed the WildFire Acquisition, which included $2.6 billion of cash consideration.
Current report
Critical Accounting Policies and Estimates
Current report
As of September 30, 2026, the Company’s critical accounting policies and estimates are consistent with those discussed in Critical Accounting Policies and Estimates within Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of its consolidated financial statements contained in the Company’s 2025 Form 10-K, with the exception of Business Combinations as noted below.
Current report
Business Combinations
Current report
Accounting for the acquisition of a business requires the allocation of the purchase price to the various assets and liabilities of the acquired business and recording deferred taxes for any differences between the allocated values and tax basis of assets and liabilities. Any excess of the purchase price over the amounts assigned to assets and liabilities is recorded as goodwill.
Current report
The purchase price allocation is accomplished by recording each asset and liability at its estimated fair value. Estimated deferred taxes are based on available information concerning the tax basis of the acquired company’s assets and liabilities and tax-related carryforwards at the acquisition date, although such estimates may change in the future as additional information becomes known. The amount of goodwill recorded in any particular business combination can vary significantly depending upon the values attributed to assets acquired and liabilities assumed relative to the total acquisition cost.
Current report
When estimating the fair values of assets acquired and liabilities assumed, the Company must apply various assumptions. The most significant assumptions relate to the estimated fair values assigned to proved and unproved crude oil and natural gas properties. Fair values of proved properties are estimated using an income approach based on discounted future net cash flows. Significant inputs include estimated reserve quantities and production profiles, forward commodity prices adjusted for location and quality differentials, future operating and development costs, and a market participant-based weighted average cost of capital, adjusted for risks associated with each reserve category. Unproved properties are valued using risk-weighted cash flows and, where available, comparable market transactions. These inputs are unobservable and represent Level 3 measurements. Because these assumptions are inherently uncertain, changes could materially affect the amounts allocated to oil and gas properties and goodwill, and therefore future depletion expense and impairment assessments.
Removed paragraphs (2)
Previous report
•the integration of acquisitions, including the WildFire Acquisition; and
Previous report
The GTP costs for the three months ended June 30, 2026 were $0.7 million higher, and $0.06 per boe lower, than the three months ended June 30, 2025. The GTP costs for the six months ended June 30, 2026 were $4.0 million, or $0.10 per boe, higher, than the six months ended June 30, 2025. The increase in GTP costs in both periods was driven by higher production and changes to certain gathering and processing contracts, which resulted in a higher portion of Magnolia’s GTP costs being recognized as expense versus a reduction to Magnolia’s natural gas revenues.
Reworded paragraphs (28)
Previous wording
•the actual consummation of the WildFire Acquisition and the expected timetable for completion thereof, the results, effects and benefits of the WildFire Acquisition, future opportunities for the Company, other plans and expectations with respect to the WildFire Acquisition, and the anticipated impact of the WildFire Acquisition on the Company’s results of operations, financial position, growth opportunities and competitive position;
Current wording
•the integration of the WildFire Acquisition, the results, effects and benefits of the WildFire Acquisition, future opportunities for the Company, other plans and expectations with respect to the WildFire Acquisition, and the anticipated impact of the WildFire Acquisition on the Company’s results of operations, financial position, growth opportunities and competitive position; and
Previous wording
All of Magnolia’s forward-looking information is subject to risks and uncertainties that could cause actual results to differ materially from the results expected. Although it is not possible to identify all factors, these risks and uncertainties include the risk factors and the timing of any of those risk factors identified this Quarterly Report on Form 10-Q and in the reports that the Company has filed and may file with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the period ended December 31, 2025 (the “2025 Form 10-K”).
Current wording
All of Magnolia’s forward-looking information is subject to risks and uncertainties that could cause actual results to differ materially from the results expected. Although it is not possible to identify all factors, these risks and uncertainties include the risk factors and the timing of any of those risk factors identified in this Quarterly Report on Form 10-Q and in the reports that the Company has filed and may file with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the period ended December 31, 2025 (the “2025 Form 10-K”).
