giddings purchase agreement ” ) by and among magnolia llc and certain affiliates of enervest ( the “ giddings sellers ” ) ; and ( iii ) a 35 % membership interest in ironwood eagle ford midstream , llc , a texas limited liability company , which owns an eagle ford gathering system , pursuant to that certain membership interest purchase agreement , by and among magnolia llc and certain affiliates of enervest ( the “ ironwood sellers ” ) . in connection with the consummation of the business combination on july 31 , 2018 , the karnes county contributors received 83.9 million shares of class b common stock , 31.8 million shares of class a common stock , and approximately $ 911.5 million in cash . the giddings sellers received approximately $ 282.7 million in cash and the ironwood sellers received $ 25.0 million in cash . in connection with the business combination , the company has been identified as the acquirer for accounting purposes and the karnes county business was deemed to be the accounting “ predecessor . ” the business combination was accounted for using the acquisition method of accounting and the successor financial statements reflect a new basis of accounting based on the fair value of net assets acquired . as a result of the application of the acquisition method of accounting , the company 's consolidated and combined financial statements and certain presentations are separated into two distinct periods to indicate the different ownership and accounting basis between the periods presented , the period before the consummation of the business combination , which includes the period from january 1 , 2018 to july 30 , 2018 ( the “ 2018 predecessor period ” ) ; the year ended december 31 , 2017 ( the “ 2017 predecessor period ” ) ; the year ended december 31 , 2016 ( the “ 2016 predecessor period ” ) ; and , together with the 2018 predecessor period and the 2017 predecessor period , ( the “ predecessor period ” ) ; and the period on and after the consummation of the business combination , which is from the closing date to december 31 , 2018 ( the “ successor period ” ) . the company operates in one reportable segment engaged in the acquisition , development , exploration , and production of oil and natural gas properties located in the united states . the company 's oil and natural gas properties are located primarily in karnes county and the giddings field in south texas , where the company primarily targets the eagle ford shale and the austin chalk formation . as of december 31 , 2018 , magnolia 's assets included 16,841 net acres in karnes county and 439,123 net acres in the giddings field . as of december 31 , 2018 , magnolia had 1,458 gross operated wells ( 1,046 net ) with total production of 61.9 mboe/d in the fourth quarter of 2018. in the fourth quarter ended december 31 , 2018 , magnolia operated three drilling rigs across its acreage , with two rigs in karnes county and one rig in the giddings field , and brought 14 gross operated horizontal wells on production . magnolia reported net income attributable to class a common stock of $ 39.1 million , or $ 0.25 per diluted common share , for the successor period . magnolia reported net income of $ 82.4 million which includes noncontrolling interest of $ 43.4 million related to the class b common stock issued to certain affiliates of enervest in connection with the business combination . as of december 31 , 2018 , the noncontrolling interest ownership was 37.4 % . net income attributable to class a common stock for the successor period includes the one-time transaction costs of $ 24.3 million incurred in connection with the business combination as well as federal income tax expense of $ 10.4 million . 29 results of operations factors affecting the comparability of the historical financial results the successor period financial statements reflect a new basis of accounting for the assets and liabilities acquired by the company in the business combination that is based on the fair value of the assets acquired and liabilities assumed . as a result , the statements of operations subsequent to the business combination includes depreciation and amortization expense on magnolia 's property , plant , and equipment balances made under the new basis of accounting . therefore , the company 's financial information prior to the business combination may not be comparable to its financial information subsequent to the business combination . certain other items of income and expense may not be comparable as a result of the following factors : for the periods prior to july 31 , 2018 , the results of operations reflect the results of solely the predecessor , which , as described above , consists of only the results of the karnes county business , including , as applicable , its ownership of the ironwood interest , when the predecessor was not owned by the company , and do not include the results of the giddings assets ; the results of operations of the predecessor were not previously accounted for as the results of operations of a stand-alone legal entity , and accordingly have been carved out , as appropriate , for the periods presented . the results of operations of the predecessor therefore include a portion of indirect costs for salaries and benefits , depreciation , rent , accounting , legal services , and other expenses . in addition to the allocation of indirect costs , the results of operations reflect certain agreements executed by the karnes county contributors for the benefit of the predecessor , including price risk management instruments . story_separator_special_tag interest expense incurred in the successor period is due to interest and amortization of debt issuance costs related to the company 's 6.0 % senior notes due 2026 ( the “ 2026 senior notes ” ) and the senior secured reserve-based revolving credit facility ( the “ rbl facility ” ) entered into in connection with the business combination . loss on derivatives , net , was $ 18.1 million for the 2018 predecessor period as compared with a loss of $ 8.5 million and loss of $ 6.7 million for the 2017 predecessor period and 2016 predecessor period , respectively . this change was attributable to unfavorable hedging positions during the 2018 predecessor period and the extinguishment of all of the derivative contracts in july 2018. the company did not have any hedging arrangements during the successor period . other expense of $ 8.4 million in the successor period included a loss of $ 6.7 million related to the difference in fair market value of the giddings purchase agreement earnout as recorded in the business combination and the payment made to fully settle the earnout agreement on september 28 , 2018. story_separator_special_tag style= `` line-height:120 % ; text-align : justify ; text-indent:48px ; font-size:10pt ; `` > magnolia enters into customary agreements in the oil and gas industry for field equipment , vehicles , and other obligations as described below in “ contractual obligations ” in this item 2. other than the off-balance sheet arrangements described herein , magnolia does not have any off-balance sheet arrangements with unconsolidated entities that are reasonably likely to materially affect the company 's liquidity or capital resource positions . critical accounting policies and estimates magnolia prepares its financial statements and the accompanying notes in conformity with accounting principles generally accepted in the united states of america , which require management to make estimates and assumptions about future events that affect the reported amounts in the financial statements and the accompanying notes . magnolia identifies certain accounting policies as critical based on , among other things , their impact on the portrayal of magnolia 's financial condition , results of operations , or liquidity and the degree of difficulty , subjectivity , and complexity in their deployment . critical accounting policies cover accounting matters that are inherently uncertain because the future resolution of such matters is unknown . management routinely discusses the development , selection , and disclosure of each of the critical accounting policies . the following is a discussion of magnolia 's most critical accounting policies . reserves estimates proved oil and gas reserves are the estimated quantities of natural gas , crude oil , condensate , and ngls that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing conditions , operating conditions , and government regulations . proved undeveloped reserves include those reserves that are expected to be recovered from new wells on undrilled acreage , or from existing wells where a relatively major expenditure is required for recompletion . undeveloped reserves may be classified as proved reserves on undrilled acreage directly offsetting development areas that are reasonably certain of production when drilled , or where reliable technology provides reasonable certainty of economic producibility . undrilled locations may be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within the company 's development plan . despite the inherent imprecision in these engineering estimates , magnolia 's reserves are used throughout the company 's financial statements . for example , since magnolia uses the units-of-production method to amortize its oil and gas properties , the quantity of reserves could significantly impact magnolia 's dd & a expense . a material adverse change in the estimated volumes of reserves could result in property impairments . finally , these reserves are the basis for magnolia 's supplemental oil and gas disclosures . 37 reserves are calculated using an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months , held flat for the life of the production , except where prices are defined by contractual arrangements . operating costs , production and ad valorem taxes and future development costs are based on current costs with no escalation . magnolia has elected not to disclose probable and possible reserves or reserve estimates in this filing . purchase price allocation accounting for the acquisition of a business requires the allocation of the purchase price to the various assets and liabilities of the acquired business and recording deferred taxes for any differences between the allocated values and tax basis of assets and liabilities . any excess of the purchase price over the amounts assigned to assets and liabilities is recorded as goodwill . the purchase price allocation is accomplished by recording