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Independant energy producer and shale exploration company Oasis Petroleum reported mixed third quarter earnings after the close Tuesday. $OAS reiterated its drilling spend cutbacks and divesting non core assets. The companies main focus is the efficiency of Williston production

Oasis Petroleum


 

Oasis Petroleum Inc. NYSE: OAS Reported Earnings After Close Tuesday

$(0.05) Missed ($0.01) EPS and $482.7 Beat $473 billion forecast in revenue 

Earnings

Oasis Petroleum reported for 3Q 2019 on Tuesday profit of $20.3 million. On a per-share basis, the Houston-based company said it had net income of 6 cents. Losses, adjusted for non-recurring gains, were 5 cents per share. The results did not meet Wall Street expectations for a loss of 1 cent per share. Oasis posted revenue of $482.7 million in the period, which topped Street forecasts. Seven analysts surveyed by Zacks expected $473 million.

Excluding certain non-cash items and their tax effect, Adjusted Net Loss Attributable to Oasis was $16.0 million, or $0.05 per diluted share, in 3Q 2019, as compared to Adjusted Net Income Attributable to Oasis of $26.3 million, or $0.08 per diluted share, in 3Q 2018. Adjusted EBITDA in 3Q 2019 was $256.6 million, as compared to Adjusted EBITDA of $270.4 million in 3Q 2018.

 

Oasis Petroleum Inc. NYSE: OAS

Market Reaction > After hours $2.95 +0.030 (1.03%)

Highlights

"Oasis delivered a strong quarter across several fronts," said Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer.

"As expected, Williston production rebounded strongly compared to the second quarter, driven by Oasis's prolific well results and industry-leading infrastructure. In the Delaware, we reached our year-end 2019 volume target, driven by high-return wells. Efficiency is improving rapidly, with Williston well costs expected to improve to $7.2 million vs. $7.6 million by year end and Delaware cycle times continuing to fall. E&P free cash generation during the quarter was supplemented by strong asset sale proceeds, both of which led to a meaningful reduction in net debt. We remain focused on driving additional operating efficiencies and reducing leverage further."

  • Delivered net cash provided by operating activities of $251.0 million and Adjusted EBITDA(1) of $256.6 million in 3Q 2019.
  • Achieved positive free cash flow during the quarter and year to date and continue to expect to be free cash flow positive in 2019 for the E&P business(2).
  • Reduced debt under the Oasis credit facility by $125.0 million during the quarter to $406.0 million as of September 30, 2019.
  • LOE per Boe decreased 15.8% to $6.16 per Boe in 3Q 2019 compared to $7.32 per Boe in 2Q 2019.
  • Crude oil differentials remained strong at $1.30 off of NYMEX WTI in 3Q 2019.
  • Produced 88.7 MBoepd in 3Q 2019, which included the impact of divested volumes of approximately 330 Boepd.
  • Volumes grew by 5% in 3Q 2019 (3% oil) as compared to 2Q 2019.
  • Divested upstream assets in various packages in the Williston Basin, which resulted in approximately $41.0 million in cash proceeds. Transactions closed late in 3Q 2019. ;

Financial and Operational Update and Outlook

  • Production averaged 80.2 MBoepd (Williston Basin) and 8.5 MBoepd (Delaware Basin) in 3Q 2019.
  • Oasis expects 4Q 2019 production to range between 83.3 to 85.3 MBoepd (70.5% oil cut), which is in line with the Company's pre-divestiture prior midpoint guidance of 86 MBoepd (71% oil cut).
  • The anticipated impact from divested volumes in 2020 is approximately 1.1 MBoepd.
  • In 3Q 2019, Oasis dropped down to one OWS crew and reduced company-wide headcount by 87, representing 12% of the workforce, resulting in a one-time G&A charge of approximately $2.4 million.
  • The Company now expects 2019 G&A to range between $125 to $131 million, excluding $20 million of litigation contingency expenses, and the run-rate impact of the reduced headcount to be approximately $10 million.
  • Oasis continues to focus on cost control measures across its businesses. CapEx in 3Q 2019 of $187 million consisted of $148 million of E&P and other (including $3 million of capitalized interest), $37 million of consolidated midstream and $3 million of acquisitions.

CapEx

The Company's 2019 E&P and other CapEx guidance remains unchanged from the August range of $620 to $640 million, which excludes capitalized interest charges of approximately $12 million.

Total 2019 midstream CapEx is now expected to be $212 to $222 million, which is below the August guidance range of $219 to $230 million.

About Oasis

Oasis is the premier operator in both the Williston Basin and Delaware Basin, possessing both coveted assets and creative people that drive the success of the Company. We are on the forefront of technology deployment, operational efficiencies, and infrastructure development. Our assets are highly concentrated and are prospective for multiple potential horizons. As we develop our positions, we expect to increase long-term shareholder value while maintaining a conservative balance sheet.

We have a long history of acquiring and exploiting oil and gas assets, which has been characterized by capital discipline coupled with differential views of the market. While we have a great track record of delivering growth in production and reserves, we do not subscribe to the idea of growth at any cost. Our goal is to increase stockholder value by building reserves, production and cash flows at an attractive return on invested capital. via company website

Sources:Oasis

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