MGY 10-K & 10-Q changes, risk factors and insider trading

The marketing of oil, natural gas, and NGL production depends in large part on the availability, proximity, and capacity of trucks, pipelines, and storage facilities, natural gas gathering systems, and other transportation, processing, and refining facilities, as well as the existence of adequate markets. If there are widespread public health crises, epidemics, and outbreaks of infectious diseases across the United States and other locations across the world and related responsive measures are imposed, and if suchany events reduce demand for oil and natural gas, available storage and transportation capacity for the Company’s production may be limited or unavailable in the future. If there is insufficient capacity, if the capacity is unavailable to the Company, or if the capacity is unavailable on commercially reasonable terms, the prices Magnolia receives for its production could be significantly depressed.

The process of estimating oil and natural gas reserves is complex. It requires interpretations of available technical data and many assumptions, including assumptions relating to current and future economic conditions and commodity prices. Any significant inaccuracies in these interpretations or assumptions could materially affect the estimated quantities and present value of reserves. In order to prepare the reserve estimates, Magnolia must project production rates and timing of development expenditures. The Company must also analyze available geological, geophysical, production, and engineering data. The extent, quality, and reliability of this data can vary. The process also requires economic assumptions about matters such as oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes other than income taxes, and availability of funds. Magnolia cannot assure you that its management team’s assumptions with respect to projected production and/or the timing of development expenditures will not materially change in subsequent periods. Magnolia’s management team and board of directors may determine to secure and deploy development capital at a faster or slower pace than currently assumed.

The standardized measure is a reporting convention that provides a common basis for comparing oil and gas companies subject to the rules and regulations of the SEC. The standardized measure requires historical 12-month pricing as required by the SEC as well as operating and development costs prevailing as of the date of computation. Consequently, it may not reflect the prices ordinarily received or that will be received for oil and natural gas production because of varying market conditions, and it also may not reflect the actual costs that will be required to produce or develop the oil and natural gas properties. In addition, the Magnolia LLC Unit Holders are generally not subject to U.S. federal, state, or local income taxes other than certain state franchise taxes. Magnolia is subject to U.S. federal, state, and local income taxes. As a result, estimates included in this Annual Report on Form 10-K of future net cash flow may be materially different from the future net cash flows that are ultimately received. Therefore, the standardized measure of estimated reserves included in this Annual Report on Form 10-K should not be construed as accurate estimates of the current fair value of such proved reserves.

Acquiring oil and natural gas properties requires Magnolia to assess reservoir and infrastructure characteristics, including recoverable reserves, future oil and natural gas prices and their applicable differentials, development and operating costs, and potential liabilities, including environmental liabilities. In connection with these assessments, Magnolia performs a review of the subject properties that it believes to be generally consistent with industry practices. Such assessments are inexact and inherently uncertain. For these reasons, the properties Magnolia has acquired or will acquire may not produce as expected. In connection with the assessments, Magnolia performs a review of the subject properties, but such a review may not reveal all existing or potential problems. In the course of due diligence, Magnolia may not review every well, pipeline, or associated facility. Magnolia cannot necessarily observe structural and environmental problems, such as groundwater contamination, when a review is performed. Magnolia may be unable to obtain or successfully enforce contractual indemnities from the seller for liabilities created prior to Magnolia’s purchase of the property. Magnolia may be required to assume the risk of the physical condition of the properties in addition to the risk that the properties may not perform in accordance with its expectations. Additionally, the success of future acquisitions will depend on Magnolia’s ability to effectively integrate effectively the then-acquired business into its then-existing operations. The process of integrating acquired assets may involve unforeseen difficulties and may require a disproportionate amount of managerial and financial resources. Magnolia’s failure to achieve consolidation savings, to successfully incorporate the additionally acquired assets into its then-existing operations successfully,operations, or to minimize any unforeseen operational difficulties, or the failure to acquire future assets at all, could have a material adverse effect on its financial condition and results of operations.

As of December 31, 2024,2025, Magnolia’s assets contained 42.443.6 MMboe of proved undeveloped reserves consisting of 14.215.2 MMBbls of oil, 78.486.8 Bcf of natural gas, and 15.113.9 MMBbls of NGLs. Development of these proved undeveloped reserves may take longer and require higher levels of capital expenditures than anticipated. Magnolia’s ability to fund these expenditures is subject to several risks. Magnolia may be unable to obtain required capital or financing on satisfactory terms, which could lead to a decline in its ability to access or grow production and reserves. Delays in the development of reserves, increases in costs to drill and develop such reserves, or decreases in commodity prices will reduce the value of the proved undeveloped reserves and future net revenues estimated for such reserves, and may result in some projects becoming uneconomic. In addition, delays in the development of reserves could cause Magnolia to have to reclassify proved undeveloped reserves as unproved reserves. Furthermore, thereThere is no certainty that Magnolia will be able to convert proved undeveloped reserves to developed reserves, or that undeveloped reserves will be economically viable or technically feasible to produce.