each asset and liability at its estimated fair value . estimated deferred taxes are based on available information concerning the tax basis of the acquired company 's assets and liabilities and tax-related carryforwards at the acquisition date , although such estimates may change in the future as additional information becomes known . the amount of goodwill recorded in any particular business combination can vary significantly depending upon the values attributed to assets acquired and liabilities assumed relative to the total acquisition cost . when estimating the fair values of assets acquired and liabilities assumed , the company must apply various assumptions . the most significant assumptions relate to the estimated fair values assigned to proved and unproved crude oil and natural gas properties . to estimate the fair values of these properties , the company prepares estimates of crude oil and natural gas reserves as described above in “ reserve estimates ” of this item 7. estimated fair values assigned to assets acquired can have a significant effect on results of operations in the future . impairments long-lived assets used in operations , including proved

liquidity and capital resources magnolia 's primary sources of liquidity and capital have been issuances of equity and debt securities and cash flows from operations . the company 's primary uses of cash have been acquisitions of oil and natural gas properties and related assets , development of the company 's oil and natural gas properties , and general working capital needs . magnolia believes that cash on hand , net cash flows generated from operations , and borrowings under the rbl facility will be adequate to fund magnolia 's capital budget and satisfy the company 's short-term liquidity needs . the company may also utilize borrowings under other various financing sources available to magnolia , including the issuance of equity or debt securities through public offerings or private placements , to fund magnolia 's acquisitions and long-term liquidity needs . magnolia 's ability to complete future offerings of equity or debt securities and the timing of these offerings will depend upon various factors including prevailing market conditions and the company 's financial condition . as of december 31 , 2018 , the company had $ 400.0 million of the 2026 senior notes outstanding and no outstanding borrowings related to the company 's rbl facility . as of december 31 , 2018 , the company has $ 685.8 million of liquidity between the $ 550.0 million of borrowing base capacity and $ 135.8 million cash on hand . as of december 31 , 2018 , the company 's adjusted consolidated net tangible asset , as calculated in accordance with the company 's indenture relating to its 2026 senior notes , was approximately $ 3.0 billion . magnolia 's next borrowing base redetermination is april 1 , 2019. for additional information about the company 's long-term debt , such as interest rates and covenants , please see note 9 - long term debt ( successor ) contained herein . cash at december 31 , 2018 , magnolia had $ 135.8 million of cash . the company 's cash is maintained with a major financial institution in the united states .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources magnolia 's primary sources of liquidity and capital have been issuances of equity and debt securities and cash flows from operations . the company 's primary uses of cash have been acquisitions of oil and natural gas properties and related assets , development of the company 's oil and natural gas properties , and general working capital needs . magnolia believes that cash on hand , net cash flows generated from operations , and borrowings under the rbl facility will be adequate to fund magnolia 's capital budget and satisfy the company 's short-term liquidity needs . the company may also utilize borrowings under other various financing sources available to magnolia , including the issuance of equity or debt securities through public offerings or private placements , to fund magnolia 's acquisitions and long-term liquidity needs . magnolia 's ability to complete future offerings of equity or debt securities and the timing of these offerings will depend upon various factors including prevailing market conditions and the company 's financial condition . as of december 31 , 2018 , the company had $ 400.0 million of the 2026 senior notes outstanding and no outstanding borrowings related to the company 's rbl facility . as of december 31 , 2018 , the company has $ 685.8 million of liquidity between the $ 550.0 million of borrowing base capacity and $ 135.8 million cash on hand . as of december 31 , 2018 , the company 's adjusted consolidated net tangible asset , as calculated in accordance with the company 's indenture relating to its 2026 senior notes , was approximately $ 3.0 billion . magnolia 's next borrowing base redetermination is april 1 , 2019. for additional information about the company 's long-term debt , such as interest rates and covenants , please see note 9 - long term debt ( successor ) contained herein . cash at december 31 , 2018 , magnolia had $ 135.8 million of cash . the company 's cash is maintained with a major financial institution in the united states .
