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Oasis Petroleum Inc.$0.46($.02)(3.19%)

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 Oasis Petroleum Inc. Announces Quarter and Year Ending December 31, 2019 Earnings and Provides an Operational Update and 2020 Outlook
   Tuesday, February 25, 2020 5:28:00 PM ET

HOUSTON, Feb. 25, 2020 /PRNewswire/ -- Oasis Petroleum Inc. (Nasdaq: OAS) ("Oasis" or the "Company") today announced financial and operational results for the quarter and year ended December 31, 2019 and provided its 2020 outlook.

"Fourth quarter results demonstrate continued execution and progress towards reducing leverage," said Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer. "Volumes exceeded expectations while spending was lower, driven by a relentless focus on efficiency. A combination of free cash flow and asset sales led Oasis to reduce E&P debt by $188 million over the course of 2019. I'm proud of the Oasis team for rising to the challenge and driving significant cost savings and efficiencies in the back half of 2019. These efforts positioned our 2020 plan to be more capital efficient, especially when we factor in lower well costs and improved cycle times in the Delaware Basin. Oasis is in a compelling position to grow modestly while generating free cash flow and continuing to pay down debt."



2019 Highlights

  • Produced 87.4 MBoepd in 4Q19, 2% above the upper range of November guidance, with oil volumes at 60.1 MBopd, at the top end of guidance.
  • Delivered net cash provided by operating activities of $892.9 million for YE19 and $253.0 million for 4Q19 and Adjusted EBITDA(1) of $1,039.5 million for YE19 and $264.0 million for 4Q19.
  • LOE per Boe averaged $6.95 per Boe in 2019, approximately 7% below original guidance.
  • Crude oil differentials were strong over 2019 averaging $1.68 off of NYMEX WTI.
  • E&P CapEx(2) was $598.0 million for 2019, 4-5% below the $620-640 million plan.
  • 2019 G&A(3) of $123.5 million was 10% below February 2019 guidance.
  • OMP delivered approximately $159 million in net Adjusted EBITDA(4) in 2019, 4% above original midpoint guidance.

(1) Non-GAAP financial measure. See "Non-GAAP Financial Measures" below for definitions of all non-GAAP financial measures included herein and reconciliations to the most directly comparable measures under United States generally accepted accounting principles ("GAAP").
(2) E&P CapEx excludes capitalized interest, midstream CapEx and acquisitions for both 2019 actual and plan.
(3) Full year 2019 G&A excludes one-time litigation contingency expense of $20 million.
(4) Refer to Oasis Midstream Partners press release dated February 25, 2020 for definition of non-GAAP financial measure and reconciliation.

2020 Plan
Oasis continues to drive towards moderate growth, free cash generation and debt reduction. The Company constructed its 2020 plan based on being free cash flow positive at $50 NYMEX WTI. Total consolidated CapEx is expected to range between $685 and $715 million with E&P and Other CapEx expected to range between $575 and $595 million. Oasis is directing approximately 55-65% of its capital to the Williston Basin and approximately 35-45% to the Delaware Basin. The Company expects approximately 80-90% of its E&P and Other CapEx to be invested in drilling and completions activities, including:

  • Completing 45 to 55 gross operated wells with a working interest of approximately 66% in the Williston Basin.
  • Completing 20 to 25 gross operated wells with a working interest of approximately 88% in the Delaware Basin.
  • 1Q20 CapEx is expected to approximate 30% of full-year guidance.

Other highlights of the 2020 plan include:

  • 1Q20 total volumes are expected to approximate 78 to 79 MBoepd with oil cut to approximate 68-69%.
  • Expect mid-single-digit year-over-year volume growth (Boe and oil) from 4Q19 to 4Q20.
  • Expect to be E&P free cash flow positive assuming average NYMEX WTI prices above $50/barrel.
  • 85-90% of 1H20 oil production hedged with an average floor of $55.46.

 

















Operational and Financial Update
Select operational and financial statistics are included in the following table for the periods presented:









































































































































































































































































































G&A expenses totaled $25.3 million in 4Q19, and $143.5 million in YE19. Amortization of equity-based compensation, which is included in G&A expenses, was $7.2 million, or $0.90 per Boe, in 4Q19 and $33.6 million, or $1.05 per Boe, for YE19. G&A expenses for the Company's E&P segment totaled $19.0 million in 4Q19 and $118.7 million for YE19. E&P Cash G&A expenses (non-GAAP), excluding non-cash equity-based compensation expenses and other non-cash charges, were $1.51 per Boe in 4Q19 and $2.07 per Boe for YE19. For a definition of E&P Cash G&A expenses and a reconciliation of E&P G&A to E&P Cash G&A, see "Non-GAAP Financial Measures" below.

