Oasis Petroleum Inc. Announces Quarter Ended September 30, 2018 Earnings

FREE Breaking News Alerts from StreetInsider.com!

E-mail Address

StreetInsider.com Top Tickers, 9/2/2026

1. PANW
2. GTLB
3. DELL
4. MDB
5. CRDO
6. MMED
7. CRK
8. VRT
9. GPUS
10. SGLD

November 5, 2018 5:01 PM EST

HOUSTON, Nov. 5, 2018 /PRNewswire/ -- Oasis Petroleum Inc. (NYSE: OAS) ("Oasis" or the "Company") today announced financial results for the quarter ended September 30, 2018 and provided an operational update.

Recent Highlights:

  • Produced 65.9 thousand barrels of oil per day ("MBopd") in the third quarter of 2018, which represents a 27% increase over third quarter 2017. Oil volumes increased by over 8.2 MBopd sequentially, adjusting for the impact of acquisitions and divestitures, and exceeded midpoint guidance for the third quarter by approximately 1%.
  • Delivered production during the third quarter of 2018 of 85.4 thousand barrels of oil equivalent per day ("MBoepd") with an oil cut of 77%. In August, Oasis Midstream Partner's ("OMP") first gas plant in Wild Basin experienced operational downtime for twelve days, which has since been fully resolved. Adjusting for this temporary gas plant outage, volumes would have been towards midpoint guidance on a BOE basis.
  • Improved oil differentials to $1.42 off of NYMEX West Texas Intermediate crude oil index price ("NYMEX WTI") in the third quarter of 2018, an approximate 22% decrease from the third quarter of 2017.
  • Lowered lease operating expenses ("LOE") per barrels of oil equivalent ("Boe") by over 17% to $6.18 per Boe in the third quarter of 2018 compared to $7.45 per Boe in the third quarter of 2017.
  • Completed and placed on production 37 gross (24.4 net) operated wells, including 35 gross (22.4 net) operated wells in the Williston Basin and 2 gross (2.0 net) operated wells in the Delaware Basin, in the third quarter of 2018. The Company continues to expect to complete approximately 110 gross operated wells in 2018 in the Williston Basin and 6 to 8 gross operated wells in the Delaware Basin.
  • Since the closing of the Permian Basin Acquisition, successfully closed various acquisitions in Loving and Ward Counties, adjacent to the Company's existing Delaware position. Combined, the acquisitions total to 1,600 net acres and approximately $20,000 per net acre, after backing out production value.
  • Closed previously announced non-core divestitures that resulted in net proceeds of approximately $331 million during the third quarter of 2018.
  • Delivered net cash provided by operating activities of $230.0 million and Adjusted EBITDA of $270.4 million for the third quarter of 2018. For a definition of Adjusted EBITDA and reconciliations of Adjusted EBITDA to net income (loss) including non-controlling interests and net cash provided by operating activities, see "Non-GAAP Financial Measures" below.

"Oasis delivered another solid quarter and remains on track to deliver capital efficient growth in 2018," said Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer. "In the Williston, we continue to execute our development program, where extensive low-cost inventory differentiates us and supports high-returns growth for well over a decade. In the Delaware, well results continue to impress and our subsurface knowledge is building, moving us closer to full-field development. Oasis's diversified asset base provides deep, low-cost inventory which in combination with our integrated business model and world-class operating team puts us in an excellent position to generate attractive returns through the commodity cycle. Separately, Oasis Midstream Partners remains an important strategic asset for Oasis, and the startup of the second Wild Basin gas plant later this month puts us in a great position to capture and realize the full value of our gas production in North Dakota."

Financial and Operational Update

  • Continuing to see encouraging results from recent Painted Woods well and expect to complete two additional wells during the fourth quarter of 2018.
  • Delaware production during the third quarter of 2018 averaged 4.7 MBoepd, increasing 12% over the second quarter of 2018. Oasis plans a three well Wolfcamp A test in the fourth quarter of 2018, and will continue to delineate additional zones throughout 2019.
  • CapEx before acquisitions was $316.8 million in the third quarter of 2018.

OMP Update

OMP mechanically completed its new 200 MMscfpd natural gas processing plant in October and expects volumes to start flowing at the end of November. Upon completion of this gas plant, OMP will be the second largest natural gas processor in the Williston Basin. OMP expects approximately 60% utilization in January 2019, consisting largely of volumes from Oasis, before increasing to above 80% by year-end 2019, as third-party volumes become more significant. In October, OMP successfully signed additional third-party agreements, which resulted in increased expectations for OMP EBITDA for 2019. Gas processing remains tight in the Williston Basin, and OMP continues to pursue additional opportunities with third-parties to further increase the utilization of its gas plant infrastructure.

