What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-02 compared with 2022-08-03 · 81 added, 91 removed, 199 unchanged (46% of the section changed)

10 unchanged sentences

• the market prices of oil, natural gas, natural gas liquids (“NGLs”), and other products or services;

• the supply and demand for oil, natural gas, NGLs, and other products or services;

• the supply and demand for oil, natural gas, NGLs, and other products or services, including impacts of actions taken by OPEC and other state-controlled oil companies;

• production and reserve levels;

20 unchanged sentences

The Company’s ongoing plan is to spend within cash flow on drilling and completing wells while maintaining low leverage.

As of June 30, 2022, Magnolia operated one rig exclusively in the Giddings area, and one rig in both the Karnes and Giddings areas.

As of September 30, 2022, Magnolia operated two rigs.

The Company’s gradual and measured approach toward both the appraisal and development of the Giddings area has created operating efficiencies leading to higher production growth this year.

5 unchanged sentences

Business Overview

As of June 30, 2022, Magnolia’s assets in South Texas included 43,475 gross (23,767 net) acres in the Karnes area, and 638,360 gross (447,924 net) acres in the Giddings area.

As of June 30, 2022, Magnolia held an interest in approximately 2,060 gross (1,317 net) wells, with total production of 74.2 thousand and 73.0 thousand barrels of oil equivalent per day for the three and six months ended June 30, 2022, respectively.

During the second quarter of 2022, Magnolia was running a two-rig program.

One rig drilled multi-well development pads exclusively in the Giddings area.

The second rig drilled a mix of wells in both the Karnes and Giddings areas.

Magnolia recognized net income attributable to Class A Common Stock of $250.6 million and $416.6 million, or $1.32 and $2.22 per diluted common share, for the three and six months ended June 30, 2022, respectively.

Magnolia recognized net income of $299.9 million and $508.5 million, which includes a noncontrolling interest of $49.3 million and $91.9 million related to the Magnolia LLC Units (and corresponding shares of Class B Common Stock) held by certain affiliates of EnerVest, for the three and six months ended June 30, 2022, respectively.

On February 3, 2022, the Company’s board of directors declared a semi-annual cash dividend of $0.20 per share of Class A Common Stock totaling approximately $37.3 million.

The dividend was paid on March 1, 2022 to shareholders of record as of the close of business on February 14, 2022.

As of September 30, 2022, Magnolia’s assets in South Texas included 43,327 gross (23,622 net) acres in the Karnes area, and 638,153 gross (448,263 net) acres in the Giddings area.

As of September 30, 2022, Magnolia held an interest in approximately 2,096 gross (1,336 net) wells, with total production of 81.5 thousand and 75.9 thousand barrels of oil equivalent per day for the three and nine months ended September 30, 2022, respectively.

During the third quarter of 2022, Magnolia was running a two-rig program.

Magnolia recognized net income attributable to Class A Common Stock of $245.5 million and $662.1 million, or $1.29 and $3.51 per diluted common share, for the three and nine months ended September 30, 2022, respectively.

Magnolia recognized net income of $287.0 million and $795.5 million, which includes a noncontrolling interest of $41.5 million and $133.4 million related to the Magnolia LLC Units (and corresponding shares of Class B Common Stock) held by certain affiliates of EnerVest, for the three and nine months ended September 30, 2022, respectively.

During the nine months ended September 30, 2022, the Company declared cash dividends to holders of its Class A Common Stock totaling $56.4 million.

The Company’s board of directors has authorized a share repurchase program of up to 30.0 million shares.

The program does not require purchases to be made within a particular time frame.

As of June 30, 2022, the Company had repurchased 17.7 million shares under the program at a cost of $246.3 million and had 12.3 million shares of Class A Common Stock remaining under its current repurchase authorization.

During the six months ended June 30, 2022, the Company also repurchased 0.6 million shares of Class A Common Stock for $11.6 million from EnerVest Energy Institutional Fund XIV-C, L.P.

