HOUSTON - Magnolia Oil & Gas Corporation (NYSE: MGY), a South Texas oil and gas exploration and production company, has announced a significant transaction involving its shareholders. Certain affiliates of EnerVest, Ltd., referred to as the Selling Stockholders, have agreed to sell 12 million shares of Magnolia's Class A common stock in an unregistered secondary block trade. This transaction is governed by Rule 144 under the Securities Act of 1933, as amended.
In a related move, Magnolia has committed to purchasing 3 million shares of its Class B common stock from the Selling Stockholders. The purchase price per share will match what the Selling Stockholders receive from the block trade. The completion of this Class B common stock purchase is contingent upon the successful finalization of the block trade.
Once both the block trade and the Class B stock purchase are concluded, the Selling Stockholders will retain ownership of approximately 4.16 million Class A shares and 10.96 million Class B shares. This will represent around 7.6% of Magnolia's total outstanding shares.
Magnolia Oil & Gas has clarified that it will not be selling any Class A common stock in the block trade and will not receive any proceeds from it. The company has also emphasized that this announcement is not an offer to sell or a solicitation to buy any securities. Furthermore, the sale of securities will not take place in any jurisdiction where such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
The company, which is focused on operations primarily in the Eagle Ford (NYSE:F) Shale and Austin Chalk formations, prides itself on moderate annual production growth, high pre-tax margins, and consistent free cash flow. These strategies are aimed at providing strong cash returns to shareholders.
InvestingPro Insights
Magnolia Oil & Gas Corporation (NYSE: MGY) has recently made headlines with its strategic shareholder transactions. To provide a deeper financial perspective on the company, InvestingPro offers valuable insights that could be of interest to investors monitoring Magnolia's performance.
InvestingPro Data shows that Magnolia has a market capitalization of approximately $5.28 billion, reflecting the company's substantial size within the oil and gas exploration and production industry. The company's P/E ratio stands at 12.46 for the last twelve months as of Q1 2024, indicating how much investors are willing to pay for a dollar of earnings. This metric can help investors gauge the market's sentiment on the company's earnings potential.
Furthermore, the company's revenue for the same period was $1.238 billion, with a notable gross profit margin of 83.89%, underscoring Magnolia's efficiency in managing its production costs relative to its revenues. Additionally, Magnolia's dividend yield as of May 2024 is 2.01%, coupled with a dividend growth of 13.04% over the last twelve months, which may attract income-focused investors seeking steady returns.
Among the InvestingPro Tips, two particularly stand out for Magnolia. First, the company holds more cash than debt on its balance sheet, which can be a sign of financial stability and may provide a cushion in times of market volatility. Second, Magnolia has raised its dividend for three consecutive years, demonstrating a commitment to returning value to shareholders and potentially indicating confidence in the company's financial health and future earnings.
Investors interested in a comprehensive analysis of Magnolia Oil & Gas can explore additional InvestingPro Tips, with a total of 11 tips available at https://www.investing.com/pro/MGY. For those considering an InvestingPro subscription, use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.