Key Operating Metrics and Guidance Update

Oasis has adjusted its completion timing during the fourth quarter of 2018 in order to minimize flaring in North Dakota and maximize capturing the value for gas volumes. Oasis now expects fourth quarter 2018 volumes to range between 87.5 and 90.0 MBoepd and its previously announced exit rates of 91 to 94 MBoepd remains intact. Oasis continues to anticipate volume growth of approximately 15% from exit 2018 to exit 2019, with no change to prior expectations surrounding the Delaware production exit guidance. Oasis continues to expect overall oil cuts of approximately 74% in 2019.

The following table presents actual results for the third quarter of 2018 as well as updated full year 2018 guidance for certain operating data:

Metric

3Q 2018 Actual

PriorFull YearGuidance

UpdatedFull Year Guidance

Differential to NYMEX WTI ($ per Bbl)

$1.42

$1.50 - $2.50

$1.50 - $2.50

LOE ($ per Boe)

$6.18

$6.00 - $7.00

$6.00 - $6.75

Marketing, transportation and gathering expenses ("MT&G") ($ per Boe)(1)

$3.84

$2.75 - $3.25

$3.00 - $3.50

Production taxes (% of oil & gas revenue)

8.6%

8.5% - 8.7%

8.5% - 8.7%

General and administrative expenses ("G&A") ($ in millions)

$34.9

$105.0 - $115.0

$115.0 - $125.0

CapEx ($ in millions)

E&P CapEx

$900.0 - $930.0

$900.0 - $930.0

OMS and OWS CapEx

$290.0 - $305.0

$290.0 - $305.0

Other CapEx

$40.0

$40.0

___________________

(1)

Excludes non-cash valuation charges on pipeline imbalances. For the third quarter of 2018, MT&G increased approximately $0.69 per Boe relative to the second quarter of 2018, for barrels shipped on long-haul pipelines and sold at coastal markets.

Operational and Financial Update

The following table presents select operational and financial data for the periods presented:

Quarter Ended:

9/30/2018

6/30/2018

9/30/2017

Production data:

Oil (Bopd)

65,870

60,632

51,825

Natural gas (Mcfpd)

117,182

112,830

85,800

Total production (Boepd)

85,400

79,437

66,125

Percent Oil

77.1

%

76.3

%

78.4

%

Average sales prices:

Oil, without derivative settlements ($ per Bbl)

$

68.07

$

65.47

$

46.35

Differential to NYMEX WTI ($ per Bbl)

1.42

2.42

1.82

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

57.25

54.53

47.93

Oil derivative settlements - net cash receipts (payments) ($ in millions)(2)

(65.6)

(60.4)

7.5

Natural gas, without derivative settlements ($ per Mcf)(3)

3.72

3.38

3.50

Natural gas, with derivative settlements ($ per Mcf)(1)(2)(3)

3.76

3.43

3.58

Natural gas derivative settlements - net cash receipts ($ in millions)(2)

0.4

0.5

0.6

Selected financial data ($ in millions):

Revenues:

Oil revenues

$

412.5

$

361.3

$

221.0

Natural gas revenues

40.1

34.7

27.6

Purchased oil and gas sales

46.4

57.6

21.2

Midstream revenues

31.2

29.3

18.8

Well services revenues

16.3

18.5

16.1

Total revenues

$

546.5

$

501.4

$

304.7

Net cash provided by operating activities

230.0

303.7

88.9

Adjusted EBITDA

270.4

241.2

179.6

Select operating expenses:

LOE

$

48.5

$

44.1

$

45.3

Midstream operating expenses

8.7

7.7

4.3

Well services operating expenses(4)

11.4

13.6

10.3

MT&G(5)

30.1

23.1

15.2

Non-cash valuation charges

0.6

(0.2)

(0.2)

Purchased oil and gas expenses

46.1

57.2

21.7

Production taxes

38.7

34.0

21.1

Depreciation, depletion and amortization ("DD&A")

163.0

153.6

132.3

Total select operating expenses

$

347.1

$

333.1

$

250.0

Select operating expenses data:

LOE ($ per Boe)

$

6.18

$

6.11

$

7.45

MT&G ($ per Boe)(5)

3.84

3.19

2.50

DD&A ($ per Boe)

20.74

21.24

21.75

E&P G&A ($ per Boe)

3.88

3.25

2.93

Production taxes (% of oil and gas revenue)

8.6

%

8.6

%

8.5

%

___________________

(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.

