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Oasis Petroleum Inc. Reports Third Quarter 2021 Results, Reiterates 2021 Outlook

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Cision

HOUSTON, Nov. 3, 2021 /PRNewswire/ -- Oasis Petroleum Inc. (NASDAQ: OAS) ("Oasis" or the "Company") today announced financial and operating results for the third quarter of 2021. Third quarter results are consistent with the update released on October 26, 2021.

3Q21 Operational and Financial Highlights:

  • Produced 51.8 MBoepd in 3Q21 with oil volumes of 31.9 MBopd;

  • E&P CapEx was $42MM, greater than 20% below guidance. Oasis reduced its FY21 CapEx guidance on October 26th by 9%, which followed the 7% reduction in August;

  • Net cash provided by operating activities was $294MM and net income was $83MM;

  • Adjusted EBITDA to Oasis(1) was $116MM and E&P Free Cash Flow(1) was $65MM;

  • As of 9/30/2021, pro forma for the Williston Basin Acquisition, Oasis had approximately $92MM of net debt, including approximately $308MM of cash, $400MM of long-term debt and no amounts drawn on its $900MM borrowing base ($450MM of elected commitments);

  • Oasis expects to receive an additional $160MM of cash upon closing of the previously announced merger between Oasis Midstream Partners (NASDAQ: OMP) and Crestwood Equity Partners (NYSE: CEQP);

  • Oasis increased its fixed dividend 33% to $0.50/share ($2.00/share annualized) on October 26, 2021;

  • Continued focus on ESG and sustainability with Oasis publishing its inaugural sustainability report in 3Q21 as well as an ESG-focused investor presentation. Both can be found on the Company's website at www.oasispetroleum.com;

  • OMP announced a 3Q21 distribution of $0.56/unit on October 26, 2021;

  • Completed acquisition of 95,000 net acres in the Williston Basin from Diamondback Energy on October 21, 2021 (the "Williston Basin Acquisition") with a final payment of approximately $511MM. The aggregate purchase price of $745MM was adjusted downward for a $75MM deposit paid in 2Q21 as well as free cash flow generated from the effective date of April 1, 2021 to the closing date of October 21, 2021.

(1) Non-GAAP financial measure. See "Non-GAAP Financial Measures" below for a reconciliation to the most directly comparable financial measures under United States generally accepted accounting principles ("GAAP").

The following table presents select E&P operational and financial data for the third quarter of 2021. E&P metrics are consistent with disclosures in the Company's investor presentation, which can be found on the Company's website (www.oasispetroleum.com), and includes further reconciliation to consolidated numbers.

E&P Metric


3Q21 Actual

Production (MBoe/d)


51.8

Production (Mbbl/d)


31.9

Differential to NYMEX WTI ($ per Bbl)


$0.43

Natural gas realization ($ over NYMEX)(1)


$1.48

E&P LOE ($ per Boe)


$9.42

E&P GPT ($ per Boe)(1)


$3.95

E&P Cash G&A ($MM)(1)(2)


$10.5

Production taxes (as a % of oil and gas revenues)


6.5%

E&P & Other CapEx(3)


$42.0

Cash Interest ($MM)(1)


$6.9

Cash taxes ($MM)


$—

___________________

(1)

Non-GAAP financial measure. See "Non-GAAP Financial Measures" below for a reconciliation to the most directly comparable financial measures under GAAP.

(2)

E&P Cash G&A would have been $8.2MM after adjusting for non-recurring items related to the Williston Basin Acquisition, the Crestwood transaction, and restructuring consulting expenses.

(3)

Includes administrative capital and excludes capitalized interest.

Select Operational and Financial Data

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


3Q21


2Q21


3Q20

Production data:






Crude oil (Bopd)

31,896



34,668



43,748


Natural gas (Mcfpd)

119,448



117,617



130,981


Total production (Boepd)

51,804



54,271



65,578


Percent crude oil

61.6

%


63.9

%


66.7

%

Average sales prices:






Crude oil, without derivative settlements ($ per Bbl)

$

70.12



$

65.52



$

38.52


Differential to NYMEX WTI ($ per Bbl)

0.43



0.61



2.44


Crude oil, with derivative settlements ($ per Bbl)

43.81



47.77



49.16


Crude oil derivative settlements - net cash receipts (payments) ($MM)

(77.2)



(56.0)



42.8


Natural gas, without derivative settlements ($ per Mcf)(1)

6.91



4.53



2.04


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

6.52



4.53



2.04


Natural gas derivative settlements - net cash payments ($MM)

(4.3)






Selected financial data ($MM):






Revenues:






Crude oil revenues

$

205.7



$

206.7



$

155.1


Natural gas revenues

75.9



48.5



24.5


Purchased oil and gas sales

53.6



81.9



44.2


Midstream revenues

66.7



55.8



47.0


Other services revenues

0.1



0.2



0.3


Total revenues

$

402.0



$

393.1



$

271.1


Net cash provided by operating activities

$

294.4



$

160.0



$

95.0


Non-GAAP financial measures:






Adjusted EBITDA

$

155.4



$

142.3



$

186.7


Adjusted EBITDA attributable to Oasis

116.2



107.0



162.7


E&P Free Cash Flow

65.4



54.8



126.3


Select operating expenses:






Lease operating expenses

$

29.3



$

34.3



$

29.4


Midstream expenses

32.4



23.5



11.1


Other services expenses





0.3


GPT, including non-cash valuation charges

16.4



20.5



20.3


Non-cash valuation charges

(0.5)



0.7



(0.1)


Purchased oil and gas expenses

53.9



85.5



47.5


Production taxes

18.4



16.2



13.0


Depreciation, depletion and amortization

33.6



39.0



36.0


Impairment





2.6


Total select operating expenses

$

184.0



$

219.0



$

160.2


___________________

(1)

Prices include the value for natural gas and natural gas liquids.

