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Oasis Petroleum Inc. Announces Quarter and Year Ending December 31, 2018 Earnings and Provides an Operational Update and 2019 Outlook

HOUSTON, Feb. 26, 2019 /PRNewswire/ -- Oasis Petroleum Inc. (OAS) ("Oasis" or the "Company") today announced financial and operational results for the quarter and year ended December 31, 2018 and provided its 2019 outlook.

Highlights

  • Increased production guidance twice in 2018, adjusted for divestitures. Production volumes averaged 88.3 thousand barrels of oil equivalent per day ("MBoepd") (76.2% oil) in the fourth quarter of 2018, in-line with midpoint guidance. Production volumes averaged 82.5 MBoepd (76.5% oil) for the year ended December 31, 2018.
  • Lowered lease operating expenses ("LOE") per barrels of oil equivalent ("Boe") by over 12% year over year to $6.44 per Boe for the year ended December 31, 2018.
  • Completed and placed on production 121 gross (85.3 net) operated wells, including 114 gross (79.0 net) operated wells in the Williston Basin and 7 gross (6.3 net) operated wells in the Delaware Basin, while investing $942.2 million of exploration and production capital expenditures ("E&P CapEx"), which excludes acquisitions, other capital and midstream capital, during 2018.
  • Closed and integrated the acquisition of approximately 22,000 net core acres in the over-pressured oil window of the Delaware Basin (the "Permian Basin Acquisition"). Additionally, Oasis purchased adjacent acreage at attractive pricing, bringing its total position to over 23,000 net acres in the Delaware Basin.
  • Oasis's midstream subsidiary, Oasis Midstream Partners LP ("OMP"), completed the construction and startup of a second natural gas plant in Wild Basin, making Oasis the second largest natural gas processor in North Dakota.
  • Successfully executed a divestiture "dropdown" of additional interests in midstream subsidiaries to OMP for $251.4 million, which increased Oasis's holdings of OMP common units and reduced debt.
  • High-graded the portfolio since announcing the Permian Basin Acquisition including non-strategic divestitures of approximately $360 million, which helped reduce financial leverage.
  • Net cash provided by operating activities was $996.4 million for the year ended December 31, 2018 and $234.4 million for the fourth quarter of 2018. Adjusted EBITDA, a non-GAAP financial measure, was $958.7 million for the year ended December 31, 2018 and $214.1 million for the fourth quarter of 2018. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income (loss) including non-controlling interests and net cash provided by operating activities, see "Non-GAAP Financial Measures" below.

"2018 was a successful year for Oasis," said Thomas B. Nusz, Oasis's Chairman and Chief Executive Officer. "We focused on development of our core Williston asset, which drove full-year oil production up 20% vs. 2017, adjusted for the Delaware acquisitions and Bakken divestitures. Also in the Williston, OMP successfully started its new 200 million cubic feet per day plant in December which puts us in a great position to capture and realize the full value of our gas production in North Dakota. Separately, we continue to integrate our new Delaware asset and prepare for full-field development. Our technical learnings have validated the quality of this acreage, first year financial performance exceeded expectations, and we expect to realize exceptional returns and value creation in coming years."

"Additionally, throughout 2018 we high-graded our asset base through a series of non-core divestitures. Operationally, our team continues to do a tremendous job optimizing our cost structure. On the resource delineation side, in the Williston Basin, several strong well results at Painted Woods and Montana in the west and Cottonwood in the east heighten our confidence in the competitive position of these areas. At year-end 2018, Oasis had over 2,000 gross operated locations in the Williston and Delaware with breakeven pricing below $45 per barrel WTI. At our current completions pace, this represents over 20 years of development. While prices have weakened considerably since 2018, we have the asset quality, inventory depth, financial strength, midstream capabilities, and services to succeed at low prices."

"Oasis has an enviable asset base. We are in a formidable position to generate significant free cash flow in 2019 through prudent capital spending reductions and operating efficiencies. Free cash flow generation from the Williston is expected to fund growth at our core Delaware asset and reduce corporate debt. Consistent with our dedication to generating free cash flow, we entered into a capital expenditures arrangement with OMP for Bobcat DevCo's 2019 expansion capital expenditures that permits us to minimize midstream spending at the Oasis level. We are poised to succeed in the current environment. Oasis has the strategic, operating, and financial capabilities to drive capital efficiency, generate strong free cash flow, and deliver for our shareholders."