Previous wording
Commodity prices continue to experience volatility driven by geopolitical conflict, evolving global supply-demand dynamics, and macroeconomic uncertainty. Most notably, the military conflict involving Iran has materially disrupted global energy markets, including significantly constraining the movement of global crude oil and refined product exports through the Strait of Hormuz. These developments, together with the ongoing Russia-Ukraine conflict, OPEC and OPEC+ production decisions, and changes in sanctions and trade restrictions affecting major oil-producing countries such as Russia, Iran, and Venezuela, have increased the risk of supply interruptions and contributed to substantial price volatility and uncertainty in global energy markets.
Current wording
Commodity prices continue to experience volatility driven by geopolitical conflict, evolving global supply-demand dynamics, and macroeconomic uncertainty. The ongoing military conflict involving Iran and instability in the Middle East have disrupted global energy markets and increased risks to regional energy infrastructure and maritime shipping routes, including the movement of global crude oil and refined product exports through key shipping corridors. These developments, together with the ongoing Russia-Ukraine conflict, OPEC and OPEC+ production decisions, and changes in sanctions and trade restrictions affecting major oil-producing countries such as Russia, Iran, and Venezuela, have contributed to significant uncertainty and volatility in global energy markets. Recent OPEC+ actions to increase production and unwind certain voluntary production cuts have added further uncertainty regarding future global supply levels and commodity prices.
Previous wording
The macroeconomic and geopolitical environment remains uncertain and continues to evolve. In combination with geopolitical risks — including sanctions regimes, trade restrictions, tariff policies that remain subject to legal, regulatory, and policy uncertainty, and the potential for prolonged or expanded disruptions to global energy supply chains — these conditions continue to increase uncertainty with respect to commodity prices, operating costs, and capital availability. The Company continues to closely monitor developments in geopolitical conditions, international trade relations, tariff policies, and energy market dynamics, any of which could adversely affect operating results, financial condition, and future cash flows.
Current wording
The macroeconomic and geopolitical environment remains uncertain and continues to evolve. In addition to geopolitical risks, uncertainty surrounding global economic growth, energy demand, sanctions regimes, trade restrictions, and tariff policies may affect commodity prices, operating costs, and capital availability. The Company continues to closely monitor developments in geopolitical conditions, international trade relations, tariff policies, and energy market dynamics, any of which could adversely affect operating results, financial condition, and future cash flows.
Previous wording
As of June 30, 2026, Magnolia’s assets in South Texas included 60,187 gross (40,135 net) acres in the Karnes area, and 742,202 gross (562,544 net) acres in the Giddings area. As of June 30, 2026, Magnolia held an interest in approximately 2,920 gross (1,983 net) wells, with total production of 106.1 thousand and 104.3 thousand barrels of oil equivalent per day for the three and six months ended June 30, 2026, respectively.
Current wording
As of September 30, 2026, Magnolia’s assets in South Texas included 45,522 gross (26,173 net) acres in the Karnes area, and approximately 1,554,461 gross (1,254,768 net) acres in the Giddings area. As of September 30, 2026, Magnolia held an interest in approximately 4,670 gross (3,696 net) wells, with total production of 117.3 thousand and 108.7 thousand barrels of oil equivalent per day for the three and nine months ended September 30, 2026, respectively.
Previous wording
Magnolia recognized net income attributable to Class A Common Stock of $181.8 million and $281.6 million, or $0.97 and $1.51 per diluted common share, for the three and six months ended June 30, 2026, respectively. Magnolia recognized net income of $181.8 million for the three months ended June 30, 2026. Magnolia recognized net income of $282.6 million, which includes noncontrolling interest of $1.0 million related to the Magnolia LLC Units (and corresponding shares of Class B Common Stock) held by certain affiliates of EnerVest, Ltd., for the six months ended June 30, 2026.
