Magnolia Oil & Gas Corp 10-Q

Item 1. Financial Statements Magnolia Oil & Gas Corporation Consolidated Balance Sheets (In thousands) March 31, 2026 December 31, 2025 ASSETS (Unaudited) (Audited) CURRENT ASSETS Cash and cash equivalents $ 124,372 $ 266,785 Trade receivables 160,767 116,530 Joint interest receivables 32,064 33,952 Income tax receivable 1,325 24,291 Other current assets 1,135 877 Total current assets 319,663 442,435 PROPERTY, PLANT AND EQUIPMENT Oil and natural gas properties 5,232,344 4,957,292 Other 21,267 20,618 Accumulated depreciation, depletion and amortization ( 2,667,132 ) ( 2,553,758 ) Total property, plant and equipment, net 2,586,479 2,424,152 OTHER ASSETS Other long-term assets 38,336 36,505 TOTAL ASSETS $ 2,944,478 $ 2,903,092 LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable $ 156,497 $ 177,568 Other current liabilities ( Note 6) 134,033 110,462 Total current liabilities 290,530 288,030 LONG-TERM LIABILITIES Long-term debt, net 393,442 393,251 Asset retirement obligations, net of current 187,471 186,038 Deferred tax liabilities 18,525 20,674 Other long-term liabilities 18,629 15,926 Total long-term liabilities 618,067 615,889 COMMITMENTS AND CONTINGENCIES ( Note 8) EQUITY Class A Common Stock, $ 0.0001 par value, 1,300,000 shares authorized, 234,287 shares issued and 185,374 shares outstanding in 2026 and 228,908 shares issued and 181,230 shares outstanding in 2025 24 23 Class B Common Stock, $ 0.0001 par value, 225,000 shares authorized, 0 shares issued and outstanding in 2026 and 5,523 shares issued and outstanding in 2025 — 1 Additional paid-in capital 1,962,082 1,903,459 Treasury Stock, at cost, 48,913 shares and 47,678 shares in 2026 and 2025, respectively ( 960,737 ) ( 928,662 ) Retained earnings 1,036,099 966,747 Accumulated other comprehensive loss ( 1,587 ) ( 1,610 ) Noncontrolling interest — 59,215 Total equity 2,035,881 1,999,173 TOTAL LIABILITIES AND EQUITY $ 2,944,478 $ 2,903,092 The accompanying notes are an integral part of these consolidated financial statements. 1 Magnolia Oil & Gas Corporation Consolidated Statements of Operations (Unaudited) (In thousands, except per share data) Three Months Ended March 31, 2026 March 31, 2025 REVENUES Oil revenues $ 257,329 $ 245,534 Natural gas revenues 51,800 51,367 Natural gas liquids revenues 49,382 53,399 Total revenues 358,511 350,300 OPERATING EXPENSES Lease operating expenses 47,751 47,075 Gathering, transportation and processing 18,207 14,953 Taxes other than income 16,387 20,105 Exploration expenses 1,742 348 Asset retirement obligations accretion 1,857 1,556 Depreciation, depletion and amortization 113,359 105,853 General and administrative expenses 31,444 24,588 Total operating expenses 230,747 214,478 OPERATING INCOME 127,764 135,822 OTHER EXPENSE Interest expense, net ( 6,004 ) ( 5,252 ) Other income (expense), net ( 36 ) 1,215 Total other expense, net ( 6,040 ) ( 4,037 ) INCOME BEFORE INCOME TAXES 121,724 131,785 Income tax expense 20,888 25,137 NET INCOME 100,836 106,648 LESS: Net income attributable to noncontrolling interest 1,011 3,721 NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK $ 99,825 $ 102,927 NET INCOME PER SHARE OF CLASS A COMMON STOCK Basic $ 0.54 $ 0.54 Diluted $ 0.54 $ 0.54 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING Basic 183,267 188,653 Diluted 183,279 188,664 COMPREHENSIVE INCOME: NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK $ 99,825 $ 102,927 Other comprehensive income, net of tax: Postretirement benefits 23 — COMPREHENSIVE INCOME ATTRIBUTABLE TO CLASS A COMMON STOCK $ 99,848 $ 102,927 The accompanying notes are an integral part of these consolidated financial statements. 2 Magnolia Oil & Gas Corporation Consolidated Statements of Changes in Equity (Unaudited) (In thousands) Class A Common Stock Class B Common Stock Additional Paid In Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Noncontrolling Interest Total Equity For the Three Months Ended March 31, 2025 Shares Value Shares Value Shares Value Balance, December 31, 2024 228,164 $ 23 5,523 $ 1 $ 1,880,243 38,808 $ ( 721,279 ) $ 754,591 $ — $ 1,913,579 $ 53,747 $ 1,967,326 Stock based compensation expense, net of forfeitures — — — — 4,929 — — — — 4,929 145 5,074 Common stock issued related to stock based compensation and other, net 463 — — — ( 4,716 ) — — — — ( 4,716 ) ( 139 ) ( 4,855 ) Modification and cash-settlement of stock based compensation — — — — ( 3,157 ) — — — — ( 3,157 ) — ( 3,157 ) Changes in ownership interest adjustment — — — — 1,116 — — — — 1,116 ( 1,116 ) — Class A Common Stock repurchases — — — — — 2,150 ( 51,978 ) — — ( 51,978 ) — ( 51,978 ) Dividends declared ($ 0.150 per share) — — — — — — — ( 28,911 ) — ( 28,911 ) — ( 28,911 ) Distributions to noncontrolling interest owners — — — — — — — — — — ( 829 ) ( 829 ) Adjustment to deferred taxes — — — — 422 — — — — 422 — 422 Tax impact of equity transactions — — — — — — ( 416 ) — — ( 416 ) — ( 416 ) Net income — — — — — — — 102,927 — 102,927 3,721 106,648 Balance, March 31, 2025 228,627 $ 23 5,523 $ 1 $ 1,878,837 40,958 $ ( 773,673 ) $ 828,607 $ — $ 1,933,795 $ 55,529 $ 1,989,324 For the Three Months Ended March 31, 2026 Balance, December 31, 2025 228,908 $ 23 5,523 $ 1 $ 1,903,459 47,678 $ ( 928,662 ) $ 966,747 $ ( 1,610 ) $ 1,939,958 $ 59,215 $ 1,999,173 Stock based compensation expense, net of forfeitures — — — — 8,113 — — — — 8,113 55 8,168 Common stock issued related to stock based