As of September 30, 2022, the Company had repurchased 20.7 million shares under the program at a cost of $308.6 million and had 9.3 million shares of Class A Common Stock re maining under its current repurchase authorization.

During the nine months ended September 30, 2022, the Company also repurchased 0.6 million shares of Class A Common Stock for $11.6 million from EnerVest Energy Institutional Fund XIV-C, L.P.

outside of the share repurchase program.

During the six months ended June 30, 2022, Magnolia LLC repurchased and subsequently canceled 5.9 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $138.8 million of cash consideration (the “Class B Common Stock Repurchases”).

During the nine months ended September 30, 2022, Magnolia LLC repurchased and subsequently canceled 5.9 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $138.8 million of cash consideration (the “Class B Common Stock Repurchases”).

Magnolia funded the Class B Common Stock Repurchases with cash on hand.

1 unchanged sentence

Magnolia did not receive any proceeds from the sale of shares of Class A Common Stock by the Magnolia LLC Unit Holders.

As of June 30, 2022, Magnolia owned approximately 86.9% of the interest in Magnolia LLC and the noncontrolling interest was approximately 13.1%.

As of September 30, 2022, Magnolia owned approximately 86.7% of the interest in Magnolia LLC and the noncontrolling interest was approximately 13.3%.

Results of Operations

7 unchanged sentences

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.

Three Months Ended June 30, 2022 Compared to the Three Months Ended June 30, 2021

Three Months Ended September 30, 2022 Compared to the Three Months Ended September 30, 2021

Oil, Natural Gas and NGL Sales Revenues.

3 unchanged sentences

Three Months Ended

(In thousands, except per unit data) June 30, 2022 June 30, 2021

(In thousands, except per unit data) September 30, 2022 September 30, 2021

Oil (MBbls) 3,381 2,851

15 unchanged sentences

NGLs (per barrel) 34.66 31.60

Oil revenues were 69% and 75% of the Company’s total revenues for the three months ended June 30, 2022 and 2021, respectively.

Oil production was 45% and 49% of total production volume for the three months ended June 30, 2022 and 2021, respectively.

Oil revenues for the three months ended June 30, 2022 were $144.1 million higher than the three months ended June 30, 2021.

A 70% increase in average prices increased second quarter 2022 revenues by $131.2 million compared to the same period in the prior year, while a 4% increase in oil production increased revenues by $12.9 million.

Natural gas revenues were 17% and 13% of the Company’s total revenues for the three months ended June 30, 2022 and 2021, respectively.

Natural gas production was 31% and 28% of total production volume for the three months ended June 30, 2022 and 2021, respectively.

Natural gas revenues for the three months ended June 30, 2022 were $52.0 million higher than the three months ended June 30, 2021.

A 104% increase in average prices increased second quarter 2022 revenues by $34.8 million compared to the same period in the prior year, while a 25% increase in natural gas production increased revenues by $17.2 million.

NGL revenues were 14% and 12% of the Company’s total revenues for the three months ended June 30, 2022 and 2021, respectively.

NGL production was 24% and 23% of total production volume for the three months ended June 30, 2022 and 2021, respectively.

NGL revenues for the three months ended June 30, 2022 were $36.5 million higher than the three months ended June 30, 2021.

An 81% increase in average prices increased second quarter 2022 revenues by $24.2 million compared to the same period in the prior year, while a 23% increase in NGL production increased revenues by $12.3 million.

Oil revenues were 66% and 69% of the Company’s total revenues for the three months ended September 30, 2022 and 2021, respectively.

Oil production was 45% and 46% of total production volume for the three months ended September 30, 2022 and 2021, respectively.

Oil revenues for the three months ended September 30, 2022 were $121.6 million higher than for the three months ended September 30, 2021.

