Magnolia Oil & Gas to acquire WildFire Energy for $4.06B, raising dividend 9% to $0.18/share

The company also filed this under Item 2.03, which means it is reporting the arrangement as a direct financial obligation. The Item 2.03 text refers back to the Item 1.01 entry for the terms rather than restating them.

Magnolia Oil & Gas entered into a definitive agreement to acquire 100% of WildFire Intermediate Holdings for total consideration of $2.65 billion in cash, 32.2 million shares of Magnolia common stock, and assumption of $600 million in 7.5% senior notes due 2029. The transaction is subject to HSR antitrust clearance and other customary closing conditions. Magnolia deposited $200 million in escrow to secure performance under the purchase agreement.

Magnolia's operating subsidiary amended and restated its reserve-based credit facility to provide $2.25 billion in maximum commitments with an initial $2.0 billion borrowing base and $1.75 billion borrowing capacity. The facility includes a $100 million letter of credit sublimit and $50 million swingline sublimit. The facility is secured by oil and gas properties and subject to semi-annual borrowing base redeterminations.

The amended credit facility requires Magnolia to maintain a leverage ratio below 3.50 to 1.00 and a current ratio above 1.00 to 1.00, along with other customary affirmative and negative covenants for reserve-based lending facilities.

The company disclosed an issuance of common stock without SEC registration, relying on the private placement exemption under Section 4(a)(2) of the Securities Act. The filing references Item 1.01 for details on the equity consideration but that section is not included in the provided text, so the specific number of shares, recipients, and transaction context cannot be determined from this excerpt.

Magnolia Oil & Gas entered into a purchase agreement to acquire assets or a business (referred to as the 'Target'). The filing discloses the announcement of the transaction but does not provide specific terms such as purchase price, target identity, or asset details in the 8-K body itself. The company is hosting an investor call to discuss the acquisition and has furnished a press release and presentation as exhibits.

The company scheduled an investor call for July 20, 2026 at 8:00 a.m. Eastern Time to provide details about the acquisition. The webcast and presentation materials are available on the company's investor relations website.

The acquisition is subject to closing conditions including HSR (Hart-Scott-Rodino) antitrust clearance. The filing identifies potential risks that could delay or prevent the transaction from closing, including regulatory approval delays and other unspecified factors.

The acquisition involves both cash and equity consideration, with the final amounts subject to purchase price adjustments. The specific dollar amounts and equity issuance details are not disclosed in the 8-K body but may be contained in the furnished press release exhibit.

The transaction will be funded through 32.2 million shares of Magnolia Class A Common Stock to WildFire owners, assumption of WildFire's $600 million of outstanding notes due in 2029, and the remainder through cash on hand and a balanced mix of debt and new equity. Magnolia has obtained committed financing and amended its secured credit facility to a $2 billion borrowing base with $1.75 billion in elected commitments contingent upon closing.

Magnolia expects to realize greater than $100 million in annual synergies and cost savings from the acquisition, with an estimated net present value of approximately $700 million. The synergies will come from development and operational efficiencies, shared facilities and infrastructure, supply chain and logistics pricing, streamlined field operations, and reduced corporate G&A expenses.

Magnolia's second quarter 2026 total production averaged 106.1 Mboe/d with oil production of 41.9 Mbo/d. D&C capital for the quarter was $125 million, and the Company ended the quarter with $296 million of cash. Based on strong second quarter production, Magnolia is raising its full year 2026 annual production growth guidance to 6 percent from 5 percent.

Magnolia Oil & Gas announced the acquisition of WildFire Energy for approximately $4.06 billion, to be funded with a mix of cash and equity including 32.2 million shares of Magnolia's Class A Common Stock. The acquisition adds approximately 810,000 net acres in the Eagle Ford and Austin Chalk formations and increases oil production by approximately 37 thousand barrels of oil per day, improving Magnolia's oil mix to approximately 50%. The transaction is anticipated to close in late Q3 2026.

On a pro forma basis, the combined company will have an enterprise value of approximately $9.11 billion, Q2 2026 oil production of 79 thousand barrels per day, total production of 159 thousand barrels of oil equivalent per day, an oil percentage of approximately 50%, and approximately 1,252,000 net acres in the Giddings field. The acquisition adds 37 thousand barrels of oil per day and 53 thousand barrels of oil equivalent per day to Magnolia's production base.

Despite the acquisition, Magnolia expects to reduce its net debt to EBITDA ratio to 1.0x or below by year-end 2027, supported by significant free cash flow generation. The company projects cumulative free cash flow of over $4.5 billion through 2030 under strip pricing as of July 15, 2026, providing a clear pathway to delever while maintaining strong shareholder returns.