Company: MGY
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001698990-25-000006
Chunk: 120

Company: Magnolia Oil & Gas Corp
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 120
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 business environment, its historical earnings and losses, current industry trends, and its outlook for future years. As of December 31, 2024, the Company recorded a valuation allowance of $7.8 million to offset the deferred tax asset created by the capital loss attributable to the sale of the Company’s interest in Highlander in Louisiana.

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The tax effects of temporary differences that give rise to significant positions of the deferred income tax assets and liabilities are presented below: (In thousands)December 31, 2024December 31, 2023Deferred tax assets:Investment in partnership$71,587 $83,853 Capital loss carryforward5,822 5,627 Oil and natural gas properties6,077 4,308 Capitalized transaction costs1,969 2,201 Total deferred tax assets85,455 95,989 Deferred tax liabilities:Oil and natural gas properties— — Total deferred tax liabilities— — Net deferred tax assets85,455 95,989 Valuation allowances(7,818)(5,631)Net deferred tax assets, net of valuation allowances$77,637 $90,358 As of December 31, 2024, the Company had a $27.7 million gross capital loss carryforward attributable to the sale of the Company’s interest in Highlander which will expire in 4 years, unless offset by future capital gains.On August 16, 2022, the U.S. enacted legislation referred to as the Inflation Reduction Act (“IRA”), which significantly changes U.S. corporate income tax laws and is effective for tax years beginning after December 31, 2022. These changes include, among others, a new 15% corporate alternative minimum tax on adjusted financial statement income of corporations with profits over $1 billion, a 1% excise tax on stock buybacks, and various tax incentives for energy and climate initiatives. As of December 31, 2024, the Company is in compliance with all applicable provisions of the IRA, including the excise tax on stock buybacks. The Company is currently not subject to the corporate alternative minimum tax. The stock buyback excise tax did not have a material impact on the Company’s consolidated financial statements. The Company will continue to evaluate the impacts of the IRA in future tax years.

11. Stockholders’ Equity 

Class A Common Stock At December 31, 2024, there were 228.2 million shares of Class A Common Stock issued