Oasis Petroleum Inc. Announces Quarter Ended June 30, 2017 Earnings

HOUSTON, Aug. 2, 2017 /PRNewswire/ -- Oasis Petroleum Inc. (NYSE: OAS) ("Oasis" or the "Company") today announced financial results for the quarter ended June 30, 2017 and provided an operational update.

Highlights include:

• Completed and placed on production 15 gross (10.8 net) operated wells in the Williston Basin in the second quarter of 2017, 60% of which were completed in June.
• Produced over 66,000 barrels of oil equivalent per day ("Boepd") in July 2017, up from 61,943 Boepd produced in the second quarter of 2017.
• Expect to complete 48 gross operated wells and produce between 67,500 and 69,500 Boepd in the second half of 2017 and continue to expect to hit exit rate of 72,000 Boepd.

"Oasis is well positioned to execute our plan for the second half of 2017, as we integrate our second internal frac spread and efficiently increase completion activity," said Taylor L. Reid, Oasis' Director, President, and Chief Operating Officer. "Our completion design innovation across our core acreage position, including Wild Basin, Indian Hills, and Alger, continues to deliver uplifts in production, and our wells remain highly economic in the current commodity price environment."

"The next six months represent the heart of our 2017 program and will lay the groundwork for everything to come in 2018 and beyond," added Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer. "The quality of the asset base we have built and the strength of the team we have assembled to develop it give me great conviction around the future success of Oasis. We are confident in our ability to execute and to manage our business prudently in what continues to be a constantly changing market."

Operational and Financial Update

Select operational and financial statistics are in the following table:

Second quarter production was adversely impacted by additional workover activity and a completion schedule weighted towards the end of the quarter.  Oasis invested incremental dollars on workovers during the latter part of the quarter, which coupled with late quarter completions, drove July production to over 66,000 Boepd.

G&A totaled $23.5 million in the second quarter of 2017, $21.9 million in the second quarter of 2016 and $23.8 million in the first quarter of 2017. Amortization of stock-based compensation, which is included in G&A, was $7.1 million, or $1.26 per Boe, in the second quarter of 2017 as compared to $6.2 million, or $1.39 per Boe, in the second quarter of 2016 and $6.7 million, or $1.18 per Boe, in the first quarter of 2017. G&A for the Company's E&P segment totaled $19.8 million in the second quarter of 2017, $17.7 million in the second quarter of 2016 and $20.1 million in the first quarter of 2017.

Interest expense was $36.8 million for the second quarter of 2017 compared to $35.0 million for the second quarter of 2016 and $36.3 million for the first quarter of 2017. Capitalized interest totaled $2.8 million for the second quarter of 2017, $4.8 million for the second quarter of 2016 and $2.8 million for the first quarter of 2017. Cash Interest totaled $35.5 million for the second quarter of 2017, $37.8 million for the second quarter of 2016 and $35.1 million for the first quarter of 2017. For a definition of Cash Interest and a reconciliation of interest expense to Cash Interest, see "Non-GAAP Financial Measures" below.

For the three months ended June 30, 2017, the Company recorded an income tax expense of $2.3 million, resulting in a 12.4% effective tax rate as a percentage of its pre-tax income for the quarter. The Company recorded an income tax expense of $16.0 million, resulting in a 40.2% effective tax rate as a percentage of its pre-tax income for the three months ended March 31, 2017.

For the second quarter of 2017, the Company reported net income of $16.6 million, or $0.07 per diluted share, as compared to a net loss of $89.9 million, or $0.51 per diluted share, for the second quarter of 2016. Excluding certain non-cash items and their tax effect, Adjusted Net Loss (non-GAAP) was $11.2 million, or $0.05 per diluted share, in the second quarter of 2017, compared to Adjusted Net Loss of $19.4 million, or $0.11 per diluted share, in the second quarter of 2016. For a definition of Adjusted Net Income (Loss) and a reconciliation of net income (loss) to Adjusted Net Income (Loss), see "Non-GAAP Financial Measures" below. Adjusted EBITDA for the second quarter of 2017 was $141.3 million, compared to Adjusted EBITDA of $132.2 million for the second quarter of 2016. For a definition of Adjusted EBITDA and a reconciliation of net income (loss) and net cash provided by (used in) operating activities to Adjusted EBITDA, see "Non-GAAP Financial Measures" below.

Capital Expenditures

The following table depicts the Company's total CapEx by category:

Hedging Activity

As of August 1, 2017, the Company had the following outstanding commodity derivative contracts, which settle monthly and are priced off of WTI for crude oil and NYMEX Henry Hub for natural gas:

The June 2017 crude oil derivative contracts settled at a net $3.3 million received in July 2017 and will be included in the Company's third quarter 2017 derivative settlements.

Conference Call Information

Investors, analysts and other interested parties are invited to listen to the conference call:

A recording of the conference call will be available beginning at 12:00 p.m. Central Time on the day of the call and will be available until Thursday, August 10, 2017 by dialing:

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 at www.oasispetroleum.com.

Non-GAAP Financial Measures

Cash Interest is a supplemental non-GAAP financial measure that is used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Cash Interest as interest expense plus capitalized interest less amortization and write-offs of deferred financing costs and debt discounts included in interest expense. Cash Interest is not a measure of interest expense as determined by United States generally accepted accounting principles, or GAAP.

The following table presents a reconciliation of the GAAP financial measure of interest expense to the non-GAAP financial measure of Cash Interest for the periods presented:

Adjusted EBITDA and Free Cash Flow are supplemental non-GAAP financial measures that are used by management and external users of the Company's 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, amortization, exploration expenses and other similar non-cash charges. The Company defines Free Cash Flow as Adjusted EBITDA less Cash Interest and CapEx, excluding capitalized interest. Adjusted EBITDA and Free Cash Flow are not measures of net income (loss) or cash flows as determined by GAAP.

The following table presents reconciliations of the GAAP financial measures of net income (loss) and net cash provided by (used in) operating activities to the non-GAAP financial measures of Adjusted EBITDA and Free Cash Flow for the periods presented:

The following tables present reconciliations of the GAAP financial measure of income (loss) before income taxes to the non-GAAP financial measure of Adjusted EBITDA for the Company's three reportable business segments on a gross basis for the periods presented:

Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share are supplemental non-GAAP financial measures that are used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted Net Income (Loss) as net income (loss) after adjusting first for (1) the impact of certain non-cash items, including non-cash changes in the fair value of derivative instruments, impairment, and other similar non-cash charges, or non-recurring items and then (2) the non-cash and non-recurring items' impact on taxes based on the Company's effective tax rate applicable to those adjusting items in the same period. Adjusted Net Income (Loss) is not a measure of net income (loss) as determined by GAAP. The Company defines Adjusted Diluted Earnings (Loss) Per Share as Adjusted Net Income (Loss) divided by diluted weighted average shares outstanding.

The following table presents reconciliations of the GAAP financial measure of net income (loss) to the non-GAAP financial measure of Adjusted Net Income (Loss) and the GAAP financial measure of diluted earnings (loss) per share to the non-GAAP financial measure of Adjusted Diluted Earnings (Loss) Per Share for the periods presented: