(Reuters) – Magnolia Oil & Gas (MGY.N) said on Monday it had agreed to acquire WildFire Energy for about $4.06 billion, including debt, to expand its position in the Giddings field in South Texas.
The deal includes about 810,000 net acres in Giddings, more than doubling Magnolia’s position there to over 1.25 million net acres, strengthening its position across the Austin Chalk, Eagle Ford and Woodbine formations.
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The acquisition also includes a sand mine that supplies about 80% of Magnolia’s annual sand needs, along with more than 500 miles of gas gathering pipelines.
Shale producers are pursuing consolidation in core operating areas to secure long-life drilling inventory, lower development costs and support shareholder returns, even as the pace of industry megamergers has slowed.
The company said the larger, contiguous acreage position is expected to generate more than $100 million in annual cost savings and operational synergies.
“WildFire is not only a hand-in-glove fit for Magnolia, but it also offers unmatched benefits while meeting several important characteristics we look for — focused, high-quality assets with concentrated scale, a low capital reinvestment rate providing moderate production growth, high operating margins, and steady free cash flow,” Magnolia CEO Chris Stavros said.
Stavros added that these qualities would allow Magnolia to deliver consistent and significant shareholder returns.
Under the agreement, WildFire owners will receive 32.2 million Magnolia Class A shares, while Magnolia will assume $600 million of WildFire notes due in 2029.
Magnolia also raised its quarterly dividend by 9% to 18 cents per share, citing confidence in the acquired assets’ ability to generate higher free cash flow.
Separately, Magnolia said second-quarter production averaged 106,100 barrels of oil equivalent per day and raised its standalone 2026 production growth forecast to 6% from 5%.
The deal is expected to close late in the third quarter of 2026.
Reporting by Pranav Mathur in Bengaluru; Editing by Anil D’Silva and Shreya Biswas
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