Current wording
Magnolia recognized net income attributable to Class A Common Stock of $80.5 million and $362.1 million, or $0.35 and $1.79 per diluted common share, for the three and nine months ended September 30, 2026, respectively. Magnolia recognized net income of $80.5 million for the three months ended September 30, 2026. Magnolia recognized net income of $363.1 million, which includes noncontrolling interest of $1.0 million related to the Magnolia LLC Units (and corresponding shares of Class B Common Stock) held by certain affiliates of EnerVest, Ltd., for the nine months ended September 30, 2026.
Previous wording
During the six months ended June 30, 2026, the Company declared and paid cash dividends and distributions totaling $62.2 million.
Current wording
During the nine months ended September 30, 2026, the Company declared and paid cash dividends and distributions totaling $105.2 million.
Previous wording
As of June 30, 2026, the Company’s board of directors had authorized a share repurchase program of up to 60.0 million shares of Class A Common Stock. The program does not require purchases to be made within a particular timeframe. The Company had repurchased 50.1 million shares under the program at a cost of $994.7 million and had 9.9 million shares of Class A Common Stock remaining under its share repurchase authorization as of June 30, 2026.
Current wording
As of September 30, 2026, the Company’s board of directors had authorized a share repurchase program of up to 60.0 million shares of Class A Common Stock. The program does not require purchases to be made within a particular timeframe. The Company had repurchased 52.4 million shares under the program at a cost of $1.1 billion and had 7.6 million shares of Class A Common Stock remaining under its share repurchase authorization as of September 30, 2026. On November 2, 2026, the Company’s board of directors increased the share repurchase authorization by an additional 15.0 million shares of Class A Common Stock, which increased the total share repurchase authorization to 75.0 million shares.
Previous wording
Three and Six Months Ended June 30, 2026 Compared to the Three and Six Months Ended June 30, 2025
Current wording
Three and Nine Months Ended September 30, 2026 Compared to the Three and Nine Months Ended September 30, 2025
Previous wording
Oil revenues for the three months ended June 30, 2026 were $147.4 million higher than the three months ended June 30, 2025. A 58% increase in average prices increased second quarter 2026 revenues by $130.8 million compared to the same period in the prior year, and a 5% increase in oil production increased revenues by $16.6 million. Oil revenues for the six months ended June 30, 2026 were $159.2 million higher than for the six months ended June 30, 2025. A 28% increase in average prices increased revenues for the six months ended June 30, 2026 by $132.7 million compared to the same period in the prior year, and a 4% increase in oil production increased revenues by $26.5 million.
Current wording
Oil revenues for the three months ended September 30, 2026 were $163.1 million higher than the three months ended September 30, 2025. A 37% increase in average prices increased third quarter 2026 revenues by $85.7 million compared to the same period in the prior year, and a 24% increase in oil production increased revenues by $77.4 million. Oil revenues for the nine months ended September 30, 2026 were $322.4 million higher than the nine months ended September 30, 2025. A 31% increase in average prices increased revenues for the nine months ended September 30, 2026 by $219.7 million compared to the same period in the prior year, and an 11% increase in oil production increased revenues by $102.7 million.
Previous wording
Natural gas revenues for the three months ended June 30, 2026 were $3.2 million lower than the three months ended June 30, 2025. A 14% decrease in average prices decreased second quarter 2026 revenues by $6.2 million compared to the same period in the prior year, partially offset by an 8% increase in natural gas production that increased revenues by $3.0 million. Natural gas revenues for the six months ended June 30, 2026 were $2.7 million lower than the six months ended June 30, 2025. A 9% decrease in average prices decreased revenues for the six months ended June 30, 2026 by $8.5 million compared to the same period in the prior year, partially offset by a 7% increase in natural gas production that increased revenues by $5.8 million.