G&A totaled $19.5MM in 3Q21, $49.3MM in 3Q20, and $20.2MM in 2Q21. Amortization of equity-based compensation, which is included in G&A, was $4.3MM, or $0.90 per barrel of oil equivalent ("Boe"), in 3Q21 as compared to $4.8MM, or $0.80 per Boe, in 3Q20 and $4.7MM, or $0.95 per Boe, in 2Q21. E&P Cash G&A (non-GAAP) totaled $10.5MM in 3Q21, $40.4MM in 3Q20, and $10.7MM in 2Q21. E&P Cash G&A was $2.21 per Boe in 3Q21, $6.70 per Boe in 3Q20, and $2.17 per Boe in 2Q21. For a definition of E&P Cash G&A and a reconciliation of G&A to E&P Cash G&A, see "Non-GAAP Financial Measures" below. 3Q21 E&P Cash G&A excludes non-recurring items related to the Williston Basin Acquisition, the Crestwood transaction, and restructuring consulting expenses. Adjusting for these items, E&P Cash G&A would have been $8.2MM. 4Q21 Guidance excludes expenses related to the Crestwood transaction. E&P Cash G&A also excludes certain non-cash items, including non-cash equity-based compensation expenses included in the E&P segment.

Interest expense was $18.2MM in 3Q21 as compared to $37.4MM in 3Q20 and $22.6MM in 2Q21. Capitalized interest totaled $0.6MM in 3Q21, $1.6MM in 3Q20 and $0.5MM in 2Q21. Cash Interest (non-GAAP) totaled $17.5MM in 3Q21, $34.7MM in 3Q20 and $13.1MM in 2Q21. For a definition of Cash Interest and a reconciliation of interest expense to Cash Interest, see "Non-GAAP Financial Measures" below.

The Company did not record a provision for income tax in 3Q21, resulting in a 0.0% effective tax rate for the quarter. In 2Q21, the Company recorded an income tax expense of $3.7MM, resulting in a 4.3% effective tax rate as a percentage of its pre-tax income for the quarter.

In 3Q21, the Company reported net income of $72.0MM, or $3.46 per diluted share, as compared to a net loss of $55.7MM, or $(0.17) per diluted share, in 3Q20. Excluding certain non-cash items and their tax effect, Adjusted Net Income Attributable to Oasis (non-GAAP) was $65.7MM, or $3.16 per diluted share, in 3Q21, as compared to Adjusted Net Income Attributable to Oasis of $70.7MM, or $0.22 per diluted share, in 3Q20. Adjusted EBITDA (non-GAAP) in 3Q21 was $155.4MM, as compared to Adjusted EBITDA of $186.7MM in 3Q20. For definitions of Adjusted Net Income Attributable to Oasis and Adjusted EBITDA and reconciliations to the most directly comparable financial measures under GAAP, see "Non-GAAP Financial Measures" below.

Capital Expenditures

The following table presents the Company's total capital expenditures ("CapEx") by category for the period presented:


1Q21


2Q21


3Q21


YTD

CapEx ($MM):








E&P

$

28.6



$

52.4



$

41.9



$

122.9


Other(1)

0.4



0.6



0.7



1.7


Total CapEx before midstream

29.0



53.0



42.6



124.6


Midstream(2)

0.3



13.4



16.1



29.8


Total CapEx

$

29.3



$

66.4



$

58.7



$

154.4


___________________

(1)

Includes capitalized interest of $0.6MM and $1.5MM for the three and nine months ended September 30, 2021, respectively.

(2)

Midstream CapEx attributable to OMP was $16.1MM and $29.5MM for the three and nine months ended September 30, 2021, respectively.

Balance Sheet and Liquidity

On October 21, 2021, the Company entered into the fifth amendment to its revolving credit agreement (the "Fifth Amendment"). In connection with the Fifth Amendment, the semi-annual redetermination of the Company's borrowing base was completed which, effective October 21, 2021, increased the borrowing base to $900.0MM and reaffirmed the aggregate lender commitments of $450.0MM.

The following table presents the Company's key balance sheet statistics and liquidity as of September 30, 2021, and does not include impacts from the closing of the Williston Basin Acquisition or the announced OMP and Crestwood transaction. Debt is calculated in accordance with respective credit facility definitions. The debt held at Oasis and OMP is not cross-collateralized and guarantors under the Oasis credit facility are not responsible for OMP debt.