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 Suspicious Activity Report : giddings purchase agreement ” ) by and among magnolia llc and certain affiliates of enervest ( the “ giddings sellers ” ) ; and ( iii ) a 35 % membership interest in ironwood eagle ford midstream , llc , a texas limited liability company , which owns an eagle ford gathering system , pursuant to that certain membership interest purchase agreement , by and among magnolia llc and certain affiliates of enervest ( the “ ironwood sellers ” ) . in connection with the consummation of the business combination on july 31 , 2018 , the karnes county contributors received 83.9 million shares of class b common stock , 31.8 million shares of class a common stock , and approximately $ 911.5 million in cash . the giddings sellers received approximately $ 282.7 million in cash and the ironwood sellers received $ 25.0 million in cash . in connection with the business combination , the company has been identified as the acquirer for accounting purposes and the karnes county business was deemed to be the accounting “ predecessor . ” the business combination was accounted for using the acquisition method of accounting and the successor financial statements reflect a new basis of accounting based on the fair value of net assets acquired . as a result of the application of the acquisition method of accounting , the company 's consolidated and combined financial statements and certain presentations are separated into two distinct periods to indicate the different ownership and accounting basis between the periods presented , the period before the consummation of the business combination , which includes the period from january 1 , 2018 to july 30 , 2018 ( the “ 2018 predecessor period ” ) ; the year ended december 31 , 2017 ( the “ 2017 predecessor period ” ) ; the year ended december 31 , 2016 ( the “ 2016 predecessor period ” ) ; and , together with the 2018 predecessor period and the 2017 predecessor period , ( the “ predecessor period ” ) ; and the period on and after the consummation of the business combination , which is from the closing date to december 31 , 2018 ( the “ successor period ” ) . the company operates in one reportable segment engaged in the acquisition , development , exploration , and production of oil and natural gas properties located in the united states . the company 's oil and natural gas properties are located primarily in karnes county and the giddings field in south texas , where the company primarily targets the eagle ford shale and the austin chalk formation . as of december 31 , 2018 , magnolia 's assets included 16,841 net acres in karnes county and 439,123 net acres in the giddings field . as of december 31 , 2018 , magnolia had 1,458 gross operated wells ( 1,046 net ) with total production of 61.9 mboe/d in the fourth quarter of 2018. in the fourth quarter ended december 31 , 2018 , magnolia operated three drilling rigs across its acreage , with two rigs in karnes county and one rig in the giddings field , and brought 14 gross operated horizontal wells on production . magnolia reported net income attributable to class a common stock of $ 39.1 million , or $ 0.25 per diluted common share , for the successor period . magnolia reported net income of $ 82.4 million which includes noncontrolling interest of $ 43.4 million related to the class b common stock issued to certain affiliates of enervest in connection with the business combination . as of december 31 , 2018 , the noncontrolling interest ownership was 37.4 % . net income attributable to class a common stock for the successor period includes the one-time transaction costs of $ 24.3 million incurred in connection with the business combination as well as federal income tax expense of $ 10.4 million . 29 results of operations factors affecting the comparability of the historical financial results the successor period financial statements reflect a new basis of accounting for the assets and liabilities acquired by the company in the business combination that is based on the fair value of the assets acquired and liabilities assumed . as a result , the statements of operations subsequent to the business combination includes depreciation and amortization expense on magnolia 's property , plant , and equipment balances made under the new basis of accounting . therefore , the company 's financial information prior to the business combination may not be comparable to its financial information subsequent to the business combination . certain other items of income and expense may not be comparable as a result of the following factors : for the periods prior to july 31 , 2018 , the results of operations reflect the results of solely the predecessor , which , as described above , consists of only the results of the karnes county business , including , as applicable , its ownership of the ironwood interest , when the predecessor was not owned by the company , and do not include the results of the giddings assets ; the results of operations of the predecessor were not previously accounted for as the results of operations of a stand-alone legal entity , and accordingly have been carved out , as appropriate , for the periods presented . the results of operations of the predecessor therefore include a portion of indirect costs for salaries and benefits , depreciation , rent , accounting , legal services , and other expenses . in addition to the allocation of indirect costs , the results of operations reflect certain agreements executed by the karnes county contributors for the benefit of the predecessor , including price risk management instruments . story_separator_special_tag interest expense incurred in the successor period is due to interest and amortization of debt issuance costs related to the company 's 6.0 % senior notes due 2026 ( the “ 2026 senior notes ” ) and the senior secured