Midstream Update

OMP completed its new 200 MMscfpd natural gas processing plant in early December and has gradually ramped up volumes through February. OMP is now the second largest natural gas processor in the Williston Basin. OMP's gas plant is currently running at approximately 60% utilization, and now expects utilization to increase to over 90% by year-end 2019 consisting of both Oasis and third-party volumes. In late 2018, OMP successfully signed additional third-party agreements, which diversifies the revenue base and provides financial resiliency. OMP continues to pursue additional opportunities with third-parties to further increase the utilization of its gas gathering and processing infrastructure.

On February 22, 2019, Oasis entered into a capital expenditures arrangement (the "Capital Expenditures Arrangement") with OMP, allowing OMP to fund growth capital for Bobcat DevCo. As a result of this arrangement, Oasis's ownership in Bobcat DevCo is expected to decline from 75% to between approximately 64% and 66% by the end of the 2019 calendar year. The Company believes this arrangement is mutually beneficial to both Oasis and OMP, as it significantly reduces Oasis's midstream spending and OMP can accretively increase its leverage to Bobcat DevCo. Additionally, in 2019, Oasis is planning capital expenditures related to its retained interest in Williston Basin infrastructure of approximately $11 million to $13 million and midstream capital expenditures of approximately $8 million in the Delaware Basin.

The terms of the Capital Expenditures Arrangement were approved by the Board of Directors of the general partner of OMP following a unanimous recommendation for approval from the conflicts committee of the Board of Directors of the general partner of OMP, which consists entirely of independent directors. The conflicts committee was advised by Baird on financial matters and Richards, Layton & Finger, P.A. on legal matters. Oasis was advised by Vinson and Elkins L.L.P. on legal matters.

2019 Plan

Oasis constructed its 2019 plan based on being free cash flow positive at $50 WTI. In order to achieve this objective, the total E&P and Other CapEx plan has been reduced by approximately 40% year over year and is expected to range between $540 million and $560 million. Oasis is directing approximately 75% of its capital to the Williston Basin and approximately 25% to the Delaware Basin. The Company expects 85% of its E&P and Other CapEx to be invested in drilling and completions activities, including:

  • Completing approximately 70 gross operated wells with a working interest of approximately 65% in the Williston Basin;
  • Completing 9 to 11 gross operated wells with a working interest of approximately 90% in the Delaware Basin; and
  • Cash flow from the Williston asset is expected to fund a small Delaware outspend in 2019. Oasis produced 88.3 MBoepd in the fourth quarter of 2018, and expects first quarter production to be essentially flat quarter over quarter.

Metric

Range

Production (Boepd)(1)


Full Year 2019

86,000 to 91,000

Full Year Financial Metrics


LOE ($ per Boe)

$7.00 to $8.00

Marketing, transportation and gathering ("MT&G") ($ per Boe)(2)

$1.50 to $3.50

E&P Cash G&A ($ in millions)(3)

$77 - $81

Production taxes (% of oil and gas revenue)

8.1% to 8.4%

2019 CapEx Plan ($ in millions)


E&P & Other CapEx(4)

$540 - $560

Midstream CapEx

150 - 170

Midstream CapEx attributable to Oasis (included in Midstream CapEx above)

19 - 21

__________________

(1)

Average oil production percentage of 72% in 2019.

(2)

Excludes the effect of non-cash valuation charges.

(3)

Cash E&P G&A represents general and administrative ("G&A") expenses less non-cash equity-based compensation expense included in our exploration and production segment. Total cash G&A for Oasis estimated at $92 million to $96 million, which excludes non-cash amortization of equity-based compensation of approximately $41 million to $45 million. See "Non-GAAP Financial Measures" below.

(4)

Other CapEx includes OWS and administrative capital and excludes capitalized interest of approximately $15 million.

Operational and Financial Update

Select operational and financial statistics are included in the following table for the periods presented:


Quarter Ended


Year Ended


12/31/2018


9/30/2018


12/31/2018


12/31/2017

Production data:








Oil (Bopd)

67,266



65,870



63,151



51,557


Natural gas (Mcfpd)

126,135



117,182



116,246



87,522


Total production (Boepd)

88,288



85,400



82,525



66,144


Percent Oil

76.2

%


77.1

%


76.5

%


77.9

%

Average sales prices:








Oil, without derivative settlements ($ per Bbl)

$

52.01



$

68.33



$

61.84



$

48.51


Differential to WTI ($ per Bbl)

6.79



1.16



2.88



2.62


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

44.14



57.50



52.65



47.99


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

(48.7)