compensation and other, net 606 — — — ( 7,956 ) — — — — ( 7,956 ) — ( 7,956 ) Changes in ownership interest adjustment — — — — 39,577 — — — — 39,577 ( 39,577 ) — Class A Common Stock repurchases — — — — — 1,235 ( 32,075 ) — — ( 32,075 ) — ( 32,075 ) Class B Common Stock purchase and cancellations — — ( 750 ) — — — — — — — ( 19,793 ) ( 19,793 ) Conversion of Class B Common Stock to Class A Common Stock 4,773 1 ( 4,773 ) ( 1 ) — — — — — — — — Dividends declared ($ 0.165 per share) — — — — — — — ( 30,473 ) — ( 30,473 ) — ( 30,473 ) Distributions to noncontrolling interest owners — — — — — — — — — — ( 911 ) ( 911 ) Adjustment to deferred taxes — — — — ( 8,311 ) — — — — ( 8,311 ) — ( 8,311 ) Tax impact of equity transactions — — — — 27,200 — — — — 27,200 — 27,200 Net income — — — — — — — 99,825 — 99,825 1,011 100,836 Other comprehensive income — — — — — — — — 23 23 — 23 Balance, March 31, 2026 234,287 $ 24 — $ — $ 1,962,082 48,913 $ ( 960,737 ) $ 1,036,099 $ ( 1,587 ) $ 2,035,881 $ — $ 2,035,881 The accompanying notes are an integral part of these consolidated financial statements. 3 Magnolia Oil & Gas Corporation Consolidated Statements of Cash Flows (Unaudited) ( In thousands) Three Months Ended March 31, 2026 March 31, 2025 CASH FLOWS FROM OPERATING ACTIVITIES NET INCOME $ 100,836 $ 106,648 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 113,359 105,853 Asset retirement obligations accretion 1,857 1,556 Amortization of deferred financing costs 546 532 Deferred income tax expense 16,890 12,342 Gain on revaluation of contingent consideration — ( 1,352 ) Stock based compensation 12,220 6,550 Other 843 353 Changes in operating assets and liabilities: Accounts receivable ( 42,349 ) ( 11,272 ) Accounts payable ( 21,071 ) ( 8,678 ) Accrued liabilities ( 6,568 ) 11,875 Other assets and liabilities, net 21,053 83 Net cash provided by operating activities 197,616 224,490 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions ( 154,990 ) ( 24,144 ) Additions to oil and natural gas properties ( 128,427 ) ( 131,168 ) Changes in working capital associated with additions to oil and natural gas properties 27,447 9,210 Other investing 8,352 30 Net cash used in investing activities ( 247,618 ) ( 146,072 ) CASH FLOW FROM FINANCING ACTIVITIES Class A Common Stock repurchases ( 33,277 ) ( 52,393 ) Class B Common Stock purchases and cancellations ( 19,793 ) — Dividends paid ( 30,473 ) ( 28,911 ) Distributions to noncontrolling interest owners ( 911 ) ( 829 ) Other financing activities ( 7,957 ) ( 8,776 ) Net cash used in financing activities ( 92,411 ) ( 90,909 ) NET CHANGE IN CASH AND CASH EQUIVALENTS ( 142,413 ) ( 12,491 ) Cash and cash equivalents – Beginning of period 266,785 260,049 Cash and cash equivalents – End of period $ 124,372 $ 247,558 The accompanying notes are an integral part of these consolidated financial statements. 4 Magnolia Oil & Gas Corporation Notes to Consolidated Financial Statements 1. Organization and Basis of Presentation Organization and Nature of Operations Magnolia Oil & Gas Corporation (either individually or together with its consolidated subsidiaries, as the context requires, the “Company” or “Magnolia”) is an independent oil and natural gas company engaged in the acquisition, development, exploration, and production of oil, natural gas, and natural gas liquid (“NGL”) reserves. The Company’s oil and natural gas properties are located primarily in the Karnes and Giddings areas in South Texas where the Company primarily targets the Eagle Ford Shale and Austin Chalk formations. Magnolia’s objective is to generate stock market value over the long term through steady organic production growth, high full cycle operating margins, an efficient capital program with short economic paybacks, significant free cash flow after capital expenditures, and effective reinvestment of free cash flow. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, certain disclosures normally included in an Annual Report on Form 10-K have been omitted. The consolidated financial statements and related notes included in this Quarterly Report should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the period ended December 31, 2025 (the “2025 Form 10-K”). Except as disclosed herein, there have been no material changes to the information disclosed in the notes to the consolidated financial statements included in the Company’s 2025 Form 10-K. In the opinion of management, all normal, recurring adjustments and accruals considered necessary to present fairly, in all material respects, the Company’s interim financial results have been included. Operating results for the periods presented are not necessarily indicative of expected results for the full year. Certain reclassifications of prior period financial statements have been made to conform to current reporting practices. The consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of intercompany transactions and balances. The Company’s interests in oil and natural gas exploration and production ventures and partnerships are proportionately consolidated. The Company reflects a noncontrolling interest representing the interest owned by the Magnolia LLC Unit Holders through their ownership of Magnolia LLC Units in the consolidated financial statements. The noncontrolling interest is presented as a component of equity. See Note 10—Stockholders’ Equity for further discussion of the noncontrolling interest. Segment Information The Company operates in one reportable segment engaged in the acquisition, development, exploration, and production of oil and natural gas properties (“Operating segment”). Magnolia’s operations are conducted predominantly in one geographic area of the United States. The Operating segment sells oil, natural gas, and NGLs which are disaggregated on the Company’s consolidated statements of operations. The profit or loss metric used to evaluate segment performance is net income reported on the Company’s consolidated statements of operations. The measure of segment assets is reported on the Company’s consolidated balance sheets as Total Assets. Significant segment expenses are the same as those in the consolidated statements of operations. 