Properties that Magnolia decides to drill that do not yield oil or natural gas in commercially viable quantities will adversely affect its results of operations and financial condition. There is no certain way to predict in advance of drilling and testing whether any particular prospect will yield oil or natural gas in sufficient quantities to recover drilling or completion costscosts, or to be economically viable. The use of seismic data and other technologies and the study of producing fields in the same area will not enable Magnolia to know conclusively prior to drilling whether oil or natural gas will be present or, if present, whether oil or natural gas will be present in commercial quantities. Magnolia cannot ensure that the analogies drawn from available data from other wells, more fully explored prospects, or producing fields will be applicable to its drilling prospects. Further, Magnolia’s drilling operations may be curtailed, delayed, or canceled as a result of numerous factors, including unexpected drilling conditions, title issues, pressure or lost circulation in formations, equipment failures or accidents, adverse weather conditions, compliance with environmental and other governmental or contractual requirements, and increases in the cost of, and shortages or delays in the availability of, electricity, supplies, materials, drilling or workover rigs, equipment, and services.

Magnolia normally sells its production to a relatively small number of customers, as is customary in the oil and natural gas business. In 2024,2025, there were threetwo purchasers who accounted for an aggregate 67%61% of the total revenue attributable to Magnolia’s assets. The loss of any significant purchaser could adversely affect Magnolia’s revenues in the short-term. Magnolia expects to depend upon these or other significant purchasers for the sale of most of its oil and natural gas production. Magnolia cannot ensure that it will continue to have ready access to suitable markets for its future oil and natural gas production.

The oil and gas industry is characterized by rapid and significant technological advancement and the introduction of new products and services using new technologies, including through the use of artificial intelligence and other emerging technologies. As others use or develop new technologies, Magnolia may be placed at a competitive disadvantage or may be forced by competitive pressures to implement those new technologies at substantial cost. In addition, other oil and gas companies may have greater financial, technical, and personnel resources that allow them to enjoy technological advantages and that may in the future allow them to implement new technologies before Magnolia can. Magnolia may not be able to respond to these competitive pressures or implement new technologies on a timely basis or at an acceptable cost. If one or more of the technologies it expects to use were to become obsolete, Magnolia’s business, financial condition, or results of operations could be materially and adversely affected.

Magnolia’s operations are subject to stringent and complex federal, state, and local laws and regulations governing the discharge of materials into the environment, health and safety aspects of the Company’s operationsoperations, or otherwise relating to environmental protection. These laws and regulations may impose numerous obligations applicable to Magnolia’s operations, including the acquisition of a permit or other approval before conducting regulated activities; the restriction of types, quantities, and concentration of materials that can be released into the environment; the limitation or prohibition of drilling activities on certain lands lying within wilderness, wetlands, and other protected areas; the application of specific health and safety criteria addressing worker protection; and the imposition of substantial liabilities for pollution resulting from the Company’s operations. Failure to comply with these laws and regulations may result in the assessment of sanctions, including administrative, civil or criminal penalties.

Certain environmental laws impose strict joint and several liability for costs required to remediate and restore sites where hazardous substances, hydrocarbonshydrocarbons, or solid wastes have been stored or released. Magnolia may be required to remediate contaminated properties currently or formerly operated by the Company or facilities of third parties that received waste generated by the Company.

Magnolia’s operations are subject to a series of risks arising from theevolving threatstandards ofregulating climategreenhouse change.gases and volatile organic compounds emissions.

