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Strong Buy on Oasis Petroleum - Analyst Blog
On Jun 25, Zacks Investment Research upgraded
Oasis Petroleum Inc.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
This oil and natural gas exploration and production company delivered positive earnings surprises in the last 4 quarters with an average beat of 11.73%. Oasis Petroleum has witnessed an upward revision in earnings estimates on the back of strong first quarter results.
Oasis Petroleum' first quarter 2013 earnings per share came in at 67 cents, surpassing the Zacks Consensus Estimate by 31.37%. Oasis Petroleum continues to perform well with its daily production touching 30,153 barrels of oil equivalent per day ("Boepd"), a 71% increase over the first quarter of 2012.
Higher oil production along with improvement in realized prices boosted the top line of the company. Total revenue at the end of the first quarter was $248.3 million, surpassing the year-ago number by 79.1% and the Zacks Consensus Estimate of $219 million by 13.2%.
Oasis Petroleum's consistent investments in exploration and
production (E&P) activities have paid rich dividends. In
2013, the company decided to invest nearly 97.8% of its proposed
capital expenditure of $1.02 billion in E&P activities. The
solid performance and systematic investment in operations
prompted the company to increase its production guidance to the
range of 31,000 Boepd to 34,000 Boepd.
Another key positive for Oasis Petroleum is the location of its 335,000 net acres in the highly concentrated Williston Basin. The dense oil accumulation in this formation and the oil dominated production profile of Oasis will help address increasing domestic demand.
The Zacks Consensus Estimate for 2013 increased 12.1% in the
last 60 days to $2.65 per share as 13 estimates were revised
higher. This comes to a year-over-year projected growth rate of
76.53%. The long-term earnings growth of the company is presently
pegged at 32.50%.
Other Stocks to Consider
Besides Oasis Petroleum Inc. other operators in the industry with a favorable Zacks Rank are Anadarko Petroleum Corporation ( APC ), Chesapeake Energy Corporation ( CHK ) and EOG Resources, Inc. ( EOG ). All these companies presently carry a Zacks Rank #2 (Buy).
ANADARKO PETROL (APC): Free Stock Analysis Report
CHESAPEAKE ENGY (CHK): Free Stock Analysis Report
EOG RES INC (EOG): Free Stock Analysis Report
OASIS PETROLEUM (OAS): Free Stock Analysis Report
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Zacks Investment Research