2. Summary of Significant Accounting Policies As of March 31, 2026, the Company’s significant accounting policies are consistent with those discussed in Note 2—Summary of Significant Accounting Policies of its consolidated financial statements contained in the Company’s 2025 Form 10-K. Recent Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” requiring disclosure of specified information about certain costs and expenses. ASU 2024-03 is effective for annual periods beginning January 1, 2027, with early adoption permitted. The Company is currently evaluating the potential effect that the updated standard will have on its financial statement disclosures. 5 3. Revenue Recognition Magnolia’s revenues include the sale of crude oil, natural gas, and NGLs. The Company has concluded that disaggregating revenue by product type appropriately depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors and has reflected this disaggregation of revenue on the Company’s consolidated statements of operations for all periods presented. The Company’s receivables consist mainly of trade receivables from commodity sales and joint interest billings due from owners on properties the Company operates. Receivables from contracts with customers totaled $ 160.8 million as of March 31, 2026 and $ 116.5 million as of December 31, 2025. For further detail regarding the Company’s revenue recognition policies, please refer to Note 2—Summary of Significant Accounting Policies of the consolidated financial statements contained in the Company’s 2025 Form 10-K. 4. Acquisitions 2026 Acquisitions During the three months ended March 31, 2026, the Company completed various bolt-on property acquisitions of certain oil and natural gas assets totaling $ 155.0 million in cash. 2025 Acquisitions During the three months ended March 31, 2025, the Company completed various bolt-on property acquisitions of certain oil and natural gas assets totaling $ 24.1 million in cash. The Company accounted for the 2026 and 2025 acquisitions as asset acquisitions. 5. Fair Value Measurements Certain of the Company’s assets and liabilities are carried at fair value and measured either on a recurring or nonrecurring basis. The Company’s fair value measurements are based either on actual market data or assumptions that other market participants would use in pricing an asset or liability in an orderly transaction, using the valuation hierarchy prescribed by GAAP under Accounting Standards Codification (“ASC”) 820. The three levels of the fair value hierarchy under ASC 820 are as follows: Level 1 - Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used. Level 2 - Pricing inputs are other than quoted prices included within Level 1 that are observable for the investment, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, inputs other than quoted prices that are observable for the investment, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 - Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. The inputs used in determination of fair value require significant judgment and estimation. The Company has other financial instruments consisting primarily of receivables, payables, and other current assets and liabilities that approximate fair value due to the nature of the instruments and their relatively short maturities. Non-financial assets and liabilities initially measured at fair value include assets acquired and liabilities assumed in business combinations and asset retirement obligations. 6 Recurring Fair Value Measurements Long-Term Debt The fair value of the Senior Notes at March 31, 2026 and December 31, 2025 was $ 413.1 million and $ 412.4 million, respectively. The fair value is based on unadjusted quoted prices in an active market, which is considered a Level 1 input in the fair value hierarchy. The carrying value of the Senior Notes, net of unamortized deferred financing costs, was $ 393.4 million and $ 393.3 million as of March 31, 2026 and December 31, 2025, respectively, and is included in “Long-term debt, net” on the Company’s consolidated balance sheets. Liability-Classified Stock Based Compensation The fair value of the liability for future cash-settled stock based compensation was $ 7.4 million and $ 5.6 million as of March 31, 2026 and December 31, 2025, respectively, and is included in “Other current liabilities” and “Other long-term liabilities” on the Company’s consolidated balance sheets. The fair value of the liability for future cash-settled stock based compensation is estimated using observable market data (the total shareholder return (“TSR”) of the Class A Common Stock relative to the TSR achieved by a specific industry peer group) and Monte Carlo simulation models, which is considered a Level 2 input in the fair value hierarchy. Nonrecurring Fair Value Measurements Certain of the Company’s assets and liabilities are measured at fair value on a nonrecurring basis. Specifically, equity-classified stock based compensation is not measured at fair value on an ongoing basis but is subject to fair value calculations in certain circumstances. For further detail, see Note 11—Stock Based Compensation . There were no other material nonrecurring fair value measurements as of March 31, 2026 or December 31, 2025. 