MT&G expenses totaled $32.7 million in 4Q19 and $128.8 million in YE19. Cash MT&G (non-GAAP), which excludes non-cash valuation charges on pipeline imbalances, totaled $32.6 million in 4Q19 and $126.4 million in YE19. Non-cash valuation charges on pipeline imbalances were $0.1 million and $2.4 million for 4Q19 and YE19, respectively. For a definition of Cash MT&G and a reconciliation of MT&G to Cash MT&G, see "Non-GAAP Financial Measures" below.

Interest expense was $44.7 million in 4Q19 and $176.2 million in YE19. Capitalized interest totaled $2.5 million in 4Q19 and $12.0 million in YE19. Cash Interest (non-GAAP) totaled $40.7 million in 4Q19 and $167.2 million in YE19. For a definition of Cash Interest and a reconciliation of interest expense to Cash Interest, see "Non-GAAP Financial Measures" below.

The Company recorded an income tax benefit of $23.9 million in 4Q19, resulting in an effective tax rate of 27.1% as a percentage of its pre-tax loss for the quarter. The Company's income tax benefit for YE19 was recorded at $32.7 million, or 26.5% of its pre-tax loss.

The Company reported net loss attributable to Oasis of $76.4 million and $128.2 million in 4Q19 and YE19, respectively. Excluding certain non-cash items and their tax effect, Adjusted Net Loss Attributable to Oasis (non-GAAP) was $5.4 million, or $0.02 per diluted share, in 4Q19 and Adjusted Net Income Attributable to Oasis (non-GAAP) was $9.2 million, or $0.03 per diluted share, in YE19. For a definition of Adjusted Net Income (Loss) Attributable to Oasis and a reconciliation of net income (loss) attributable to Oasis to Adjusted Net Income (Loss) Attributable to Oasis, see "Non-GAAP Financial Measures" below.

The Company completed and placed on production 8 gross (5.1 net) operated wells in 4Q19 and 78 gross (51.5 net) operated wells in YE19.

Capital Expenditures
The following table depicts the Company's total capital expenditures ("CapEx") by category:

























Liquidity and Balance Sheet
As of YE19, Oasis had cash and cash equivalents of $20.0 million, total elected commitments under the Oasis Credit Facility of $1,100.0 million and a borrowing base under the OMP Credit Facility of $575.0 million. In addition, Oasis had $337.0 million of borrowings and $15.1 million of outstanding letters of credit issued under the Oasis Credit Facility and $458.5 million of borrowings and $1.7 million of outstanding letters of credit under the OMP Credit Facility, resulting in an unused borrowing capacity of $862.7 million for both revolving credit facilities as of YE19.

Hedging Activity
As of February 24, 2020, the Company's crude oil hedge position remained unchanged compared to the update included in the press release dated January 30, 2020. The December 2019 crude oil derivative contracts settled at a net $2.0 million paid in January 2020 and will be included in the Company's 1Q20 derivative settlements.

Conference Call Information
Investors, analysts and other interested parties are invited to listen to the conference call:










A recording of the conference call will be available beginning at 12:00 p.m. Central Time on the day of the call and will be available until Wednesday, March 4, 2020 by dialing:




The conference call will also be available for replay for approximately 30 days at www.oasispetroleum.com .

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including the Company's drilling program, production, derivatives activities, capital expenditure levels and other guidance included in this press release. These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include, but are not limited to, changes in crude oil and natural gas prices, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, the ability to realize the anticipated benefits from the previously announced Delaware midstream assets assignment from Oasis to OMP, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as the Company's ability to access them, the proximity to and capacity of transportation facilities, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the Company's business and other important factors that could cause actual results to differ materially from those projected as described in the Company's reports filed with the Securities and Exchange Commission.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

About Oasis Petroleum Inc.
Oasis is an independent exploration and production company focused on the acquisition and development of onshore, unconventional crude oil and natural gas resources in the United States. For more information, please visit the Company's website at www.oasispetroleum.com .