(2)

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)

For the three and nine months ended September 30, 2017, well services operating expenses have been adjusted to include $1.2 million and $2.7 million, respectively, for certain well services direct field labor compensation expenses which were previously recognized in general and administrative expenses on the Company's Condensed Consolidated Statements of Operations.

(5)

Excludes non-cash valuation charges on pipeline imbalances.

G&A totaled $34.9 million in the third quarter of 2018, $21.4 million in the third quarter of 2017 and $28.2 million in the second quarter of 2018. Amortization of equity-based compensation, which is included in G&A, was $7.5 million, or $0.95 per Boe, in the third quarter of 2018 as compared to $6.6 million, or $1.09 per Boe, in the third quarter of 2017 and $7.4 million, or $1.02 per Boe, in the second quarter of 2018. G&A for the Company's E&P segment totaled $30.5 million in the third quarter of 2018, $17.8 million in the third quarter of 2017 and $23.5 million in the second quarter of 2018.

MT&G, excluding non-cash valuation charges on pipeline imbalances, increased $14.9 million to $30.1 million in the third quarter of 2018, as compared to $15.2 million in the third quarter of 2017, primarily attributable to higher oil gathering and transportation expenses related to an increase in volumes being transported on the Dakota Access Pipeline to market the Company's equity barrels, which resulted in improved price realizations. MT&G, excluding non-cash valuation charges on pipeline imbalances, increased $7.0 million as compared to $23.1 million in the second quarter of 2018 primarily due to the higher aforementioned costs.

There was no impairment loss in the third quarter of 2018. Impairment loss totaled $0.1 million in the third quarter of 2017 and $384.1 million in the second quarter of 2018.

Interest expense was $39.6 million for the third quarter of 2018 as compared to $37.4 million for the third quarter of 2017 and $40.9 million for the second quarter of 2018. Capitalized interest totaled $4.5 million for the third quarter of 2018, $3.1 million for the third quarter of 2017 and $4.2 million for the second quarter of 2018. Cash Interest totaled $39.4 million for the third quarter of 2018, $36.2 million for the third quarter of 2017 and $40.5 million for the second quarter of 2018. 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 September 30, 2018, the Company recorded an income tax expense of $24.8 million, resulting in a 27.2% effective tax rate as a percentage of its pre-tax income for the quarter. The Company recorded an income tax benefit of $101.0 million, resulting in a 24.2% effective tax rate as a percentage of its pre-tax loss for the three months ended June 30, 2018.

For the third quarter of 2018, the Company reported net income of $62.3 million, or $0.20 per diluted share, as compared to a net loss of $41.2 million, or $0.18 per diluted share, for the third quarter of 2017. Excluding certain non-cash items and their tax effect, Adjusted Net Income Attributable to Oasis (non-GAAP) was $25.6 million, or $0.08 per diluted share, in the third quarter of 2018, as compared to Adjusted Net Income Attributable to Oasis of $0.5 million, or $0.00 per diluted share, in the third quarter of 2017. For a definition of Adjusted Net Income (Loss) Attributable to Oasis and a reconciliation of net income (loss) attributable to Oasis to Adjusted Net Income (Loss) Attributable to Oasis, see "Non-GAAP Financial Measures" below. Adjusted EBITDA for the third quarter of 2018 was $270.4 million, as compared to Adjusted EBITDA of $179.6 million for the third quarter of 2017. For a definition of Adjusted EBITDA and a reconciliation of net income (loss) including non-controlling interests 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 2018

2Q 2018

3Q 2018

YTD - 3Q 2018

(In millions)

CapEx:

E&P

$

176.9

$

280.0

$

247.9

$

704.8

Well services

4.3

0.9

1.1

6.3

Other(1)

6.3

5.4

6.4

18.1

Total CapEx before acquisitions and midstream

187.5

286.3

255.4

729.2

Midstream(2)

88.8

68.6

61.4

218.8

Total CapEx before acquisitions

276.3

354.9

316.8

948.0

Acquisitions

890.9

3.6

55.6

950.1

Total CapEx(3)

$

1,167.2

$

358.5

$

372.4

$

1,898.1

___________________

(1)

Other CapEx includes such items as administrative capital and capitalized interest.