The threat of climate change continues to attract considerable attention globally. In the United States, no comprehensive climate change legislation regulating the emission of GHGs or directly imposing a price on carbon has been implemented at the federal level. However, federal regulators, state and local governments, and private parties have taken (or announced that they plan to take) actions that have or may have a significant influence on the Company’s operations.operations, and legislation and regulations continue to evolve. In December 2023, the EPA publishedannounced a final rule later published on March 8, 2024, to strengthen the existing emissions reduction requirements in Subpart OOOOa, expand reduction requirements for new, modified and reconstructed oil and natural gas sources in Subpart OOOOb, and impose methane emissions limitations on existing oil and natural gas sources nationwide for the first time. The final rule establishesestablished “Emissions Guidelines,” creating a Subpart OOOOc that requires states to develop plans to reduce methane emissions from existing sources that must be at least as effective as presumptive standards set by the EPA. The final rule also createscreated a new third-party monitoring program to flag large emissions events, referred to as “super emitters”. Notably, the EPA imposed a December 6, 2022 applicability date for Subparts OOOOb and OOOOc, meaning that sources constructed prior to that date will be considered existing sources with later compliance dates. The final rule gives states, along with federal tribes that wish to regulate existing sources, until March 2026 to develop and submit their plans for reducing methane emissions from existing sources. The final emissions guidelines under Subpart OOOOc provideprovided until 2029 for existing sources to comply. The final rule is subject to ongoing litigation but remains in effect. However, in March 2025, the EPA announced its intention to reconsider the March 8, 2024 rule, including Subparts OOOOb and OOOOc, with a final rule expected in or around July 2026. A subsequent rule finalized on November 26, 2025, and published on December 3, 2025, gives states, along with federal tribes that wish to regulate existing sources, until January 2027 to develop and submit their plans for reducing methane emissions from existing sources. Additionally, in August 2022, the Inflation Reduction Act of 2022 was signed into law. Among other things, the Inflation Reduction Act amendsamended the Clean Air Act to include a Methane Emissions and Waste Reduction Incentive Program for petroleum and natural gas systems. This program requiresrequired the EPA to impose a “Waste Emissions Charge (“WEC”) on certain oil and gas sources that are already required to report emissions under EPA’s Greenhouse Gas Reporting Program. To implement the program, in May 2024, the EPA finalized revisions to the Greenhouse Gas Reporting Program for the oil and natural gas sector. TheHowever, emissionsin reportedMarch under2025, President Trump signed Congress’ Joint Resolution of Disapproval of the WEC, and in May 2025, EPA issued a final rule to remove the WEC regulations from the Code of Federal Regulations. In July 2025, the One Big Beautiful Bill Act of 2025 delayed the effective date of the WEC until 2034. In addition, in September 2025, EPA proposed to permanently remove program obligations from the Greenhouse Gas Reporting Program willfor bemost source categories, and suspend program obligations for some sources subject to subpart W (which applies to emission sources in certain segments of the basispetroleum forand anynatural paymentsgas underindustry) until 2034. Under the Methaneproposed Emissionsrule, Reduction Program. However, petitions for reconsideration to the EPA are pending and litigationfacilities in the D.C.natural Circuitgas challengingdistribution thesegment revisionsof havesubpart commenced.W Inwould Novemberno 2024,longer thereport to EPA finalizedafter areporting regulationyear to implement the Inflation Reduction Act’s Waste Emissions Charge.2024. The Waste Emissions Charge for 2024 is $900 per ton emitted over annual methane emissions thresholds, and increases to $1,200 in 2025, and $1,500 in 2026. In January 2025, industry associations challenged the Waste Emissions Charge rule in the D.C. Circuit. The emissions fee and funding provisions of the Inflation Reduction Act and related legislation could increase operating costs within the oil and gas industry and accelerate the transition away from fossil fuels, which could in turn adversely affect Magnolia’s business and results of operations. However, in January 2025, President Trump issued an executive order directing the heads of all federal agencies to identify and begin the processes to suspend, revise, or rescind all agency actions that are unduly burdensome on the identification, development, or use of domestic energy resources. Consequently, future implementation and enforcement of these proposed and final rules remains uncertain at this time.

Separately, a number of states have developed programs that are aimed at reducing GHG emissions by means of cap and trade programs, carbon taxes, or encouraging the use of renewable energy or alternative low-carbon fuels. Cap and trade programs typically require major sources of GHG emissions to acquire and surrender emission allowances in return for emitting those GHGs. In addition, efforts have been made and continue to be made in the international community toward the adoption of international treaties or protocols that would address global climate change issues. For example, pursuant to the terms of the Paris Agreement, the United States previously committed to reducing its GHG emissions by at least 50% below 2005 levels by 2030. In addition, at the 26th conference of parties (“COP26”) in September 2021, the United States and the European Union jointly announced the Global Methane Pledge, a pact that aims to reduce global methane emissions at least 30% below 2020 levels by 2030, including “all feasible reductions” in the energy sector. COP26 concluded with the finalization of the Glasgow Climate Pact, which stated long-term global goals (including those in the Paris Agreement) to limit the increase in the global average temperature and emphasized reductions in GHG emissions. At the 27th conference of parties in November 2022, the United States agreed, in conjunction with the European Union and a number of other partner countries, to develop standards for monitoring and reporting methane emissions to help create a market for low methane-intensity natural gas. At the 28th conference of parties in December 2023, member countries entered into an agreement that calls for actions toward achieving, at a global scale, a tripling of renewable energy capacity and doubling energy efficiency improvements by 2030. However, in January 2025, President Trump issued an executive order directing the notice to the United Nations of the United States’ immediate withdrawal from the Paris Agreement and all other agreements made under the United Nations Framework Convention on Climate Change. AsThe awithdrawal result,became effective in January 2026. In addition, the United States did not send an official delegation to the 30th conference of the parties. The full impact of these actions remains unclear at this time. In addition, the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo to end the concept of general deference to regulatory agency interpretations of laws introduces new complexity for federal agencies and administration of climate change policy and regulatory programs. Consequently, to the extent that governmental entities in the United States or other countries implement or impose climate change regulations on the oil and gas industry, it could have a material adverse effect on the Company’s business, including by restricting Magnolia’s ability to execute on its business strategy, requiring additional capital, compliance, operating and maintenance costs, increasing the cost of Magnolia’s products and services, reducing demand for its products and services, reducing its access to financial markets, or creating greater potential for governmental investigations or litigation.