6. Other Current Liabilities The following table provides detail of the Company’s other current liabilities as of the periods presented: (In thousands) March 31, 2026 December 31, 2025 Accrued capital expenditures $ 48,825 $ 21,378 Current operating lease liabilities 19,456 18,212 Other 65,752 70,872 Total other current liabilities $ 134,033 $ 110,462 7. Long-term Debt The Company’s long-term debt is comprised of the following: (In thousands) March 31, 2026 December 31, 2025 Revolving credit facility $ — $ — Senior Notes due 2032 400,000 400,000 Total long-term debt 400,000 400,000 Less: Unamortized deferred financing cost ( 6,558 ) ( 6,749 ) Long-term debt, net $ 393,442 $ 393,251 Credit Facility The original RBL Facility was entered into by and among Magnolia Operating, as borrower, Magnolia Intermediate, as its holding company, the banks, financial institutions, and other lending institutions from time to time party thereto, as lenders, the other parties from time to time party thereto and Citibank, N.A., as administrative agent, collateral agent, issuing bank, and swingline lender. On February 16, 2022, Magnolia Operating, as borrower, amended and restated the original RBL Facility in its entirety (the “2022 RBL Facility”). On November 13, 2024, Magnolia Operating, as borrower, amended and restated the 2022 RBL Facility in its entirety, providing for maximum commitments in an aggregate principal amount of $ 1.5 billion with a letter of credit facility with a $ 50.0 million sublimit, with an initial borrowing base of $ 800.0 million and borrowing capacity of $ 450.0 million. The RBL Facility is 7 guaranteed by certain parent companies and subsidiaries of Magnolia LLC and is collateralized by certain of Magnolia Operating’s oil and natural gas properties. The RBL Facility matures on November 13, 2029, subject to certain conditions. Borrowings under the RBL Facility bear interest, at Magnolia Operating’s option, at a rate per annum equal to either the term SOFR rate or the alternative base rate plus the applicable margin. Additionally, Magnolia Operating is required to pay a commitment fee quarterly in arrears in respect of unused commitments under the RBL Facility. The applicable margin and the commitment fee rate are calculated based upon the utilization levels of the RBL Facility as a percentage of unused lender commitments then in effect. The RBL Facility contains certain affirmative and negative covenants customary for financings of this type, including compliance with a leverage ratio of less than 3.50 to 1.00 and a current ratio of greater than 1.00 to 1.00. As of March 31, 2026, the Company was in compliance with all covenants under the RBL Facility. Deferred financing costs in connection with the RBL Facility are amortized on a straight-line basis over a period of five years from November 2024 to November 2029 and included in “Interest expense, net” in the Company’s consolidated statements of operations. The unamortized portion of the deferred financing costs is included in “Other long-term assets” on the Company’s consolidated balance sheets as of March 31, 2026 and December 31, 2025. The Company recognized interest expense related to the RBL Facility of $ 0.8 million for each of the three months ended March 31, 2026 and 2025. The Company did no t have any outstanding borrowings under the RBL Facility as of March 31, 2026. Senior Notes On November 26, 2024, the Issuers issued and sold $ 400.0 million aggregate principal amount of Senior Notes in a private placement under Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Senior Notes were issued under the Indenture, dated as of November 26, 2024 (the “Indenture”), by and among the Issuers, the Company, the guarantors named therein, and Regions Bank, as trustee. The Senior Notes are guaranteed on a senior unsecured basis by the Company, Magnolia LLC, Magnolia Oil & Gas Holdings LLC, and Magnolia Intermediate and may be guaranteed by certain future subsidiaries of the Company. The Senior Notes will mature on December 1, 2032 and bear interest at the rate of 6.875 % per annum. Deferred financing costs are amortized using the effective interest method over the term of the Senior Notes and are included in “Interest expense, net” in the Company’s consolidated statements of operations. The unamortized portion of the deferred financing costs is included as a reduction to the carrying value of the Senior Notes, which has been recorded as “Long-term debt, net” on the Company’s consolidated balance sheets as of March 31, 2026 and December 31, 2025. The Company recognized interest expense related to the Senior Notes of $ 7.1 million for each of the three months ended March 31, 2026 and 2025. At any time prior to December 1, 2027, the Issuers may, on any one or more occasions, redeem all or a part of the Senior Notes at a redemption price equal to 100 % of the principal amount of the Senior Notes redeemed, plus a “make whole” premium on accrued and unpaid interest, if any, to, but excluding, the date of redemption. After December 1, 2027, the Issuers may redeem all or a part of the Senior Notes based on principal plus a set premium, as set forth in the Indenture, including any accrued and unpaid interest. 8. Commitments and Contingencies Legal Matters From time to time, the Company is or may become involved in litigation in the ordinary course of business. Certain of the Magnolia LLC Unit Holders and EnerVest Energy Institutional Fund XIV-C, L.P. (collectively the “Co-Defendants”) and the Company have been named as defendants in a lawsuit where the plaintiffs claim to be entitled to a minority working interest in certain Karnes County Assets. The litigation is in the pre-trial stage. The exposure related to this litigation is currently not reasonably estimable. The Co-Defendants retain all such liability. Matters that are probable of unfavorable outcome to Magnolia and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, Magnolia’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. The Company does not believe the outcome of any such disputes or legal actions will have a material effect on its consolidated statements of operations, balance sheet, or cash flows after consideration of recorded accruals. Actual amounts could differ materially from management’s estimates. 8 Environmental Matters The Company, as an owner or lessee and operator of oil and natural gas properties, is subject to various federal, state, and local laws and regulations, and in certain cases permits, relating to discharge of materials into, and the protection of, the environment. These laws, regulations, and permits may, among other things, impose liability on a lessee under an oil and natural gas lease for the cost of pollution clean-up resulting from operations and subject the lessee to liability for pollution damages. In some instances, the Company may be directed to suspend or cease operations in an affected area. The Company maintains insurance coverage, which it believes is customary in the industry, although the Company is not fully insured against all environmental risks. Contingencies In November 2023, the Company acquired certain oil and natural gas producing properties including leasehold and mineral interests in the Giddings area. The acquisition included a maximum of $ 40.0 million in additional contingent cash consideration based on future commodity prices. The contingent consideration was payable in three tranches based on average NYMEX WTI prices for (i) the period beginning July 1, 2023 through December 31, 2023, (ii) the year ending December 31, 2024, and (iii) the year ending December 31, 2025. The first tranche was settled for $ 2.7 million in January 2024 and the second tranche was settled for $ 2.8 million in January 2025. All of the tranches of the contingent consideration were settled as of December 31, 2025 and the final tranche did not require a payment. The Company recognized a gain of $ 1.4 million on the revaluation of the contingent consideration for the three months ended March 31, 2025. Gains and losses on revaluation are included in “Other income (expense), net” on the Company’s consolidated statements of operations. 9. Income Taxes The Company’s income tax provision consists of the following components: Three Months Ended (In thousands) March 31, 2026 March 31, 2025 Current: Federal $ 3,851 $ 12,145 State 147 650 Total current 3,998 12,795 Deferred: Federal 15,985 11,780 State 905 562 Total deferred 16,890 12,342 Income tax expense $ 20,888 $ 25,137 The Company is subject to U.S. federal income tax, Texas state margin tax, and Louisiana corporate income tax. The Company estimates its annual effective tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which it operates. The Company’s effective tax rates for the three months ended March 31, 2026 and 2025 were 17.2 % and 19.1 %, respectively. The primary differences between the annual effective tax rates and the statutory rate of 21.0% are state taxes, tax credits, and income attributable to noncontrolling interest. On July 4, 2025, the U.S. enacted legislation referred to as the One Big Beautiful Bill Act, which contains certain significant changes to U.S. corporate income tax laws and is generally effective for tax years beginning after December 31, 2024. These changes include, among others, the immediate deduction of domestic research and development (“R&D”) expenses, the option to retroactively deduct previously capitalized R&D expenses, and 100% bonus depreciation for property acquired after January 19, 2025. The impacts are reflected in the Company’s income tax provision for the quarter ended March 31, 2026, which resulted in a decrease in current tax expense offset by an increase in deferred tax expense. 