Current wording
Natural gas revenues for the three months ended September 30, 2026 were $0.3 million higher than the three months ended September 30, 2025. An 11% increase in natural gas production increased third quarter 2026 revenues by $4.3 million compared to the same period in the prior year, partially offset by a 9% decrease in average prices that decreased revenues by $4.0 million. Natural gas revenues for the nine months ended September 30, 2026 were $2.5 million lower than the nine months ended September 30, 2025. A 9% decrease in average prices decreased revenues for the nine months ended September 30, 2026 by $12.8 million compared to the same period in the prior year, partially offset by an 8% increase in natural gas production that increased revenues by $10.3 million.
Previous wording
NGL revenues for the three months ended June 30, 2026 were $15.6 million higher than the three months ended June 30, 2025. A 17% increase in average prices increased second quarter 2026 revenues by $8.3 million compared to the same period in the prior year, and a 13% increase in NGL production increased revenues by $7.3 million. NGL revenues for the six months ended June 30, 2026 were $11.6 million higher than the six months ended June 30, 2025, almost entirely due to an increase in NGL production.
Current wording
NGL revenues for the three months ended September 30, 2026 were $24.2 million higher than the three months ended September 30, 2025. A 31% increase in average prices increased third quarter 2026 revenues by $15.8 million compared to the same period in the prior year, and a 12% increase in NGL production increased revenues by $8.4 million. NGL revenues for the nine months ended September 30, 2026 were $35.8 million higher than the nine months ended September 30, 2025. A 12% increase in NGL production increased revenues for the nine months ended September 30, 2026 by $20.1 million compared to the same period in the prior year, and a 10% increase in average prices increased revenues by $15.7 million.
Previous wording
Lease operating expenses are costs incurred in the operation of producing properties, including expenses for utilities, direct labor, water disposal, workover rigs, workover expenses, materials, and supplies. Lease operating expenses for the three months ended June 30, 2026 were $4.8 million, or $0.13 per boe, higher than the three months ended June 30, 2025. Lease operating expenses for the six months ended June 30, 2026 were $5.5 million higher, and $0.05 per boe lower, than the six months ended June 30, 2025. The increase in both periods were due to higher workover activity and an increase in surface repair and maintenance and compression associated with higher well count.
Current wording
September 30, 2026 were $7.4 million higher, and $0.06 per boe lower, than the three months ended September 30, 2025. Lease operating expenses for the nine months ended September 30, 2026 were $12.9 million higher, and $0.05 per boe lower, than the nine months ended September 30, 2025. The increase in both periods was due to a higher well count and additional activity from the WildFire Acquisition. Lease operating expenses per boe decreased due to higher production.
Previous wording
Gathering, transportation and processing (“GTP”) costs are costs incurred to deliver oil, natural gas, and NGLs to the market. These expenses can vary based on the volume of oil, natural gas, and NGLs produced as well as the cost of commodity processing.
Current wording
Gathering, transportation and processing (“GTP”) costs are costs incurred to deliver oil, natural gas, and NGLs to the market. These expenses can vary based on the volume of oil, natural gas, and NGLs produced as well as the cost of commodity processing. The GTP costs for the three months ended September 30, 2026 were $1.9 million higher, and $0.10 per boe lower, than the three months ended September 30, 2025. The increase in GTP costs was driven by higher production volumes. The decrease on a per boe basis was primarily due to a higher proportion of oil production due to the WildFire Acquisition, which carries lower gathering and transportation costs than natural gas and NGLs. The GTP costs for the nine months ended September 30, 2026 were $5.8 million, or $0.02 per boe, higher, than the nine months ended September 30, 2025, primarily due to higher production volumes from the Company’s development program in the Giddings area.
Previous wording
Taxes other than income include production, ad valorem, and franchise taxes. These taxes are based on rates primarily established by state and local taxing authorities. Production taxes are based on the market value of production. Ad valorem taxes are based on the fair market value of the mineral interests or business assets. Taxes other than income for the three months ended June 30, 2026 were $4.0 million, or $0.26 per boe, higher than the three months ended June 30, 2025. Taxes other than income for the six months ended June 30, 2026 were $0.2 million higher, and $0.14 per boe lower, than the six months ended June 30, 2025. The increase in taxes other than income was primarily due to an increase in production taxes due to higher oil prices, partially offset by severance tax refunds and a decrease in ad valorem taxes as a result of lower market valuations.