Furthermore, climate change-related developments may result in negative perceptions of the traditional oil and gas industry and, in turn, reputational risks associated with exploration and production activities. Negative public perception regarding the Company and/or its industry resulting from, among other things, concerns raised by advocacy groups about climate change, emissions, hydraulic fracturing, seismicity, or oil spills may lead to increased litigation risk and regulatory, legislative, and judicial scrutiny. These actions may cause operational delays or restrictions, increased operating costs, additional regulatory burdens and increased risk of litigation. Moreover, governmental authorities exercise considerable discretion in the timing and scope of permit issuance and the public may engage in the permitting process, including through intervention in the courts. Negative public perception could cause the permits Magnoliathe Company needs to conduct the Company’sits operations to be withheld, delayed, or burdened by requirements that restrict the Company’s ability to profitably conduct the Company’s business. In addition, various officials and candidates at the federal, state, and local levels, have made climate-related pledges or proposed banning hydraulic fracturing altogether. More broadly, the enactment of climate change-related policies and initiatives across the market at the corporate level and/or investor community level may in the future result in increases in the Company’s compliance costs and other operating costs and have other adverse effects (e.g., greater potential for governmental investigations or litigation, driving down demand for the Company’s products, or stimulating demand for alternative forms of energy that do not rely on combustion of fossil fuels).

In addition, in recent years, companies across all industries are facing increasing scrutiny from certain investors, employees, customers, lenders and other stakeholders related to their sustainability practices, particularly with respect to climate change. At the same time, recent political developments could subject the Company to increased risk of criticism or litigation risks from certain “anti-ESG” parties. Such sentiment may focus on the Company’s GHG reduction initiatives, which anti-ESG proponents may assert as unlawful, political, or polarizing in nature. If Magnolia does not adapt to or comply with investor or other stakeholder expectations and standards on sustainability matters as they continue to evolve, or if the Company is perceived to have not responded appropriately or quickly enough to growing concern for climate change issues, regardless of whether there is a regulatory or legal requirement to do so, the Company may suffer from reputational damage and its business, financial condition, and results of operations could be materially and adversely affected. Further, the Company’s continuing efforts to research, establish, accomplish, and accurately report on the implementation of its sustainability strategy may also create additional operational risks and expenses and expose the Company to reputational, legal and other risks. While Magnolia creates and publishes voluntary disclosures regarding sustainability matters from time to time, some of the statements in those voluntary disclosures may be based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith. Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many sustainability matters.

From time to time the U.S. Congress has considered proposals to regulate hydraulic fracturing under the U.S. Safe Drinking Water Act. While, to date, those proposals have not been enacted, such proposals may be considered again in the future. Several states have already enacted or are otherwise considering legislation to regulate hydraulic fracturing practices through more stringent permitting, fluid disclosure, and well construction requirements on hydraulic-fracturing operations or otherwise seek to ban fracturing activities altogether. However, no bans on hydraulic-fracturing activities are pending in Texas. Hydraulic fracturing of wells and subsurface water disposal via injection wells are also under public and governmental scrutiny due to potential environmental and physical impacts, including possible contamination of groundwater and drinking water and possible links to seismic events. In addition, some municipalities have significantly limited or prohibited drilling activities and/or hydraulic fracturing or are considering doing so. The adoption of any new federal, state, or local laws or the implementation of regulations regarding hydraulic fracturing in areas in which the Company operates could result in operational delays, increased compliance costs, or a decrease in Magnolia’s production, which could have an adverse effect on the Company’s business, financial condition, and results of operations.

From time to time, federal legislation has been proposed that would, if enacted into law, make significant changes to tax laws, including to certain key U.S. federal and state income tax provisions currently available to oil and natural gas exploration and development companies. Such legislative changes have included, but have not been limited to, (i) the repeal of the percentage depletion allowance for oil and natural gas properties, (ii) the elimination of current deductions for intangible drilling and development costs, and (iii) an extension of the amortization period for certain geological and geophysical expenditures. Although these provisions were largely unchanged in recent federal tax legislation such as the InflationOne ReductionBig Beautiful Bill Act of 2022,2025, Congress could consider, and could include, some or all of these proposals as part of future tax reform legislation. Moreover, other more general features of any additional tax reform legislation, including changes to cost recovery rules, may be developed that also would change the taxation of oil and gas companies. It is unclear whether these or similar changes will be enacted in future legislation and, if enacted, how soon any such changes could take effect. The passage of any legislation as a result of these proposals and other similar changes in U.S. federal income tax laws could adversely affect Magnolia’s future cash flows and results of operations.

