Magnolia Oil & Gas said it ended the third quarter with about $1.9 billion of net debt, bringing leverage below 1.0x net debt to 2027 EBITDA at current strip prices, more than a year ahead of its original plan tied to the Wildfire Energy acquisition.
The company also sold non-core assets in Dimmit and Zavala counties for $47.5 million and received 616 net acres in Gonzales County. Magnolia said the acreage added to a contiguous block it had consolidated earlier in 2026, lifting its average operated working interest in that area to 98%. The divested assets carried about 1.4 mboe/d of next-twelve-month production, about 84% oil.
For the third quarter, Magnolia estimated production at 116,000 to 118,000 boe/d, with oil making up about 42% of volumes. That compares with its fourth-quarter outlook of 159,000 to 161,000 boe/d, with oil at 49% to 50%, reflecting the first full quarter after the Wildfire deal and the impact of the asset sales.
Capital spending is expected to rise from $155 million to $165 million in the third quarter to about $235 million in the fourth quarter. For 2027, Magnolia said D&C capital spending is currently estimated at $900 million to $950 million.
The company said it repurchased about 2.3 million shares during the quarter and ended with approximately 267 million shares outstanding. It plans to buy back at least 1% of shares outstanding each quarter.
Magnolia also said it has added hedges covering more than half of oil production through the second quarter of 2027. The newly added costless collars include 3.68 million barrels in the fourth quarter of 2026 at a weighted average floor of $73.75 per barrel and ceiling of $90.97. Additional volumes are hedged at 2.7 million barrels in the first quarter of 2027 and 2.275 million barrels in the second quarter of 2027.
The company expects at least one-third of more than $100 million in annual run-rate synergies to be realized by year-end 2026. It also said third-quarter one-time transaction and integration costs should total $65 million to $75 million, and it spent about $14 million on 3D seismic over newly acquired acreage. Following these announcements, the company's shares moved -0.47%, and are now trading at a price of $23.49. For the full picture, make sure to review Magnolia Oil & Gas Corp's 8-K report.
