MGY
Magnolia to acquire WildFire Energy in $4.1bn Eagle Ford deal
Article Summary
BUY- Magnolia Oil & Gas (NYSE: MGL) agreed to acquire WildFire Energy in an Eagle Ford Shale deal valued at approximately $4.06 billion, more than doubling its acreage in the Giddings field and adding 810,000 net acres across the Eagle Ford and Austin Chalk plays.
- The acquisition includes 32.2 million Magnolia Class A common shares issued to WildFire's owners, $600 million of notes due in 2029, and $1.75 billion in secured credit facility commitments contingent upon closing.
- WildFire assets are projected to contribute around 53,000 barrels of oil equivalent per day, of which approximately 70% is oil, with a 29% base oil decline rate, increasing Magnolia's oil mix to roughly 50%.
- Magnolia Oil & Gas expects annual run-rate synergies from operational efficiencies and corporate cost savings to exceed $100 million by the end of 2027, with net present value of approximately $700 million.
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Growth Stock Scoring Breakdown
| METRIC | VALUE | WEIGHT | ANALYSIS |
|---|---|---|---|
| Sales Growth TTM ? | -2.0% | 25% | 0.0 ptsDeclining (-2.0%) - NOT a growth stock |
| EPS Growth Next 5Y ? | 19.4% | 25% | 50.0 ptsMeets Minimum (19.4%) - Passes screener |
| Target Price Upside ? | 32.9% | 20% | 85.0 ptsLarge Upside (32.9%) - Target: $32.94 vs Current: $24.79 |
| Gross Margin % ? | 46.0% | 15% | 60.0 ptsSolid (46.0%) - Decent margins |
| Drawdown from 52-Wk High ? | -24.3% | 15% | 40.0 ptsMild Pullback (-24.3%) - Light entry opportunity |
Disclaimer: This rating is for informational purposes only and is not financial advice.
All data sourced from Finviz.
Always conduct your own research and consult with a financial advisor before making investment decisions.
Past performance does not guarantee future results.
About MGY
- Magnolia Oil & Gas Corporation, an independent oil and natural gas company, engages in the acquisition, development, exploration, and production of oil, natural gas, and natural gas liquids reserves in the United States.
- The company's properties are located primarily in Karnes County and the Giddings area in South Texas comprising the Eagle Ford Shale and the Austin Chalk formation.
- The company was incorporated in 2017 and is headquartered in Houston, Texas.