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06.08.2019 22:55:00
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Oasis Petroleum Inc. Announces Quarter Ended June 30, 2019 Earnings
HOUSTON, Aug. 6, 2019 /PRNewswire/ -- Oasis Petroleum Inc. (NYSE: OAS) ("Oasis" or the "Company") today announced financial and operating results for the second quarter of 2019.
Recent Highlights:
- Delivered net cash provided by operating activities of $214.0 million and Adjusted EBITDA(1) of $249.6 million for the second quarter of 2019.
- Produced 84.5 MBoepd, an increase of 6.3% from the second quarter of 2018.
- Temporary downtime in OMP's Wild Basin natural gas processing complex caused an estimated 3.0 MBoepd and $6 million in lost production and Adjusted EBITDA(1), respectively. July production averaged approximately 89 MBoepd.
- Achieved positive free cash flow year to date and continues to expect to be free cash flow positive in 2019 for the E&P business(2).
- Delaware Basin well costs are targeted at $9.6 million per ~10,000 foot lateral well.
- LOE totaled $7.32 per Boe in the second quarter of 2019, within the Company's guidance of $7.00 to $7.75 per Boe.
- Both total Company G&A expense and E&P Cash G&A(1) expense decreased 10% from the first quarter of 2019.
- Improved crude oil differentials to $0.96 off of NYMEX WTI, a significant improvement from the fourth quarter of 2018.
(1) Non-GAAP measure. See "Non-GAAP Financial Measures" below for definitions of all non-GAAP measures included herein and reconciliations to the most directly comparable measures under United States generally accepted accounting principles ("GAAP"). |
(2) For more detail on E&P free cash flow, see pages six and seven of the Company's investor presentation on the Company's website at www.oasispetroleum.com. |
"Oasis continues to execute its plan of harvesting Williston free cash flow to fund growth in the Delaware," said Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer. "Our operational expertise and deep inventory in the Williston support full field development and we are expanding outside of Wild Basin with impressive results. In the Delaware, our learnings are advancing faster than expected, resulting in faster cycle times, lowered costs, and strong well performance. We are seeing strong performance from not only the Wolfcamp A wells, but also from recent Wolfcamp B and C wells. With assets focused in two of the best oil basins in the US, a team with a proven operating track record, and strong realizations in both basins, we are structured to succeed through volatile commodity markets."
Financial and Operational Update and Outlook
- Production averaged 78.3 MBoepd (Williston Basin) and 6.2 MBoepd (Delaware Basin). Oasis expects production in the third quarter of 2019 to range between 87 and 90 MBoepd (approximately 71.5% oil).
- Oasis updated its differential guidance to between $1.50 and $3.00 per barrel in 2019 as compared to between $1.50 and $3.50 per barrel previously.
- CapEx of $295 million consisted of $206 million of E&P and other, $83 million of consolidated midstream and $6 million of acquisitions. The Company now expects 2019 E&P and other CapEx to be approximately $620 to $640 million. The increase primarily reflects 1) an adjustment to deflation expectations related to a lower budgeted crude oil price, 2) improved cycle times in the Delaware Basin resulting in increased spuds with the two rig program, and 3) increased non-operated spending and a number of operating wells with higher working interests.
Metric | 2Q 2019 Actual | Prior Full Year Guidance | Updated Full Year Guidance | |||
Production (MBoepd) | 84.5 | 86.0 - 91.0 | 86.8 - 88.5 | |||
Differential to NYMEX WTI ($ per Bbl) | $0.96 | $1.50 - $3.50 | $1.50 - $3.00 | |||
Natural gas realized price (as a % of Henry Hub) | 89% | N/A | 85% | |||
Lease operating expenses ($ per Boe) | $7.32 | $7.00 - $7.75 | $7.00 - $7.75 | |||
Marketing, transportation and gathering expenses ($ per Boe)(1) | $3.69 | $3.50 - $4.50 | $3.50 - $4.50 | |||
E&P Cash G&A ($ in millions)(2) | $17.2 | $77 - $81 | $77 - $81 | |||
Production taxes (as a % of oil and gas revenues) | 7.9% | 8.1% - 8.4% | 8.1% - 8.4% | |||
CapEx ($ in millions) | ||||||
E&P & Other CapEx(3) | $206.4 | $540 - $560 | $620 - $640 | |||
Midstream CapEx | $82.6 | $195 - $219 | $219 - $230 | |||
Midstream CapEx attributable to Oasis (included in Midstream CapEx above) | $70.9 | $11 - $13 | $15 - $16 |
___________________ | |
(1) | Marketing, transportation and gathering expenses ("MT&G") exclude the effect of non-cash valuation charges on pipeline imbalances. |
(2) | E&P Cash G&A represents general and administrative ("G&A") expenses less non-cash equity-based compensation expenses included in the Company's exploration and production ("E&P") segment. Total 2019 cash G&A for Oasis is estimated at $92 to $96 million, which excludes non-cash amortization of equity-based compensation of approximately $41 to $45 million. See "Non-GAAP Financial Measures" below. |
(3) | Other CapEx includes well services and administrative capital and excludes estimated capitalized interest of approximately $15 million for 2019. |
Midstream Update
- OMP continues to successfully secure third party volumes to feed the Wild Basin natural gas processing complex. In June, the complex experienced temporary operational downtime, which was resolved in early July. The gas complex has recently been processing above 280 MMscfpd with the second natural gas plant processing at times above its 200 MMscfpd design capacity.
- Oasis continues to work with third parties for gas infrastructure in the Delaware Basin and expects to provide an update in the coming months on the outcome of the selection process.
