Magnolia Oil & Gas files financials for $4.1B WildFire Energy acquisition

Magnolia files comprehensive financial documentation for its previously announced acquisition of WildFire Energy, including two years of audited financials, recent quarterly results, pro forma combined statements, and an independent reserve report. These disclosures are being incorporated by reference for use in future registration statements and offering documents, completing the regulatory requirements for the transaction.

Magnolia is acquiring WildFire's Eagle Ford/Austin Chalk/Woodbine assets covering approximately 810,000 net acres in nine Texas counties. The target produces 53 MBoe/d (70% oil) and holds 271.2 MMBoe of total proved reserves as of year-end 2025, with 139.8 MMBoe proved developed. This represents a significant acreage and production expansion for Magnolia in the Eagle Ford basin.

These are preliminary estimates subject to change and have not been audited. The production and capex figures provide context for the company's baseline operations before the WildFire acquisition closes.

These preliminary estimates are unaudited and subject to change. The figures show the acquired assets' recent operational performance and capital intensity.

Magnolia held approximately $295.9 million in cash with zero drawn on its credit facility as of June 30, 2026. This strong liquidity position provides financial flexibility to fund the WildFire acquisition and ongoing operations.

WildFire Energy I LLC reported net income of $462.4 million for the year ended December 31, 2025, up from $351.7 million in 2024. The company generated total operating revenues of $898.1 million in 2025 (down from $969.2 million in 2024), with income from operations of $382.0 million. The increase in net income despite lower revenues was driven by a $166.8 million gain on derivative instruments in 2025 versus a $35.0 million loss in 2024, and lower interest expense ($82.7 million in 2025 vs $96.8 million in 2024).

WildFire's proved reserves totaled 271.2 million barrels of oil equivalent (MMBoe) as of December 31, 2025, up from 254.6 MMBoe at year-end 2024. The increase was driven by 50.3 MMBoe from extensions and discoveries, partially offset by 17.4 MMBoe of production and 16.5 MMBoe of negative revisions (6.1 MMBoe due to lower SEC prices and 10.3 MMBoe due to performance and other economic factors). Proved developed reserves were 139.8 MMBoe and proved undeveloped reserves were 131.4 MMBoe.

WildFire had $700.8 million in long-term debt (net of current portion) as of December 31, 2025, down from $848.6 million at year-end 2024. The company has $670 million of 7.500% Senior Notes due 2029, a revolving credit facility, and deferred acquisition payments. Scheduled debt maturities include $60 million in 2026, $45 million in 2027, and $670 million in 2029. The company paid down $98 million net on its revolving credit facility during 2025.

WildFire distributed $156.8 million to unit holders during 2025 as a return of contributed capital, double the $78.4 million distributed in 2024. The company also authorized special advance distributions to incentive unit holders of $3.2 million in 2025, recorded as compensation expense. In January 2026, the company made additional cash distributions of $49.0 million to unit holders and $1.0 million to incentive unit holders.

The standardized measure of WildFire's discounted future net cash flows from proved reserves was $4.07 billion as of December 31, 2025, down from $4.62 billion at year-end 2024. The decrease was primarily driven by net changes in prices (negative $960.0 million impact) and revisions in quantity estimates (negative $324.3 million), partially offset by positive changes in future development costs ($473.7 million) and extensions ($568.6 million). The measure uses a 10% discount rate and SEC-mandated 12-month average prices.

WildFire Energy I LLC reported a net loss of $146.967 million for Q1 2026, compared to net income of $99.019 million in Q1 2025. The loss was driven by a $273.036 million loss on derivative instruments, partially offset by $143.010 million in operating income.

Total operating revenues for Q1 2026 were $276.851 million, up from $244.426 million in Q1 2025. Oil revenues increased to $249.068 million from $216.131 million, while natural gas and NGL revenues declined modestly.

WildFire restructured 2028 crude oil derivatives in January 2026, monetizing their fair value to support 2026 cash flows. The company entered offsetting purchase contracts and new 2026 swaps on a cashless basis, continuing to recognize changes in fair value through earnings.

WildFire distributed $49.0 million to unit holders in Q1 2026 as a return of contributed capital, up from $39.2 million in Q1 2025. The Board also authorized special advance distributions to incentive unit holders of $1.0 million, recorded as compensation expense.

Magnolia Oil & Gas entered into a definitive agreement to acquire 100% of WildFire Energy, a Houston-based independent E&P company operating over 1,600 net wells across approximately 690,000 net acres in the East Texas Eagle Ford. The transaction is expected to close in Q3 2026, subject to customary closing conditions including shareholder and regulatory approvals.

Total consideration is approximately $4.1 billion, consisting of 32.2 million Magnolia shares, $2.7 billion in cash, and assumption of $600 million of WildFire's 7.500% Senior Notes due 2029. The cash portion is funded through $100 million cash on hand, $970 million from an equity offering, $1.1 billion drawn on Magnolia's revolver, and $500 million from new 7% senior notes.

On a pro forma combined basis as of December 31, 2025, Magnolia and WildFire together would have total proved reserves of 481.4 MMboe, consisting of Magnolia's 210.2 MMboe and WildFire's 271.2 MMboe. The combined proved developed reserves would be 306.4 MMboe, with proved undeveloped reserves of 175.0 MMboe.

As of December 31, 2025, the pro forma combined standardized measure of discounted future net cash flows from proved reserves would be $6.6 billion, consisting of Magnolia's $2.5 billion and WildFire's $4.1 billion. This represents the present value of estimated future net revenues from proved oil and gas reserves using SEC pricing and a 10% discount rate.

Netherland, Sewell & Associates estimated WildFire Energy I LLC's proved reserves at 196.5 million barrels of oil equivalent (MMBOE) as of December 31, 2025, with a present value at 10% discount of $4.1 billion. Total proved reserves consist of 100.3 MMBBL proved developed producing, 96.1 MMBBL proved undeveloped, plus associated NGL and gas volumes. An additional 107.8 MMBBL of probable reserves were estimated with $786.6 million PV-10 value.

The reserve valuation uses SEC-compliant 12-month average pricing: WTI crude at $65.1 million/barrel and Henry Hub gas at $3.387/MMBTU for the January-December 2025 period. These prices are held constant over the life of the properties and adjusted for quality and transportation to yield weighted average realized prices of $65.20/barrel oil, $20.26/barrel NGL, and $2.716/MCF gas for proved reserves.

The report represents the entirety of WildFire Energy I LLC's proved reserves. Approximately 51% of total proved reserves (100.3 MMBBL) are classified as proved developed producing, while 49% (96.1 MMBBL) are proved undeveloped requiring future capital investment. The properties are located in Texas.