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Oasis Petroleum (OAS) Posts Q1 Loss on High Cost & Low Prices

Zacks Equity Research

Oasis Petroleum Inc. OAS reported first-quarter loss per share — excluding one-time items — of 2 cents against the Zacks Consensus Estimate of a profit of 4 cents. The reported figure also compared unfavorably with the year-ago income of 10 cents. The weak results can be attributed to lower realized oil prices and high costs.

The company’s total operating revenues in the first quarter amounted to $575.7 million, increasing from $473.8 million a year ago on the back of higher production. The top line also surpassed the Zacks Consensus Estimate of $459 million.

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

Production & Realized Prices

Production of oil and natural gas averaged 91.7 thousand oil-equivalent barrels per day (MBOE/d) (26% oil), up 19.4% from a year ago and 3.6% above the midpoint of the company’s guidance.

Oasis Petroleum’s production of oil was 66 thousand barrels per day and natural gas output came in at 154,005 thousand cubic feet per day.

The average realized crude oil price during the first quarter was $53.52 per barrel, representing a decrease of 13.3% from the year-ago realization of $61.75. Moreover, the average realized natural gas price during the quarter under review was $3.66 per thousand cubic feet, down11.1% from the year-ago period.

Total Expenses

Total operating expenses in the quarter surged 45% y/y to $522.4 million. Higher depreciation, impairment, marketing and purchase costs drove the total expenses. Depreciation costs totaled $189.8 million versus $149 million in the year-ago period.

The company’s lease operating expenses increased 9.3% y/y to $7.08 per barrel of oil equivalent (Boe). The company anticipates lease operating expenses per Boe in the band of $7-$7.75 for the remainder of the year.

Financial Position

Capital spending (before acquisitions) totaled $226.8 million in the quarter. Oasis Petroleum generated $174.9 million in net cash flow from operations, lower than the year-ago period’s $228.4 million.

As of Mar 31, the Bakken-focused operator — with a market capitalization of almost $2 billion — had $15.4 million in cash and cash equivalents. The company had a long-term debt of $2.8 billion, representing a debt-to-capitalization ratio of 42.2%.

Guidance

Oasis Petroleum expects 2019 output levels in the range of 86-91 MBOE/d. The company expects capital spending within $540-$560 million from the upstream segment.Midstream spending is expected within $195-$219 million versus prior forecast of $150-$170 million.

Zacks Rank & Key Picks

Oasis Petroleum currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, investors interested in the energy space can consider some better-ranked players such as:

Devon Energy Corporation DVN: Devon’s 2019 earnings are expected to grow 66% on a year-over-year basis.

Murphy Oil Corporation MUR: Murphy surpassed earnings estimates in three out of the trailing four quarters, with average positive surprise of 17.33%. The company’s 2019 earnings are expected to grow 26.2%.

Bonanza Creek Energy, Inc. BCEI: The company delivered average positive earnings surprise of 14.53% in the trailing four quarters. Bonanza Creek’s 2019 revenues are expected to grow 23.1% y/y.

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