10. Stockholders’ Equity Class A Common Stock At March 31, 2026, there were 234.3 million shares of Class A Common Stock issued and 185.4 million shares of Class A Common Stock outstanding. The holders of Class A Common Stock vote together as a single class on all matters and are entitled one 9 vote for each share held. There is no cumulative voting with respect to the election of directors, which results in the holders of more than 50 % of the Company’s outstanding common shares being able to elect all of the directors. In the event of a liquidation, dissolution, or winding up of the Company, the holders of the Class A Common Stock are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. The holders of the Class A Common Stock have no preemptive or other subscription rights, and there are no sinking fund provisions applicable to such shares. Class B Common Stock and Noncontrolling Interest In February 2026, the Magnolia LLC Unit Holders redeemed 4.8 million Magnolia LLC Units (and a corresponding number of shares of Class B Common Stock) for an equivalent number of shares of Class A Common Stock and such shares of Class A Common Stock were subsequently sold by the Magnolia LLC Unit Holders to the public. In addition, Magnolia LLC repurchased and subsequently cancelled the remaining 0.7 million Magnolia LLC Units (and a corresponding number of shares of Class B Common Stock) owned by Magnolia LLC Unit Holders for $ 19.8 million. Noncontrolling interest in Magnolia’s consolidated subsidiaries includes amounts attributable to Magnolia LLC Units that were issued to the Magnolia LLC Unit Holders. As of March 31, 2026, the aforementioned transactions eliminated the Company’s noncontrolling interest and Magnolia owned 100.0 % of the interest in Magnolia LLC. Share Repurchase Program As of March 31, 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. In addition, the Company may repurchase shares pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which would permit the Company to repurchase shares at times that may otherwise be prohibited under the Company’s Amended Insider Trading and Regulation FD Policy. The share repurchase program does not require purchases to be made within a particular time frame. The Company had repurchased 48.4 million shares under the program at a cost of $ 945.4 million and had 11.6 million shares of Class A Common Stock remaining under its share repurchase authorization as of March 31, 2026. Dividends and Distributions The Company’s board of directors periodically declares dividends payable on issued and outstanding shares of Class A Common Stock, and a corresponding distribution from Magnolia LLC to Magnolia LLC Unit Holders. Dividends in excess of retained earnings are recorded as a reduction of additional paid-in capital and distributions to the Magnolia LLC Unit Holders are recorded as a reduction of noncontrolling interest. The following table sets forth information with respect to cash dividends and distributions declared by the Company’s board of directors during the three months ended March 31, 2026 and the year ended December 31, 2025, on its own behalf and in its capacity as the managing member of Magnolia LLC, on issued and outstanding shares of Class A Common Stock and Magnolia LLC Units: Record Date Payment Date Dividend/ Distribution Amount per share (1) Distributions by Magnolia LLC (2) Dividends Declared by the Company Distributions to Magnolia LLC Unit Holders (In thousands, except per share amounts) February 10, 2026 March 2, 2026 $ 0.165 $ 31,384 $ 30,473 $ 911 November 10, 2025 December 1, 2025 $ 0.150 $ 28,583 $ 27,754 $ 829 August 11, 2025 September 2, 2025 $ 0.150 $ 28,910 $ 28,081 $ 829 May 12, 2025 June 2, 2025 $ 0.150 $ 29,179 $ 28,350 $ 829 February 14, 2025 March 3, 2025 $ 0.150 $ 29,740 $ 28,911 $ 829 (1) Per share of Class A Common Stock and per Magnolia LLC Unit. (2) Reflects total cash dividend and distribution payments made, or to be made, to holders of Class A Common Stock and Magnolia LLC Unit Holders (other than the Company) as of the applicable record date. 11. Stock Based Compensation The Company’s board of directors adopted the “Magnolia Oil & Gas Corporation Long Term Incentive Plan” (as amended, the “Plan”), effective as of July 17, 2018. A total of 16.8 million shares of Class A Common Stock have been authorized for issuance 10 under the Plan as of March 31, 2026. The Company grants stock based compensation awards in the form of restricted stock units (“RSU”), performance restricted stock units (“PRSU”), and performance share units (“PSU”) to eligible employees and directors to enhance the Company’s ability to attract, retain, and motivate persons who make important contributions to the Company by providing these individuals with equity ownership opportunities. Shares issued as a result of awards granted under the Plan are generally new shares of Class A Common Stock. The Company’s awards provide for accelerated vesting upon retirement under specific conditions. Stock based compensation expense is recognized net of forfeitures within “General and administrative expenses” and “Lease operating expenses” on the consolidated statements of operations and was $ 12.2 million and $ 6.5 million for the three months ended March 31, 2026 and 2025, respectively. The Company has elected to account for forfeitures of awards granted under the Plan as they occur in determining compensation expense. The total income tax benefit recognized for stock that vested during the three months ended March 31, 2026 and 2025 was $ 5.7 million and $ 3.4 million, respectively. On February 12, 2025, certain PSUs were modified to be 50 % settled in cash. In accordance with ASC 718, the Company reclassified 50 % of the impacted PSUs from equity-classified awards to liability-classified awards, resulting in a reclassification of $ 2.0 million from equity to liability. The modification resulted in additional compensation expense of $ 0.4 million recognized within “General and administrative expenses” on the consolidated