Magnolia is subject to taxes by U.S. federal, state, and local tax authorities. Magnolia’s future effective tax rates could be subject to volatility or adversely affected by a number of factors, including changes in the valuation of Magnolia’s deferred tax assets and liabilities, expected timing and amount of the release of any tax valuation allowances, tax effects of stock based compensation, or changes in tax laws, regulations, or interpretations thereof.

As of December 31, 2024,2025, the Company’s board of directors had authorized a share repurchase program of up to 40.050.0 million shares of Class A Common Stock. The program does not require purchases to be made within a particular timeframe. The Company had repurchased 38.347.1 million shares under the program at a cost of $707.8$913.3 million and had 1.72.9 million shares of Class A Common Stock remaining under its share repurchase authorization as of December 31, 2024.2025. On February 12,5, 2025,2026, the Company’s board of directors increased the share repurchase authorization by an additional 10.0 million shares of Class A Common Stock, which increased the total share repurchase authorization to 50.060.0 million shares.million.

Magnolia’s historical financial condition and results of operations for the periods presented may not be comparable, either from period to period or going forward, as a result of the followingCompany’s factors:redemption of its 2026 Senior Notes that bore interest at 6.0% per annum and its issuance of the 2032 Senior Notes that bear interest at 6.875% per annum, both of which occurred in November 2024.

Natural gasOil revenues for the year ended December 31, 20242025 were $11.8$128.6 million lower than the year ended December 31, 2023.2024. A 17%15% decrease in average prices decreased 2025 revenues for the year ended December 31, 2024 by $17.4$161.0 million compared to the same period in the prior year, partially offset by a 7%4% increase in natural gasoil production whichthat increased revenues by $5.6$32.4 million.

NGLNatural gas revenues for the year ended December 31, 20242025 were $12.4$100.0 million higher than the year ended December 31, 2023.2024. A 9%79% increase in NGLaverage productionprices increased 2025 revenues for the year ended December 31, 2024 by $15.0$71.9 million compared to the same period in the prior year, partially offset byand a 2%17% decreaseincrease in averagenatural pricesgas whichproduction decreasedincreased revenues by $2.6$28.1 million.

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

Lease operating expenses are the 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 year ended December 31, 20242025 were $25.4$5.7 million,million orhigher, $0.34and $0.39 per boe,boe higherlower, than the year ended December 31, 2023,2024, due to an increase in chemicals,surface compression, operatingrepair and maintenancemaintenance, costscontract labor, and payrollequipment expenserentals associated with a higher well countcount, offset by broad cost reduction initiatives. The decrease in additionlease operating expenses per boe was due to higher workover activity.production.

Gathering, transportation, and processing (“GTP”) 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 Company is also party to a number of percent-of-proceeds arrangements that track closely to natural gas and NGL pricing and affect the cost of commodity processing. The gathering, transportation, and processingGTP costs for the year ended December 31, 20242025 were $4.5$27.3 million, or $0.26$0.63 per boe, lowerhigher than the year ended December 31, 2023,2024, primarilydriven dueby tohigher contractual changesproduction and lower natural gas prices and NGL pricing while the change per boe was duechanges to thecertain increasegathering and processing contracts, which resulted in a higher portion of Magnolia’s GTP costs being recognized as expense versus a reduction to Magnolia’s natural gas and NGL production.revenues.

Taxes other than income include production, ad valorem, and franchise taxes. These taxes are based on rates primarily established by state and local taxing authorities. Production taxes are based on the market value of production. Ad valorem taxes are based on the fair market value of the mineral interests or business assets. Taxes other than income for the year ended December 31, 20242025 were $6.3$4.6 million,million orhigher, $0.01and $0.09 per boe,boe higherlower, than the year ended December 31, 2023,2024, primarily due to an increase in productionad valorem taxes as a result of thehigher increasemarket invalue oilof andnew NGLwells revenues,brought whichonline. was partially offset by theThe decrease in naturaltaxes gasother revenues.than income per boe was due to higher production.

Depreciation, depletion and amortization (“DD&A”) during the year ended December 31, 20242025 was $89.7$23.3 million,million orhigher, $1.81and $0.60 per boe,boe higherlower, than the year ended December 31, 20232024 due to increasedhigher production andthat aincreased higheroverall depreciableDD&A. The decrease in DD&A per boe was due to reserve growth exceeding the increase in the underlying cost basis.