A 37% increase in average prices increased third quarter 2022 revenues by $71.9 million compared to the same period in the prior year, while a 19% increase in oil production increased revenues by $49.7 million.

Natural gas revenues were 20% and 15% of the Company’s total revenues for the three months ended September 30, 2022 and 2021, respectively.

Natural gas production was 30% and 31% of total production volume for the three months ended September 30, 2022 and 2021, respectively.

Natural gas revenues for the three months ended September 30, 2022 were $56.3 million higher than the three months ended September 30, 2021.

A 96% increase in average prices increased third quarter 2022 revenues by $41.8 million compared to the same period in the prior year, while a 17% increase in natural gas production increased revenues by $14.5 million.

NGL revenues were 14% and 16% of the Company’s total revenues for the three months ended September 30, 2022 and 2021, respectively.

NGL production was 25% and 23% of total production volume for the three months ended September 30, 2022 and 2021, respectively.

NGL revenues for the three months ended September 30, 2022 were $20.0 million higher than the three months ended September 30, 2021.

A 10% increase in average prices increased third quarter 2022 revenues by $4.4 million compared to the same period in the prior year, while a 31% increase in NGL production increased revenues by $15.6 million.

Operating Expenses and Other Income (Expense) .

1 unchanged sentence

Three Months Ended

(In thousands, except per unit data) June 30, 2022 June 30, 2021

(In thousands, except per unit data) September 30, 2022 September 30, 2021

Operating Expenses:

5 unchanged sentences

Depreciation, depletion and amortization 68,972 47,993

Amortization of intangible assets — 7,233

General and administrative expenses 19,625 14,695

3 unchanged sentences

Loss on derivatives, net — (623)

Other income, net 6,538 135

Other income (expense), net (166) 142

Total other expense, net $ (5,429) $ (7,955)

6 unchanged sentences

Depreciation, depletion and amortization 9.20 7.74

Amortization of intangible assets — 1.22

General and administrative expenses 2.62 2.37

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, 2022 were $10.6 million, or $1.11 per boe, higher compared to the corresponding 2021 period, due to an increase in costs including operating and maintenance costs, workover activities and additional non-operated activities.

Lease operating expenses for the three months ended September 30, 2022 were $11.1 million, or $0.82 per boe, higher compared to the corresponding 2021 period, due to an increase in costs including operating and maintenance costs, workover activities and additional non-operated activities.

Gathering, transportation and processing 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 gathering, transportation and processing costs for the three months ended June 30, 2022 were $6.1 million, or $0.69 per boe, higher than the three months ended June 30, 2021, primarily due to increased natural gas production and higher prices.

The gathering, transportation and processing costs for the three months ended September 30, 2022 were $7.8 million, or $0.71 per boe, higher than the three months ended September 30, 2021, primarily due to increased natural gas production and higher prices.

Taxes other than income include production and ad valorem taxes.

2 unchanged sentences

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, 2022 were $13.6 million, or $1.72 per boe, higher compared to the three months ended June 30, 2021, primarily due to an increase in oil, natural gas, and NGL revenues.

Exploration expenses are geological and geophysical costs that include seismic surveying costs, costs of expired or abandoned leases, and delay rentals.

The exploration expenses for the three months ended June 30, 2022 were $3.3 million, or $0.49 per boe, higher than the three months ended June 30, 2021, due to the purchase of seismic licenses and increased seismic surveying costs.

Depreciation, depletion and amortization (“DD&A”) during the three months ended June 30, 2022 was $13.9 million, or $1.15 per boe, higher than the three months ended June 30, 2021 due to increased production and a higher depreciable cost basis.

For the three months ended June 30, 2022, the Company did not recognize any amortization of intangible assets, because the intangible assets were fully amortized in June 2021 as a result of the termination of the Non-Compete.

During the three months ended June 30, 2021, the Company recognized $7.2 million of amortization of intangible assets.

