Magnolia Oil & Gas Corporation (NYSE: MGY) shares fell about 3% on Tuesday after the company announced a definitive agreement to acquire private equity-backed WildFire Energy for approximately $4 billion.
The transaction, which has been unanimously approved by Magnolia’s board of directors, is expected to expand the company’s position in South Texas and more than double its footprint in the Giddings field
WildFire Energy, founded in partnership with Warburg Pincus, Kayne Anderson and its management team in 2019, is an independent oil and gas producer focused on assets in the Austin Chalk, Eagle Ford and Woodbine formations. The company currently produces about 53,000 barrels of oil equivalent per day, with approximately 70% of production weighted toward oil, across roughly 810,000 net acres. WildFire has expanded through acquisitions, including the purchase of Hawkwood Energy in 2021, as well as organic development.
Magnolia said the acquisition will strengthen its position in the South Texas region by adding a large-scale asset base and increasing its development inventory. WildFire CEO Anthony Bahr highlighted the company’s growth since its formation and said the transaction would create further opportunities for the combined business. “We are excited for the opportunities ahead for Magnolia and believe this transaction positions the asset for continued success,” Bahr said. Warburg Pincus Managing Director Ryan Dalton wrote that WildFire had developed into a large-scale energy platform through acquisitions and operational execution. “WildFire represents a rare combination of high-quality underdeveloped assets, market opportunity and a strong management team with the unique capabilities to acquire, optimize and scale oil and gas assets,” Dalton said.