Oasis Petroleum (OAS) Tops Q1 EPS by 2c, Sales Beat

After the close, Oasis Petroleum (NYSE: OAS) reported Q1 adjusted EPS of $0.65, versus the analyst estimate of $0.63. Revenue for the quarter came in at $349.52 million versus the consensus estimate of $337.02 million.

Highlights include:

• Completed the sale of certain non-operated properties in its Sanish project area and other non-operated leases adjacent to its Sanish position (the "Sanish Divestiture") for cash proceeds of approximately $321.9 million, on March 5, 2014.
• Increased average daily production to 42,856 barrels of oil equivalent per day ("Boepd"). Excluding production from Sanish in the fourth quarter of 2013 and the first quarter of 2014, Oasis grew production 5% quarter over quarter.
• Expects production in the second quarter of 2014 to range between 43,000 and 46,000 Boepd.
• Grew Adjusted EBITDA to a record $239.8 million in the first quarter of 2014. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income and net cash provided by operating activities, see "Non-GAAP Financial Measures" below.
• Invested capital expenditures ("CapEx") of $307.5 million in the first quarter of 2014.
• Lowered well costs to $7.2 million, including the impact of Oasis Well Services ("OWS").
• Plans to complete over 20% of its wells during the second half of 2014 with slickwater, due to encouraging early production uplift of more than 25% in the areas tested and analyzed.

"Oasis continues to execute and deliver on expectations, as we produced in the middle of our production range and continued to drive down well costs in the first quarter in spite of harsh weather conditions," said Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer. "Our first quarter well costs were approximately $7.2 million, including the CapEx savings of $0.4 million per well realized from OWS, as we completed approximately 80% of our wells from multi-well pads and continued to optimize drilling and completion costs by area across our significant acreage position."

Mr. Nusz added, "We picked up an additional rig during the quarter, and we anticipate a sixteenth rig coming after the spring breakup season. The majority of our rigs will be operating on pads through the spring breakup season, and we expect to produce between 43,000 and 46,000 Boepd in the second quarter. In addition, we have been identifying and testing completion techniques outside of our base design. Specifically, early time results from slickwater completions point to greater than 25% production uplift in Indian Hills, Foreman Butte, and Red Bank. Based on encouraging results to date from slickwater tests and other completion technology, we intend to complete over 60% of our wells in the second half of 2014 with alternative completion techniques. We are focused on designs that may increase production or reduce costs, ultimately driving higher per well and per drilling spacing unit returns."

For earnings history and earnings-related data on Oasis Petroleum (OAS) click here.

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