General and administrative expenses during the year ended December 31, 20242025 were $11.6$8.3 million,million orhigher, $0.13and $0.04 per boe,boe higherlower, than the year ended December 31, 20232024 primarilydue drivento byan increasedincrease corporatein payrollpayroll-related expenses and otherequity non-recurringcompensation, costs.including changes from the modification of stock based compensation awards in 2025, partially offset by certain one-time costs incurred in 2024.

Interest expense, net, during the year ended December 31, 20242025 was $14.3$7.2 million higher than the year ended December 31, 2023,2024, driven by lower interest income realized during 20242025 as a result of lower interest rates and cash balances.

For the year ended December 31, 2024,2025, income tax expense was $11.4$15.7 million lower than the year ended December 31, 2023,2024, primarily a result of additional tax credits and a decrease in income before income taxes,taxes. partiallyThe offsetdecrease byin ancurrent tax expense and increase in controllingdeferred interest.tax expense were primarily due to the acceleration of tax deductions from the passage of the One Big Beautiful Bill Act of 2025. See Note 10—Income Taxes in the notes to the consolidated financial statements included in this Annual Report on Form 10-K for further detail.

Net cash provided by operating activities totaled $920.9$878.6 million and $855.8$920.9 million for the years ended December 31, 20242025 and 2023,2024, respectively. During the year ended December 31, 2024,2025, cash provided by operating activities wasdecreased positivelydue impactedto bylower therealized timingoil of collectionsprices and thereceipts increase in oil, natural gas, and NGL production,timing, partially offset by lowerincreased production, higher realized oil, natural gas,gas prices, and NGLfavorable prices.payments timing.

As of December 31, 2024,2025, the Company’s board of directors had authorized a share repurchase program of up to 40.050.0 million shares of Class A Common Stock. On February 12,5, 2025,2026, the Company’s board of directors increased the share repurchase authorization by an additional 10.0 million shares of Class A Common Stock, which increased the total share repurchase authorization to 50.060.0 million. The program does not require purchases to be made within a particular timeframe and whether the Company undertakes these additional repurchases is ultimately subject to numerous considerations, market conditions, and other factors. During the years ended December 31, 20242025 and 2023,2024, the Company repurchased 7.58.9 million and 9.67.5 million shares under this authorization, for a total cost of approximately $182.8$205.5 million and $207.0$182.8 million, respectively.

During the year ended December 31, 2025, the Company declared and paid cash dividends to holders of its Class A Common Stock totaling $113.1 million. Additionally, $3.3 million was distributed to the Magnolia LLC Unit Holders. During the year ended December 31, 2024, the Company declared and paid cash dividends to holders of its Class A Common Stock totaling $97.6 million. Additionally, $7.8 million was distributed to the Magnolia LLC Unit Holders. During the year ended December 31, 2023, the Company declared cash dividends to holders of its Class A Common Stock totaling $87.8 million. During the same time period, cash paid for dividends was $88.1 million, inclusive of dividends on vested non-participating securities. Additionally, $10.0 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.

Proved oil and natural gas reserves are those quantities of oil, natural gas, and NGLs which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced, or the operator must be reasonably certain,certain that it will commence within a reasonable time. Estimated proved developed oil and natural gas reserves can be expected to be recovered through existing wells with existing equipment and operating methods or where the cost of the required equipment is relatively minor compared to the cost of a new well.

Proved undeveloped reserves are proved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion. Reserves on undrilled acreage are limited to those that are directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances. Undrilled locations can be classified as undeveloped reserves only if a plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances justify a longer time. All of Magnolia’s proved undeveloped reserves as of December 31, 2024,2025, that are included in this Annual Report,Report on Form 10-K, are planned to be developed within one year.

PleaseIn addition to the below, please refer to Part I, Item 1A—Risk Factors of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (“2025 Form 10-K”), and Part I, Item 3—Quantitative and Qualitative Disclosures About Market Risk of this Quarterly Report on Form 10-Q. Any of these factors could result in a significant or material adverse effect on Magnolia’s business, results of operations, or financial condition. ThereExcept as provided below, there have been no material changes to the Company’s risk factors since its 2025 Form 10-K. Additional risk factors not presently known to the Company or that the Company currently deems immaterial may also impair its business, results of operations, or financial condition.

•the integration of acquisitionsacquisitions, including the WildFire Acquisition; and

All of Magnolia’s forward-looking information is subject to risks and uncertainties that could cause actual results to differ materially from the results expected. Although it is not possible to identify all factors, these risks and uncertainties include the risk factors and the timing of any of those risk factors identified this Quarterly Report on Form 10-Q and in the reports that the Company has filed and may file with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the period ended December 31, 2025 (the “2025 Form 10-K”).