General and administrative expenses during the three months ended June 30, 2022 were $6.2 million, or $1.45 per boe, lower than the three months ended June 30, 2021, primarily driven by the reduction in costs due to the termination of the Services Agreement on June 30, 2021, partially offset by higher corporate payroll expenses related to increased employee headcount.

Other income, net, during the three months ended June 30, 2022 was $6.4 million higher than the three months ended June 30, 2021, primarily driven by the receipt of an earnout payment in the second quarter of 2022 associated with the sale of the Company’s 35% membership interest in Ironwood Eagle Ford Midstream, LLC in 2020.

Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021

Taxes other than income for the three months ended September 30, 2022 were $12.5 million, or $1.28 per boe, higher compared to the three months ended September 30, 2021, primarily due to an increase in oil, natural gas, and NGL revenues.

Depreciation, depletion and amortization (“DD&A”) during the three months ended September 30, 2022 was $21.0 million, or $1.46 per boe, higher than the three months ended September 30, 2021 due to increased production and a higher depreciable cost basis.

General and administrative expenses during the three months ended September 30, 2022 were $4.9 million, or $0.25 per boe, higher than the three months ended September 30, 2021, primarily driven by higher corporate payroll expenses related to increased employee headcount and professional service fees.

Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021

Oil, Natural Gas and NGL Sales Revenues.

2 unchanged sentences

This ratio may not be reflective of the current price ratio between the two products.

Six Months Ended

(In thousands, except per unit data) June 30, 2022 June 30, 2021

Nine Months Ended

(In thousands, except per unit data) September 30, 2022 September 30, 2021

Oil (MBbls) 9,216 8,346

15 unchanged sentences

NGLs (per barrel) 37.14 24.93

Oil revenues were 69% and 73% of the Company’s total revenues for the six months ended June 30, 2022 and 2021, respectively.

Oil production was 44% and 48% of total production volume for the six months ended June 30, 2022 and 2021, respectively.

Oil revenues for the six months ended June 30, 2022 were $259.8 million higher than the six months ended June 30, 2021.

A 67% increase in average prices increased revenues by $225.1 million during the six months ended June 30, 2022 compared to the same period in the prior year, while a 6% increase in oil production increased revenues by $34.7 million.

Natural gas revenues were 16% and 15% of the Company’s total revenues for the six months ended June 30, 2022 and 2021, respectively.

Natural gas production was 31% and 29% of total production volume for the six months ended June 30, 2022 and 2021, respectively.

Natural gas revenues for the six months ended June 30, 2022 were $72.9 million higher than the six months ended

June 30, 2021.

A 67% increase in average prices increased revenues by $46.4 million during the six months ended June 30, 2022 compared to the same period in the prior year, while a 23% increase in natural gas production increased revenues by $26.5 million.

NGL revenues were 15% and 12% of the Company’s total revenues for the six months ended June 30, 2022 and 2021, respectively.

NGL production was 25% and 23% of total production volume for the six months ended June 30, 2022 and 2021, respectively.

NGL revenues for the six months ended June 30, 2022 were $68.6 million higher than the six months ended June 30, 2021.

An 81% increase in average prices increased revenues by $45.9 million during the six months ended June 30, 2022 compared to the same period in the prior year, while a 22% increase in NGL production increased revenues by $22.7 million.

Oil revenues were 68% and 71% of the Company’s total revenues for the nine months ended September 30, 2022 and 2021, respectively.

Oil production was 44% and 47% of total production volume for the nine months ended September 30, 2022 and 2021, respectively.

Oil revenues for the nine months ended September 30, 2022 were $381.4 million higher than the nine months ended September 30, 2021.

A 56% increase in average prices increased revenues by $295.2 million during the nine months ended September 30, 2022 compared to the same period in the prior year, while a 10% increase in oil production increased revenues by $86.2 million.

Natural gas revenues were 18% and 15% of the Company’s total revenues for the nine months ended September 30, 2022 and 2021, respectively.