(2)

Midstream CapEx attributable to OMP was $16.7 million and $85.3 million for the three and nine months ended September 30, 2018, respectively.

(3)

Total CapEx reflected in the table above differs from the amounts for capital expenditures and acquisitions shown in the statements 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 CapEx, while the amounts presented in the statements of cash flows is presented on a cash basis.

Hedging Activity

The Company's crude oil contracts will settle monthly based on the average NYMEX WTI for fixed price swaps and two-way and three-way costless collars. The Company's basis swaps for crude oil will either settle monthly based on the fixed basis differential from NYMEX WTI to Intercontinental Exchange, Inc. Brent crude oil index price ("ICE Brent") or Argus WTI Midland crude oil index price ("Midland") to NYMEX WTI. The Company's natural gas contracts will settle monthly based on the average NYMEX Henry Hub natural gas index price ("NYMEX HH") for fixed price swaps. The Company's basis swaps for natural gas will settle monthly based on the fixed basis differential from Inside FERC Northern Natural Gas Ventura ("IF NNG Ventura") to NYMEX HH. As of November 5, 2018, the Company had the following outstanding commodity derivative contracts:

Three Months Ending

Six Months Ending

September 30, 2018

December 31, 2018

June 30, 2019

December 31, 2019

Crude Oil (Volume in MBblpd)

Fixed Price Swaps

Volume

42.0

43.2

13.0

13.0

Price

$

53.14

$

53.95

$

53.47

$

53.47

Collars

Volume

3.0

8.5

11.0

11.0

Floor

$

48.67

$

62.47

$

58.18

$

58.18

Ceiling

$

53.07

$

68.40

$

77.65

$

77.65

3-Way

Volume

—

—

11.0

9.0

Sub-Floor

$

—

$

—

$

40.91

$

40.00

Floor

$

—

$

—

$

51.36

$

50.56

Ceiling

$

—

$

—

$

69.29

$

67.80

Total Crude Oil Volume

45.0

51.7

35.0

33.0

Basis Swaps (NYMEX WTI-ICE Brent)

Volume

1.0

2.0

2.0

—

Price

$

(10.50)

$

(9.68)

$

(9.68)

$

—

Basis Swaps (Midland-NYMEX WTI)

Volume

—

1.3

2.0

—

Price

$

—

$

(7.50)

$

(7.50)

$

—

Total Crude Oil Basis Volume

1.0

3.3

4.0

—

Natural Gas (Volume in MMBtupd)

Fixed Price Swaps

Volume

35,978

41,315

15,475

5,000

Price

$

3.02

$

3.03

$

2.91

$

2.82

Total Natural Gas Volume

35,978

41,315

15,475

5,000

Basis Swaps (IF NNG Ventura-NYMEX HH)

Volume

3,261

19,946

25,000

—

Price

$

(0.06)

$

0.01

$

0.02

$

—

Total Natural Gas Basis Volume

3,261

19,946

25,000

—

The September 2018 crude oil derivative contracts settled at a net $22.8 million paid in October 2018 and will be included in the Company's fourth quarter 2018 derivative settlements.

Conference Call Information

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

Date:

Tuesday, November 6, 2018

Time:

10:00 a.m. Central Time

Live Webcast:

https://www.webcaster4.com/Webcast/Page/1052/27747

Website:

www.oasispetroleum.com

Sell-side analysts with a question may use the following dial-in:

Dial-in:

888-317-6003

Intl. Dial in:

412-317-6061

Conference ID:

1584359

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 Tuesday, November 13, 2018 by dialing:

Replay dial-in:

877-344-7529

Intl. replay:

412-317-0088

Replay code:

10124917

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 in the United States. For more information, please visit the Company's website at www.oasispetroleum.com.