statements of operations. The modification affected three grantees. Equity-Classified Stock Based Compensation The following table presents a summary of Magnolia’s unvested equity-classified RSU, PRSU, and PSU activity for the three months ended March 31, 2026. Restricted Stock Units Performance Restricted Stock Units Performance Share Units Units Weighted Average Grant Date Fair Value Units Weighted Average Grant Date Fair Value Units Weighted Average Grant Date Fair Value Unvested at December 31, 2025 (1) 1,600,848 $ 21.99 3,565 $ 21.98 514,212 $ 22.94 Granted 787,056 26.17 — — 211,333 36.65 Adjusted for performance multiple (2) — — — — 52,553 24.69 Vested ( 707,530 ) 21.87 ( 306 ) 23.01 ( 182,435 ) 24.69 Forfeited ( 7,853 ) 23.50 — — — — Unvested at March 31, 2026 1,672,521 $ 24.00 3,259 $ 21.88 595,663 $ 27.43 (1) In February 2026, the Company modified the performance conditions of PSUs granted in 2024 and 2025, resulting in additional compensation expense of $ 0.7 million that will be recognized prospectively over the remaining service periods. The modification affected fourteen grantees. (2) Upon completion of the performance period for the PSUs granted in 2023, a performance multiple of 140 % was applied to each of the grants resulting in additional PSUs earned in 2026. The weighted average grant date fair values of the RSUs and PSUs granted during the three months ended March 31, 2025 were $ 23.00 and $ 19.87 per share, respectively. Restricted Stock Units The Company grants service-based RSU awards to employees, which generally vest and settle ratably over a three-year service period, and to non-employee directors, which vest in full after one year . Non-employee directors may elect to defer the RSU settlement date. RSUs represent the right to receive shares of Class A Common Stock at the end of the vesting period equal to the number of RSUs that vest. RSUs are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient ceases to be an employee or director of the Company prior to vesting of the award. Compensation expense for the service-based RSU awards is based upon the grant date market value of the award and such costs are recorded on a straight-line basis over the requisite service period for each separately vesting portion of the award, as if the award was, in-substance, multiple awards. The aggregate fair values of RSUs that vested during the three months ended March 31, 2026 and 2025 were $ 20.2 million and $ 10.9 million, respectively. Unrecognized compensation expense related to unvested RSUs as of March 31, 2026 was $ 32.8 million, which the Company expects to recognize over a weighted average period of 2.2 years. 11 Performance Restricted Stock Units and Performance Share Units The Company previously granted PRSUs to certain employees. Each PRSU represents the contingent right to receive one share of Class A Common Stock once the PRSU is both vested and earned. PRSUs generally vest and settle either ratably over a three-year service period or at the end of a three-year service period, in each case, subject to the recipient’s continued employment or service through each applicable vesting date. Each PRSU is earned based on whether Magnolia’s stock price achieves a target average stock price for any 20 consecutive trading days during the five-year performance period (“Performance Condition”). If PRSUs are not earned by the end of the five-year performance period, the PRSUs will be forfeited and no shares of Class A Common Stock will be issued, even if the vesting conditions have been met. Compensation expense for the PRSU awards is based upon the grant date fair market value of the award, calculated using a Monte Carlo simulation, and such costs are recorded on a straight-line basis over the requisite service period for each separately vesting portion of the award, as if the award was, in-substance, multiple awards, as applicable. The aggregate fair value of PRSUs that vested during the three months ended March 31, 2025 was $ 5.4 million. The aggregate fair value of PRSUs that vested during the three months ended March 31, 2026 and the unrecognized compensation expense related to unvested PRSUs as of March 31, 2026 were insignificant. The Company grants equity-classified PSUs to certain employees. Each equity-classified PSU, to the extent earned, represents the contingent right to receive one share of Class A Common Stock and the awardee may earn between zero and 200 % of the target number of the equity-classified PSUs granted based on the total shareholder return (“TSR”) of the Class A Common Stock relative to the TSR achieved by a specific industry peer group over a three-year performance period. In addition to satisfaction of the TSR conditions, vesting of the equity-classified PSUs is subject to the awardee’s continued employment through the date of settlement of the equity-classified PSUs (unless an employee elects to retire under certain qualifying conditions), which will occur within 60 days following the end of the performance period. The aggregate fair value of equity-classified PSUs that vested during the three months ended March 31, 2026 was $ 4.8 million. Unrecognized compensation expense related to unvested equity-classified PSUs as of March 31, 2026 was $ 9.8 million, which the Company expects to recognize over a weighted average period of 1.9 years. The following table summarizes the Monte Carlo simulation assumptions used to