- Total Midstream CapEx is expected to range between $219 to $230 million for 2019, which reflects capturing additional third party business, incremental plant costs and an acceleration of spending from 2020 to 2019. Net CapEx from Oasis attributable to its retained interest is expected to range between $15 and $16 million.
- More details on OMP's performance can be found in OMP's second quarter 2019 press release issued on August 6, 2019 available on OMP's website at www.oasismidstream.com.
Operational and Financial Update
The following table presents select operational and financial data for the periods presented:
Quarter Ended: | |||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | |||||
Production data: | |||||||
Crude oil (Bopd) | 61,224 | 66,046 | 60,632 | ||||
Natural gas (Mcfpd) | 139,380 | 154,005 | 112,830 | ||||
Total production (Boepd) | 84,454 | 91,714 | 79,437 | ||||
Percent crude oil | 72.5% | 72.0% | 76.3% | ||||
Average sales prices: | |||||||
Crude oil, without derivative settlements ($ per Bbl) | $ 58.87 | $ | 53.52 | $ | 65.82 | ||
Differential to NYMEX WTI ($ per Bbl) | 0.96 | 1.30 | 2.07 | ||||
Crude oil, with derivative settlements ($ per Bbl)(1) | 56.79 | 55.79 | 54.88 | ||||
Crude oil derivative settlements - net cash receipts (payments) ($ in millions)(2) | (11.6) | 13.5 | (60.4) | ||||
Natural gas, without derivative settlements ($ per Mcf)(2) | 2.29 | 3.66 | 3.38 | ||||
Natural gas, with derivative settlements ($ per Mcf)(1)(2) | 2.43 | 3.65 | 3.43 | ||||
Natural gas derivative settlements - net cash receipts (payments) ($ in millions)(2) | 1.8 | (0.1) | 0.5 | ||||
Selected financial data ($ in millions): | |||||||
Revenues: | |||||||
Crude oil revenues(3) | $ 328.0 | $ | 318.1 | $ | 363.2 | ||
Natural gas revenues | 29.0 | 50.7 | 34.7 | ||||
Purchased oil and gas sales(3) | 109.4 | 148.5 | 128.1 | ||||
Midstream revenues | 51.6 | 48.0 | 29.3 | ||||
Well services revenues | 11.4 | 10.4 | 18.5 | ||||
Total revenues | $ 529.4 | $ | 575.7 | $ | 573.8 | ||
Net cash provided by operating activities | 214.0 | 174.9 | 303.7 | ||||
Adjusted EBITDA(4) | 249.6 | 269.3 | 241.2 | ||||
Select operating expenses: | |||||||
Lease operating expenses | $ 56.2 | $ | 58.4 | $ | 44.1 | ||
Midstream expenses | 17.4 | 16.7 | 7.7 | ||||
Well services expenses | 8.5 | 7.0 | 13.6 | ||||
MT&G(5) | 28.4 | 32.7 | 23.1 | ||||
Non-cash valuation charges | 0.1 | 2.3 | (0.2) | ||||
Purchased oil and gas expenses(3) | 109.7 | 149.9 | 129.6 | ||||
Production taxes | 28.1 | 29.6 | 34.0 | ||||
Depreciation, depletion and amortization | 177.4 | 189.8 | 153.6 | ||||
Total select operating expenses | $ 425.8 | $ | 486.4 | $ | 405.5 | ||
Select operating expenses data: | |||||||
Lease operating expense ($ per Boe) | $ 7.32 | $ | 7.08 | $ | 6.11 | ||
MT&G ($ per Boe)(5) | 3.69 | 3.96 | 3.19 | ||||
Depreciation, depletion and amortization ($ per Boe) | 23.08 | 23.00 | 21.24 | ||||
E&P G&A ($ per Boe) | 3.35 | 3.33 | 3.25 | ||||
E&P Cash G&A ($ per Boe)(4) | 2.24 | 2.30 | 2.28 | ||||
Production taxes (as a % of oil and gas revenues) | 7.9% | 8.0% | 8.6% | ||||
___________________ | |
(1) | Realized prices include gains or losses on cash settlements for commodity derivatives, which do not qualify for or were not designated as hedging instruments for accounting purposes. Cash settlements represent the cumulative gains and losses on the Company's derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled. |
(2) | Natural gas prices include the value for natural gas and natural gas liquids. |
(3) | For the three and six months ended June 30, 2018, crude oil revenues, purchased oil and gas sales and purchased oil and gas expenses have been revised to correct errors related to the presentation of certain crude oil purchase and sale arrangements, which had no impact on reported net income (loss). The amounts presented herein reflect the impact of the revision. |
(4) | Adjusted EBITDA and E&P Cash G&A represent non-GAAP measures. See "Non-GAAP Financial Measures" below for further information and reconciliations to the most directly comparable financial measures under GAAP. |
(5) | Excludes non-cash valuation charges on pipeline imbalances. |
G&A totaled $30.9 million in the second quarter of 2019, $28.2 million in the second quarter of 2018 and $34.5 million in the first quarter of 2019. Amortization of equity-based compensation, which is included in G&A, was $8.9 million, or $1.16 per barrel of oil equivalent ("Boe"), in the second quarter of 2019 as compared to $7.4 million, or $1.02 per Boe, in the second quarter of 2018 and $9.0 million, or $1.09 per Boe, in the first quarter of 2019. G&A for the Company's E&P segment totaled $25.8 million in the second quarter of 2019, $23.5 million in the second quarter of 2018 and $27.5 million in the first quarter of 2019.