3Q21 ($MM)

OAS


OMP


Consolidated

Revolving credit facility(1)

$

400.0



$

450.0



$

850.0


Elected commitments

450.0



450.0



900.0


Revolver borrowings



210.0



210.0


Senior notes

400.0



450.0



850.0


Total debt

400.0



660.0



1,060.0


Cash (including non-current restricted cash)

818.9



29.7



848.6


Letters of credit

1.3



5.5



6.8


Liquidity

$

1,217.6



$

264.2



$

1,481.8


___________________

(1)

The borrowing base under the Oasis credit facility increased to $900.0MM, effective October 21, 2021.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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, as well as the impact of the novel coronavirus 2019 ("COVID-19") pandemic on the Company's operations. 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, risks that the proposed merger of OMP and Crestwood may not be consummated or the benefits contemplated therefrom may not be realized, the ability to obtain requisite regulatory and unitholder approval and the satisfaction of the other conditions to the consummation of the proposed transaction, the ability of Crestwood to successfully integrate OMP's operations and employees and realize anticipated synergies and cost savings, the potential impact of the announcement or consummation of the proposed transaction on relationships, including with employees, suppliers, customers, competitors and credit rating agencies, changes in crude oil and natural gas prices, developments in the global economy, particularly the public health crisis related to the COVID-19 pandemic and the adverse impact thereof on demand for crude oil and natural gas, the outcome of government policies and actions, including actions taken to address the COVID-19 pandemic and to maintain the functioning of national and global economies and markets, the impact of Company actions to protect the health and safety of employees, vendors, customers, and communities, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, the ability to realize the anticipated benefits from the Williston Basin acquisition and Permian Basin divestitures, 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 U.S. Securities and Exchange Commission. Additionally, the unprecedented nature of the COVID-19 pandemic and the related decline of the oil and gas exploration and production industry may make it particularly difficult to identify risks or predict the degree to which identified risks will impact the Company's business and financial condition. Because considerable uncertainty exists with respect to the future pace and extent of a global economic recovery from the effects of the COVID-19 pandemic, the Company cannot predict whether or when crude oil production and economic activities will return to normalized levels.

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 Petroleum Inc. is an independent exploration and production company with quality and sustainable long-lived assets in the Williston Basin. The Company is uniquely positioned with a best-in-class balance sheet and is focused on rigorous capital discipline and generating free cash flow by operating efficiently, safely and responsibly to develop its unconventional onshore oil-rich resources in the continental United States. For more information, please visit the Company's website at www.oasispetroleum.com.

Oasis Petroleum Inc.

Condensed Consolidated Balance Sheets (Unaudited)



Successor


September 30, 2021


December 31, 2020






(In thousands, except share data)

ASSETS




Current assets




Cash and cash equivalents

$

448,608



$

15,856


Restricted cash



4,370


Accounts receivable, net

269,740



206,539


Inventory

28,309



33,929


Prepaid expenses

4,274



9,729


Derivative instruments



467


Other current assets

2,326



727


Total current assets

753,257



271,617


Property, plant and equipment




Oil and gas properties (successful efforts method)

733,585



810,328


Other property and equipment

962,174



935,950


Less: accumulated depreciation, depletion and amortization

(112,915)



(17,491)


Total property, plant and equipment, net

1,582,844



1,728,787


Restricted cash – non–current

400,000




Assets held for sale, net



5,500


Derivative instruments

39,717




Long-term inventory

17,510



14,522


Operating right-of-use assets

5,115



6,083


Intangible assets

41,624



43,667


Goodwill

70,534



70,534


Other assets

88,911



18,327


Total assets

$

2,999,512



$

2,159,037






LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities




Accounts payable

$

5,522



$

3,242


Revenues and production taxes payable

232,217



146,497


Accrued liabilities

129,000



126,284


Accrued interest payable

26,361



980


Derivative instruments

266,337



56,944


Advances from joint interest partners

1,874



2,723


Current operating lease liabilities

1,914



2,607


Other current liabilities

1,859



1,954


Total current liabilities

665,084



341,231


Long-term debt

1,041,895



710,000


Deferred income taxes

984



984


Asset retirement obligations

45,974



46,363


Derivative instruments

142,516



37,614


Operating lease liabilities

1,706



2,362


Other liabilities

8,022



7,744


Total liabilities

1,906,181



1,146,298


Commitments and contingencies




Stockholders' equity




Common stock, $0.01 par value: 60,000,000 shares authorized; 20,096,011 shares issued and
19,905,228 shares outstanding at September 30, 2021 and 20,093,017 shares issued and
20,093,017 shares outstanding at December 31, 2020

200



200


Treasury stock, at cost: 190,783 shares at September 30, 2021 and no shares at December 31, 2020

(14,560)




Additional paid-in capital

866,992



965,654


Retained earnings (accumulated deficit)

51,810...



(49,912)


Oasis share of stockholders' equity

904,442



915,942


Non-controlling interests

188,889



96,797


Total stockholders' equity

1,093,331



1,012,739


Total liabilities and stockholders' equity

$

2,999,512



$

2,159,037


Oasis Petroleum Inc.

Condensed Consolidated Statements of Operatio...