Magnolia Oil & Gas is expanding its South Texas development program following the WildFire acquisition, combining higher production with lower well costs and a larger Austin Chalk opportunity. Third-quarter production increased 17% year over year to 117,300 BOE/d, while the company generated $224 million in adjusted free cash flow. With integration progressing ahead of schedule, Magnolia plans to operate four drilling rigs and two completion crews in 2027, directing approximately 65% of drilling activity to the Austin Chalk and 35% to the Eagle Ford.
Q3/2026 Call Transcript Summary
- Production increased: Q3 production averaged 117,300 BOE/d, up 17% year over year. Oil production rose 24% to 49,100 bbl/d. Results included only 20 days of WildFire ownership.
- Strong financial results: Adjusted net income reached $166 million, or $0.71 per diluted share, with adjusted EBITDAX of $392 million and adjusted free cash flow of $224 million.
- Capital discipline: Q3 drilling and completion spending was $147 million, below guidance and equal to 38% of adjusted EBITDAX. Management remains committed to keeping D&C spending within 55% of adjusted EBITDAX.
- Giddings remains the growth engine: Production averaged 97,700 BOE/d, up 23%, representing approximately 83% of company production. Giddings oil production increased 39%. Karnes production remained near 20,000 BOE/d, with management targeting sustained output and strong free cash flow.
- WildFire integration is ahead of schedule: Magnolia expects to capture at least one-third of the more than $100 million in annual run-rate synergies by year-end 2026 and at least three-quarters by mid-2027.
- Lower well costs: Identified D&C savings total at least $1 million per well, supported by faster drilling, improved rigs and frac equipment, multi-well pads, procurement savings and completion optimization. Magnolia’s sand mine reduces sand costs by approximately one-third.
- Austin Chalk opportunity expanding: Early wells on acquired WildFire acreage have strengthened management’s confidence in additional drilling inventory. Magnolia now holds approximately 1.25 million net acres in Giddings; broader exploration of other formations will come later.
- 2027 drilling program: Magnolia plans to operate four rigs and two completion crews, allocating approximately 65% of activity to the Austin Chalk and 35% to the Eagle Ford. Development on legacy WildFire acreage should be split roughly evenly between the two formations.
- 2027 outlook: Planned capital spending of $900 million–$950 million supports 4%–5% organic growth in both total production and oil. Estimated maintenance capital is approximately $800 million.
- Managing service-cost inflation: The 2027 budget assumes mid-single-digit oilfield service inflation. Magnolia is pursuing savings through equipment upgrades, owned sand supply, dual-fuel frac equipment and field-gas trials.
- Debt reduction progressing: Net debt ended Q3 at approximately $1.9 billion, down $100 million since the WildFire closing. Leverage was below 1× forecast 2027 EBITDAX, ahead of schedule. Management expects to repay the $435 million revolver balance in early 2027 and ultimately reduce leverage below 0.5×.
- Shareholder returns: Magnolia returned approximately $103 million through dividends and repurchases, buying back 2.3 million shares. The quarterly dividend is $0.18 per share, approximately 20% higher than at the start of 2026.
- Portfolio focus: Magnolia sold non-core Western Eagle Ford assets for $47.5 million and received 616 net acres, primarily in Gonzales County within its Karnes area.
- Q4 outlook: Production is expected to reach 159,000–161,000 BOE/d, reflecting a full quarter of WildFire ownership, with D&C spending of approximately $235 million.
The file contains 83 well records, all in Texas, with Activity Dates from January 8 through November 7, 2026. All 83 licence numbers are unique.
Scope: Every record is labelled “Magnolia Oil & Gas Operating LLC (WildFire).” These counts describe the supplied file and may not cover all drilling by the combined company.
Record count by Province/State
Province/State Records Texas 83 Total 83
Counties grouped by play
The play assignments below use the file’s Field values. Counties with activity in both formations appear in both groups.
Play County Records Austin Chalk Washington 22 Austin Chalk Fayette 15 Austin Chalk Robertson 7 Austin Chalk Burleson 4 Austin Chalk Lee 4 Austin Chalk Brazos 1 Austin Chalk subtotal 53 Eagle Ford Burleson 18 Eagle Ford Karnes 8 Eagle Ford Lee 2 Eagle Ford Robertson 1 Eagle Ford Dimmit 1 Eagle Ford subtotal 30 Total 83
Austin Chalk accounts for 63.9% of records and Eagle Ford for 36.1%. Across both plays, Burleson and Washington lead with 22 records each, followed by Fayette with 15.
Top Contractor and Rig combinations
Only five combinations appear in the file.
Rank Contractor and Rig Records 1 H&P 475 29 2 Patterson 248 23 3 Cactus 144 18 4 Cactus 414 11 5 Patterson 817 2 Total 83
Magnolia’s supplied WildFire drilling file contains 83 Texas wells through November 7, 2026, comprising 53 Austin Chalk wells and 30 Eagle Ford wells, with Burleson and Washington counties leading activity. Following 17% year-over-year production growth and $224 million in adjusted free cash flow in Q3, Magnolia plans a $900 million–$950 million capital program in 2027 targeting 4%–5% organic production growth while capturing acquisition savings.
Author: phinds