Company: MGY
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001698990-25-000006
Chunk: 101

Company: Magnolia Oil & Gas Corp
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 101
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 United States of America (“GAAP”). Certain reclassifications of prior period financial statements have been made to conform to current reporting practices. The consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of intercompany transactions and balances. The Company’s interests in oil and natural gas exploration and production ventures and partnerships are proportionately consolidated. The Company reflects a noncontrolling interest representing the interest owned by the Magnolia LLC Unit Holders through their ownership of Magnolia LLC Units in the consolidated financial statements. The noncontrolling interest is presented as a component of equity. See Note 11—Stockholders’ Equity for further discussion of noncontrolling interest.Segment InformationThe Company operates in one reportable segment engaged in the acquisition, development, exploration, and production of oil and natural gas properties (“Operating segment”). Magnolia’s operations are conducted predominantly in one geographic area of the United States. The Operating segment sells oil, natural gas, and NGLs which are disaggregated on the company’s consolidated statements of operations. The Operating segment’s major customers are disclosed in Note 15—Major Customers.The Company’s chief operating decision maker (“CODM”) is the President and Chief Executive Officer. The significant accounting policies for the reportable segment are the same as those of the consolidated entity described in Note 2—Summary of Significant Accounting Policies. The profit or loss metric used to evaluate segment performance is net income reported on the Company’s consolidated statements of operations. The measure of segment assets is reported on the Company’s consolidated balance sheets as Total Assets.The CODM uses the consolidated statements of operations to review net income generated from segment assets to make decisions about allocating resources and assess performance of the Company. Net income is used to monitor budget versus actual results and to benchmark against the Company’s competitors. Significant segment expenses are the same as those in the consolidated statements of operations.

2. Summary of Significant Accounting Policies

Variable Interest EntitiesMagnolia LLC is a variable interest entity (“VIE”). The Company determined that it is the primary beneficiary of Magnolia LLC as the Company is the managing member and has the power to direct the activities most significant to Magnolia LLC’s economic performance as well as the obligation to absorb losses and receive benefits that are potentially significant. At December 31, 2024, the Company had an approximate 97.2% economic interest in Magnolia LLC and 100% of Magnolia LLC’s assets, liabilities, and results of operations are consolidated in the Company’s consolidated financial statements contained herein. At December 31,