MT&G, excluding non-cash valuation charges on pipeline imbalances, increased $5.3 million to $28.4 million in the second quarter of 2019, as compared to $23.1 million in the second quarter of 2018, primarily attributable to higher crude oil gathering and transportation expenses related to an increase in volumes being transported on the Dakota Access Pipeline to market the Company's equity barrels, which resulted in improved price realizations. MT&G, excluding non-cash valuation charges on pipeline imbalances, decreased $4.3 million in the second quarter of 2019, as compared to $32.7 million in the first quarter of 2019 primarily due to lower production volumes.
Interest expense was $43.2 million for the second quarter of 2019 as compared to $40.9 million for the second quarter of 2018 and $44.5 million for the first quarter of 2019. Capitalized interest totaled $3.6 million for the second quarter of 2019, $4.2 million for the second quarter of 2018 and $2.8 million for the first quarter of 2019. Cash Interest totaled $42.0 million for the second quarter of 2019, $40.5 million for the second quarter of 2018 and $42.6 million for the first quarter of 2019. 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, 2019, the Company recorded an income tax expense of $12.2 million, resulting in a 19.3% effective tax rate as a percentage of its pre-tax income for the quarter. The Company recorded an income tax benefit of $3.7 million, resulting in a 3.3% effective tax rate as a percentage of its pre-tax loss for the three months ended March 31, 2019.
For the second quarter of 2019, the Company reported net income of $42.8 million, or $0.14 per diluted share, as compared to a net loss of $320.2 million, or $1.02 per diluted share, for the second quarter of 2018. Excluding certain non-cash items and their tax effect, Adjusted Net Income Attributable to Oasis was $11.0 million, or $0.03 per diluted share, in the second quarter of 2019, as compared to Adjusted Net Income Attributable to Oasis of $28.9 million, or $0.09 per diluted share, in the second quarter of 2018. Adjusted EBITDA for the second quarter of 2019 was $249.6 million, as compared to Adjusted EBITDA of $241.2 million for the second quarter of 2018. For definitions of Adjusted Net Income (Loss) Attributable to Oasis and Adjusted EBITDA and reconciliations to the most directly comparable GAAP measures, see "Non-GAAP Financial Measures" below.
Capital Expenditures and Completions
The following table depicts the Company's total capital expenditures ("CapEx") by category:
1Q 2019 | 2Q 2019 | YTD - 2Q 2019 | |||||
(In millions) | |||||||
CapEx: | |||||||
E&P | $ 165.7 | $ | 202.1 | $ | 367.8 | ||
Well services | 0.1 | — | 0.1 | ||||
Other(1) | 3.9 | 4.3 | 8.2 | ||||
Total CapEx before midstream | 169.7 | 206.4 | 376.1 | ||||
Midstream(2) | 57.1 | 82.6 | 139.7 | ||||
Total CapEx before acquisitions | 226.8 | 289.0 | 515.8 | ||||
Acquisitions | — | 5.8 | 5.8 | ||||
Total CapEx(3) | $ 226.8 | $ | 294.8 | $ | 521.6 | ||
___________________ | |
(1) | Other CapEx includes such items as administrative capital and capitalized interest. |
(2) | Midstream CapEx attributable to Oasis Midstream Partners ("OMP") was $45.2 million and $70.9 million for the three months ended March 31, 2019 and June 30, 2019, respectively. |
(3) | Total CapEx (including acquisitions) reflected in the table above differs from the amounts shown in the statements of cash flows in the Company's condensed consolidated financial statements because amounts reflected in the table above include changes in accrued liabilities from the previous reporting period for CapEx, while the amounts presented in the statements of cash flows is presented on a cash basis. |
Oasis completed and placed on production 27 gross (20.6 net) operated wells and 0.8 net non-operated wells during the second quarter of 2019. Completions included 24 gross (17.6 net) operated wells in the Williston Basin and 3 gross (3.0 net) operated wells in the Delaware Basin. The completions cadence was back weighted during the quarter with only 2 wells completed in April.
Liquidity and Balance Sheet
As of June 30, 2019, Oasis had cash and cash equivalents of $20.3 million, total elected commitments under the Oasis credit facility of $1,350.0 million and total elected commitments under the OMP credit facility of $475.0 million. In addition, Oasis had $531.0 million of borrowings and $14.0 million of outstanding letters of credit issued under the Oasis credit facility and $408.0 million of borrowings and $8.2 million of outstanding letters of credit under the OMP credit facility, resulting in a total unused borrowing capacity of $863.8 million for both revolving credit facilities as of June 30, 2019.
