Oasis Petroleum Inc. Announces Quarter Ended June 30, 2017 Earnings

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August 2, 2017 5:00 PM EDT

HOUSTON, Aug. 2, 2017 /PRNewswire/ -- Oasis Petroleum Inc. (NYSE: OAS) ("Oasis" or the "Company") today announced financial results for the quarter ended June 30, 2017 and provided an operational update.

Highlights include:

  • Completed and placed on production 15 gross (10.8 net) operated wells in the Williston Basin in the second quarter of 2017, 60% of which were completed in June.
  • Produced over 66,000 barrels of oil equivalent per day ("Boepd") in July 2017, up from 61,943 Boepd produced in the second quarter of 2017.
  • Expect to complete 48 gross operated wells and produce between 67,500 and 69,500 Boepd in the second half of 2017 and continue to expect to hit exit rate of 72,000 Boepd.

"Oasis is well positioned to execute our plan for the second half of 2017, as we integrate our second internal frac spread and efficiently increase completion activity," said Taylor L. Reid, Oasis' Director, President, and Chief Operating Officer. "Our completion design innovation across our core acreage position, including Wild Basin, Indian Hills, and Alger, continues to deliver uplifts in production, and our wells remain highly economic in the current commodity price environment."

"The next six months represent the heart of our 2017 program and will lay the groundwork for everything to come in 2018 and beyond," added Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer. "The quality of the asset base we have built and the strength of the team we have assembled to develop it give me great conviction around the future success of Oasis. We are confident in our ability to execute and to manage our business prudently in what continues to be a constantly changing market."

Operational and Financial Update

Select operational and financial statistics are in the following table:

Quarter Ended:

6/30/2017

3/31/2017

6/30/2016

Production data:

Oil (Bopd)

47,795

49,281

41,176

Natural gas (Mcfpd)

84,890

83,470

49,983

Total production (Boepd)

61,943

63,192

49,507

Percent Oil

77

%

78

%

83

%

Average sales prices:

Oil, without derivative settlements (per Bbl)

$

44.61

$

47.03

$

40.81

Differential to NYMEX West Texas Intermediate crude oil index prices ("WTI") (per Bbl)

3.68

4.88

4.85

Natural gas (per Mcf)(1)

3.19

3.81

1.42

Revenues ($ in millions):

Oil

$

194.0

$

208.6

$

152.9

Natural gas

24.6

28.7

6.4

Bulk oil sales

8.1

27.6

—

Midstream services ("OMS")

15.6

14.6

6.9

Well services ("OWS")

11.8

5.6

12.8

Total revenues

$

254.1

$

285.1

$

179.0

OMS and OWS operating expenses ($ in millions):

OMS

$

3.3

$

3.3

$

1.7

OWS

8.1

3.9

7.1

Select operating expenses:

LOE ($ per Boe)

$

7.92

$

7.71

$

7.00

    MT&G ($ per Boe)(2)

2.17

1.77

1.55

DD&A ($ per Boe)

22.23

22.27

27.19

Exploration and production ("E&P") general and administrative expenses ("G&A") ($ per Boe)

3.52

3.54

3.93

Production taxes (% of oil and gas revenues)

8.7

%

8.6

%

9.0

%

(1)

Natural gas prices include the value for natural gas and natural gas liquids.

(2)

Excludes non-cash valuation charges on pipeline imbalances.

Second quarter production was adversely impacted by additional workover activity and a completion schedule weighted towards the end of the quarter.  Oasis invested incremental dollars on workovers during the latter part of the quarter, which coupled with late quarter completions, drove July production to over 66,000 Boepd.