Current wording
Taxes other than income include production, ad valorem, and franchise taxes. These taxes are based on rates primarily established by state and local taxing authorities. Production taxes are based on the market value of production. Ad valorem taxes are based on the fair market value of the mineral interests or business assets. Taxes other than income for the three months ended September 30, 2026 were $4.5 million, or $0.11 per boe, higher than the three months ended September 30, 2025. Taxes other than income for the nine months ended September 30, 2026 were $4.7 million higher, and $0.05 per boe lower, than the nine months ended September 30, 2025. The increase in taxes other than income was primarily due to an increase in production taxes due to higher oil prices, partially offset by severance tax refunds and a decrease in ad valorem taxes as a result of lower market valuations.
Previous wording
Depreciation, depletion and amortization (“DD&A”) during the three months ended June 30, 2026 was $9.4 million, or $0.09 per boe, higher than the three months ended June 30, 2025. DD&A for the six months ended June 30, 2026 was $16.9 million, or $0.09 per boe, higher than the six months ended June 30, 2025. The increase in DD&A was primarily due to higher production. The slight increase in the DD&A rate period over period was primarily due to acquisitions made during 2026.
Current wording
Depreciation, depletion and amortization (“DD&A”) during the three months ended September 30, 2026 was $37.2 million, or $1.74 per boe, higher than the three months ended September 30, 2025. DD&A for the nine months ended September 30, 2026 was $54.2 million, or $0.69 per boe, higher than the nine months ended September 30, 2025. The increase in DD&A per boe was primarily due to a higher depletion rate resulting from the WildFire Acquisition, as the fair value of the acquired properties relative to their proved reserves exceeded the Company's historical depletion rate.
Previous wording
G&A during the three months ended June 30, 2026 were $5.9 million, or $0.42 per boe, higher, than the three months ended June 30, 2025. G&A expenses during the six months ended June 30, 2026 were $12.7 million, or $0.49 per boe, higher than the six months ended June 30, 2025. The increase in G&A was primarily due to increased stock based compensation expense as a result of higher grant date fair values, accelerated vesting of certain awards, and changes in expected payouts for the Company’s performance share unit awards. Other increases in G&A were primarily due to increased professional service fees, payroll costs, and rent expense.
Current wording
G&A during the three months ended September 30, 2026 were $1.1 million higher, and $0.27 per boe lower, than the three months ended September 30, 2025 due to higher professional service fees, payroll costs, and rent expense, partially offset by reduced stock based compensation expense from the acceleration of vesting of certain awards in first half of 2026. G&A expenses during the nine months ended September 30, 2026 were $13.9 million, or $0.22 per boe, higher than the nine months ended September 30, 2025 due to increased professional service fees, payroll costs, and rent expense, and stock based compensation expense as a result of higher grant date fair values, accelerated vesting of certain awards, and changes in expected payouts for the Company’s performance share unit awards.
Previous wording
Transaction related costs incurred during the three and six months ended June 30, 2026 relate to the WildFire Acquisition.
Current wording
Transaction and integration costs incurred during the three and nine months ended September 30, 2026 relate to the WildFire Acquisition. Transaction costs consist primarily of legal, advisory and other professional fees incurred in connection with the WildFire Acquisition. The integration costs are the incremental costs directly attributable to integrating the acquired operations, including consulting, system-conversion, employee severance and acquisition-related employee compensation and other transition-related costs.
