Oasis Petroleum Inc. Announces Quarter Ended September 30, 2016 Earnings

___________________

(1)

For the three months ended September 30, 2016, average sales prices for oil are calculated using total oil revenues, excluding bulk oil sales of $1.9 million, divided by oil production.

(2)

Realized prices include gains or losses on cash settlements for commodity derivatives, which do not qualify for and were not designated as hedging instruments for accounting purposes.

(3)

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.

(4)

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

(5)

Excludes non-cash valuation charges on pipeline imbalances and bulk oil purchases.

___________________

(1)

Other CapEx includes such items 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.

Oasis Petroleum Inc.

Condensed Consolidated Balance Sheet

(Unaudited)

September 30, 2016

December 31, 2015

(In thousands, except share data)

ASSETS

Current assets

Cash and cash equivalents

$

13,776

$

9,730

Accounts receivable — oil and gas revenues

103,128

96,495

Accounts receivable — joint interest and other

77,903

100,914

Inventory

8,513

11,072

Prepaid expenses

6,093

7,328

Derivative instruments

9,142

139,697

Other current assets

4,290

50

Total current assets

222,845

365,286

Property, plant and equipment

Oil and gas properties (successful efforts method)

6,438,782

6,284,401

Other property and equipment

580,171

443,265

Less: accumulated depreciation, depletion, amortization and impairment

(1,866,280)

(1,509,424)

Total property, plant and equipment, net

5,152,673

5,218,242

Assets held for sale

—

26,728

Derivative instruments

194

15,776

Other assets

22,549

23,343

Total assets

$

5,398,261

$

5,649,375

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

$

7,929

$

9,983

Revenues and production taxes payable

141,991

132,356

Accrued liabilities

98,926

167,669

Accrued interest payable

19,798

49,413

Derivative instruments

17,308

—

Advances from joint interest partners

5,191

4,647

Other current liabilities

—

6,500

Total current liabilities

291,143

370,568

Long-term debt

2,125,573

2,302,584

Deferred income taxes

546,202

608,155

Asset retirement obligations

37,092

35,338

Liabilities held for sale

—

10,228

Derivative instruments

7,755

—

Other liabilities

2,992

3,160

Total liabilities

3,010,757

3,330,033

Commitments and contingencies

Stockholders' equity

Common stock, $0.01 par value: 450,000,000 and 300,000,000 shares authorized at September 30, 2016 and December 31, 2015, respectively; 182,038,164 shares issued and 181,186,070 shares outstanding at September 30, 2016 and 139,583,990 shares issued and 139,076,064 shares outstanding at December 31, 2015

1,779

1,376

Treasury stock, at cost: 852,094 and 507,926 shares at September 30, 2016 and December 31, 2015, respectively

(15,895)

(13,620)

Additional paid-in capital

1,755,427

1,497,065

Retained earnings

646,193

834,521

Total stockholders' equity

2,387,504

2,319,342

Total liabilities and stockholders' equity

$

5,398,261

$

5,649,375

Oasis Petroleum Inc.

Condensed Consolidated Statement of Operations

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2016

2015

2016

2015

(In thousands, except per share data)

Revenues

Oil and gas revenues

$

158,183

$

175,270

$

434,835

$

563,239

Well services and midstream revenues

19,128

21,965

51,839

44,429

Total revenues

177,311

197,235

486,674

607,668

Operating expenses

Lease operating expenses

35,696

35,670

98,283

112,556

Well services and midstream operating expenses

8,165

10,023

21,429

19,370

Marketing, transportation and gathering expenses

8,856

8,465

23,899

23,313

Production taxes

14,638

16,676

39,758

53,915

Depreciation, depletion and amortization

111,948

123,734

356,885

361,430

Exploration expenses

489

327

1,192

2,252

Rig termination

—

—

—

3,895

Impairment

382

80

3,967

24,917

General and administrative expenses

22,845

22,358

69,087

67,190

Total operating expenses

203,019

217,333

614,500

668,838

Gain (loss) on sale of properties

6

172

(1,305)

172

Operating loss

(25,702)

(19,926)

(129,131)

(60,998)

Other income (expense)

Net gain (loss) on derivative instruments

20,847

103,637

(55,624)

111,285

Interest expense, net of capitalized interest

(31,726)

(36,513)

(105,444)

(112,702)

Gain (loss) on extinguishment of debt

(13,793)

—

4,865

—

Other income (expense)

(259)

249

188

370

Total other income (expense)

(24,931)

67,373

(156,015)

(1,047)

Income (loss) before income taxes

(50,633)

47,447

(285,146)

(62,045)

Income tax benefit (expense)

16,691

(20,392)

96,818

17,829

Net income (loss)

$

(33,942)

$

27,055

$

(188,328)

$

(44,216)

Earnings (loss) per share:

Basic

$

(0.19)

$

0.20

$

(1.09)

$

(0.35)

Diluted

(0.19)

0.20

(1.09)

(0.35)

Weighted average shares outstanding:

Basic

177,120

137,014

172,360

127,827

Diluted

177,120

137,014

172,360

127,827

Oasis Petroleum Inc.