G&A totaled $23.5 million in the second quarter of 2017, $21.9 million in the second quarter of 2016 and $23.8 million in the first quarter of 2017. Amortization of stock-based compensation, which is included in G&A, was $7.1 million, or $1.26 per Boe, in the second quarter of 2017 as compared to $6.2 million, or $1.39 per Boe, in the second quarter of 2016 and $6.7 million, or $1.18 per Boe, in the first quarter of 2017. G&A for the Company's E&P segment totaled $19.8 million in the second quarter of 2017, $17.7 million in the second quarter of 2016 and $20.1 million in the first quarter of 2017.

Interest expense was $36.8 million for the second quarter of 2017 compared to $35.0 million for the second quarter of 2016 and $36.3 million for the first quarter of 2017. Capitalized interest totaled $2.8 million for the second quarter of 2017, $4.8 million for the second quarter of 2016 and $2.8 million for the first quarter of 2017. Cash Interest totaled $35.5 million for the second quarter of 2017, $37.8 million for the second quarter of 2016 and $35.1 million for the first quarter of 2017. For a definition of Cash Interest and a reconciliation of interest expense to Cash Interest, see "Non-GAAP Financial Measures" below.

For the three months ended June 30, 2017, the Company recorded an income tax expense of $2.3 million, resulting in a 12.4% effective tax rate as a percentage of its pre-tax income for the quarter. The Company recorded an income tax expense of $16.0 million, resulting in a 40.2% effective tax rate as a percentage of its pre-tax income for the three months ended March 31, 2017.

For the second quarter of 2017, the Company reported net income of $16.6 million, or $0.07 per diluted share, as compared to a net loss of $89.9 million, or $0.51 per diluted share, for the second quarter of 2016. Excluding certain non-cash items and their tax effect, Adjusted Net Loss (non-GAAP) was $11.2 million, or $0.05 per diluted share, in the second quarter of 2017, compared to Adjusted Net Loss of $19.4 million, or $0.11 per diluted share, in the second quarter of 2016. For a definition of Adjusted Net Income (Loss) and a reconciliation of net income (loss) to Adjusted Net Income (Loss), see "Non-GAAP Financial Measures" below. Adjusted EBITDA for the second quarter of 2017 was $141.3 million, compared to Adjusted EBITDA of $132.2 million for the second quarter of 2016. For a definition of Adjusted EBITDA and a reconciliation of net income (loss) and net cash provided by (used in) operating activities to Adjusted EBITDA, see "Non-GAAP Financial Measures" below.

Capital Expenditures

The following table depicts the Company's total CapEx by category:

1Q 2017

2Q 2017

YTD 2017

CapEx ($ in thousands):

E&P

$

90,780

$

100,822

$

191,602

OMS

13,144

53,777

66,921

OWS

—

268

268

Other(1)

5,871

18,108

23,979

Total CapEx(2)

$

109,795

$

172,975

$

282,770

(1)

Other CapEx includes asset acquisitions, primarily related to midstream assets, of $17.2 million for the six months ended June 30, 2017 and other items, such as administrative capital and capitalized interest.

(2)

CapEx reflected in the table above differs from the amounts shown in the statement of cash flows in the Company's condensed consolidated financial statements because amounts reflected in the table above include changes in accrued liabilities from the previous reporting period for capital expenditures, while the amounts presented in the statement of cash flows are presented on a cash basis.

Hedging Activity

As of August 1, 2017, the Company had the following outstanding commodity derivative contracts, which settle monthly and are priced off of WTI for crude oil and NYMEX Henry Hub for natural gas:

Crude oil (Volume in Mbopd)

1H17

2H17

1H18

2H18

Swaps

Volume

19.3

22.7

22.0

20.0

Price

$

49.20

$

49.90

$

51.17

$

51.11

Collars

Volume

8.0

8.0

1.0

1.0

Floor

$

46.25

$

46.25

$

50.00

$

50.00

Ceiling

$

54.37

$

54.37

$

55.70

$

55.70

3-way

Volume

6.0

6.0

—

—

Sub-Floor

$

31.67

$

31.67

—

—

Floor

$

45.83

$

45.83

—

—

Ceiling

$

59.94

$

59.94

—

—

Total Crude Oil Volume

33.3

36.7

23.0

21.0

Natural Gas (Volume in MMBtupd)

Swaps

Volume

16.5

20.0

15.0

15.0

Price

$

3.31

$

3.32

$

3.04

$

3.04

The June 2017 crude oil derivative contracts settled at a net $3.3 million received in July 2017 and will be included in the Company's third quarter 2017 derivative settlements.

