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Oasis Petroleum (OAS) Slips to Loss in Q4, Production Jumps

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U.S. energy firm Oasis Petroleum Inc.OAS reported fourth-quarter loss per share - excluding one-time items - of 2 cents, as against the Zacks Consensus Estimate of 4 cents profit and the year-ago income of 12 cents. The weak results can be attributed to lower realized oil prices .

Oasis Petroleum's total operating revenues in the fourth quarter amounted to $599.8 million, increasing substantially from $434.9 million a year ago. The top line also surpassed the Zacks Consensus Estimate of $433 million, driven by strong production growth.

The company's lease operating expenses rose 12.5% to $6.95 per barrels of oil equivalent.

Production & Realized Prices

The production of oil and natural gas averaged 88.3 thousand oil-equivalent barrels per day (MBOE/d) (76% oil), up 20.6% from last year and at the midpoint of the company's guidance.

Oasis Petroleum's production for oil was 67.3 thousand barrels per day (MBbl/d), while natural gas output came in at 126,135 thousand cubic feet per day (Mcf/d).

The average realized crude oil price during the fourth quarter was $52.01 per barrel, representing a decrease of 23.9% from the year-ago realization of $68.33. Meanwhile, the average realized natural gas price during the December quarter of 2018 was $4.27 per thousand cubic feet (Mcf), up 14.8% from the year-ago period.

Financial Position

Capital spending (before acquisitions) totaled $303.6 million this quarter. Oasis Petroleum delivered a slightly improving cash flow performance this quarter - a benchmark for the oil and gas industry - with $234.4 million in net cash flow from operations, up from $209.1 million a year ago.

As of Dec 31, 2018, the Bakken-focused operator with a market capitalization of almost $2 billion, had $22.2 million in cash and cash equivalents. The company had long-term debt of $2.7 billion, representing a debt-to-capitalization ratio of 41.1%.

Guidance

Oasis Petroleum expects first quarter output to be essentially flat sequentially, while 2019 production is estimated in the range of 86-91 MBOE/d. The company further said that it will spend 40% less in 2019, expecting capital spending of $540-$560 million (75% Williston, 25% Delaware). Overall, Oasis Petroleum projects 2019 capital spending of $709-$751 million (including $150-$170 million for midstream). The company's lease operating expense is set to increase from $6.44 per BOE in 2018 to $7-$8 per BOE in 2019.

Proved Reserves

As of year-end 2018, Oasis had 320.5 thousand barrels of oil equivalent equivalent in proved reserves, up 2.7% year over year.

Zacks Rank & Stock Picks

Oasis Petroleum currently retains a Zacks Rank #3 (Hold).

Some better-ranked players in the energy space are Enbridge Inc. ENB , Archrock, Inc. AROC and NuStar Energy L.P. NS . All the companies carry a Zacks Rank #2 (Buy).

(You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .)

Enbridge's earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average positive surprise being 31.8%.

The 2019 Zacks Consensus Estimate for Archrock is 63 cents, representing 31.3% earnings per unit growth over 2018. Next year's average forecast is 78 cents pointing to another 23.8% growth.

The 2019 Zacks Consensus Estimate for NuStar is $1.10, representing 64.2% earnings per unit growth over 2018. Next year's average forecast is $1.32 pointing to another 20.3% growth.

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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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