Natural gas production was 31% and 30% of total production volume for the nine months ended September 30, 2022 and 2021, respectively.

Natural gas revenues for the nine months ended September 30, 2022 were $129.3 million higher than the nine months ended September 30, 2021.

A 78% increase in average prices increased revenues by $87.5 million during the nine months ended September 30, 2022 compared to the same period in the prior year, while a 21% increase in natural gas production increased revenues by $41.8 million.

NGL revenues were 14% of the Company’s total revenues for each of the nine months ended September 30, 2022 and 2021.

NGL production was 25% and 23% of total production volume for the nine months ended September 30, 2022 and 2021, respectively.

NGL revenues for the nine months ended September 30, 2022 were $88.6 million higher than the nine months ended September 30, 2021.

A 49% increase in average prices increased revenues by $50.1 million during the nine months ended September 30, 2022 compared to the same period in the prior year, while a 25% increase in NGL production increased revenues by $38.5 million.

Operating Expenses and Other Income (Expense) .

The following table summarizes the Company’s operating expenses and other income (expense) for the periods indicated.

Six Months Ended

(In thousands, except per unit data) June 30, 2022 June 30, 2021

Nine Months Ended

(In thousands, except per unit data) September 30, 2022 September 30, 2021

Operating Expenses:

11 unchanged sentences

Loss on derivatives, net — (3,110)

Other income (expense), net 6,744 (94)

Other income, net 6,579 48

Total other expense, net $ (15,058) $ (26,581)

8 unchanged sentences

General and administrative expenses 2.67 3.38

Lease operating expenses for the six months ended June 30, 2022 were $20.0 million, or $1.05 per boe, higher compared to the corresponding 2021 period, due to an increase in costs including operating and maintenance costs, workover activities, and additional non-operated activities.

The gathering, transportation and processing costs for the six months ended June 30, 2022 were $11.7 million, or $0.66 per boe, higher than the six months ended June 30, 2021, primarily due to increased natural gas production and higher prices.

Taxes other than income for the six months ended June 30, 2022 were $23.7 million, or $1.52 per boe, higher compared to the six months ended June 30, 2021, primarily due to an increase in oil, natural gas, and NGL revenues.

The exploration expenses for the six months ended June 30, 2022 were $6.8 million, or $0.50 per boe, higher than the six months ended June 30, 2021, due to the purchase of seismic licenses and increased seismic surveying costs.

DD&A during the six months ended June 30, 2022 was $24.1 million, or $0.86 per boe, higher than the six months ended June 30, 2021 due to increased production and a higher depreciable cost basis.

For the six months ended June 30, 2022, the Company did not recognize any amortization of intangible assets, because the intangible assets were fully amortized in June 2021 as a result of the termination of the Non-Compete.

During the six months ended June 30, 2021, the Company recognized $9.3 million of amortization of intangible assets.

General and administrative expenses during the six months ended June 30, 2022 were $9.5 million, or $1.23 per boe, lower than the six months ended June 30, 2021, primarily driven by the reduction in costs due to the termination of the Services Agreement on June 30, 2021, partially offset by higher corporate payroll expenses related to increased employee headcount.

Other income (expense), net, during the six months ended June 30, 2022 was $6.7 million.

Lease operating expenses for the nine months ended September 30, 2022 were $31.1 million, or $0.97 per boe, higher compared to the corresponding 2021 period, due to an increase in costs including operating and maintenance costs, workover activities, and additional non-operated activities.

The gathering, transportation and processing costs for the nine months ended September 30, 2022 were $19.4 million, or $0.68 per boe, higher than the nine months ended September 30, 2021, primarily due to increased natural gas production and higher prices.

Taxes other than income for the nine months ended September 30, 2022 were $36.3 million, or $1.44 per boe, higher compared to the nine months ended September 30, 2021, primarily due to an increase in oil, natural gas, and NGL revenues.