(65.6)



(211.7)



(9.8)


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

4.27



3.72



3.88



3.81


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

4.02



3.76



3.84



3.86


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

(2.9)



0.4



(1.8)



1.5


Selected financial data ($ in millions):








Revenues:








Oil revenues(4)

$

321.8



$

414.1



$

1,425.4



$

912.8


Natural gas revenues

49.6



40.1



164.6



121.8


Purchased oil and gas sales(4)

183.1



173.0



551.8



133.5


Midstream revenues

30.6



31.2



119.0



72.8


Well services revenues

14.7



16.3



61.1



52.8


Total revenues

$

599.8



$

674.7



$

2,321.9



$

1,293.7


Net cash provided by operating activities

$

234.4



$

230.0



$

996.4



$

507.9


Adjusted EBITDA

$

214.1



$

270.4



$

958.7



$

707.7


Select operating expenses:








LOE

$

56.5



$

48.5



$

193.9



$

177.1


Midstream operating expenses

7.6



8.7



31.9



17.6


Well services operating expenses

8.8



11.4



41.2



37.2


MT&G(5)

28.9



30.1



102.9



56.6


Non-cash valuation charges

3.8



0.6



4.3



(0.8)


Purchased oil and gas expenses(4)

179.9



174.3



554.3



134.6


Production taxes

29.9



38.7



133.7



88.1


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

170.5



163.0



636.3



530.8


Total select operating expenses

$

485.9



$

475.3



$

1,698.5



$

1,041.2


Select operating expenses data:








LOE ($ per Boe)

$

6.95



$

6.18



$

6.44



$

7.34


MT&G ($ per Boe)(5)

3.55



3.84



3.41



2.34


DD&A ($ per Boe)

20.99



20.74



21.12



21.99


E&P G&A ($ per Boe)

3.08



3.88



3.40



3.21


E&P Cash G&A ($ per Boe)(6)

2.18



2.97



2.48



2.16


Production taxes (% of oil and gas revenue)

8.1

%


8.6

%


8.4

%


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 quarter ended September 30, 2018 and the year ended December 31, 2017, oil revenues, purchased oil and gas sales and purchased oil and gas expenses have been revised as described in Revision of Prior Period Financial Statements below.

(5)

Excludes non-cash valuation charges on pipeline imbalances of $3.8 million and $0.6 million for the quarters ended December 31, 2018 and September 30, 2018, respectively, and $4.3 million and a credit of $0.8 million for the years ended December 31, 2018 and 2017, respectively.

(6)

Cash E&P G&A, a non-GAAP measure, represents G&A expenses less non-cash equity-based compensation expense included in the Company's exploration and production segment. See "Non-GAAP Financial Measures" below for a reconciliation of the Company's E&P G&A to Cash E&P G&A.

G&A expenses for the fourth quarter of 2018 totaled $30.3 million, and for the year ended December 31, 2018, G&A totaled $121.3 million. Amortization of equity-based compensation, which is included in G&A expenses, was $7.7 million, or $0.95 per Boe, for the fourth quarter of 2018 and $29.3 million, or $0.97 per Boe, for the full year of 2018. G&A expenses for the Company's E&P segment totaled $25.1 million for the fourth quarter of 2018 and $102.5 million for the full year of 2018. Total Cash E&P G&A expenses, excluding non-cash equity-based compensation expenses, were $2.18 per Boe for the fourth quarter of 2018 and $2.48 per Boe for the full year of 2018.

Interest expense was $41.5 million for the fourth quarter of 2018 and $159.1 million for the full year of 2018. Capitalized interest totaled $4.0 million for the fourth quarter of 2018 and $17.2 million for the full year of 2018. Cash Interest (non-GAAP) totaled $40.5 million for the fourth quarter of 2018 and $157.6 million for the full year 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 December 31, 2018, the Company recorded an income tax expense of $69.5 million, resulting in an effective tax rate of 23.5% as a percentage of its pre-tax income for the quarter. The Company's income tax benefit for the year ended December 31, 2018 was recorded at $5.8 million, or 23.1% of its pre-tax loss.

The Company reported net income attributable to Oasis of $222.0 million in the fourth quarter of 2018. For the full year of 2018, Oasis reported net loss attributable to Oasis of $35.3 million. Excluding certain non-cash items and their tax effect in the fourth quarter of 2018, Adjusted Net Loss Attributable to Oasis (non-GAAP) was $7.3 million, or $0.02 per diluted share, and in the full year of 2018, Adjusted Net Income Attributable to Oasis (non-GAAP) was $79.6 million, or $0.26 per diluted share, respectively. 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.

