en.Wedoany.com Reported - U.S. oil and gas producer Magnolia Oil & Gas (MGY.N) announced on July 20 that it will acquire WildFire Energy for approximately $4.06 billion (including debt) to expand its operations in the Giddings oil field in South Texas.
The transaction includes approximately 810,000 net acres in the Giddings area, more than doubling Magnolia's footprint in the region to over 1.25 million net acres, strengthening its position in the Austin Chalk, Eagle Ford, and Woodbine formations.
The acquisition also includes a sand mine capable of meeting approximately 80% of Magnolia's annual sand demand, as well as over 500 miles of gathering pipelines.
Shale producers are seeking consolidation in core operating areas to secure long-life drilling inventories, reduce development costs, and support shareholder returns, even as the pace of large-scale industry mergers has slowed.
The company stated that the larger, more contiguous acreage is expected to generate over $100 million in annual cost savings and operational synergies.
Magnolia Oil & Gas CEO Chris Stavros said that WildFire Energy is a strong fit with Magnolia, offering unparalleled benefits while meeting several key characteristics, including focused, high-quality assets, concentrated scale, moderate production growth driven by low capital reinvestment rates, high operating margins, and stable free cash flow. Stavros added that these attributes will enable Magnolia to consistently deliver significant shareholder returns.
Under the agreement, WildFire owners will receive 32.2 million shares of Magnolia Class A common stock, while Magnolia will assume WildFire's $600 million notes due 2029.
Magnolia also raised its quarterly dividend by 9% to 18 cents per share and expressed confidence in the ability of its acquired assets 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 from 5% to 6%.
The transaction is expected to close by the end of the third quarter of 2026.
