[Editor's note: A version of this story appears in the January 2019 edition of Oil and Gas Investor. Subscribe to the magazine here.]
Magnolia Oil & Gas Corp. (NYSE: MGY) didn’t exist as an E&P a year ago. As a special purpose acquisition company, TPG Pace Holdings Corp., at the time, Magnolia came to be this past summer via the acquisition of Eagle Ford Shale assets carved out of privately held EnerVest Ltd.
But CEO Steve Chazen knows something about achieving scale when it comes to investor buy-ins. He previously led Top 5 E&P Occidental Petroleum Corp. (NYSE: OXY), taking it through a portfolio rationalization that would make an asset adviser’s head spin, positioning that company with high-return, sustainable assets to weather future downturns.
“Oil and gas isn’t all that popular in the investment community,” he told Oil and Gas Investor after closing the deal with EnerVest, “so I needed to find investors that invested in normal companies—cable or technology or industrial companies—where there are earnings from free cash flow and reasonable growth. I had to design a company that worked that way.