Company: MGY
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001698990-25-000013
Chunk: 15

Company: Magnolia Oil & Gas Corp
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 8
Chunk 15
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million and a loss of $4.2 million on the revaluation of the remaining tranches for the three months ended March 31, 2025 and 2024, respectively. Gains and losses on revaluation are included in “Other income (expense), net” on the Company’s consolidated statements of operations.

9. Income Taxes

The Company’s income tax provision consists of the following components:Three Months Ended (In thousands)March 31, 2025March 31, 2024Current:Federal$12,145 $10,981 State650 647 Total current12,795 11,628 Deferred:Federal11,780 8,225 State562 483 Total deferred12,342 8,708 Income tax expense$25,137 $20,336 The Company is subject to U.S. federal income tax and margin tax in the state of Texas. The Company estimates its annual effective tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which it operates. The Company’s effective tax rates for the three months ended March 31, 2025 and 2024 were 19.1% and 17.2%, respectively. The primary differences between the annual effective tax rate and the statutory rate of 21.0% are income attributable to noncontrolling interest, state taxes, and tax credits.

10

As of March 31, 2025, the Company’s total gross deferred tax assets were $73.6 million. Management assessed whether it is more-likely-than-not that the Company will generate sufficient taxable income to realize its deferred income tax assets, including the investment in partnership and net operating loss carryforwards. In making this determination, the Company considered all available positive and negative evidence and made certain assumptions. The Company considered, among other things, the overall business environment, its historical earnings and losses, current industry trends, and its outlook for future years. As of March 31, 2025, the Company maintains a valuation allowance of $7.8 million, the majority of which offsets a deferred tax asset associated with a tax capital loss that will expire in 2028, unless offset by future capital gains.

10. Stockholders’ Equity 

Class A Common Stock At March 31, 2025, there were 228.6 million shares of Class A Common Stock issued and 187.7 million shares of Class A Common Stock outstanding. The holders of Class A Common Stock and Class