Conference Call Information

Investors, analysts and other interested parties are invited to listen to the conference call:

Date:

Thursday, August 3, 2017

Time:

10:00 a.m. Central Time

Dial-in:

888-317-6003

Intl. Dial in:

412-317-6061

Conference ID:

3753112

Website:

www.oasispetroleum.com

A recording of the conference call will be available beginning at 12:00 p.m. Central Time on the day of the call and will be available until Thursday, August 10, 2017 by dialing:

Replay dial-in:

877-344-7529

Intl. replay:

412-317-0088

Replay code:

10110100

The conference call will also be available for replay for approximately 30 days at www.oasispetroleum.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including the Company's drilling program, production, derivative instruments, capital expenditure levels and other guidance included in this press release. These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include, but are not limited to, changes in oil and natural gas prices, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as the Company's ability to access them, the proximity to and capacity of transportation facilities, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the Company's business and other important factors that could cause actual results to differ materially from those projected as described in the Company's reports filed with the SEC.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

About Oasis Petroleum Inc.

Oasis is an independent exploration and production company focused on the acquisition and development of unconventional oil and natural gas resources, primarily operating in the Williston Basin. For more information, please visit the Company's website at www.oasispetroleum.com.

Oasis Petroleum Inc.

Condensed Consolidated Balance Sheet

(Unaudited)

June 30, 2017

December 31, 2016

(In thousands, except share data)

ASSETS

Current assets

Cash and cash equivalents

$

11,440

$

11,226

Accounts receivable, net

218,302

204,335

Inventory

17,942

10,648

Prepaid expenses

10,610

7,623

Derivative instruments

31,851

362

Other current assets

62

4,355

Total current assets

290,207

238,549

Property, plant and equipment

Oil and gas properties (successful efforts method)

7,488,075

7,296,568

Other property and equipment

695,592

618,790

Less: accumulated depreciation, depletion, amortization and impairment

(2,252,653)

(1,995,791)

Total property, plant and equipment, net

5,931,014

5,919,567

Derivative instruments

11,834

—

Long-term inventory

8,762

—

Other assets

19,904

20,516

Total assets

$

6,261,721

$

6,178,632

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

$

12,257

$

4,645

Revenues and production taxes payable

143,715

139,737

Accrued liabilities

139,766

119,173

Accrued interest payable

39,128

39,004

Derivative instruments

—

60,469

Advances from joint interest partners

5,816

7,597

Other current liabilities

—

10,490

Total current liabilities

340,682

381,115

Long-term debt

2,359,683

2,297,214

Deferred income taxes

527,181

513,529

Asset retirement obligations

51,059

48,985

Derivative instruments

—

11,714

Other liabilities

5,506

2,918

Total liabilities

3,284,111

3,255,475

Commitments and contingencies

Stockholders' equity

Common stock, $0.01 par value: 450,000,000 shares authorized; 238,642,598 shares issued and 237,410,395 shares outstanding at June 30, 2017 and 237,201,064 shares issued and 236,344,172 shares outstanding at December 31, 2016

2,345

2,331

Treasury stock, at cost: 1,232,203 and 856,892 shares at June 30, 2017 and December 31, 2016, respectively

(21,401)

(15,950)

Additional paid-in capital

2,362,084

2,345,271

Retained earnings

634,582

591,505

Total stockholders' equity

2,977,610

2,923,157

Total liabilities and stockholders' equity

$

6,261,721

$

6,178,632

 

Oasis Petroleum Inc.