calculate the grant date fair value of the equity-classified PSUs granted during the respective periods. Three Months Ended Equity-classified PSU Grant Date Fair Value Assumptions March 31, 2026 March 31, 2025 Expected term (in years) 2.90 2.88 Expected volatility 33.20 % 38.62 % Risk-free interest rate 3.48 % 4.28 % Dividend yield 2.87 % 2.37 % Liability-Classified Stock Based Compensation The following table presents a summary of Magnolia’s unvested liability-classified PSU activity for the three months ended March 31, 2026. Performance Share Units Unvested at December 31, 2025 280,459 Granted 101,620 Adjusted for performance multiple (1) 27,343 Vested ( 94,921 ) Forfeited — Unvested at March 31, 2026 314,501 (1) Upon completion of the performance period for the PSUs granted in 2023, a performance multiple of 140 % was applied to each of the grants resulting in additional PSUs earned in 2026. 12 Performance Share Units The Company grants liability-classified PSUs to certain employees. Each liability-classified PSU, to the extent earned, represents the contingent right to receive cash in lieu of each share of Class A Common Stock and the awardee may earn between zero and 200 % of the target number of liability-classified PSUs granted based on the TSR of the Class A Common Stock relative to the TSR achieved by a specific industry peer group over a three-year performance period. In addition to satisfaction of the TSR conditions, vesting of the liability-classified PSUs is subject to the awardee’s continued employment through the date of settlement of the liability-classified PSUs (unless an employee elects to retire under certain qualifying conditions), which will occur within 60 days following the end of the performance period. The aggregate fair value of liability-classified PSUs that vested during the three months ended March 31, 2026 was $ 2.3 million. Unrecognized compensation expense related to unvested liability-classified PSUs as of March 31, 2026 was $ 5.1 million, which the Company expects to recognize over a weighted average period of 1.3 years. The following table summarizes the Monte Carlo simulation assumptions used to remeasure the fair value of the liability-classified PSUs during the three months ended March 31, 2026. Liability-classified PSU Remeasurement Fair Value Assumptions March 31, 2026 Expected term (in years) 0.75 - 2.75 Expected volatility 29.16 % - 34.80 % Risk-free interest rate 3.63 % - 3.74 % Dividend yield 2.46 % 12. Earnings Per Share The Company’s unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are deemed participating securities, and therefore dividends and net income allocated to such awards have been deducted from earnings in computing basic and diluted net income per share under the two-class method. Diluted net income per share attributable to Class A Common Stock is calculated under both the two-class method and the treasury stock method and the more dilutive of the two calculations is presented. The components of basic and diluted net income per share attributable to Class A Common Stock are as follows: Three Months Ended (In thousands, except per share data) March 31, 2026 March 31, 2025 Basic: Net income attributable to Class A Common Stock $ 99,825 $ 102,927 Less: Dividends and net income allocated to participating securities 1,678 1,610 Net income, net of participating securities $ 98,147 $ 101,317 Weighted average number of common shares outstanding during the period - basic 183,267 188,653 Net income per share of Class A Common Stock - basic $ 0.54 $ 0.54 Diluted: Net income attributable to Class A Common Stock $ 99,825 $ 102,927 Less: Dividends and net income allocated to participating securities 1,678 1,610 Net income, net of participating securities $ 98,147 $ 101,317 Weighted average number of common shares outstanding during the period - basic 183,267 188,653 Add: Dilutive effect of stock based compensation and other 12 11 Weighted average number of common shares outstanding during the period - diluted 183,279 188,664 Net income per share of Class A Common Stock - diluted $ 0.54 $ 0.54 For the three months ended March 31, 2026 and 2025, the Company excluded 2.6 million and 5.5 million, respectively, of weighted average shares of Class A Common Stock issuable upon the exchange of Class B Common Stock (and corresponding Magnolia LLC Units) as the effect was anti-dilutive. 13 13. Related Party Transactions For the three months ended March 31, 2026 and 2025, there were no material related party transactions with an entity that held more than 10% of the Company’s common stock or qualified as a principal owner of the Company, as defined in ASC 850, “Related Party Disclosures.” 14. Supplemental Cash Flow Information Supplemental cash flow disclosures are presented below: Three Months Ended (In thousands) March 31, 2026 March 31, 2025 Supplemental cash items: Cash paid (received) for income taxes, net $ ( 19,116 ) $ — Cash paid for interest 441 441 Supplemental non-cash investing and financing activity: Accrued capital expenditures 48,825 40,955 Supplemental non-cash lease operating activity: Right-of-use assets obtained in exchange for operating lease obligations 6,781 16,877 15. Subsequent Events On May 1, 2026, the Company’s board of directors declared a quarterly cash dividend of $ 0.165 per share of Class A Common Stock payable on June 1, 2026 to shareholders or members of record, as applicable, as of May 12, 2026.