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Oasis (OAS) Up 2.1% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Oasis Petroleum (OAS). Shares have added about 2.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Oasis due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Oasis Petroleum Delivers Robust Results in Q2

Oasis Petroleum reported better-than-expected results in the second quarter of 2018 on the back of higher-than-anticipated production volumes. Precisely, production volumes in the quarter under review came in at 79.4 thousand barrels of oil equivalent per day (MBoe/d), surpassing the Zacks Consensus Estimate of 78.9 MBoe/d.

Oasis Petroleum reported adjusted net earnings per share of 10 cents, beating the Zacks Consensus Estimate of 7 cents. Notably, the company has an impressive earnings surprise history, having topped estimates in each of the last 10 quarters.

The bottom line also turned around from the prior-year quarter's adjusted loss of 5 cents per share, primarily on the back of higher price realizations and robust production growth.

Oasis Petroleum's total operating revenues in the second quarter amounted to $501.3 million, increasing substantially from $254.1 million a year ago. The top line also surpassed the Zacks Consensus Estimate of $394 million.

Volume Analysis

Oasis Petroleum's average quarterly volume came at the higher end of the guided range and increased 28.2% year over year to 79.4 MBoe/d. Out of the total volume, 76.3% or 60.6 thousand barrels per day was oil.

Realized Prices

The average realized price for oil jumped about 46.8% from the year-ago quarter to $65.5 per barrel and that of natural gas increased 5.9% to $3.4 per thousand cubic feet.

Financial Position

During the quarter under review, capital expenditure of the company came in at $358.5 million. Net cash from operating activities came in at $303.7 million, way higher than the year-ago figure of $102.1 million.

As of Jun 30, Oasis Petroleum had cash and cash equivalents of 17.1 million. Long-term debt of the company stands at $2,757.5 million, representing a debt-to-capitalization ratio of 43.5%. Notably, the leverage increased from the prior-year level of 40.9%.

Updated 2018 Guidance

Driven by strong second-quarter results, Oasis Petroleum lifted its production outlook for full-year 2018. The company now expects output in the range of 83-84.5 MBoe/d, up from the prior guidance of 81-84 MBoe/d. Third-quarter and fourth-quarter output is expected within 85-88 MBoe/d and 91-94 MBoe/d, respectively.

Further, lease operating costs are expected to reduce to $6-$7 per barrel of oil equivalent (Boe) versus prior guided range of $6.5-$7.5 per Boe. Exploration and Production capex is now anticipated in the band of $900-$930 million, reflecting an increase from the earlier guided range of $815-$855 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, Oasis has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Oasis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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