Selected Financial and Operational Statistics

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2016

2015

2016

2015

Operating results (in thousands):

Revenues

Oil

$

148,962

$

169,672

$

413,068

$

542,049

Natural gas

9,221

5,598

21,767

21,190

Well services

10,641

15,381

29,459

27,308

Midstream

8,487

6,584

22,380

17,121

Total revenues

$

177,311

$

197,235

$

486,674

$

607,668

Production data:

Oil (MBbls)

3,628

4,077

11,245

12,107

Natural gas (MMcf)

5,007

3,438

13,809

9,940

Oil equivalents (MBoe)

4,463

4,650

13,547

13,764

Average daily production (Boe per day)

48,509

50,546

49,440

50,418

Average sales prices:

Oil, without derivative settlements (per Bbl)(1)

$

40.54

$

41.61

$

36.57

$

44.77

Oil, with derivative settlements (per Bbl)(1)(2)

43.79

60.77

46.85

68.84

Natural gas (per Mcf)(3)

1.84

1.63

1.58

2.13

Costs and expenses (per Boe of production):

Lease operating expenses

$

8.00

$

7.67

$

7.26

$

8.18

Marketing, transportation and gathering expenses(4)

1.58

1.63

1.58

1.64

Production taxes

3.28

3.59

2.93

3.92

Depreciation, depletion and amortization

25.08

26.61

26.35

26.26

General and administrative expenses ("G&A")

5.12

4.81

5.10

4.88

Exploration and production G&A

4.31

4.07

4.28

4.43

___________________

(1)

For both the three and nine months ended September 30, 2016, average sales prices for oil are calculated using total oil revenues, excluding bulk oil sales of $1.9 million, divided by oil production.

(2)

Realized prices include gains or losses on cash settlements for commodity derivatives, which do not qualify for and 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.

(3)

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

(4)

Excludes non-cash valuation charges on pipeline imbalances and bulk oil purchases.

Oasis Petroleum Inc.

Condensed Consolidated Statement of Cash Flows

(Unaudited) 

Nine Months Ended September 30,

2016

2015

(In thousands)

Cash flows from operating activities:

Net loss

$

(188,328)

$

(44,216)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation, depletion and amortization

356,885

361,430

Gain on extinguishment of debt

(4,865)

—

(Gain) loss on sale of properties

1,305

(172)

Impairment

3,967

24,917

Deferred income taxes

(96,818)

(17,829)

Derivative instruments

55,624

(111,285)

Stock-based compensation expenses

18,761

19,629

Deferred financing costs amortization and other

10,174

7,468

Working capital and other changes:

Change in accounts receivable

11,349

108,309

Change in inventory

2,559

8,425

Change in prepaid expenses

1,168

638

Change in other current assets

(240)

5,529

Change in other assets

(148)

—

Change in accounts payable, interest payable and accrued liabilities

(41,991)

(84,133)

Change in other current liabilities

(6,000)

1,655

Change in other liabilities

17

(28)

Net cash provided by operating activities

123,419

280,337

Cash flows from investing activities:

Capital expenditures

(340,314)

(740,633)

Proceeds from sale of properties

12,333

78

Costs related to sale of properties

(310)

—

Derivative settlements

115,576

291,436

Advances from joint interest partners

544

(1,239)

Net cash used in investing activities

(212,171)

(450,358)

Cash flows from financing activities:

Proceeds from revolving credit facility

835,000

618,000

Principal payments on revolving credit facility

(778,000)

(938,000)

Repurchase of senior unsecured notes

(435,907)

—

Proceeds from issuance of senior unsecured convertible notes

300,000

—

Deferred financing costs

(8,811)

(3,587)

Proceeds from sale of common stock

182,791

462,833

Purchases of treasury stock

(2,275)

(2,771)

Net cash provided by financing activities

92,798

136,475

Increase (decrease) in cash and cash equivalents

4,046

(33,546)

Cash and cash equivalents:

Beginning of period

9,730

45,811

End of period

$

13,776

$

12,265

Supplemental non-cash transactions:

Change in accrued capital expenditures

$

(49,177)

$

(233,913)

Change in asset retirement obligations

(8,083)

3,405

___________________

(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.

___________________

(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.

___________________

(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)

As of September 30, 2016, Adjusted Net Income (Loss) includes the non-cash adjustment for amortization of deferred financing costs. Comparative periods have been conformed. The amortization of deferred financing costs are included in interest expense on the Company's Condensed Consolidated Statement of Operations. For the nine months ended September 30, 2016 and 2015, the amortization of deferred financing costs included $1.8 million and $0.5 million, respectively, for unamortized deferred financing costs related to the revolving credit facility, which were written off in proportion to the decreases in the borrowing base.

(3)

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