reserve-based revolving credit facility ( the “ rbl facility ” ) entered into in connection with the business combination . loss on derivatives , net , was $ 18.1 million for the 2018 predecessor period as compared with a loss of $ 8.5 million and loss of $ 6.7 million for the 2017 predecessor period and 2016 predecessor period , respectively . this change was attributable to unfavorable hedging positions during the 2018 predecessor period and the extinguishment of all of the derivative contracts in july 2018. the company did not have any hedging arrangements during the successor period . other expense of $ 8.4 million in the successor period included a loss of $ 6.7 million related to the difference in fair market value of the giddings purchase agreement earnout as recorded in the business combination and the payment made to fully settle the earnout agreement on september 28 , 2018. story_separator_special_tag style= `` line-height:120 % ; text-align : justify ; text-indent:48px ; font-size:10pt ; `` > magnolia enters into customary agreements in the oil and gas industry for field equipment , vehicles , and other obligations as described below in “ contractual obligations ” in this item 2. other than the off-balance sheet arrangements described herein , magnolia does not have any off-balance sheet arrangements with unconsolidated entities that are reasonably likely to materially affect the company 's liquidity or capital resource positions . critical accounting policies and estimates magnolia prepares its financial statements and the accompanying notes in conformity with accounting principles generally accepted in the united states of america , which require management to make estimates and assumptions about future events that affect the reported amounts in the financial statements and the accompanying notes . magnolia identifies certain accounting policies as critical based on , among other things , their impact on the portrayal of magnolia 's financial condition , results of operations , or liquidity and the degree of difficulty , subjectivity , and complexity in their deployment . critical accounting policies cover accounting matters that are inherently uncertain because the future resolution of such matters is unknown . management routinely discusses the development , selection , and disclosure of each of the critical accounting policies . the following is a discussion of magnolia 's most critical accounting policies . reserves estimates proved oil and gas reserves are the estimated quantities of natural gas , crude oil , condensate , and ngls that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing conditions , operating conditions , and government regulations . proved undeveloped reserves include those reserves that are expected to be recovered from new wells on undrilled acreage , or from existing wells where a relatively major expenditure is required for recompletion . undeveloped reserves may be classified as proved reserves on undrilled acreage directly offsetting development areas that are reasonably certain of production when drilled , or where reliable technology provides reasonable certainty of economic producibility . undrilled locations may be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within the company 's development plan . despite the inherent imprecision in these engineering estimates , magnolia 's reserves are used throughout the company 's financial statements . for example , since magnolia uses the units-of-production method to amortize its oil and gas properties , the quantity of reserves could significantly impact magnolia 's dd & a expense . a material adverse change in the estimated volumes of reserves could result in property impairments . finally , these reserves are the basis for magnolia 's supplemental oil and gas disclosures . 37 reserves are calculated using an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months , held flat for the life of the production , except where prices are defined by contractual arrangements . operating costs , production and ad valorem taxes and future development costs are based on current costs with no escalation . magnolia has elected not to disclose probable and possible reserves or reserve estimates in this filing . purchase price allocation accounting for the acquisition of a business requires the allocation of the purchase price to the various assets and liabilities of the acquired business and recording deferred taxes for any differences between the allocated values and tax basis of assets and liabilities . any excess of the purchase price over the amounts assigned to assets and liabilities is recorded as goodwill . the purchase price allocation is accomplished by recording each asset and liability at its estimated fair value . estimated deferred taxes are based on available information concerning the tax basis of the acquired company 's assets and liabilities and tax-related carryforwards at the acquisition date , although such estimates may change in the future as additional information becomes known . the amount of goodwill recorded in any particular business combination can vary significantly depending upon the values attributed to assets acquired and liabilities assumed relative to the total acquisition cost . when estimating the fair values of assets acquired and liabilities assumed , the company must apply various assumptions . the most significant assumptions relate to the estimated fair values assigned to proved and unproved crude oil and natural gas properties . to estimate the fair values of these properties , the company prepares estimates of crude oil and natural gas reserves as described above in “ reserve estimates ” of this item 7. estimated fair values assigned to assets acquired can have a significant effect on results of operations in the future . impairments long-lived assets used in operations , including proved