Commodity prices continue to experience volatility driven by geopolitical conflict, evolving global supply-demand dynamics, and macroeconomic uncertainty. Most notably, the escalation of military conflict involving Iran has materially disrupted global energy markets, including significantly constraining the movement of global crude oil and refined product exports through the Strait of Hormuz. These developments, together with the ongoing Russia-Ukraine conflict, OPEC and OPEC+ production decisions, and changes in sanctions and trade restrictions affecting major oil-producing countries such as Russia, Iran, and Venezuela, have increased the risk of supply interruptions and contributed to substantial price volatility and uncertainty in global energy markets.

As of MarchJune 31,30, 2026, Magnolia’s assets in South Texas included 60,187 gross (39,93540,135 net) acres in the Karnes area, and 741,586742,202 gross (561,950562,544 net) acres in the Giddings area. As of MarchJune 31,30, 2026, Magnolia held an interest in approximately 2,8902,920 gross (1,9601,983 net) wells, with total production of 102.6106.1 thousand and 104.3 thousand barrels of oil equivalent per day for the three and six months ended MarchJune 31,30, 2026.2026, respectively.

Magnolia recognized net income attributable to Class A Common Stock of $99.8$181.8 million and $281.6 million, or $0.54$0.97 and $1.51 per diluted common share, for the three and six months ended MarchJune 31,30, 2026, respectively. Magnolia recognized net income of $181.8 million for the three months ended June 30, 2026. Magnolia recognized net income of $100.8$282.6 million, which includes noncontrolling interest of $1.0 million related to the Magnolia LLC Units (and corresponding shares of Class B Common Stock) held by certain affiliates of EnerVest, Ltd., for the threesix months ended MarchJune 31,30, 2026.

During the threesix months ended MarchJune 31,30, 2026, the Company declared and paid cash dividends and distributions totaling $31.4$62.2 million.

As of MarchJune 31,30, 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. The program does not require purchases to be made within a particular timeframe. The Company had repurchased 48.450.1 million shares under the program at a cost of $945.4$994.7 million and had 11.69.9 million shares of Class A Common Stock remaining under its share repurchase authorization as of MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, Magnolia owned 100.0% of the interest in Magnolia LLC.

Three and Six Months Ended MarchJune 31,30, 2026 Compared to the Three and Six Months Ended MarchJune 31,30, 2025

Oil revenues for the three months ended MarchJune 31,30, 2026 were $11.8$147.4 million higher than the three months ended MarchJune 31,30, 2025. A 4%58% increase in oilaverage productionprices increased firstsecond quarter 2026 revenues by $10.1$130.8 million compared to the same period in the prior year, and a 1%5% increase in oil production increased revenues by $16.6 million. Oil revenues for the six months ended June 30, 2026 were $159.2 million higher than for the six months ended June 30, 2025. A 28% increase in average prices increased revenues for the six months ended June 30, 2026 by $1.7$132.7 million compared to the same period in the prior year, and a 4% increase in oil production increased revenues by $26.5 million.

NGLNatural gas revenues for the three months ended MarchJune 31,30, 2026 were $4.0$3.2 million lower than the three months ended MarchJune 31,30, 2025. A 16%14% decrease in average prices decreased firstsecond quarter 2026 revenues by $8.6$6.2 million compared to the same period in the prior year, partially offset by an 8% increase in natural gas production that increased revenues by $3.0 million. Natural gas revenues for the six months ended June 30, 2026 were $2.7 million lower than the six months ended June 30, 2025. A 9% decrease in average prices decreased revenues for the six months ended June 30, 2026 by $8.5 million compared to the same period in the prior year, partially offset by a 10%7% increase in NGLnatural gas production that increased revenues by $4.6$5.8 million.

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 MarchJune 31,30, 2026 were $0.7$4.8 million, or $0.13 per boe, higher than the three months ended June 30, 2025. Lease operating expenses for the six months ended June 30, 2026 were $5.5 million higher, and $0.25$0.05 per boe lower, than the threesix months ended MarchJune 31,30, 2025. The increase wasin both periods were due to higher workover activity and an increase in surface repair and maintenance and compression associated with higher well count. The decrease in lease operating expenses per boe was due to higher production.

Gathering, transportation and processing (“GTP”) 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 GTP costs for the three months ended March 31, 2026 were $3.3 million, or $0.25 per boe, higher, than the three months ended March 31, 2025 driven by higher production and changes to certain gathering and processing contracts, which resulted in a higher portion of Magnolia’s GTP costs being recognized as expense versus a reduction to Magnolia’s natural gas revenues.

Taxes other than income include production, ad valorem, and franchise taxes. These taxes are based on rates primarily established by state and local taxing authorities. Production taxes are based on the market value of production. 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 MarchJune 31,30, 2026 were $3.7$4.0 million, or $0.53$0.26 per boe, lowerhigher than the three months ended MarchJune 31,30, 2025. Taxes other than income for the six months ended June 30, 2026 were $0.2 million higher, and $0.14 per boe lower, than the six months ended June 30, 2025. The decreaseincrease in taxes other than income was primarily due to an increase in production taxes due to higher oil prices, partially offset by severance tax refunds and a decrease in ad valorem taxes as a result of lower market valuations and a decrease in production taxes as a result of severance tax refunds.valuations.

