News Releases

HOUSTON, May 7, 2012 /PRNewswire/ -- Oasis Petroleum Inc. (NYSE: OAS) ("Oasis" or the "Company") today announced financial results for the quarter ended March 31, 2012. 

Highlights for the three months ended March 31, 2012 include:

• Grew average daily production to 17,633 barrels of oil equivalent per day ("Boepd"), a 118% increase over the first quarter of 2011.  Daily production increased by 16% compared to the fourth quarter of 2011 and exceeded guidance range of 15,000 to 16,500 Boepd.
• Increased revenue to $138.6 million in the first quarter of 2012, up from $58.7 million in the first quarter of 2011 and $116.9 million in the fourth quarter of 2011, for an increase of 136% and 19%, respectively.
• Grew Adjusted EBITDA to $101.1 million, an increase of $60.0 million over the first quarter of 2011 and a sequential increase of$15.3 million over the fourth quarter of 2011.  For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income (loss) and net cash provided by operating activities, see "Non-GAAP Financial Measure" below.
• Increased net income to $16.4 million in the first quarter of 2012, up from a net loss of $6.8 million in the first quarter of 2011 and a net loss of $13.4 million in the fourth quarter of 2011.

"Our team's ability to bring forward incremental activity and increase working interests above plan resulted in production 7% over the top end of our guidance range for the first quarter of 2012.  We believe our production will continue to grow in the second quarter of 2012, ranging between 18,000 and 19,500 Boepd," said Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer. "We exited the quarter with momentum, as we continue to improve rig efficiency and frac times.  We drove lease operating expenses down to $6.12per Boe as our infrastructure development efforts deliver on expected cost reductions.  Lastly, price differentials for Bakken crude were volatile again in the first quarter of 2012, but Oasis Petroleum Marketing did a great job moving oil and transitioning our takeaway to a mix of about 50% rail and 50% pipeline.  Differentials have also improved dramatically from the widest levels experienced in February 2012." 

The Company's average price per barrel of oil, without realized derivatives, was $88.10 in the first quarter of 2012, compared to $82.33in the first quarter of 2011 and $85.46 in the fourth quarter of 2011.  The average price differential compared to West Texas Intermediate ("WTI") crude oil index prices was 14% in the first quarter of 2012, compared to 13% in the first quarter of 2011 and 10% in the fourth quarter of 2011.  The Company's differentials increased in the first quarter of 2012 due to lower quoted prices for Bakken crude in markets such as Clearbrook, Minnesota and Guernsey, Wyoming as a result of increased production from the Williston Basin and from Canada and temporary refinery constraints.

Total revenue for the first quarter of 2012 was $138.6 million compared to $58.7 million for the first quarter of 2011, an increase of 136%.  Sequential quarter-over-quarter revenue growth was $21.7 million, or 19%. This increase is primarily due to a 16% increase in production, coupled with sales of $1.5 million from bulk oil purchases and $0.7 million of well service revenues in the first quarter of 2012.    The Company incurred $1.4 million of costs associated with the bulk oil purchase, which is included in Marketing, transportation and gathering expenses.  Excluding the bulk oil purchases, Marketing, transportation and gathering on a per Boe basis would have been$0.74 in the first quarter of 2012.

Lease operating expenses ("LOE") per Boe decreased $1.61, or 21%, to $6.12 per Boe in the first quarter of 2012 compared to the first quarter of 2011, and decreased $2.10 per Boe in the first quarter of 2012 compared to the fourth quarter of 2011.  LOE trended down due to an increase in produced water volumes flowing through the Company's salt water disposal systems. 

Production taxes as a percent of revenue were 9.6% in the first quarter of 2012, 10.4% in the first quarter of 2011, and 10.1% in the fourth quarter of 2011. The Company's effective production tax rate decreased in the first quarter of 2012 primarily as a result of certain new wells in Montana subject to lower incentivized production tax rates.

Depreciation, depletion and amortization ("DD&A") was $24.23 per Boe in the first quarter of 2012, $18.97 per Boe in the first quarter of 2011, and $19.40 per Boe in the fourth quarter of 2011. The sequential quarter increase in DD&A of $4.83 per Boe was a result of the increase in well costs in 2011 outpacing the increase in associated reserves, due to increases in service costs in the Williston Basin throughout the year, and the addition of infrastructure assets, primarily Company-owned salt water disposal assets.