Hedging Activity
The Company's crude oil contracts will settle monthly based on the average NYMEX West Texas Intermediate crude oil index price ("NYMEX WTI") for fixed price swaps and two-way and three-way costless collars. The Company's basis swaps for crude oil will settle monthly based on the fixed basis differential from Argus WTI Houston crude oil index price ("Houston") to NYMEX WTI. The Company's natural gas contracts will settle monthly based on the average NYMEX Henry Hub natural gas index price ("NYMEX HH") for fixed price swaps. As of August 6, 2019, the Company had the following outstanding commodity derivative contracts:
Six Months Ending | |||||||||||
December 31, 2019 | June 30, 2020 | December 31, 2020 | June 30, 2021 | ||||||||
Crude Oil (Volume in MBopd) | |||||||||||
Fixed Price Swaps | |||||||||||
Volume | 23.8 | 10.0 | 3.0 | — | |||||||
Price | $ | 57.35 | $ | 59.87 | $ | 58.85 | $ | — | |||
Two-Way Collars | |||||||||||
Volume | 14.0 | 5.0 | 2.0 | — | |||||||
Floor | $ | 58.07 | $ | 51.50 | $ | 50.50 | $ | — | |||
Ceiling | $ | 74.64 | $ | 61.76 | $ | 60.70 | $ | — | |||
Three-Way Collars | |||||||||||
Volume | 12.0 | 13.0 | 12.0 | 2.0 | |||||||
Sub-Floor | $ | 40.00 | $ | 40.00 | $ | 40.00 | $ | 40.00 | |||
Floor | $ | 51.57 | $ | 54.13 | $ | 52.48 | $ | 50.00 | |||
Ceiling | $ | 65.40 | $ | 64.81 | $ | 63.86 | $ | 64.25 | |||
Total Crude Oil Volume | 49.8 | 28.0 | 17.0 | 2.0 | |||||||
Basis Swaps (Houston-NYMEX WTI) | |||||||||||
Volume | 1.5 | — | — | — | |||||||
Price | $ | 4.55 | $ | — | $ | — | $ | — | |||
Natural Gas (Volume in MMBtupd) | |||||||||||
Fixed Price Swaps | |||||||||||
Volume | 30,000 | — | — | — | |||||||
Price | $ | 2.92 | $ | — | $ | — | $ | — | |||
The June 2019 crude oil derivative contracts settled at a net $0.6 million received in July 2019 and will be included in the Company's third quarter 2019 derivative settlements.
Conference Call Information
Investors, analysts and other interested parties are invited to listen to the conference call:
Date: | Wednesday, August 7, 2019 | |
Time: | 10:00 a.m. Central Time | |
Live Webcast: | https://www.webcaster4.com/Webcast/Page/1052/31143 | |
Website: | www.oasispetroleum.com |
Sell-side analysts with a question may use the following dial-in:
Dial-in: | 888-317-6003 | |
Intl. Dial in: | 412-317-6061 | |
Conference ID: | 2649196 |
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 Wednesday, August 14, 2019 by dialing:
Replay dial-in: | 877-344-7529 | |
Intl. replay: | 412-317-0088 | |
Replay code: | 10133701 |
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 crude oil and natural gas prices, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, the ability to consummate the previously announced Delaware acreage from Oasis to OMP and realize the anticipated benefits therefrom, 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 Securities and Exchange Commission.
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 onshore, unconventional crude oil and natural gas resources in the United States. For more information, please visit the Company's website at www.oasispetroleum.com.
Oasis Petroleum Inc. | |||||
Condensed Consolidated Balance Sheets | |||||
(Unaudited) | |||||
June 30, 2019 | December 31, 2018 | ||||
(In thousands, except share data) | |||||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ 20,258 | $ | 22,190 | ||
Accounts receivable, net | 396,104 | 387,602 | |||
Inventory | 30,056 | 33,128 | |||
Prepaid expenses | 6,018 | 10,997 | |||
Derivative instruments | 19,089 | 99,930 | |||
Intangible assets, net | — | 125 | |||
Other current assets | 195 | 183 | |||
Total current assets | 471,720 | 554,155 | |||
Property, plant and equipment | |||||
Oil and gas properties (successful efforts method) | 9,283,462 | 8,912,189 | |||
Other property and equipment | 1,301,835 | 1,151,772 | |||
Less: accumulated depreciation, depletion, amortization and impairment | (3,416,183) | (3,036,852) | |||
Total property, plant and equipment, net | 7,169,114 | 7,027,109 | |||
Derivative instruments | 5,636 | 6,945 | |||
Long-term inventory | 13,286 | 12,260 | |||
Operating right-of-use assets | 20,054 | — | |||
Other assets | 30,478 | 25,673 | |||
Total assets | $ 7,710,288 | $ | 7,626,142 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current liabilities | |||||
Accounts payable | $ 15,155 | $ | 20,166 | ||
Revenues and production taxes payable | 170,534 | 216,695 | |||
Accrued liabilities | 315,450 | 331,651 | |||
Accrued interest payable | 37,701 | 38,040 | |||
Derivative instruments | 4,445 | 84 | |||
Advances from joint interest partners | 4,076 | 5,140 | |||
Current operating lease liabilities | 7,837 | — | |||
Other current liabilities | 3,230 | — | |||
Total current liabilities | 558,428 | 611,776 | |||
Long-term debt | 2,896,524 | 2,735,276 | |||
Deferred income taxes | 308,672 | 300,055 | |||
Asset retirement obligations | 55,228 | 52,384 | |||
Derivative instruments | — | 20 | |||
Operating lease liabilities | 18,021 | — | |||
Other liabilities | 6,957 | 7,751 | |||
Total liabilities | 3,843,830 | 3,707,262 | |||
Commitments and contingencies | |||||
Stockholders' equity | |||||
Common stock, $0.01 par value: 900,000,000 shares authorized; 324,680,450 shares issued and 321,894,286 shares outstanding at June 30, 2019 and 320,469,049 shares issued and 318,377,161 shares outstanding at December 31, 2018 | 3,183 | 3,157 | |||
Treasury stock, at cost: 2,786,164 and 2,091,888 shares at June 30, 2019 and December 31, 2018, respectively | (33,330) | (29,025) | |||
Additional paid-in capital | 3,096,355 | 3,077,755 | |||
Retained earnings | 610,564 | 682,689 | |||
Oasis share of stockholders' equity | 3,676,772 | 3,734,576 | |||
Non-controlling interests | 189,686 | 184,304 | |||
Total stockholders' equity | 3,866,458 | 3,918,880 | |||
Total liabilities and stockholders' equity | $ 7,710,288 | $ | 7,626,142 | ||
Oasis Petroleum Inc. | |||||||||||
Condensed Consolidated Statements of Operations | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands, except per share data) | |||||||||||
Revenues | |||||||||||
Oil and gas revenues | $ | 357,004 | $ | 397,849 | $ | 725,786 | $ | 764,444 | |||
Purchased oil and gas sales | 109,389 | 128,064 | 257,860 | 195,773 | |||||||
Midstream revenues | 51,573 | 29,342 | 99,594 | 57,264 | |||||||
Well services revenues | 11,439 | 18,496 | 21,897 | 30,082 | |||||||
Total revenues | 529,405 | 573,751 | 1,105,137 | 1,047,563 | |||||||
Operating expenses | |||||||||||
Lease operating expenses | 56,228 | 44,141 | 114,672 | 88,922 | |||||||
Midstream expenses | 17,368 | 7,688 | 34,097 | 15,673 | |||||||
Well services expenses | 8,474 | 13,560 | 15,444 | 20,947 | |||||||
Marketing, transportation and gathering expenses | 28,488 | 22,833 | 63,438 | 43,846 | |||||||
Purchased oil and gas expenses | 109,662 | 129,579 | 259,566 | 200,173 | |||||||
Production taxes | 28,142 | 34,026 | 57,760 | 65,026 | |||||||
Depreciation, depletion and amortization | 177,358 | 153,570 | 367,191 | 302,835 | |||||||
Exploration expenses | 887 | 617 | 1,717 | 1,386 | |||||||
Impairment | 24 | 384,135 | 653 | 384,228 | |||||||
General and administrative expenses | 30,926 | 28,230 | 65,385 | 56,170 | |||||||
Total operating expenses | 457,557 | 818,379 | 979,923 | 1,179,206 | |||||||
Gain (loss) on sale of properties | (276) | 1,954 | (3,198) | 1,954 | |||||||
Operating income (loss) | 71,572 | (242,674) | 122,016 | (129,689) | |||||||
Other income (expense) | |||||||||||
Net gain (loss) on derivative instruments | 34,749 | (120,285) | (82,862) | (191,401) | |||||||
Interest expense, net of capitalized interest | (43,186) | (40,910) | (87,654) | (78,056) | |||||||
Loss on extinguishment of debt | — | (13,651) | — | (13,651) | |||||||
Other income | 279 | 218 | 233 | 35 | |||||||
Total other expense, net | (8,158) | (174,628) | (170,283) | (283,073) | |||||||
Income (loss) before income taxes | 63,414 | (417,302) | (48,267) | (412,762) | |||||||
Income tax benefit (expense) | (12,240) | 101,001 | (8,537) | 100,173 | |||||||
Net income (loss) including non-controlling interests | 51,174 | (316,301) | (56,804) | (312,589) | |||||||
Less: Net income attributable to non-controlling interests | 8,417 | 3,903 | 15,321 | 7,025 | |||||||
Net income (loss) attributable to Oasis | $ | 42,757 | $ | (320,204) | $ | (72,125) | $ | (319,614) | |||
Earnings (loss) attributable to Oasis per share: | |||||||||||
Basic | $ | 0.14 | $ | (1.02) | $ | (0.23) | $ | (1.06) | |||
Diluted | 0.14 | (1.02) | (0.23) | (1.06) | |||||||
Weighted average shares outstanding: | |||||||||||
Basic | 314,982 | 313,072 | 314,724 | 301,652 | |||||||
Diluted | 314,982 | 313,072 | 314,724 | 301,652 | |||||||
Oasis Petroleum Inc. | |||||||||||
Selected Financial and Operational Statistics | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Operating results (in thousands): | |||||||||||
Revenues | |||||||||||
Crude oil revenues(1) | $ 327,977 | $ 363,183 | $ | 646,098 | $ | 689,493 | |||||
Natural gas revenues | 29,027 | 34,666 | 79,688 | 74,951 | |||||||
Purchased oil and gas sales(1) | 109,389 | 128,064 | 257,860 | 195,773 | |||||||
Midstream revenues | 51,573 | 29,342 | 99,594 | 57,264 | |||||||
Well services revenues | 11,439 | 18,496 | 21,897 | 30,082 | |||||||
Total revenues | $ 529,405 | $ 573,751 | $ | 1,105,137 | $ | 1,047,563 | |||||
Production data: | |||||||||||
Crude oil (MBbls) | 5,571 | 5,517 | 11,515 | 10,802 | |||||||
Natural gas (MMcf) | 12,684 | 10,268 | 26,544 | 20,045 | |||||||
Oil equivalents (MBoe) | 7,685 | 7,229 | 15,940 | 14,142 | |||||||
Average daily production (Boe per day) | 84,454 | 79,437 | 88,064 | 78,135 | |||||||
Average sales prices: | |||||||||||
Crude oil, without derivative settlements (per Bbl) | $ 58.87 | $ 65.82 | $ | 56.11 | $ | 63.83 | |||||