Condensed Consolidated Statement of Operations

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

(In thousands, except per share data)

Revenues

Oil and gas revenues

$

218,633

$

159,337

$

455,885

$

276,652

Bulk oil sales

8,091

—

35,722

—

Midstream revenues

15,566

6,910

30,172

13,893

Well services revenues

11,801

12,833

17,428

18,818

Total revenues

254,091

179,080

539,207

309,363

Operating expenses

Lease operating expenses

44,665

31,523

88,537

62,587

Midstream operating expenses

3,263

1,740

6,590

3,478

Well services operating expenses

8,088

7,135

11,990

9,786

Marketing, transportation and gathering expenses

12,039

6,491

22,990

15,043

Bulk oil purchases

7,980

—

35,982

—

Production taxes

18,971

14,367

39,270

25,120

Depreciation, depletion and amortization

125,291

122,488

251,957

244,937

Exploration expenses

1,667

340

3,156

703

Impairment

3,200

23

5,882

3,585

General and administrative expenses

23,548

21,876

47,382

46,242

Total operating expenses

248,712

205,983

513,736

411,481

Loss on sale of properties

—

(1,311)

—

(1,311)

Operating income (loss)

5,379

(28,214)

25,471

(103,429)

Other income (expense)

Net gain (loss) on derivative instruments

50,532

(90,846)

106,607

(76,471)

Interest expense, net of capitalized interest

(36,838)

(34,979)

(73,159)

(73,718)

Gain on extinguishment of debt

—

11,642

—

18,658

Other income (expense)

(166)

(32)

(150)

447

Total other income (expense)

13,528

(114,215)

33,298

(131,084)

Income (loss) before income taxes

18,907

(142,429)

58,769

(234,513)

Income tax benefit (expense)

(2,339)

52,498

(18,376)

80,127

Net income (loss)

$

16,568

$

(89,931)

$

40,393

$

(154,386)

Earnings (loss) per share:

Basic

$

0.07

$

(0.51)

$

0.17

$

(0.91)

Diluted

0.07

(0.51)

0.17

(0.91)

Weighted average shares outstanding:

Basic

233,283

176,984

233,176

169,953

Diluted

234,917

176,984

236,281

169,953

 

Oasis Petroleum Inc.

Selected Financial and Operational Statistics

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

Operating results (in thousands):

Revenues

Oil

$

194,005

$

152,900

$

402,599

$

264,106

Natural gas

24,628

6,437

53,286

12,546

Bulk oil sales

8,091

—

35,722

—

Midstream

15,566

6,910

30,172

13,893

Well services

11,801

12,833

17,428

18,818

Total revenues

$

254,091

$

179,080

$

539,207

$

309,363

Production data:

Oil (MBbls)

4,349

3,747

8,785

7,617

Natural gas (MMcf)

7,725

4,549

15,237

8,802

Oil equivalents (MBoe)

5,637

4,505

11,324

9,084

Average daily production (Boe per day)

61,943

49,507

62,564

49,911

Average sales prices:

Oil, without derivative settlements (per Bbl)

$

44.61

$

40.81

$

45.83

$

34.67

Oil, with derivative settlements (per Bbl)(1)

42.56

48.94

40.72

48.30

Natural gas (per Mcf)(2)

3.19

1.42

3.50

1.43

Costs and expenses (per Boe of production):

Lease operating expenses

$

7.92

$

7.00

$

7.82

$

6.89

Marketing, transportation and gathering expenses(3)

2.17

1.55

1.97

1.58

Production taxes

3.37

3.19

3.47

2.77

Depreciation, depletion and amortization

22.23

27.19

22.25

26.96

General and administrative expenses ("G&A")

4.18

4.86

4.18

5.09

Exploration and production G&A

3.52

3.93

3.53

4.27

(1)

Realized prices include gains or losses on cash settlements for commodity derivatives, which do not qualify for or were not designated as hedging instruments for accounting purposes. Cash settlements represent the cumulative gains and losses on the Company's derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled.