Previous wording
For the three months ended June 30, 2026, income tax expense was $29.7 million higher than the three months ended June 30, 2025 driven by a $31.4 million increase in deferred income tax expense and offset by a $1.7 million decrease in current income tax expense. Income tax expense during the six months ended June 30, 2026 was $25.4 million higher compared to the six months ended June 30, 2025, driven by a $35.9 million increase in deferred income tax expense and offset by a $10.5 million decrease in current income tax expense. The increase in total tax expense was primarily due to an increase in income before income taxes. Accelerated deductions as a result of the passage of the One Big Beautiful Bill Act resulted in lower current tax expense and higher deferred tax expense. See Note 9— Income Taxes in the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q for further detail.
Current wording
For the three months ended September 30, 2026, income tax expense was $6.6 million higher than the three months ended September 30, 2025, driven by a $16.6 million decrease in current income tax benefit, offset by a $10.0 million decrease in deferred income tax expense. Income tax expense during the nine months ended September 30, 2026 was $32.0 million higher compared to the nine months ended September 30, 2025, driven by a $25.9 million increase in deferred income tax expense and a $6.1 million decrease in current income tax benefit. The increase in total tax expense was primarily due to an increase in income before income taxes. In 2026, additional depletion and bonus depreciation from the WildFire Acquisition lowered current tax expense and increased deferred tax expense. In 2025, the passage of the One Big Beautiful Bill Act accelerated deductions, which resulted in lower current tax expense and higher deferred tax expense. See Note 11— Income Taxes in the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q for further detail.
Previous wording
The Company may also utilize borrowings under other various financing sources available to Magnolia, including the RBL Facility and the issuance of equity or debt securities through public offerings or private placements, to fund Magnolia’s acquisitions and long-term liquidity needs. Magnolia’s ability to complete future offerings of equity and debt securities and the timing of these offerings will depend upon various factors, including prevailing market conditions and the Company’s financial condition. The Company anticipates its current cash balance, cash flows from operations, and its available sources of liquidity to be sufficient to meet the Company’s cash requirements.
Current wording
The Company may also utilize borrowings under other various financing sources available to Magnolia, including the RBL Facility and the issuance of equity or debt securities through public offerings or private placements, to fund Magnolia’s acquisitions and long-term liquidity needs. Magnolia’s ability to complete future offerings of equity and debt securities and the timing of these offerings will depend upon various factors, including prevailing market conditions and the Company’s financial condition.
Previous wording
As of June 30, 2026, the Company had $400.0 million of principal debt related to the 2032 Senior Notes outstanding and no outstanding borrowings related to the RBL Facility. As of June 30, 2026, the Company had $745.9 million of liquidity comprised of the $450.0 million of borrowing capacity under the RBL Facility, and $295.9 million of cash and cash equivalents.
Current wording
As of September 30, 2026, the Company had $1.9 billion of principal debt related to the Senior Notes outstanding and outstanding borrowings related to the RBL Facility. As of September 30, 2026, the Company had $1.3 billion of liquidity comprised of the $1.3 billion of available borrowing capacity under the RBL Facility, and $17.5 million of cash and cash equivalents.
Previous wording
At June 30, 2026, Magnolia had $295.9 million of cash and cash equivalents. The Company’s cash and cash equivalents are maintained with various financial institutions in the United States. Deposits with these institutions may exceed the amount of insurance provided on such deposits. However, the Company regularly monitors the financial stability of its financial institutions and believes that the Company is not exposed to any significant default risk.
Current wording
At September 30, 2026, Magnolia had $17.5 million of cash and cash equivalents. The Company’s cash and cash equivalents are maintained with various financial institutions in the United States. Deposits with these institutions may exceed the amount of insurance provided on such deposits. However, the Company regularly monitors the financial stability of its financial institutions and believes that the Company is not exposed to any significant default risk.
Previous wording
Net cash provided by operating activities totaled $581.6 million and $423.2 million for the six months ended June 30, 2026 and 2025, respectively. During the six months ended June 30, 2026, cash provided by operating activities primarily increased due to higher oil prices and increased production.