Crude oil, with derivative settlements (per Bbl)(2) | 56.79 | 54.88 | 56.27 | 54.81 | |||||||
Natural gas, without derivative settlements (per Mcf)(3) | 2.29 | 3.38 | 3.00 | 3.74 | |||||||
Natural gas, with derivative settlements (per Mcf)(2)(3) | 2.43 | 3.43 | 3.07 | 3.77 | |||||||
Costs and expenses (per Boe of production): | |||||||||||
Lease operating expenses | $ 7.32 | $ 6.11 | $ | 7.19 | $ | 6.29 | |||||
MT&G(4) | 3.69 | 3.19 | 3.83 | 3.10 | |||||||
Production taxes | 3.66 | 4.71 | 3.62 | 4.60 | |||||||
Depreciation, depletion and amortization | 23.08 | 21.24 | 23.04 | 21.41 | |||||||
G&A | 4.02 | 3.91 | 4.10 | 3.97 | |||||||
E&P G&A | 3.35 | 3.25 | 3.34 | 3.32 | |||||||
___________________ | |
(1) | For the three and six months ended June 30, 2018, crude oil revenues, purchased oil and gas sales and purchased oil and gas expenses have been revised to correct errors related to the presentation of certain crude oil purchase and sale arrangements, which had no impact on reported net income (loss). The amounts presented herein reflect the impact of the revision. |
(2) | Realized prices include gains or losses on cash settlements for commodity derivatives, which do not qualify for or were not designated as hedging instruments for accounting purposes. Cash settlements represent the cumulative gains and losses on the Company's derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled. |
(3) | Natural gas prices include the value for natural gas and natural gas liquids. |
(4) | Excludes non-cash valuation charges on pipeline imbalances. |
Oasis Petroleum Inc. | |||||
Condensed Consolidated Statements of Cash Flows | |||||
(Unaudited) | |||||
Six Months Ended June 30, | |||||
2019 | 2018 | ||||
(In thousands) | |||||
Cash flows from operating activities: | |||||
Net loss including non-controlling interests | $ | (56,804) | $ | (312,589) | |
Adjustments to reconcile net loss including non-controlling interests to net cash provided by operating activities: | |||||
Depreciation, depletion and amortization | 367,191 | 302,835 | |||
Loss on extinguishment of debt | — | 13,651 | |||
(Gain) loss on sale of properties | 3,198 | (1,954) | |||
Impairment | 653 | 384,228 | |||
Deferred income taxes | 8,617 | (100,293) | |||
Derivative instruments | 82,862 | 191,401 | |||
Equity-based compensation expenses | 17,924 | 14,130 | |||
Deferred financing costs amortization and other | 12,245 | 10,518 | |||
Working capital and other changes: | |||||
Change in accounts receivable, net | (12,914) | (5,866) | |||
Change in inventory | 3,029 | (4,721) | |||
Change in prepaid expenses | 3,918 | 573 | |||
Change in accounts payable, interest payable and accrued liabilities | (36,514) | 40,849 | |||
Change in other assets and liabilities, net | (4,473) | (746) | |||
Net cash provided by operating activities | 388,932 | 532,016 | |||
Cash flows from investing activities: | |||||
Capital expenditures | (525,501) | (536,959) | |||
Acquisitions | (5,781) | (524,255) | |||
Proceeds from sale of properties | — | 2,236 | |||
Derivative settlements | 3,629 | (96,823) | |||
Other | — | (933) | |||
Net cash used in investing activities | (527,653) | (1,156,734) | |||
Cash flows from financing activities: | |||||
Proceeds from revolving credit facilities | 1,178,000 | 1,933,000 | |||
Principal payments on revolving credit facilities | (1,025,000) | (1,265,000) | |||
Repurchase of senior unsecured notes | — | (423,143) | |||
Proceeds from issuance of senior unsecured notes | — | 400,000 | |||
Deferred financing costs | (482) | (6,790) | |||
Purchases of treasury stock | (4,305) | (6,064) | |||
Distributions to non-controlling interests | (10,093) | (6,846) | |||
Other | (1,331) | (87) | |||
Net cash provided by financing activities | 136,789 | 625,070 | |||
Increase (decrease) in cash and cash equivalents | (1,932) | 352 | |||
Cash and cash equivalents: | |||||
Beginning of period | 22,190 | 16,720 | |||
End of period | $ | 20,258 | $ | 17,072 | |
Supplemental non-cash transactions: | |||||
Change in accrued capital expenditures | $ | (30,598) | $ | 90,040 | |
Change in asset retirement obligations | 3,840 | 5,407 | |||
Issuance of shares in connection with acquisition | — | 371,220 | |||
Non-GAAP Financial Measures
E&P Cash G&A is defined as the total general and administrative expenses included in the Company's exploration and production segment less non-cash equity-based compensation expenses included in its exploration and production segment. E&P Cash G&A is not a measure of general and administrative expenses as determined by GAAP. Management believes that the presentation of E&P Cash G&A provides useful additional information to investors and analysts to assess the Company's operating costs in comparison to peers without regard to equity-based compensation programs, which can vary substantially from company to company.