(2)

Natural gas prices include the value for natural gas and natural gas liquids.

(3)

Excludes non-cash valuation charges on pipeline imbalances.

 

Oasis Petroleum Inc.

Condensed Consolidated Statement of Cash Flows

(Unaudited)

Six Months Ended June 30,

2017

2016

(In thousands)

Cash flows from operating activities:

Net income (loss)

$

40,393

$

(154,386)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation, depletion and amortization

251,957

244,937

Gain on extinguishment of debt

—

(18,658)

Loss on sale of properties

—

1,311

Impairment

5,882

3,585

Deferred income taxes

18,376

(80,127)

Derivative instruments

(106,607)

76,471

Stock-based compensation expenses

13,823

12,979

Deferred financing costs amortization and other

8,871

6,552

Working capital and other changes:

Change in accounts receivable

(13,743)

4,297

Change in inventory

(1,007)

2,054

Change in prepaid expenses

(264)

1,423

Change in other current assets

280

(114)

Change in long-term inventory and other assets

(8,768)

100

Change in accounts payable, interest payable and accrued liabilities

11,158

(18,034)

Change in other current liabilities

(10,490)

9,001

Change in other liabilities

—

10

Net cash provided by operating activities

209,861

91,401

Cash flows from investing activities:

Capital expenditures

(252,461)

(231,341)

Proceeds from sale of properties

4,000

11,679

Costs related to sale of properties

—

(310)

Derivative settlements

(8,899)

103,790

Advances from joint interest partners

(1,781)

769

Net cash used in investing activities

(259,141)

(115,413)

Cash flows from financing activities:

Proceeds from revolving credit facility

484,000

359,000

Principal payments on revolving credit facility

(429,000)

(462,000)

Repurchase of senior unsecured notes

—

(56,925)

Deferred financing costs

—

(751)

Proceeds from sale of common stock

—

182,953

Purchases of treasury stock

(5,451)

(1,520)

Other

(55)

—

Net cash provided by financing activities

49,494

20,757

Increase (decrease) in cash and cash equivalents

214

(3,255)

Cash and cash equivalents:

Beginning of period

11,226

9,730

End of period

$

11,440

$

6,475

Supplemental non-cash transactions:

Change in accrued capital expenditures

$

19,017

$

(17,015)

Change in asset retirement obligations

1,759

(8,785)

Notes payable from acquisition

4,875

—

Non-GAAP Financial Measures

Cash Interest is a supplemental non-GAAP financial measure that is used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Cash Interest as interest expense plus capitalized interest less amortization and write-offs of deferred financing costs and debt discounts included in interest expense. Cash Interest is not a measure of interest expense as determined by United States generally accepted accounting principles, or GAAP.

The following table presents a reconciliation of the GAAP financial measure of interest expense to the non-GAAP financial measure of Cash Interest for the periods presented:

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

(In thousands)

Interest expense

$

36,838

$

34,979

$

73,159

$

73,718

Capitalized interest

2,816

4,835

5,636

9,303

Amortization of deferred financing costs

(1,709)

(2,030)

(3,399)

(5,947)

Amortization of debt discount

(2,480)

—

(4,835)

—

Cash Interest

$

35,465

$

37,784

$

70,561

$

77,074

Adjusted EBITDA and Free Cash Flow are supplemental non-GAAP financial measures that are used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation, depletion, amortization, exploration expenses and other similar non-cash charges. The Company defines Free Cash Flow as Adjusted EBITDA less Cash Interest and CapEx, excluding capitalized interest. Adjusted EBITDA and Free Cash Flow are not measures of net income (loss) or cash flows as determined by GAAP.