Depreciation, depletion and amortization (“DD&A”) during the three months ended MarchJune 31,30, 2026 was $7.5$9.4 million, or $0.10$0.09 per boe, higher than the three months ended MarchJune 31,30, 2025. DD&A for the six months ended June 30, 2026 was $16.9 million, or $0.09 per boe, higher than the six months ended June 30, 2025. The increase in DD&A was primarily due to higher production. The slight increase in the DD&A rate period over period was primarily due to acquisitions made during 2026.

G&A during the three months ended MarchJune 31,30, 2026 were $6.9$5.9 million, or $0.58$0.42 per boe, higher, than the three months ended MarchJune 31,30, 2025. G&A expenses during the six months ended June 30, 2026 were $12.7 million, or $0.49 per boe, higher than the six months ended June 30, 2025. The increase in G&A was primarily due to increased stock based compensation expense as a result of higher grant date fair values, accelerated vesting of certain awards, and changes in expected payouts for the Company’s performance share unit awards. Other increases in G&A were primarily due to increased professional service fees, payroll costs, and rent expense.

For the three months ended MarchJune 31,30, 2026, income tax expense was $4.2$29.7 million lowerhigher than the three months ended MarchJune 31,30, 2025 driven by ana $8.8$31.4 million decreaseincrease in currentdeferred income tax expense and offset by a $4.6$1.7 million decrease in current income tax expense. Income tax expense during the six months ended June 30, 2026 was $25.4 million higher compared to the six months ended June 30, 2025, driven by a $35.9 million increase in deferred income tax expense and offset by a $10.5 million decrease in current income tax expense. The decreaseincrease in total tax expense was primarily due to aan decreaseincrease in income before income taxes and an increase in the discrete impact from stock based compensation that vested during the three months ended March 31, 2026 compared to March 31, 2025.taxes. Accelerated deductions as a result of the passage of the One Big Beautiful Bill Act resulted in lower current tax expense and higher deferred tax expense. See Note 9— Income Taxes in the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q for further detail.

As of MarchJune 31,30, 2026, the Company had $400.0 million of principal debt related to the 2032 Senior Notes outstanding and no outstanding borrowings related to the RBL Facility. As of MarchJune 31,30, 2026, the Company had $574.4$745.9 million of liquidity comprised of the $450.0 million of borrowing capacity under the RBL Facility, and $124.4$295.9 million of cash and cash equivalents.

At MarchJune 31,30, 2026, Magnolia had $124.4$295.9 million of cash and cash equivalents. The Company’s cash and cash equivalents are maintained with various financial institutions in the United States. Deposits with these institutions may exceed the amount of insurance provided on such deposits. However, the Company regularly monitors the financial stability of its financial institutions and believes that the Company is not exposed to any significant default risk.

Net cash provided by operating activities totaled $197.6$581.6 million and $224.5$423.2 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. During the threesix months ended MarchJune 31,30, 2026, cash provided by operating activities decreasedprimarily increased due to lowerhigher realized NGLoil prices and the timing of receipts and payments, partially offset by increased production and the receipt of tax refunds.production.

The Company made individually insignificant bolt-on acquisitions totaling $155.0$156.2 million and $24.1$39.7 million during the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

During the firstsecond quarter of 2026, Magnolia operated two rigs. The activity during the first quarter of 2026 was largely driven by the number of operated and non-operated drilling rigs. 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. The Company’s ongoing plan is to continue to spend within cash flow on drilling and completing wells while maintaining low financial leverage.

As of MarchJune 31,30, 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. 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 each of the threesix months ended MarchJune 31,30, 2026 and 2025, the Company repurchased 1.23.0 million and 2.24.4 million shares for a total cost of approximately $32.1$81.4 million and $52.0$100.7 million, respectively.

During the threesix months ended MarchJune 31,30, 2025,2026, Magnolia LLC repurchased and subsequently canceled 0.7 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $19.8 million of cash consideration. As of MarchJune 31,30, 2026, Magnolia owned 100.0% of the interest in Magnolia LLC.

During the threesix months ended MarchJune 31,30, 2026, the Company declared and paid cash dividends to holders of its Class A Common Stock totaling $30.5$61.2 million. Additionally, $0.9 million was distributed to the Magnolia LLC Unit Holders. During the threesix months ended MarchJune 31,30, 2025, the Company declared and paid cash dividends to holders of its Class A Common Stock totaling $28.9$57.3 million. Additionally, $0.8$1.7 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.