(WO) — Magnolia Oil & Fuel Corp. has agreed to accumulate WildFire Power for about $4.06 billion, making a considerably bigger place throughout the Eagle Ford and Austin Chalk in South Texas and greater than doubling Magnolia’s acreage within the Giddings area.
The transaction will add roughly 810,000 internet acres and 53,000 boed of manufacturing, roughly 70% weighted to grease. Following closing, Magnolia will management greater than 1.25 million internet acres in Giddings, with improvement alternatives throughout the Austin Chalk, Eagle Ford and Woodbine formations.
“The acquisition of the WildFire oil and fuel properties and acreage is a pure and strategic match,” Magnolia Chairman, President and CEO Chris Stavros mentioned. “It makes our enterprise higher by extending our runway of advantaged profitability and vital free money circulate technology.”
Magnolia mentioned WildFire’s acreage is adjoining to and overlaps parts of its current Giddings place, creating a bigger contiguous working footprint. The corporate expects the mixture to generate greater than $100 million in annual price financial savings and synergies by way of longer laterals, shared infrastructure, decrease company bills and streamlined area operations.
The acquired belongings embody greater than 500 miles of fuel gathering pipelines and a sand mine that provides roughly 80% of Magnolia’s annual sand necessities, together with all of WildFire’s present wants.
WildFire’s manufacturing base has an estimated 29% oil decline price and advantages from entry to Gulf Coast markets. Magnolia mentioned the acquisition ought to instantly enhance money circulate, free money circulate and earnings per share whereas reducing the corporate’s general capital reinvestment price.
“WildFire shouldn’t be solely a hand-in-glove match for Magnolia, nevertheless it additionally presents unmatched advantages,” Stavros mentioned. “Our technical groups see in depth future potential within the Austin Chalk, with additional upside within the Woodbine in addition to different appraisal alternatives.”
Underneath the settlement, WildFire’s house owners will obtain 32.2 million shares of Magnolia Class A typical inventory. Magnolia may even assume $600 million of WildFire notes due in 2029. The remaining consideration shall be funded by way of money, debt and new widespread fairness.
Magnolia has secured dedicated financing from JPMorgan Chase Financial institution, Citigroup International Markets and Wells Fargo. The corporate additionally elevated its secured credit score facility to a $2 billion borrowing base, with $1.75 billion in elected commitments contingent on closing.
The acquisition is predicted to shut late within the third quarter of 2026, topic to customary approvals and shutting circumstances.
Individually, Magnolia reported second-quarter manufacturing of 106,100 boed, together with 41,900 bpd of oil. The corporate raised its standalone 2026 manufacturing development steerage to six% from 5%.
Magnolia additionally elevated its quarterly dividend by 9% to $0.18 per share, citing the anticipated enhance in free money circulate from the WildFire acquisition.
