Mizuho Securities Reiterates Buy as Oasis Petroleum (OAS) Announces $785M Acquisition
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Mizuho Securities reiterated a Buy rating and $17.00 price target on Oasis Petroleum (NYSE: OAS) following the company's announcement of a $785 million acquisition of 55,000 net acres with ~12.4 mboe/d of production and 92 net "core" locations. Today's acquisition is an important step to backfill inventory.
Analyst Timothy Rezvan commented, "Oasis addressed inventory concerns with a $785 million acquisition this morning that adds 12.4 mboe/d of production, 92 "core" net locations and 31.6 mmboe of PDP reserves. Pricing does not appear cheap, but will prove to be warranted if acquired locations produce close to the updated productivity numbers of Wild Basin (updated to 1.55 mmboe EURs for wells now costing $5.2 million). This is an impressive $4.19/boe well-level F&D cost (net of 20% royalty). OAS shares may underperform due to an equity issuance announced. We would buy the dip."
Shares of Oasis Petroleum closed at $11.23 yesterday.
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