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Oasis (OAS) Stock Barely Moves Despite Q3 Earnings Beat

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  • OAS
  • EOG
  • FANG
  • COP

Shares of Oasis Petroleum Inc. OAS have shown no significant change since the third-quarter 2021 earnings release on Nov 3.

Despite OAS’ better-than-expected third-quarter bottom and top-line performance and its efforts to maximize capital returns to its shareholders by increasing dividends and share repurchases, the stock failed to display an uptrend.

Behind the Earnings Headlines

Williston Basin-focused oil and gas producer Oasis Petroleum reported third-quarter 2021 adjusted earnings per share of $3.16, comfortably beating the Zacks Consensus Estimate of $1.95 and improving from the quarter-ago profit of $2.76. The outperformance can be attributed to higher commodity prices and better-than-expected production.

OAS’ total operating revenues of $402 million beat the Zacks Consensus Estimate of $262 million. The top line also improved from the sequential quarter’s figure of $393 million.

Among other encouraging metrics of Oasis Petroleum, adjusted EBITDA, and exploration and production (E&P) free cash flow totaled $116 million and $65 million, respectively. OAS paid a quarterly dividend of 50 cents per share ($2 annualized) in the third quarter of 2021, indicating a hike from the sequential quarter’s dividend of 37.5 cents.

Production & Price Realizations

Total production (comprising 61.6% oil) slipped 4.5% from the quarter-ago level to 51.804 thousand oil-equivalent barrels per day (MBOE/d) and surpassed the Zacks Consensus Estimate of 50.83 MBOE/d. While oil volume came in at 31.896 thousand barrels per day (down 8% year over year), natural gas totaled 119,448 thousand cubic feet per day (up 2%).

The average realized crude oil price during the third quarter was $70.12 per barrel, reflecting a 7% increase from the prior-quarter realization of $65.52. The average realized natural gas price was $6.91 per thousand cubic feet, surging 52.5% from the quarter-earlier period’s figure.

Oasis Petroleum Inc. Price, Consensus and EPS Surprise

Oasis Petroleum Inc. Price, Consensus and EPS Surprise
Oasis Petroleum Inc. Price, Consensus and EPS Surprise

Oasis Petroleum Inc. price-consensus-eps-surprise-chart | Oasis Petroleum Inc. Quote

Total Expenses

Total operating expenses in the quarter descended to $203.9 million from the sequential quarter’s $240.5 million. This upside was mainly on account of a drop in depreciation, depletion and amortization outlays, and purchased oil and gas expenses, which were down13.7% and 37%, respectively, from the corresponding sequential quarter’s levels. OAS’ lease operating expenses also fell to $9.42 per barrel of oil equivalent (Boe) from the quarter-ago figure of $10.21 per Boe.

Financial Position

Capital spending totaled $42.6 million in the quarter. Oasis Petroleum recorded $294 million in net cash flow provided by operations.

As of Jun 30, this Bakken-focused operator had $448.61 million in cash and cash equivalents. The company had long-term debt of $104 billion, representing a debt-to-capitalization of 48.8%.

Guidance

For the fourth quarter of 2021, Oasis Petroleum reiterates its E&P capex estimate in the $65-$75 million range. OAS retains its current-year E&P capex outlook in the $200-$215 million band.

Management maintains its average volume view of 74.5-77.5 MBOE/d for the December quarter.

Zacks Rank & Stocks to Consider

Oasis Petroleum currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space are EOG Resources EOG, Diamondback Energy FANG and ConocoPhillips COP, each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

EOG Resources reported third-quarter 2021 adjusted earnings per share of $2.16, beating the Zacks Consensus Estimate of $2.01. Strong earnings were driven by increased production volumes and a higher realization of commodity prices.

EOG announced a quarterly dividend of 75 cents per share, indicating an 82% increase from the previous level. The dividend will be paid out on Jan 28, 2022, to its shareholders of record as of Jan 14, 2022. EOG Resources also declared a special dividend of $2 per share. Moreover, the board of directors updated its share repurchase authorization to $5 billion.

Diamondback Energy reported third-quarter 2021 adjusted earnings of $2.94 per share, which surpassed the Zacks Consensus Estimate of $2.81 and also the year-ago quarter’s earnings of 62 cents. FANG’s bottom line was aided by better-than-expected production.

The board of directors declared a dividend of 50 cents per share for the third quarter. This signifies an 11.1% hike in its quarterly payout from the previous level of 45 cents. The amount will be paid out on Nov 18, 2021, to its shareholders of record as of Nov 11. FANG also generated a free cash flow of $740 million in the third quarter.

ConocoPhillips reported third-quarter 2021 adjusted earnings per share of $1.77, comfortably beating the Zacks Consensus Estimate of $1.53. This outperformance is led by increased production volumes owing to the Concho acquisition and the rising realized commodity prices.

Based in Houston, TX, this one of the world’s largest independent oil and gas producers’ capital expenditures and investments totaled $1.3 billion, and dividend payments grossed $579 million. ConocoPhillips’ net cash provided by operating activities was recorded at $4.8 billion, up from the year-ago figure of $868 million. COP generated a free cash flow of $2.8 billion in the third quarter.


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