 

Oasis Petroleum Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

September 30, 2018

December 31, 2017

(In thousands, except share data)

ASSETS

Current assets

Cash and cash equivalents

$

16,892

$

16,720

Accounts receivable, net

428,184

363,580

Inventory

31,409

19,367

Prepaid expenses

6,444

7,631

Derivative instruments

—

344

Intangible assets, net

375

—

Other current assets

192

193

Total current assets

483,496

407,835

Property, plant and equipment

Oil and gas properties (successful efforts method)

8,671,144

7,838,955

Other property and equipment

1,088,781

868,746

Less: accumulated depreciation, depletion, amortization and impairment

(2,859,788)

(2,534,215)

Total property, plant and equipment, net

6,900,137

6,173,486

Derivative instruments

—

9

Long-term inventory

12,610

12,200

Other assets

20,188

21,600

Total assets

$

7,416,431

$

6,615,130

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

$

17,206

$

13,370

Revenues and production taxes payable

287,333

213,995

Accrued liabilities

307,526

236,480

Accrued interest payable

20,574

38,963

Derivative instruments

180,129

115,716

Advances from joint interest partners

3,878

4,916

Other current liabilities

40

40

Total current liabilities

816,686

623,480

Long-term debt

2,633,009

2,097,606

Deferred income taxes

230,504

305,921

Asset retirement obligations

51,357

48,511

Derivative instruments

33,017

19,851

Other liabilities

7,775

6,182

Total liabilities

3,772,348

3,101,551

Commitments and contingencies

Stockholders' equity

Common stock, $0.01 par value: 900,000,000 and 450,000,000 shares authorized at September 30, 2018 and December 31, 2017, respectively; 320,507,783 shares issued and 318,419,144 shares outstanding at September 30, 2018 and 270,627,014 shares issued and 269,295,466 shares outstanding at December 31, 2017

3,157

2,668

Treasury stock, at cost: 2,088,639 and 1,331,548 shares at September 30, 2018 and December 31, 2017, respectively

(28,985)

(22,179)

Additional paid-in capital

3,070,642

2,677,217

Retained earnings

460,712

717,985

Oasis share of stockholders' equity

3,505,526

3,375,691

Non-controlling interests

138,557

137,888

Total stockholders' equity

3,644,083

3,513,579

Total liabilities and stockholders' equity

$

7,416,431

$

6,615,130

 

Oasis Petroleum Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2018

2017

2018

2017

(In thousands, except per share data)

Revenues

Oil and gas revenues

$

452,643

$

248,648

$

1,212,235

$

704,533

Purchased oil and gas sales

46,356

21,195

121,971

56,917

Midstream revenues

31,187

18,767

88,451

48,939

Well services revenues

16,262

16,138

46,344

33,566

Total revenues

546,448

304,748

1,469,001

843,955

Operating expenses

Lease operating expenses

48,534

45,334

137,456

133,871

Midstream operating expenses

8,652

4,301

24,325

10,891

Well services operating expenses

11,405

10,288

32,352

23,858

Marketing, transportation and gathering expenses

30,713

15,028

74,559

38,018

Purchased oil and gas expenses

46,088

21,701

121,251

57,683

Production taxes

38,722

21,052

103,748

60,322

Depreciation, depletion and amortization

162,984

132,289

465,819

384,246

Exploration expenses

22,315

854

23,701

4,010

Impairment

—

139

384,228

6,021

General and administrative expenses

34,859

21,368

91,029

67,170

Total operating expenses

404,272

272,354

1,458,468

786,090

Gain on sale of properties

36,869

—

38,823

—

Operating income

179,045

32,394

49,356

57,865

Other income (expense)

Net gain (loss) on derivative instruments

(48,544)

(54,310)

(239,945)

52,297

Interest expense, net of capitalized interest

(39,560)

(37,389)

(117,616)

(110,548)

Loss on extinguishment of debt

(47)

—

(13,698)

—

Other income (expense)

111

(605)

146

(755)

Total other expense

(88,040)

(92,304)

(371,113)

(59,006)

Income (loss) before income taxes

91,005

(59,910)

(321,757)

(1,141)

Income tax benefit (expense)

(24,782)

18,846

75,391

470

Net income (loss) including non-controlling interests

66,223

(41,064)

(246,366)

(671)

Less: Net income attributable to non-controlling interests

3,882

150

10,907

150

Net income (loss) attributable to Oasis

$

62,341

$

(41,214)

$

(257,273)

$

(821)

Earnings (loss) attributable to Oasis per share:

Basic

$

0.20

$

(0.18)

$

(0.84)

$

0.00

Diluted

0.20

(0.18)

(0.84)

0.00

Weighted average shares outstanding:

Basic

313,167

233,389

305,533

233,248

Diluted

316,387

233,389

305,533

233,248

 

Oasis Petroleum Inc.