The Company completed and placed on production 121 gross (85.3 net) operated wells during 2018 and 30 gross (21.7 net) operated wells during the fourth quarter of 2018.

The Company sells a significant amount of its crude oil production through gathering systems connected to multiple pipeline and rail facilities, which allows it to shift volumes between pipeline and rail markets in order to optimize price realizations. For the first three quarters of 2018, the Company's oil price differentials improved to less than $2.00 per barrel discount to WTI. Purchased oil and gas sales, which consist primarily of the sale of crude oil purchased to optimize transportation costs or for blending at the Company's crude oil terminal, increased $418.3 million to $551.8 million for the year ended December 31, 2018 as compared to the year ended December 31, 2017, primarily due to higher volumes purchased and sold driven by increased market opportunities in the Williston Basin and in the Delaware Basin. Purchased oil and gas expenses increased $419.7 million to $554.3 million for the year ended December 31, 2018 as compared to December 31, 2017.

Revision of Prior Period Financial Statements. In connection with the preparation of the Company's consolidated financial statements for the year ended December 31, 2018, the Company identified errors in its previously issued 2017 annual consolidated financial statements and in each of the interim periods within 2018 and 2017. These prior period errors related to the presentation of certain crude oil purchase and sale arrangements. Specifically, although the Company previously presented the transactions on a net basis in oil and gas revenues, the Company was required to present these purchase and sale arrangements on a gross basis in purchased oil and gas expenses and purchased oil and gas sales. In addition, the Company identified certain assets and liabilities related to these arrangements that were reported on a net basis in accounts receivable on the balance sheet, but did not meet all of the criteria for a right of setoff. The correction of these errors had no effect on the reported consolidated net income (loss) attributable to Oasis or earnings (loss) attributable to Oasis per share data for the year ended December 31, 2017 or for any of the interim periods within 2018 and 2017 or to Oasis share of stockholders' equity at December 31, 2017. Based on an analysis of quantitative and qualitative factors, the Company determined the related impact was not material to its consolidated financial statements, and therefore, amendments of previously filed reports are not required.

For the quarter ended December 31, 2017, the Company revised the Consolidated Statements of Operations by increasing purchased oil and gas sales and purchased oil and gas expenses by $30.5 million and $30.4 million, respectively, and decreasing oil and gas revenues by $0.1 million. For the year ended December 31, 2017, the Company revised the Consolidated Statements of Operations by increasing purchased oil and gas sales and purchased oil and gas expenses by $45.6 million and $45.3 million, respectively, and decreasing oil and gas revenues by $0.3 million. For the quarter ended September 30, 2018, the Company revised the Consolidated Statements of Operations by increasing oil and gas revenues, purchased oil and gas sales and purchased oil and gas expenses by $1.6 million, $126.6 million and $128.2 million, respectively. As of December 31, 2017, the Company revised the Consolidated Balance Sheets by increasing both accounts receivable and accrued liabilities by $7.8 million. The amounts presented herein reflect the impact of this revision.

As a result of the errors noted above, the Company has identified a material weakness in its internal control over financial reporting. Accordingly, management will disclose in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 that its internal control over financial reporting and its disclosure controls and procedures are not effective as of December 31, 2018 and will receive an adverse opinion on internal control over financial reporting as of December 31, 2018 from PricewaterhouseCoopers LLP. In response to the material weakness identified, management has developed a plan to remediate the material weakness, and has begun working on that remediation plan. In addition, management performed additional analyses and procedures in order to conclude that the Company's consolidated financial statements for the year ended December 31, 2018 are fairly presented, in all material respects, in accordance with generally accepted accounting principles.

Capital Expenditures

The following table depicts the Company's CapEx for the year ended December 31, 2018:


2018

CapEx ($ in millions)


E&P (excluding acquisitions)

$

942.2


Well Services

7.8


Other(1)

24.0


Total CapEx before acquisitions and midstream

974.0


Midstream(2)

277.6


Total CapEx before acquisitions

1,251.6


Acquisitions

951.9


Total CapEx(3)

$

2,203.5


__________________

(1)

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

(2)

Midstream CapEx attributable to OMP was $116.6 million for the year ended December 31, 2018.

(3)

Total CapEx (including acquisitions) reflected in the table above differs from the amounts shown in the statements of cash flows in the Company's 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 are presented on a cash basis. In addition, for the year ended December 31, 2018, capital expenditures (including acquisitions) reflected in the table above includes consideration paid through the issuance of common stock in connection with the Permian Basin Acquisition.