The exploration expenses for the nine months ended September 30, 2022 were $7.7 million, or $0.35 per boe, higher than the nine months ended September 30, 2021, due to the purchase of seismic licenses and increased seismic surveying costs.

DD&A during the nine months ended September 30, 2022 was $45.1 million, or $1.08 per boe, higher than the nine months ended September 30, 2021 due to increased production and a higher depreciable cost basis.

For the nine months ended September 30, 2022, the Company did not recognize any amortization of intangible assets, because the intangible assets were fully amortized in June 2021 as a result of the termination of the Non-Compete.

During the nine months ended September 30, 2021, the Company recognized $9.3 million of amortization of intangible assets.

General and administrative expenses during the nine months ended September 30, 2022 were $4.6 million, or $0.71 per boe, lower than the nine months ended September 30, 2021, primarily driven by the reduction in costs due to the termination of the

Services Agreement on June 30, 2021, partially offset by higher corporate payroll expenses related to increased employee headcount and professional service fees.

Other income (expense), net, during the nine months ended September 30, 2022 was $6.6 million.

This is primarily comprised of the receipt of an earnout payment in the second quarter of 2022 associated with the sale of the Company’s 35% membership interest in Ironwood Eagle Ford Midstream, LLC in 2020.

5 unchanged sentences

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.

As of June 30, 2022, the Company had $400.0 million of principal debt related to the 2026 Senior Notes outstanding and no outstanding borrowings related to the Amended and Restated RBL Facility.

As of June 30, 2022, the Company had $951.9 million of liquidity comprised of the $450.0 million of borrowing base capacity of the Amended and Restated RBL Facility, and $501.9 million of cash and cash equivalents.

As of September 30, 2022, the Company had $400.0 million of principal debt related to the 2026 Senior Notes outstanding and no outstanding borrowings related to the Amended and Restated RBL Facility.

As of September 30, 2022, the Company had $1,139.5 million of liquidity comprised of the $450.0 million of borrowing base capacity of the Amended and Restated RBL Facility, and $689.5 million of cash and cash equivalents.

Cash and Cash Equivalents

At June 30, 2022, Magnolia had $501.9 million of cash and cash equivalents.

At September 30, 2022, Magnolia had $689.5 million of cash and cash equivalents.

The Company’s cash and cash equivalents are maintained with various financial institutions in the United States.

3 unchanged sentences

The following table presents the sources and uses of the Company’s cash and cash equivalents for the periods presented:

Six Months Ended

(In thousands) June 30, 2022 June 30, 2021

Nine Months Ended

(In thousands) September 30, 2022 September 30, 2021

SOURCES OF CASH AND CASH EQUIVALENTS

10 unchanged sentences

Other (13,058) (10,477)

(483,095) (308,310)

Net uses of cash and cash equivalents (706,128) (475,473)

NET CHANGE IN CASH AND CASH EQUIVALENTS $ 322,557 $ 52,462

3 unchanged sentences

The factors that determine operating cash flows are largely the same as those that affect net earnings, with the exception of certain non-cash expenses such as DD&A, stock based compensation, amortization of deferred financing costs, the non-cash portion of exploration expenses, and asset retirement obligations accretion.

Net cash provided by operating activities totaled $618.0 million and $306.0 million for the six months ended June 30, 2022 and 2021, respectively.

During the six months ended June 30, 2022, cash provided by operating activities was positively impacted by increased oil, natural gas, and NGL prices, partially offset by higher operating expenses and income tax payments.

Net cash provided by operating activities totaled $1,028.7 million and $527.9 million for the nine months ended September 30, 2022 and 2021, respectively.

During the nine months ended September 30, 2022, cash provided by operating activities was positively impacted by increased oil, natural gas, and NGL prices, partially offset by higher operating expenses and income tax payments.

