Magnolia Oil & Gas acquires majority of Harvest Oil & Gas' South Texas assets

August 21, 2018

HOUSTON -- Magnolia Oil & Gas Corporation has announced that it has agreed to acquire substantially all of the South Texas assets of Harvest Oil & Gas Corp. for approximately $135 million in cash, without giving effect to effective date adjustments, and 4.2 million newly issued shares of the Company’s Class A common stock valued at approximately $56 million as of the close of trading on Aug. 20, 2018. The cash consideration will be funded using cash on the balance sheet and borrowings under the Company’s revolving credit facility. The Acquisition is expected to close on Aug. 31, 2018 and will have an effective date of July 1, 2018.

Acquisition highlights

Immediately accretive transaction that adds an undivided working interest across a portion of the company's existing Karnes County assets and all its existing Giddings field assets
Acquisition adds approximately 15 net locations to our core Karnes County inventory and approximately 114,000 net acres to Giddings field
Harvest South Texas Assets produced approximately 4,800 boed in the first half of 2018, with 1,400 boed in Karnes County (69% oil/83% liquids) and 3,400 boed in Giddings field (27% oil/53% liquids)
In the first half of 2018, Harvest South Texas assets generated revenues less direct operating expenses of approximately $25 million and incurred approximately $13 million of capital expenditures, which resulted in approximately $12 million of revenues less direct operating expenses after capital expenditures

Magnolia Chairman and CEO, Steve Chazen, commented, “We are very pleased to announce our agreement to acquire Harvest’s South Texas Assets. Harvest represented our largest non-operated working interest owner and the assets are a natural fit for Magnolia. We believe this accretive transaction is highly complementary to our business objectives of maximizing shareholder returns by generating steady production growth, strong pre-tax margins and significant free cash flow.”