Selected Financial and Operational Statistics

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2018

2017

2018

2017

Operating results (in thousands):

Revenues

Oil revenues

$

412,530

$

221,004

$

1,097,171

$

623,603

Natural gas revenues

40,113

27,644

115,064

80,930

Purchased oil and gas sales

46,356

21,195

121,971

56,917

Midstream revenues

31,187

18,767

88,451

48,939

Well services revenues

16,262

16,138

46,344

33,566

Total revenues

$

546,448

$

304,748

$

1,469,001

$

843,955

Production data:

Oil (MBbls)

6,060

4,768

16,862

13,552

Natural gas (MMcf)

10,781

7,894

30,825

23,131

Oil equivalents (MBoe)

7,857

6,083

21,999

17,408

Average daily production (Boe per day)

85,400

66,125

80,583

63,764

Average sales prices:

Oil, without derivative settlements (per Bbl)

$

68.07

$

46.35

$

65.07

$

46.02

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

57.25

47.93

55.40

45.90

Natural gas, without derivative settlements (per Mcf)(2)

3.72

3.50

3.73

3.50

Natural gas, with derivative settlements (per Mcf)(1)(2)

3.76

3.58

3.77

3.53

Costs and expenses (per Boe of production):

Lease operating expenses

$

6.18

$

7.45

$

6.25

$

7.69

MT&G(3)

3.84

2.50

3.36

2.16

Production taxes

4.93

3.46

4.72

3.47

Depreciation, depletion and amortization

20.74

21.75

21.17

22.07

G&A(4)

4.44

3.51

4.14

3.86

E&P G&A

3.88

2.93

3.52

3.32

___________________

(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.

(4)

For the three and nine months ended September 30, 2017, well services operating expenses have been adjusted to include $1.2 million and $2.7 million, respectively, for certain well services direct field labor compensation expenses which were previously recognized in general and administrative expenses on the Company's Condensed Consolidated Statements of Operations.

 

Oasis Petroleum Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended September 30,

2018

2017

(In thousands)

Cash flows from operating activities:

Net loss including non-controlling interests

$

(246,366)

$

(671)

Adjustments to reconcile net loss including non-controlling interests to net cash provided by operating activities:

Depreciation, depletion and amortization

465,819

384,246

Loss on extinguishment of debt

13,698

—

Gain on sale of properties

(38,823)

—

Impairment

384,228

6,021

Deferred income taxes

(75,418)

(470)

Derivative instruments

239,945

(52,297)

Equity-based compensation expenses

21,586

20,451

Deferred financing costs amortization and other

20,074

12,666

Working capital and other changes:

Change in accounts receivable, net

(61,275)

(81,022)

Change in inventory

(12,076)

(235)

Change in prepaid expenses

1,196

823

Change in other current assets

1

276

Change in long-term inventory and other assets

(490)

(12,843)

Change in accounts payable, interest payable and accrued liabilities

50,308

32,282

Change in other current liabilities

—

(10,490)

Change in other liabilities

(406)

—

Net cash provided by operating activities

762,001

298,737

Cash flows from investing activities:

Capital expenditures

(841,088)

(443,649)

Acquisitions

(579,886)

—

Proceeds from sale of properties

333,029

4,000

Costs related to sale of properties

(2,707)

—

Derivative settlements

(162,013)

(804)

Advances from joint interest partners

(1,038)

(2,502)

Net cash used in investing activities

(1,253,703)

(442,955)

Cash flows from financing activities:

Proceeds from Revolving Credit Facilities

2,499,000

764,000

Principal payments on Revolving Credit Facilities

(1,959,000)

(732,000)

Repurchase of senior unsecured notes

(423,190)

—

Proceeds from issuance of senior unsecured notes

400,000

—

Deferred financing costs

(7,650)

(96)

Proceeds from sale of Oasis Midstream common units, net of offering costs

—

115,813

Purchases of treasury stock

(6,806)

(6,182)

Distributions to non-controlling interests

(10,393)

—

Other

(87)

(55)

Net cash provided by financing activities

491,874

141,480

Increase (decrease) in cash and cash equivalents

172

(2,738)

Cash and cash equivalents:

Beginning of period

16,720

11,226

End of period

$

16,892

$

8,488

Supplemental non-cash transactions:

Change in accrued capital expenditures

$

79,011

$

63,499

Change in asset retirement obligations

2,854

3,112

Issuance of shares in connection with the Permian Basin Acquisition

371,220

—

Installment notes 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 September 30,

Nine Months Ended September 30,

2018

2017

2018

2017

(In thousands)

Interest expense

$

39,560

$

37,389

$

117,616

$

110,548

Capitalized interest

4,531

3,137

13,209

8,773

Amortization of deferred financing costs

(1,813)

(1,729)

(5,511)

(5,128)

Amortization of debt discount

(2,852)

(2,591)

(8,201)

(7,426)

Cash Interest

$

39,426

$

36,206

$

117,113

$

106,767

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 or non-recurring 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) including non-controlling interests 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 September 30,

Nine Months Ended September 30,

2018

2017

2018

2017

(In thousands)

Net income (loss) including non-controlling interests

$

66,223

$

(41,064)

$

(246,366)

$

(671)

Gain on sale of properties

(36,869)

—

(38,823)

—

Loss on extinguishment of debt

47

—

13,698

—

Net (gain) loss on derivative instruments

48,544

54,310

239,945

(52,297)

Derivative settlements(1)

(65,190)

8,095

(162,013)

(804)

Interest expense, net of capitalized interest

39,560

37,389

117,616

110,548

Depreciation, depletion and amortization

162,984

132,289

465,819

384,246

Impairment

—

139

384,228

6,021

Exploration expenses

22,315

854

23,701

4,010

Equity-based compensation expenses

7,456

6,628

21,586

20,451

Income tax (benefit) expense

24,782

(18,846)

(75,391)

(470)

Other non-cash adjustments

574

(208)

557

491

Adjusted EBITDA

270,426

179,586

744,557

471,525

Adjusted EBITDA attributable to non-controlling interests

5,194

190

14,647

190

Adjusted EBITDA attributable to Oasis

265,232

179,396

729,910

471,335

Cash Interest

(39,426)

(36,206)

(117,113)

(106,767)

Capital expenditures(2)

(372,343)

(240,373)

(1,898,105)

(523,143)

Capitalized interest

4,531

3,137

13,209

8,773

Free Cash Flow

$

(142,006)

$

(94,046)

$

(1,272,099)

$

(149,802)

Net cash provided by operating activities

$

229,985

$

88,876

$

762,001

$

298,737

Derivative settlements(1)

(65,190)

8,095

(162,013)

(804)

Interest expense, net of capitalized interest

39,560

37,389

117,616

110,548

Exploration expenses

22,315

854

23,701

4,010

Deferred financing costs amortization and other

(9,556)

(3,795)

(20,074)

(12,666)

Current tax expense

(93)

—

27

—

Changes in working capital

52,831

48,375

22,742

71,209

Other non-cash adjustments

574

(208)

557

491

Adjusted EBITDA

270,426

179,586

744,557

471,525

Adjusted EBITDA attributable to non-controlling interests

5,194

190

14,647

190

Adjusted EBITDA attributable to Oasis

265,232

179,396

729,910

471,335

Cash Interest

(39,426)

(36,206)

(117,113)

(106,767)

Capital expenditures(2)

(372,343)

(240,373)

(1,898,105)

(523,143)

Capitalized interest

4,531

3,137

13,209

8,773

Free Cash Flow

$

(142,006)

$

(94,046)

$

(1,272,099)

$

(149,802)

___________________

(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)

Capital expenditures (including acquisitions) reflected in the table above differ from the amounts shown in the statements of cash flows in our condensed consolidated financial statements because amounts reflected in the table 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. Acquisitions totaled $55.6 million and $1.1 million for the three months ended September 30, 2018 and 2017, respectively, and $950.1 million and $5.9 million for the nine months ended September 30, 2018 and 2017, respectively.

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

Exploration and Production

Three Months Ended September 30,

Nine Months Ended September 30,

2018

2017

2018

2017

(In thousands)

Income (loss) before income taxes including non-controlling interests

$

59,375

$

(88,835)

$

(423,470)

$

(71,999)

Gain on sale of properties

(46,459)

—

(48,413)

—

Loss on extinguishment of debt

47

—

13,698

—

Net (gain) loss on derivative instruments

48,544

54,310

239,945

(52,297)

Derivative settlements(1)

(65,190)

8,095

(162,013)

(804)

Interest expense, net of capitalized interest

39,398

37,369

117,009

110,528

Depreciation, depletion and amortization

158,630

129,626

453,083

376,818

Impairment

—

139

384,228

6,021

Exploration expenses

22,315

854

23,701

4,010

Equity-based compensation expenses

7,102

6,344

20,565

19,741

Other non-cash adjustments

574

(208)

557

491

Adjusted EBITDA

$

224,336

$

147,694

$

618,890

$

392,509

___________________

(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 September 30,

Nine Months Ended September 30,

2018

2017

2018

2017

(In thousands)

Income before income taxes including non-controlling interests

$

30,959

$

25,179

$

100,754

$

69,046

Loss on sale of properties

9,590

—

9,590

—

Interest expense, net of capitalized interest

162

20

607

20

Depreciation, depletion and amortization

7,373

4,163

20,902

11,375

Equity-based compensation expenses

442

392

1,222

1,104

Adjusted EBITDA

$

48,526

$

29,754

$

133,075

$

81,545

Well Services

Three Months Ended September 30,

Nine Months Ended September 30,

2018

2017

2018

2017

(In thousands)

Income before income taxes including non-controlling interests

$

9,158

$

10,832

$

25,316

$

9,195

Depreciation, depletion and amortization

3,940

3,196

11,560

9,417

Equity-based compensation expenses

354

281

1,149

1,015

Adjusted EBITDA

$

13,452

$

14,309

$

38,025

$

19,627

Adjusted Net Income (Loss) Attributable to Oasis and Adjusted Diluted Earnings (Loss) Attributable to Oasis 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) Attributable to Oasis 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, (2) the impact of net income attributable to non-controlling interests and (3) 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) Attributable to Oasis is not a measure of net income (loss) as determined by GAAP. The Company defines Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share as Adjusted Net Income (Loss) Attributable to Oasis divided by diluted weighted average shares outstanding.

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

Three Months Ended September 30,

Nine Months Ended September 30,

2018

2017

2018

2017

(In thousands, except per share data)

Net income (loss) attributable to Oasis

$

62,341

$

(41,214)

$

(257,273)

$

(821)

Gain on sale of properties

(36,869)

—

(38,823)

—

Loss on extinguishment of debt

47

—

13,698

—

Net (gain) loss on derivative instruments

48,544

54,310

239,945

(52,297)

Derivative settlements(1)

(65,190)

8,095

(162,013)

(804)

Impairment

—

139

384,228

6,021

Amortization of deferred financing costs

1,814

1,728

5,512

5,127

Amortization of debt discount

2,852

2,591

8,201

7,426

Other non-cash adjustments

574

(208)

557

491

Tax impact(2)

11,449

(24,941)

(107,140)

12,735

Adjusted Net Income (Loss) Attributable to Oasis

$

25,562

$

500

$

86,892

$

(22,122)

Diluted earnings (loss) attributable to Oasis per share

$

0.20

$

(0.18)

$

(0.84)

$

0.00

Gain on sale of properties

(0.12)

—

(0.13)

—

Loss on extinguishment of debt

—

—

0.04

—

Net (gain) loss on derivative instruments

0.15

0.23

0.78

(0.22)

Derivative settlements(1)

(0.21)

0.03

(0.52)

—

Impairment

—

—

1.24

0.03

Amortization of deferred financing costs

0.01

0.01

0.02

0.02

Amortization of debt discount

0.01

0.01

0.03

0.03

Other non-cash adjustments

—

—

—

—

Tax impact(2)

0.04

(0.10)

(0.34)

0.05

Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share

$

0.08

$

0.00

$

0.28

$

(0.09)

Diluted weighted average shares outstanding(3)

316,387

234,041

308,985

233,248

Effective tax rate applicable to adjustment items

23.7

%

37.4

%

23.7

%

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.

(3)

The Company included 3,220,000 and 3,452,000 of unvested stock awards for the three and nine months ended September 30, 2018, respectively, and 652,000 of unvested stock awards for the three months ended September 30, 2017 in computing Adjusted Diluted Income Attributable to Oasis Per Share due to the dilutive effect under the treasury stock method. No unvested stock awards were included in computing Adjusted Diluted Loss Attributable to Oasis Per Share for the nine months ended September 30, 2017 because the effect was anti-dilutive due to Adjusted Net Loss Attributable to Oasis.

 

Cision View original content:http://www.prnewswire.com/news-releases/oasis-petroleum-inc-announces-quarter-ended-september-30-2018-earnings-300744227.html

SOURCE Oasis Petroleum Inc.


Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Press Releases

Related Entities

Argus, Crude Oil, Earnings, Definitive Agreement