Uses of Cash and Cash Equivalents

The Company made individually insignificant bolt-on acquisitions during each of the six months ended June 30, 2022 and 2021.

The Company made individually insignificant bolt-on acquisitions during each of the nine months ended September 30, 2022 and 2021.

Additions to Oil and Natural Gas Properties

The following table sets forth the Company’s capital expenditures for the periods presented:

Three Months Ended Six Months Ended

(In thousands) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Three Months Ended Nine Months Ended

(In thousands) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Drilling and completion $ 114,468 $ 67,180 $ 319,843 $ 159,838

1 unchanged sentence

Total capital expenditures $ 116,050 $ 68,388 $ 323,510 $ 162,744

During the second quarter of 2022, Magnolia was running a two-rig program.

One rig drilled multi-well development pads in the Giddings area.

The second rig drilled a mix of wells in both the Karnes and Giddings areas.

During the third quarter of 2022, Magnolia was running a two-rig program.

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.

2 unchanged sentences

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 six months ended June 30, 2022 and 2021, the Company repurchased 3.6 million and 4.0 million shares for a total cost of approximately $81.7 million and $44.3 million, respectively.

During the six months ended June 30, 2022, the Company also repurchased 0.6 million shares of Class A Common Stock for $11.6 million from EnerVest Energy Institutional Fund XIV-C, L.P.

During the nine months ended September 30, 2022 and 2021, the Company repurchased 6.6 million and 6.0 million shares for a total cost of approximately $144.0 million and $73.8 million, respectively.

During the nine months ended September 30, 2022, the Company also repurchased 0.6 million shares of Class A Common Stock for $11.6 million from EnerVest Energy Institutional Fund XIV-C, L.P.

outside of the share repurchase program.

During the six months ended June 30, 2022 and 2021, Magnolia LLC repurchased and subsequently canceled 5.9 million and 10.0 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $138.8 million and $122.5 million of cash consideration, respectively.

As of June 30, 2022, Magnolia owned approximately 86.9% of the interest in Magnolia LLC and the noncontrolling interest was approximately 13.1%.

During the nine months ended September 30, 2022 and 2021, Magnolia LLC repurchased and subsequently canceled 5.9 million and 13.0 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $138.8 million and $171.7 million of cash consideration, respectively.

As of September 30, 2022, Magnolia owned approximately 86.7% of the interest in Magnolia LLC and the noncontrolling interest was approximately 13.3%.

In January 2021, the Company amended the Non-Compete such that, rather than delivering an aggregate of 4.0 million shares of Class A Common Stock upon the two and one-half year and the four year anniversaries of July 31, 2018 (the “Closing Date”), the Company would deliver (i) the cash value of approximately 2.0 million shares of Class A Common Stock and approximately 0.4 million shares of Class A Common Stock on the two and one-half year anniversary of the Closing Date and (ii) an aggregate of 1.6 million shares of Class A Common Stock on the four year anniversary of the Closing Date, in each case subject to the terms and conditions of the Non-Compete.

1 unchanged sentence

On June 30, 2021, as part of the Second Non-Compete Amendment, the Company paid $24.9 million in cash in lieu of delivering the remaining 1.6 million shares of Class A Common Stock.

On February 3, 2022, the Company’s board of directors declared a cash dividend of $0.20 per share of Class A Common Stock totaling $37.3 million, of which $37.2 million was paid as of June 30, 2022.

In addition, $8.6 million was distributed to the Magnolia LLC Unit Holders.

During the nine months ended September 30, 2022, the Company declared cash dividends to holders of its Class A Common Stock totaling $56.4 million, of which $56.2 million was paid as of September 30, 2022.

Additionally, $11.4 million was distributed to the Magnolia LLC Unit Holders.

During the nine months ended September 30, 2021, the Company declared cash dividends to holders of its Class A Common Stock totaling $14.2 million, of which $14.1 million was paid as of September 30, 2021.

Additionally, $4.8 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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis