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Oasis Petroleum (OAS) Reports Wider-Than-Expected Q3 Loss

Zacks Equity Research

Oasis Petroleum Inc. OAS incurred third-quarter 2019 adjusted loss per share of 5 cents, wider than the Zacks Consensus Estimate of a loss of a cent. The bottom line also deteriorated from the year-ago income of 8 cents a share. The loss can be attributed to weaker year-over-year commodity price realizations.

The company’s total operating revenues of $482.7 million in the third quarter marginally missing the Zacks Consensus Estimate of $487 million. Moreover, the top line declined from the year-ago figure of $674.7 million.

Production & Price Realizations

Production of oil and natural gas was up 3.8% from the year-ago level to 88.7 thousand oil-equivalent barrels per day (MBOE/d) comprising 70.8% oil. Oasis Petroleum’s production of oil and natural gas was 62.8 thousand barrels per day (down 4.6% year over year) and 155,391 thousand cubic feet per day (up 32.6%), respectively.

The average realized crude oil price during the third quarter was $55.12 per barrel, reflecting a 19.3% decrease from the prior-year realization of $68.33. Moreover, the average realized natural gas price was $1.81 per thousand cubic feet, down 51.3% from the year-earlier period.

Total Expenses

Total operating expenses in the quarter declined 11.1% year over year to $473.5 million, primarily owing to lower commodity purchase costs. Notably, purchased oil and gas expenses were $78.7 million compared with $174.3 million in the corresponding quarter of last year.

The company’s lease operating expenses decreased to $6.16 per barrel of oil equivalent (Boe) from the year-ago figure of $6.18 per Boe.

Financial Position

Capital spending (before acquisitions) totaled $187.2 million in the quarter. Oasis Petroleum recorded $250.9 million in net cash flow from operations, higher than the year-ago period’s $229.9 million.
The company posted a positive free cash flow of 16.9 million in the quarter under review.

As of Sep 30, the Bakken-focused operator with a market capitalization of almost $1 billion had $19.4 million in cash and cash equivalents. The company had a long-term debt of $2.8 billion, representing a debt-to-capitalization ratio of 41.7%.

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

Guidance

Oasis Petroleum expects full-year capital spending from the midstream segment within $212-$222 million, lower than the previous guided range of $219-$230 million. The company’s E&P and other capex view for 2019 is intact within $620-$640 million. It further projects its annual G&A outlook in the band of $125-$131 million.

Fourth-quarter output is anticipated within 83.3-85.3 MBOE/d (70.5% oil).

Zacks Rank & Key Picks

Oasis Petroleum currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space are Murphy U.S.A. Inc. MUSA, NuStar Energy L.P. NS and World Fuel Services Corporation INT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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