General and administrative expenses ("G&A") totaled $12.2 million in the first quarter of 2012, $6.0 million in the first quarter of 2011, and $9.6 million in the fourth quarter of 2011.  The increase in G&A expenses from the fourth quarter of 2011 to the first quarter of 2012 was primarily due to higher compensation costs from organizational growth, including $1.6 million related to Oasis Well Services ("OWS").  G&A expenses were $7.60 per Boe in the first quarter of 2012 ($6.59 per Boe for exploration and production ("E&P") only),$8.17 per Boe in the first quarter of 2011, and $6.82 per Boe in the fourth quarter of 2011.  Additionally, the Company recorded approximately $1.6 million, or $0.99 per Boe, for the amortization of restricted stock-based compensation, which is included in G&A expenses for the first quarter of 2012, as compared to $0.5 million, or $0.72 per Boe, in the first quarter of 2011 and $1.1 million, or$0.76 per Boe, in the fourth quarter of 2011.

As a result of the Company's derivative activities, it incurred net cash settlement losses of $1.3 million and $0.5 million in the first quarters of 2012 and 2011, respectively. As a result of forward oil price changes, the Company recognized non-cash unrealized mark-to-market net derivative losses of $17.3 million and $31.2 million for the first quarters of 2012 and 2011, respectively.

The Company recorded non-cash charges for the impairment of oil and natural gas properties of $0.4 million in the first quarter of 2012 related to unproved property leases that expired during the period, as compared to $1.4 million in the first quarter of 2011 and $0.3 million in the fourth quarter of 2011.

Interest expense increased $8.7 million to $13.9 million for the first quarter of 2012 compared to the first quarter of 2011 and increased$3.0 million compared to the fourth quarter of 2011. This sequential quarter increase was the result of additional interest expense resulting from the Company's issuance of 6.5% senior unsecured notes in November of 2011. There were no borrowings under the Company's revolving credit facility during the three months ended March 31, 2012.

Income tax expense was $9.8 million for the three months ended March 31, 2012, resulting in an effective tax rate of 37.4%, which is consistent with the Company's effective tax rate in the fourth quarter of 2011. The Company's income tax benefit for the three months ended March 31, 2011 was recorded at 37.8% of pre-tax net loss.  The Company's effective tax rate is expected to continue to closely approximate the statutory rate applicable to the U.S. and the blended state rate of the states in which the Company conducts business.

Adjusted EBITDA for the first quarter of 2012 was $101.1 million, an increase of $60.0 million, or 146%, over the first quarter of 2011 of $41.1 million, and an 18% increase over the fourth quarter of 2011 of $85.9 million.

The Company reported net income of $16.4 million, or $0.18 per weighted average diluted share, for the first quarter of 2012 as compared to a net loss of $6.8 million, or $0.07 per weighted average diluted share, for the first quarter of 2011 and a net loss of $13.4 million, or $0.15 per weighted average diluted share, for the fourth quarter of 2011.

Capital Expenditures

Oasis' E&P capital expenditures were $267.0 million for the first quarter of 2012.  The following table depicts the Company's capital expenditures by category: 

Liquidity

On March 31, 2012, Oasis had total cash and cash equivalents of $287.3 million and had no outstanding indebtedness under its $350 million revolving credit facility. On May 1, 2012, Oasis had total cash and cash equivalents of $322 million and had no indebtedness under its $500 million revolving credit facility, which was increased by $150 million on April 3, 2012.

Hedging Activity

As of May 7, 2012, the Company had the following outstanding commodity derivative contracts, all of which are priced off of NYMEX WTI and settle monthly:

 

Conference Call Information

The Company will host a conference call on Tuesday, May 8, 2012 at 10:00 a.m. Central Time to discuss its first quarter 2012 financial and operational results.  Investors, analysts and other interested parties are invited to listen to the conference call by dialing 877-621-0256 (U.S.) or 706-634-0151 (International); the Conference ID is 75907981 or via the Company's website atwww.oasispetroleum.com.  A recording of the conference call will be available by dialing 855-859-2056 (U.S.) or 404-537-3406 (International), using the Conference ID 75907981 beginning at 1:00 p.m. Central Time on the day of the call, and available untilTuesday, May 15, 2012.  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, derivative instruments, 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, but are not limited to, 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 unconventional oil and natural gas resources, primarily operating in the Williston Basin.   For more information, please visit the Company's website atwww.oasispetroleum.com. 

Contact: 
Oasis Petroleum Inc. 
Richard Robuck, (281) 404-9600 
Director � Finance

 

 

 

 

 

 

Non-GAAP Financial Measure

Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation, depletion and amortization, property impairments, exploration expenses, unrealized derivative gains and losses and non-cash stock-based compensation expense. Adjusted EBITDA is not a measure of net income or cash flows as determined by United States generally accepted accounting principles, or GAAP.

The following tables present a reconciliation of the non-GAAP financial measure of Adjusted EBITDA to the GAAP financial measures of net income (loss) and net cash provided by operating activities, respectively. 

SOURCE Oasis Petroleum Inc.