The following table presents a reconciliation of the GAAP financial measure of general and administrative expenses included in its exploration and production segment to the non-GAAP financial measure of E&P Cash G&A for the periods presented:
Exploration and Production | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands) | |||||||||||
E&P general and administrative expenses | $ | 25,761 | $ | 23,492 | $ | 53,288 | $ | 46,971 | |||
Equity-based compensation expenses | (8,522) | (7,012) | (17,102) | (13,463) | |||||||
E&P Cash G&A | $ | 17,239 | $ | 16,480 | $ | 36,186 | $ | 33,508 | |||
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 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:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands) | |||||||||||
Interest expense | $ | 43,186 | $ | 40,910 | $ | 87,654 | $ | 78,056 | |||
Capitalized interest | 3,645 | 4,227 | 6,463 | 8,678 | |||||||
Amortization of deferred financing costs | (1,823) | (1,937) | (3,593) | (3,698) | |||||||
Amortization of debt discount | (3,006) | (2,731) | (5,890) | (5,349) | |||||||
Cash Interest | $ | 42,002 | $ | 40,469 | $ | 84,634 | $ | 77,687 | |||
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 or non-recurring charges. The Company defines Free Cash Flow as Adjusted EBITDA attributable to Oasis 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) including non-controlling interests 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:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands) | |||||||||||
Net income (loss) including non-controlling interests | $ | 51,174 | $ | (316,301) | $ | (56,804) | $ | (312,589) | |||
(Gain) loss on sale of properties | 276 | (1,954) | 3,198 | (1,954) | |||||||
Loss on extinguishment of debt | — | 13,651 | — | 13,651 | |||||||
Net (gain) loss on derivative instruments | (34,749) | 120,285 | 82,862 | 191,401 | |||||||
Derivative settlements(1) | (9,817) | (59,849) | 3,629 | (96,823) | |||||||
Interest expense, net of capitalized interest | 43,186 | 40,910 | 87,654 | 78,056 | |||||||
Depreciation, depletion and amortization | 177,358 | 153,570 | 367,191 | 302,835 | |||||||
Impairment | 24 | 384,135 | 653 | 384,228 | |||||||
Exploration expenses | 887 | 617 | 1,717 | 1,386 | |||||||
Equity-based compensation expenses | 8,911 | 7,376 | 17,924 | 14,130 | |||||||
Income tax (benefit) expense | 12,240 | (101,001) | 8,537 | (100,173) | |||||||
Other non-cash adjustments | 120 | (226) | 2,395 | (17) | |||||||
Adjusted EBITDA | 249,610 | 241,213 | 518,956 | 474,131 | |||||||
Adjusted EBITDA attributable to non-controlling interests | 11,693 | 5,148 | 21,896 | 9,452 | |||||||
Adjusted EBITDA attributable to Oasis | 237,917 | 236,065 | 497,060 | 464,679 | |||||||
Cash Interest | (42,002) | (40,469) | (84,634) | (77,687) | |||||||
Capital expenditures(2) | (294,875) | (358,534) | (521,668) | (1,525,762) | |||||||
Capitalized interest | 3,645 | 4,227 | 6,463 | 8,678 | |||||||
Free Cash Flow | $ | (95,315) | $ | (158,711) | $ | (102,779) | $ | (1,130,092) | |||
Net cash provided by operating activities | $ | 214,006 | $ | 303,657 | $ | 388,932 | $ | 532,016 | |||
Derivative settlements(1) | (9,817) | (59,849) | 3,629 | (96,823) | |||||||
Interest expense, net of capitalized interest | 43,186 | 40,910 | 87,654 | 78,056 | |||||||
Exploration expenses | 887 | 617 | 1,717 | 1,386 | |||||||
Deferred financing costs amortization and other | (5,315) | (5,043) | (12,245) | (10,518) | |||||||
Current tax (benefit) expense | 76 | 120 | (80) | 120 | |||||||
Changes in working capital | 6,467 | (38,973) | 46,954 | (30,089) | |||||||
Other non-cash adjustments | 120 | (226) | 2,395 | (17) | |||||||
Adjusted EBITDA | 249,610 | 241,213 | 518,956 | 474,131 | |||||||
Adjusted EBITDA attributable to non-controlling interests | 11,693 | 5,148 | 21,896 | 9,452 | |||||||
Adjusted EBITDA attributable to Oasis | 237,917 | 236,065 | 497,060 | 464,679 | |||||||
Cash Interest | (42,002) | (40,469) | (84,634) | (77,687) | |||||||
Capital expenditures(2) | (294,875) | (358,534) | (521,668) | (1,525,762) | |||||||
Capitalized interest | 3,645 | 4,227 | 6,463 | 8,678 | |||||||
Free Cash Flow | $ | (95,315) | $ | (158,711) | $ | (102,779) | $ | (1,130,092) | |||
___________________ | |
(1) | Cash settlements represent the cumulative gains and losses on the Company's derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled. |
(2) | Capital expenditures (including acquisitions) reflected in the table above differ from the amounts shown in the statements of cash flows in the Company's condensed consolidated financial statements because amounts reflected in the table include changes in accrued liabilities from the previous reporting period for capital expenditures, while the amounts presented in the statements of cash flows are presented on a cash basis. Acquisitions totaled $5.8 million for the three and six months ended June 30, 2019, and $3.5 million and $894.5 million for the three and six months ended June 30, 2018, respectively. |
The following tables present reconciliations of the GAAP financial measure of income (loss) before income taxes including non-controlling interests 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:
Exploration and Production | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands) | |||||||||||
Income (loss) before income taxes including non-controlling interests | $ | 14,925 | $ | (454,662) | $ | (141,533) | $ | (482,847) | |||
(Gain) loss on sale of properties | 276 | (1,954) | 3,198 | (1,954) | |||||||
Loss on extinguishment of debt | — | 13,651 | — | 13,651 | |||||||
Net (gain) loss on derivative instruments | (34,749) | 120,285 | 82,862 | 191,401 | |||||||
Derivative settlements(1) | (9,817) | (59,849) | 3,629 | (96,823) | |||||||
