Oasis Petroleum (OAS) Reports Narrower-Than-Expected Q4 Loss

Oasis Petroleum Inc. (NASDAQ:OAS) incurred fourth-quarter 2019 adjusted loss per share of 2 cents, narrower than the Zacks Consensus Estimate of a loss of 6 cents. This outperformance can be attributed to higher realized oil prices and reduced year-over-year operating expenses. Meanwhile, the bottom line was essentially flat year over year.

The company’s total operating revenues of $483.9 million surpassed the Zacks Consensus Estimate of $421 million. However, the top line fell from the year-ago figure of $599.7 million owing to lower production.

Production & Price Realizations

Total production (comprising 69% oil) was marginally down from the year-ago level to 87.4 thousand oil-equivalent barrels per day (MBOE/d). While oil volume came in at 60.1 thousand barrels per day (down 10.6% year over year), natural gas totaled 163,762 thousand cubic feet per day (up 30%).

The average realized crude oil price during the fourth quarter was $53.66 per barrel, reflecting a 3.17% increase from the prior-year realization of $52.01. However, the average realized natural gas price was $2.77 per thousand cubic feet, down 35.1% from the year-earlier period.

Total Expenses

Total operating expenses in the quarter declined 11.6% year over year to $459.4 million, primarily owing to lower commodity purchase costs. Notably, purchased oil and gas expenses were $70.9 million compared with $179 million in the corresponding quarter of last year.

The company’s lease operating expenses increased to $7.26 per barrel of oil equivalent (Boe) from the year-ago figure of $6.95 per Boe.

Financial Position

Capital spending (before acquisitions) totaled $134.5 million in the quarter. Oasis Petroleum recorded $252.9 million in net cash flow from operations, higher than the year-ago period’s $234.4 million.

The company posted a positive free cash flow of $75.3 million in the quarter under review.

As of Dec 31, this Bakken-focused operator with a market capitalization of almost $1 billion had $20 million in cash and cash equivalents. The company had long-term debt worth $2.7 billion, representing a debt-to-capitalization ratio of 41.4%.

Guidance

Oasis Petroleum expects 2020 total capital spending within $685-$715 million, indicating a fall from the previous year’s reported figure of $843.4 million. The company’s E&P and other capex view for the full year is expected within $575-$595 million. It further projects its midstream segment’s capex outlook in the band of $110-$120 million.

Full-year output is anticipated within 82.5-86.5 MBOE/d.

Zacks Rank & Key Picks

Oasis Petroleum has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Contango Oil & Gas Company (NYSE:MCF) , Apache Corporation (NYSE:APA) and Earthstone Energy, Inc. (NYSE:ESTE) , 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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