Current wording
Net cash provided by operating activities totaled $950.6 million and $670.2 million for the nine months ended September 30, 2026 and 2025, respectively. During the nine months ended September 30, 2026, cash provided by operating activities primarily increased due to higher oil prices and increased production.
Previous wording
The Company made individually insignificant bolt-on acquisitions totaling $156.2 million and $39.7 million during the six months ended June 30, 2026 and 2025, respectively.
Current wording
Additionally, the Company made individually insignificant bolt-on acquisitions totaling $156.3 million and $64.4 million during the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
During the second quarter of 2026, Magnolia operated two rigs. The number of operated drilling rigs is largely dependent on commodity prices and the Company’s strategy of maintaining spending to accommodate the Company’s business model. The Company’s ongoing plan is to continue to spend within cash flow on drilling and completing wells while maintaining low financial leverage.
Current wording
During the third quarter of 2026, Magnolia operated two rigs until the WildFire Acquisition closed on September 10, 2026, after which, Magnolia operated four rigs. The number of operated drilling rigs is largely dependent on commodity prices and the Company’s strategy of maintaining spending to accommodate the Company’s business model. The Company’s ongoing plan is to continue to spend within cash flow on drilling and completing wells while maintaining low financial leverage.
Previous wording
As of June 30, 2026, the Company’s board of directors had authorized a share repurchase program of up to 60.0 million shares of Class A Common Stock. The program does not require purchases to be made within a particular time frame and whether the Company undertakes these additional repurchases is ultimately subject to numerous considerations, market conditions, and other factors. During each of the six months ended June 30, 2026 and 2025, the Company repurchased 3.0 million and 4.4 million shares for a total cost of approximately $81.4 million and $100.7 million, respectively.
Current wording
As of September 30, 2026, the Company’s board of directors had authorized a share repurchase program of up to 60.0 million shares of Class A Common Stock. The program does not require purchases to be made within a particular time frame and whether the Company undertakes these additional repurchases is ultimately subject to numerous considerations, market conditions, and other factors. During the nine months ended September 30, 2026 and 2025, the Company repurchased 5.3 million and 6.5 million shares for a total cost of approximately $141.6 million and $152.1 million, respectively.
Previous wording
During the six months ended June 30, 2026, Magnolia LLC repurchased and subsequently canceled 0.7 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $19.8 million of cash consideration. As of June 30, 2026, Magnolia owned 100.0% of the interest in Magnolia LLC.
Current wording
During the nine months ended September 30, 2026, Magnolia LLC repurchased and subsequently canceled 0.7 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $19.8 million of cash consideration. As of September 30, 2026, Magnolia owned 100.0% of the interest in Magnolia LLC.
Previous wording
During the six months ended June 30, 2026, the Company declared and paid cash dividends to holders of its Class A Common Stock totaling $61.2 million. Additionally, $0.9 million was distributed to the Magnolia LLC Unit Holders. During the six months ended June 30, 2025, the Company declared and paid cash dividends to holders of its Class A Common Stock totaling $57.3 million. Additionally, $1.7 million was distributed to the Magnolia LLC Unit Holders. The amount and frequency of future dividends is subject to the discretion of the Company’s board of directors and primarily depends on earnings, capital expenditures, debt covenants, and various other factors.
Current wording
During the nine months ended September 30, 2026, the Company declared and paid cash dividends to holders of its Class A Common Stock totaling $104.3 million. Additionally, $0.9 million was distributed to the Magnolia LLC Unit Holders. During the nine months ended September 30, 2025, the Company declared and paid cash dividends to holders of its Class A Common Stock totaling $85.3 million. Additionally, $2.5 million was distributed to the Magnolia LLC Unit Holders. The amount and frequency of future dividends is subject to the discretion of the Company’s board of directors and primarily depends on earnings, capital expenditures, debt covenants, and various other factors.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Lease operating expenses are costs incurred in the operation of producing properties, including expenses for utilities, direct labor, water disposal, workover rigs, workover expenses, materials, and supplies. Lease operating expenses for the three months ended