Interest expense, net of capitalized interest | 38,977 | 40,727 | 79,697 | 77,611 | |||||||
Depreciation, depletion and amortization | 172,687 | 149,250 | 357,506 | 294,454 | |||||||
Impairment | 24 | 384,135 | 653 | 384,228 | |||||||
Exploration expenses | 887 | 617 | 1,717 | 1,386 | |||||||
Equity-based compensation expenses | 8,522 | 7,012 | 17,102 | 13,463 | |||||||
Other non-cash adjustments | 120 | (226) | 2,395 | (17) | |||||||
Adjusted EBITDA | $ | 191,852 | $ | 198,986 | $ | 407,226 | $ | 394,553 | |||
___________________ | |
(1) | Cash settlements represent the cumulative gains and losses on the Company's derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled. |
Midstream Services | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands) | |||||||||||
Income before income taxes including non-controlling interests | $ | 51,016 | $ | 37,815 | $ | 97,074 | $ | 69,796 | |||
Interest expense, net of capitalized interest | 4,209 | 183 | 7,957 | 445 | |||||||
Depreciation, depletion and amortization | 8,893 | 6,900 | 18,080 | 13,529 | |||||||
Equity-based compensation expenses | 515 | 409 | 980 | 780 | |||||||
Adjusted EBITDA | $ | 64,633 | $ | 45,307 | $ | 124,091 | $ | 84,550 | |||
Well Services | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands) | |||||||||||
Income before income taxes including non-controlling interests | $ | 1,499 | $ | 8,051 | $ | 2,319 | $ | 16,158 | |||
Depreciation, depletion and amortization | 3,358 | 3,930 | 7,287 | 7,619 | |||||||
Equity-based compensation expenses | 527 | 409 | 1,088 | 795 | |||||||
Adjusted EBITDA | $ | 5,384 | $ | 12,390 | $ | 10,694 | $ | 24,572 | |||
Adjusted Net Income (Loss) Attributable to Oasis and Adjusted Diluted Earnings (Loss) Attributable to Oasis 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) Attributable to Oasis 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, (2) the impact of net income attributable to non-controlling interests and (3) 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) Attributable to Oasis is not a measure of net income (loss) as determined by GAAP. The Company defines Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share as Adjusted Net Income (Loss) Attributable to Oasis divided by diluted weighted average shares outstanding.
The following table presents reconciliations of the GAAP financial measure of net income (loss) attributable to Oasis to the non-GAAP financial measure of Adjusted Net Income (Loss) Attributable to Oasis and the GAAP financial measure of diluted earnings (loss) attributable to Oasis per share to the non-GAAP financial measure of Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share for the periods presented:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands, except per share data) | |||||||||||
Net income (loss) attributable to Oasis | $ | 42,757 | $ | (320,204) | $ | (72,125) | $ | (319,614) | |||
(Gain) loss on sale of properties | 276 | (1,954) | 3,198 | (1,954) | |||||||
Loss on extinguishment of debt | — | 13,651 | — | 13,651 | |||||||
Net (gain) loss on derivative instruments | (34,749) | 120,285 | 82,862 | 191,401 | |||||||
Derivative settlements(1) | (9,817) | (59,849) | 3,629 | (96,823) | |||||||
Impairment | 24 | 384,135 | 653 | 384,228 | |||||||
Amortization of deferred financing costs | 1,823 | 1,937 | 3,593 | 3,698 | |||||||
Amortization of debt discount | 3,006 | 2,731 | 5,890 | 5,349 | |||||||
Other non-cash adjustments | 120 | (226) | 2,395 | (17) | |||||||
Tax impact(2) | 7,565 | (111,592) | 14,273 | (121,102) | |||||||
Adjusted Net Income Attributable to Oasis | $ | 11,005 | $ | 28,914 | $ | 44,368 | $ | 58,817 | |||
Diluted earnings (loss) attributable to Oasis per share | $ | 0.14 | $ | (1.02) | $ | (0.23) | $ | (1.06) | |||
(Gain) loss on sale of properties | — | (0.01) | 0.01 | (0.01) | |||||||
Loss on extinguishment of debt | — | 0.04 | — | 0.04 | |||||||
Net (gain) loss on derivative instruments | (0.11) | 0.38 | 0.26 | 0.63 | |||||||
Derivative settlements(1) | (0.03) | (0.19) | 0.01 | (0.32) | |||||||
Impairment | — | 1.23 | — | 1.26 | |||||||
Amortization of deferred financing costs | 0.01 | 0.01 | 0.01 | 0.01 | |||||||
Amortization of debt discount | 0.01 | 0.01 | 0.02 | 0.02 | |||||||
Other non-cash adjustments | — | — | 0.01 | — | |||||||
Tax impact(2) | 0.01 | (0.36) | 0.05 | (0.38) | |||||||
Adjusted Diluted Earnings Attributable to Oasis Per Share | $ | 0.03 | $ | 0.09 | $ | 0.14 | $ | 0.19 | |||
Diluted weighted average shares outstanding(3) | 314,982 | 315,664 | 316,081 | 304,859 | |||||||
Effective tax rate applicable to adjustment items | 19.2% | 24.2% | (14.0)% | 24.2% | |||||||
___________________ | |
(1) | Cash settlements represent the cumulative gains and losses on the Company's derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled. |
(2) | The tax impact is computed utilizing the Company's effective tax rate applicable to the adjustments for certain non-cash and non-recurring items. |
(3) | No unvested stock awards were included in computing Adjusted Diluted Earnings Attributable to Oasis Per Share for the three months ended June 30, 2019 because the effect was anti-dilutive under the treasury stock method. For the six months ended June 30, 2019 and the three and six months ended June 30, 2018, the Company included 1,357,000, 2,592,000 and 3,207,000, respectively, of unvested stock awards in computing Adjusted Diluted Earnings Attributable to Oasis Per Share due to the dilutive effect under the treasury stock method. |
View original content:http://www.prnewswire.com/news-releases/oasis-petroleum-inc-announces-quarter-ended-june-30-2019-earnings-300897557.html
SOURCE Oasis Petroleum Inc.
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