Magnolia expands Giddings position with $4-billion WildFire Energy acquisition
Magnolia Oil & Gas Corp. has agreed to acquire WildFire Energy LLC in a cash-and-stock deal valued at $4.06 billion, including WildFire’s debt, more than doubling Magnolia’s Giddings acreage position in South Texas.
Andrew Dittmar, principal analyst at Enverus Intelligence Research, told Oil & Gas Journal via email that the deal is "a unique use of a private acquisition by a [small- to mid-cap] public company to reshape its scale," as Magnolia's enterprise value would increase to about $9 billion from about $5 billion and production would rise by about 50%.
He said Enverus Intelligence Research estimates the acquisition "boosts Magnolia’s remaining location count by about 70%, giving the company pro forma more than 1,000 net locations at 10,000-ft laterals."
Expanded Eagle Ford, Austin Chalk position
The mostly contiguous assets held directly or indirectly by WildFire Energy encompass about 810,000 net acres, primarily in Brazos, Burleson, Fayette, Grimes, Lee, Madison, Milam, Robertson, and Washington counties, Tex., according to a June 20 filing by Magnolia with the US Securities and Exchange Commission.
In the filing, Magnolia said WildFire’s second-quarter 2025 production is expected to average 53,000 boe/d, about 70% oil, primarily from the Eagle Ford, Austin Chalk, and Woodbine formations.
Magnolia said the acquisition would strengthen its position in the Eagle Ford/Austin Chalk trend by expanding its inventory of high-return drilling locations, adding development flexibility and longer laterals, and leveraging its technical expertise to improve well performance and lower costs.
"WildFire has a large, low-decline oily PDP base with historic development centered on the Eagle Ford. While there are significant future Eagle Ford development opportunities, our technical teams see extensive future potential in the Austin Chalk with further upside in the Woodbine as well as other appraisal opportunities that should expand on our success in Giddings since 2018," said Chris Stavros, Magnolia's chairman, president, and chief executive officer.
The deal is expected to result in a pro forma position in Giddings of more than 1.25 million net acres, add more than 500 miles of gas-gathering pipelines, and offer various cost savings, the company said.
"Magnolia is guiding to $100 million in run rate synergies by the end of 2027, with savings coming from the chance to deploy long laterals, shared facilities and infrastructure and additional sand sourcing for operations from WildFire's in-basin mine. As always, successful execution will be key for the longer-term success of the deal," Enverus' Dittmar said.
Total consideration consists of $2.65 billion in cash, 32.2 million shares of Magnolia Class A common stock, and the assumption of $600 million of outstanding debt.
Eagle Ford deal marks major private equity exit
The deal is one of the largest recent private equity exits in the US shale sector and further consolidates ownership across the core Eagle Ford trend.
"WildFire was one of only a handful of remaining private equity-sponsored E&Ps in any of the main Lower 48 shale plays that could boast hundreds of remaining drilling locations," Dittmar noted.
Higher oil prices have supported asset valuations, increasing the likelihood that private companies will bring upstream assets to market as mature plays become more attractive under improved pricing conditions.
Within the Eagle Ford, WildFire and Verdun Oil represented the two largest remaining private equity-sponsored opportunities, according to Dittmar.
On scale, he continued, the deal stands out. "It is the largest acquisition purely focused on the Eagle Ford in over a decade and just the fifth deal to top the $3 billion mark solely in the play. It is also one of the top five private equity sales since 2024."
About the Author
Mikaila Adams
Managing Editor, Content Strategist
Mikaila Adams has 20 years of experience as an editor, most of which has been centered on the oil and gas industry. She enjoyed 12 years focused on the business/finance side of the industry as an editor for Oil & Gas Journal's sister publication, Oil & Gas Financial Journal (OGFJ). After OGFJ ceased publication in 2017, she joined Oil & Gas Journal and was later named Managing Editor - News. Her role has expanded into content strategy. She holds a degree from Texas Tech University.