The following table presents reconciliations of the GAAP financial measures of net income (loss) and net cash provided by (used in) operating activities to the non-GAAP financial measures of Adjusted EBITDA and Free Cash Flow for the periods presented:

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

(In thousands)

Net income (loss)

$

16,568

$

(89,931)

$

40,393

$

(154,386)

Loss on sale of properties

—

1,311

—

1,311

Gain on extinguishment of debt

—

(11,642)

—

(18,658)

Net (gain) loss on derivative instruments

(50,532)

90,846

(106,607)

76,471

Derivative settlements(1)

(939)

30,477

(8,899)

103,790

Interest expense, net of capitalized interest

36,838

34,979

73,159

73,718

Depreciation, depletion and amortization

125,291

122,488

251,957

244,937

Impairment

3,200

23

5,882

3,585

Exploration expenses

1,667

340

3,156

703

Stock-based compensation expenses

7,115

6,249

13,823

12,979

Income tax (benefit) expense

2,339

(52,498)

18,376

(80,127)

Other non-cash adjustments

(213)

(484)

699

723

Adjusted EBITDA

141,334

132,158

291,939

265,046

Cash interest

(35,465)

(37,784)

(70,561)

(77,074)

Capital expenditures(2)

(172,975)

(131,288)

(282,770)

(219,243)

Capitalized interest

2,816

4,835

5,636

9,303

Free Cash Flow

$

(64,290)

$

(32,079)

$

(55,756)

$

(21,968)

Net cash provided by operating activities

$

102,062

$

137,452

$

209,861

$

91,401

Derivative settlements(1)

(939)

30,477

(8,899)

103,790

Interest expense, net of capitalized interest

36,838

34,979

73,159

73,718

Exploration expenses

1,667

340

3,156

703

Deferred financing costs amortization and other

(3,931)

(1,486)

(8,871)

(6,552)

Changes in working capital

5,850

(69,120)

22,834

1,263

Other non-cash adjustments

(213)

(484)

699

723

Adjusted EBITDA

141,334

132,158

291,939

265,046

Cash interest

(35,465)

(37,784)

(70,561)

(77,074)

Capital expenditures(2)

(172,975)

(131,288)

(282,770)

(219,243)

Capitalized interest

2,816

4,835

5,636

9,303

Free Cash Flow

$

(64,290)

$

(32,079)

$

(55,756)

$

(21,968)

(1)

Cash settlements represent the cumulative gains and losses on the Company's derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled.

(2)

CapEx reflected in the table above differs from the amounts shown in the statement of cash flows in the Company's condensed consolidated financial statements because amounts reflected in the table above include changes in accrued liabilities from the previous reporting period for capital expenditures, while the amounts presented in the statement of cash flows are presented on a cash basis.

The following tables present reconciliations of the GAAP financial measure of income (loss) before income taxes to the non-GAAP financial measure of Adjusted EBITDA for the Company's three reportable business segments on a gross basis for the periods presented:

Exploration and Production

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

(In thousands)

Income (loss) before income taxes

$

(3,900)

$

(158,978)

$

16,836

$

(264,744)

Loss on sale of properties

—

1,669

—

1,669

Gain on extinguishment of debt

—

(11,642)

—

(18,658)

Net (gain) loss on derivative instruments

(50,532)

90,846

(106,607)

76,471

Derivative settlements(1)

(939)

30,477

(8,899)

103,790

Interest expense, net of capitalized interest

36,838

34,979

73,159

73,718

Depreciation, depletion and amortization

122,785

120,039

247,193

240,881

Impairment

3,200

23

5,882

1,154

Exploration expenses

1,667

340

3,156

703

Stock-based compensation expenses

6,897

6,077

13,395

12,625

Other non-cash adjustments

(213)

(484)

699

723

Adjusted EBITDA

$

115,803

$

113,346

$

244,814

$

228,332

(1)

Cash settlements represent the cumulative gains and losses on the Company's derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled.