Oasis Petroleum Inc. Financial Statements

























































































































































 



















































































































































































































































































 































































































































































































































 




























































































































































Non-GAAP Financial Measures

E&P Cash G&A Reconciliation

E&P Cash G&A is a supplemental non-GAAP financial measure that is used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines E&P Cash G&A as the total general and administrative expenses included in the Company's exploration and production segment less non-cash equity-based compensation expenses and other non-cash charges included in the Company's exploration and production segment. E&P Cash G&A is not a measure of general and administrative expenses as determined by United States generally accepted accounting principles, or GAAP.

The following table presents a reconciliation of the GAAP financial measure of general and administrative expenses included in the Company's exploration and production segment to the non-GAAP financial measure of E&P Cash G&A for the periods presented:


















































Cash MT&G Reconciliation

Cash MT&G is defined as the total marketing, transportation and gathering expenses less non-cash valuation charges on pipeline imbalances. Cash MT&G is not a measure of marketing, transportation and gathering expenses as determined by GAAP. Management believes that the presentation of Cash MT&G provides useful additional information to investors and analysts to assess the cash costs incurred to get its commodities to market without regard for the change in value of its pipeline imbalances, which vary monthly based on commodity prices.

The following table presents a reconciliation of the GAAP financial measure of marketing, transportation and gathering expenses to the non-GAAP financial measure of Cash MT&G for the periods presented:





























Cash Interest Reconciliation

Cash Interest is a supplemental non-GAAP financial measure that is used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Cash Interest as interest expense plus capitalized interest less amortization and write-offs of deferred financing costs and debt discounts included in interest expense. Cash Interest is not a measure of interest expense as determined by GAAP.

The following table presents a reconciliation of the GAAP financial measure of interest expense to the non-GAAP financial measure of Cash Interest for the periods presented:











































Adjusted EBITDA and Free Cash Flow Reconciliations

Adjusted EBITDA and Free Cash Flow are supplemental non-GAAP financial measures that are used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation, depletion, amortization, exploration expenses and other similar non-cash or non-recurring charges. The Company defines Free Cash Flow as Adjusted EBITDA attributable to Oasis less Cash Interest and CapEx, excluding capitalized interest. Adjusted EBITDA and Free Cash Flow are not measures of net income (loss) or cash flows as determined by GAAP.

The following table presents reconciliations of the GAAP financial measures of net income (loss) including non-controlling interests and net cash provided by (used in) operating activities to the non-GAAP financial measures of Adjusted EBITDA and Free Cash Flow for the periods presented:







































































































































































































































































































Segment Adjusted EBITDA Reconciliations

The following tables present reconciliations of the GAAP financial measure of income (loss) before income taxes including non-controlling interests to the non-GAAP financial measure of Adjusted EBITDA for the Company's three reportable business segments on a gross basis for the periods presented:
























































































































 






































































































Adjusted Net Income (Loss) Attributable to Oasis and Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share Reconciliations

Adjusted Net Income (Loss) Attributable to Oasis and Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share are supplemental non-GAAP financial measures that are used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted Net Income (Loss) Attributable to Oasis as net income (loss) after adjusting for (1) the impact of certain non-cash and non-recurring items, including non-cash changes in the fair value of derivative instruments, impairment and other similar non-cash and non-recurring charges, (2) the impact of net income attributable to non-controlling interests and (3) the non-cash and non-recurring items' impact on taxes based on the Company's effective tax rate applicable to those adjusting items, excluding net income attributable to non-controlling interests, in the same period. Adjusted Net Income (Loss) Attributable to Oasis is not a measure of net income (loss) as determined by GAAP. The Company defines Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share as Adjusted Net Income (Loss) Attributable to Oasis divided by diluted weighted average shares outstanding. Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share is not a measure of diluted earnings (loss) per share as determined by GAAP.

The following table presents reconciliations of the GAAP financial measure of net income (loss) attributable to Oasis to the non-GAAP financial measure of Adjusted Net Income (Loss) Attributable to Oasis and the GAAP financial measure of diluted earnings (loss) attributable to Oasis per share to the non-GAAP financial measure of Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share for the periods presented:













































































































































































































































 

Cision View original content:http://www.prnewswire.com/news-releases/oasis-petroleum-inc-announces-quarter-and-year-ending-december-31-2019-earnings-and-provides-an-operational-update-and-2020-outlook-301011226.html

SOURCE Oasis Petroleum Inc.



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