Estimated Net Proved Reserves

The Company's estimated net proved reserves and related PV-10 are based on reports prepared by DeGolyer and MacNaughton, independent reserve engineers. The table below summarizes the Company's estimated net proved reserves and related PV-10 at December 31, 2018:


December 31, 2018


Net Estimated Reserves
(MMBoe)


PV-10(1)

(in millions)

Proved Developed

201.1



$

3,573.6


Undeveloped

119.4



1,100.7


Total Proved

320.5



$

4,674.3


__________________

(1)

PV-10 is a non-GAAP financial measure and generally differs from Standardized Measure, the most directly comparable GAAP financial measure, because it does not include the effect of income taxes on discounted future net cash flows.

Liquidity and Balance Sheet

As of December 31, 2018, Oasis had cash and cash equivalents of $22.2 million, total elected commitments under the Oasis Credit Facility of $1,350.0 million and a borrowing base under the OMP Credit Facility of $400.0 million. In addition, Oasis had $468.0 million of borrowings and $14.0 million of outstanding letters of credit issued under the Oasis Credit Facility and $318.0 million of borrowings under the OMP Credit Facility, resulting in an unused borrowing base capacity of $950.0 million for both revolving credit facilities as of December 31, 2018.

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 or Argus WTI Houston crude oil index price ("Houston") 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 February 26, 2019, the Company had the following outstanding commodity derivative contracts:


Three Months Ending


Six Months Ending


December 31, 2018


June 30, 2019


December 31, 2019


June 30, 2020

Crude oil (Volume in MBopd)








Fixed Price Swaps








Volume

43.2



13.0



13.0




Price

$

53.95



$

53.47



$

53.47



$


Collars








Volume

8.5



13.0



12.0




Floor

$

62.47



$

57.46



$

58.08



$


Ceiling

$

68.40



$

74.49



$

76.05



$


3-way








Volume



12.0



12.0



3.0


Sub-Floor

$



$

40.83



$

40.00



$

40.00


Floor

$



$

51.25



$

51.57



$

57.24


Ceiling

$



$

68.59



$

65.40



$

58.04


Total Crude Oil Volume

51.7



38.0



37.0



3.0


Basis Swaps (NYMEX WTI-ICE Brent)








Volume

2.0



2.0






Price

$

(9.68)



$

(9.68)



$



$


Basis Swaps (Midland-NYMEX WTI)








Volume

1.3



3.8






Price

$

(7.50)



$

(6.77)



$



$


Basis Swaps (Houston-NYMEX WTI)








Volume



1.5



1.5




Price

$



$

4.55



$

4.55



$


Total Crude Oil Basis Volume

3.3



7.3



1.5












Natural Gas (Volume in MMBtupd)








Fixed Price Swaps








Volume

41,315



30,475



20,000




Price

$

3.03



$

3.20



$

2.90



$


Total Natural Gas Volume

41,315



30,475



20,000




Basis Swaps (IF NNG Ventura-NYMEX HH)








Volume

19,946



26,630






Price

$

0.01



$

0.05



$



$


Total Natural Gas Basis Volume

19,946



26,630






The December 2018 crude oil derivative contracts settled at a net $10.6 million received in January 2019 and will be included in the Company's first quarter of 2019 derivative settlements.

Conference Call Information

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

Date:


Wednesday, February 27, 2019

Time:


10:00 a.m. Central Time

Live Webcast:


https://www.webcaster4.com/Webcast/Page/1052/29262

OR:



Dial-in:


888-317-6003

Intl. Dial in:


412-317-6061

Conference ID:


8270035

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 Wednesday, March 6, 2019 by dialing:

Replay dial-in:


877-344-7529

Intl. replay:


412-317-0088

Replay code:


10128589

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, derivatives activities, 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 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 onshore, 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. Financial Statements

OASIS PETROLEUM INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)



December 31,


2018


2017


(In thousands, except share data)

ASSETS




Current assets




Cash and cash equivalents

$

22,190



$

16,720


Accounts receivable, net

387,602



371,379


Inventory

33,128



19,367


Prepaid expenses

10,997



7,631


Derivative instruments

99,930



344


Intangible assets, net

125




Other current assets

183



193


Total current assets

554,155



415,634


Property, plant and equipment




Oil and gas properties (successful efforts method)

8,912,189



7,838,955


Other property and equipment

1,151,772



868,746


Less: accumulated depreciation, depletion, amortization and impairment

(3,036,852)



(2,534,215)


Total property, plant and equipment, net

7,027,109



6,173,486


Derivative instruments

6,945



9


Long-term inventory

12,260



12,200


Other assets

25,673



21,600


Total assets

$

7,626,142



$

6,622,929


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities




Accounts payable

$

20,166



$

13,370


Revenues and production taxes payable

216,695



213,995


Accrued liabilities

331,651



244,279


Accrued interest payable

38,040



38,963


Derivative instruments

84



115,716


Advances from joint interest partners

5,140



4,916


Other current liabilities



40


Total current liabilities

611,776



631,279


Long-term debt

2,735,276



2,097,606


Deferred income taxes

300,055



305,921


Asset retirement obligations

52,384



48,511


Derivative instruments

20



19,851


Other liabilities

7,751



6,182


Total liabilities

3,707,262



3,109,350


Commitments and contingencies




Stockholders' equity




Common stock, $0.01 par value: 900,000,000 and 450,000,000 shares authorized at December 31, 2018 and December 31, 2017, respectively; 320,469,049 shares issued and 318,377,161 shares outstanding at December 31, 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: 2,091,888 and 1,331,548 shares at December 31, 2018 and December 31, 2017, respectively

(29,025)



(22,179)


Additional paid-in capital

3,077,755



2,677,217


Retained earnings

682,689



717,985


Oasis share of stockholders' equity

3,734,576



3,375,691


Non-controlling interests

184,304



137,888


Total stockholders' equity

3,918,880



3,513,579


Total liabilities and stockholders' equity

$

7,626,142



$

6,622,929


 

OASIS PETROLEUM INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



Three Months Ended December 31,


Year Ended December 31,


2018


2017


2018


2017


(In thousands, except per share data)

Revenues








Oil and gas revenues

$

371,385



$

330,290



$

1,590,024



$

1,034,634


Purchased oil and gas sales

183,050



61,547



551,808



133,542


Midstream revenues

30,589



23,813



119,040



72,752


Well services revenues

14,731



19,225



61,075



52,791


Total revenues

599,755



434,875



2,321,947



1,293,719


Operating expenses








Lease operating expenses

56,456



43,263



193,912



177,134


Midstream operating expenses

7,587



6,698



31,912



17,589


Well services operating expenses

8,848



13,370



41,200



37,228


Marketing, transportation and gathering expenses

32,634



17,722



107,193



55,740


Purchased oil and gas expenses

179,865



62,043



554,307



134,615


Production taxes

29,948



27,811



133,696



88,133


Depreciation, depletion and amortization

170,477



146,556



636,296



530,802


Exploration expenses

3,731



7,590



27,432



11,600


Impairment



866



384,228



6,887


General and administrative expenses

30,317



24,627



121,346



91,797


Total operating expenses

519,863



350,546



2,231,522



1,151,525


Gain (loss) on sale of properties

(10,236)



1,774



28,587



1,774


Operating income

69,656



86,103



119,012



143,968


Other income (expense)








Net gain (loss) on derivative instruments

268,402



(123,954)



28,457



(71,657)


Interest expense, net of capitalized interest

(41,469)



(36,289)



(159,085)



(146,837)


Loss on extinguishment of debt

(150)





(13,848)




Other income (expense)

(25)



(577)



121



(1,332)


Total other income (expense)

226,758



(160,820)



(144,355)



(219,826)


Income (loss) before income taxes

296,414



(74,717)



(25,343)



(75,858)


Income tax benefit (expense)

(69,548)



202,834



5,843



203,304


Net income (loss) including non-controlling interests

226,866



128,117



(19,500)



127,446


Less: Net income attributable to non-controlling interests

4,889



3,500



15,796



3,650


Net income (loss) attributable to Oasis

$

221,977



$

124,617



$

(35,296)



$

123,796


Earnings (loss) per share:








Basic

$

0.71



$

0.52



$

(0.11)



$

0.53


Diluted

0.70



0.52



(0.11)



0.52


Weighted average shares outstanding:








Basic

313,260



240,143



307,480



234,986


Diluted

315,098



241,960



307,480



237,875


 

null

OASIS PETROLEUM INC.

SELECTED FINANCIAL AND OPERATIONAL STATS



Three Months Ended December 31,


Year Ended December 31,


2018


2017


2018


2017

Operating results ($ in thousands):




Revenues