 

Midstream Services

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

(In thousands)

Income before income taxes

$

23,106

$

18,040

$

43,867

$

33,198

Gain on sale of properties

—

(358)

—

(358)

Depreciation, depletion and amortization

3,753

1,732

7,211

3,415

Impairment

—

—

—

2,431

Stock-based compensation expenses

365

224

713

443

Adjusted EBITDA

$

27,224

$

19,638

$

51,791

$

39,129

 

Well Services

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

(In thousands)

Income (loss) before income taxes

$

1,950

$

(2,142)

$

(1,637)

$

1,885

Depreciation, depletion and amortization

3,057

3,895

6,222

8,127

Stock-based compensation expenses

338

235

734

899

Adjusted EBITDA

$

5,345

$

1,988

$

5,319

$

10,911

Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share are supplemental non-GAAP financial measures that are used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted Net Income (Loss) as net income (loss) after adjusting first for (1) the impact of certain non-cash items, including non-cash changes in the fair value of derivative instruments, impairment, and other similar non-cash charges, or non-recurring items and then (2) the non-cash and non-recurring items' impact on taxes based on the Company's effective tax rate applicable to those adjusting items in the same period. Adjusted Net Income (Loss) is not a measure of net income (loss) as determined by GAAP. The Company defines Adjusted Diluted Earnings (Loss) Per Share as Adjusted Net Income (Loss) divided by diluted weighted average shares outstanding.

The following table presents reconciliations of the GAAP financial measure of net income (loss) to the non-GAAP financial measure of Adjusted Net Income (Loss) and the GAAP financial measure of diluted earnings (loss) per share to the non-GAAP financial measure of Adjusted Diluted Earnings (Loss) Per Share for the periods presented:

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

(In thousands, except per share data)

Net income (loss)

$

16,568

$

(89,931)

$

40,393

$

(154,386)

Loss on sale of properties

—

1,311

—

1,311

Gain on extinguishment of debt

—

(11,642)

—

(18,658)

Net (gain) loss on derivative instruments

(50,532)

90,846

(106,607)

76,471

Derivative settlements(1)

(939)

30,477

(8,899)

103,790

Impairment

3,200

23

5,882

3,585

Amortization of deferred financing costs

1,709

2,030

3,399

5,947

Amortization of debt discount

2,480

—

4,835

—

Other non-cash adjustments

(213)

(484)

699

723

      Tax impact(2)

16,575

(42,075)

37,679

(64,731)

Adjusted Net Loss

$

(11,152)

$

(19,445)

$

(22,619)

$

(45,948)

Diluted earnings (loss) per share

$

0.07

$

(0.51)

$

0.17

$

(0.91)

Loss on sale of properties

—

0.01

—

0.01

Gain on extinguishment of debt

—

(0.07)

—

(0.11)

Net (gain) loss on derivative instruments

(0.22)

0.51

(0.45)

0.45

Derivative settlements(1)

—

0.17

(0.04)

0.61

Impairment

0.01

—

0.02

0.02

Amortization of deferred financing costs

0.01

0.01

0.01

0.03

Amortization of debt discount

0.01

—

0.02

—

      Tax impact(2)

0.07

(0.23)

0.17

(0.37)

Non-GAAP Diluted Loss Per Share

$

(0.05)

$

(0.11)

$

(0.10)

$

(0.27)

Diluted weighted average shares outstanding

234,917

176,984

236,281

169,953

Effective tax rate applicable to adjustment items

37.4

%

37.4

%

37.4

%

37.4

%

(1)

Cash settlements represent the cumulative gains and losses on the Company's derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled.

(2)

The tax impact is computed utilizing the Company's effective tax rate applicable to the adjustments for certain non-cash and non-recurring items.

 

View original content:http://www.prnewswire.com/news-releases/oasis-petroleum-inc-announces-quarter-ended-june-30-2017-earnings-300498752.html

SOURCE Oasis Petroleum Inc.


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