News Releases

HOUSTON, Feb. 25, 2013 /PRNewswire/ -- Oasis Petroleum Inc. (NYSE: OAS) ("Oasis" or the "Company") today announced financial results for the quarter and year ending December 31, 2012. 

Financial Highlights in 2012:

• Increased revenue by 108% to $686.7 million in 2012, up from $330.4 million in the prior year.
• Grew Adjusted EBITDA by 118% to $512.3 million in 2012, up from $234.5 million in the prior year. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income and net cash provided by operating activities, see "Non-GAAP Financial Measures" below.
• Increased net income by 93% to $153.4 million in 2012, up from $79.4 million in the prior year.

Financial Update
Total revenue for the fourth quarter of 2012 was $214.3 million compared to $116.9 million for the fourth quarter of 2011, an increase of 83%.  Sequential quarter-over-quarter revenue growth was $29.6 million, or 16%.  Total revenue for the full year 2012 was $686.7 million compared to $330.4 million in 2011.  This year-over-year increase was due to a $340.1 million increase in oil and gas revenues primarily related to higher production in 2012 and a $16.2 million increase in well services revenues related to Oasis Well Services LLC ("OWS") commencing fracturing activity in 2012.

Lease operating expenses for the fourth quarter of 2012 totaled $16.9 million, or $6.68 per Boe, a 19% decrease per Boe over the fourth quarter of 2011 of $8.22 per Boe.  Lease operating expenses for the full year 2012 totaled $54.9 million, or $6.68 per Boe, a 20% decrease per Boe over the full year 2011 of $8.36 per Boe.  This year-over-year decrease was primarily due to the increase in production of 110% outpacing the Company's overall net increase in costs of 68%.  Increased costs primarily related to workovers, chemical treatments, equipment rental and fresh water injections, which have improved operational performance and minimized downtime in our wells. These cost increases were partially offset by salt water disposal activity and lower operating costs related to improved weather conditions as compared to the first half of 2011.

Well services operating expenses represent third-party working interests' share of fracturing service costs incurred by OWS for fracturing jobs completed in 2012. Well services operating expenses totaled $4.7 million for the fourth quarter of 2012 and $11.8 millionfor the full year 2012. There were no well services operating expenses in 2011 because OWS did not commence fracturing activity until the first quarter of 2012.

Marketing, transportation and gathering expenses for the fourth quarter of 2012 totaled $2.0 million, or $0.78 per Boe, a 90% increase per Boe over the fourth quarter of 2011 of $0.41 per Boe.  Marketing, transportation and gathering expenses for the full year 2012 totaled $9.3 million, or $1.13 per Boe, a $0.79 increase per Boe over the full year 2011 of $0.34 per Boe.  This year-over-year increase was mainly attributable to increased oil transportation costs related to Oasis Petroleum Marketing LLC ("OPM"), which did not commence operations until late in the third quarter of 2011, combined with a $1.4 million cost for bulk oil purchases made by OPM in the first quarter of 2012, partially offset by a $0.7 million non-cash valuation charge on oil pipeline imbalances.  Excluding this pipeline imbalance charge and bulk oil purchase costs, our marketing, transportation and gathering expenses would have been $1.04 per Boe for the full year 2012 and $1.03 for the fourth quarter of 2012.  The increase in marketing, transportation and gathering in the fourth quarter 2012 over the fourth quarter of 2011 was primarily due to higher operated volumes flowing through third-party oil gathering pipelines, partially offset by a non-cash oil pipeline imbalance valuation charge.  While transporting volumes through third-party oil gathering pipelines increases marketing, transportation and gathering expenses, it improves oil price realizations by eliminating trucking costs, which are reflected in the oil price differential rather than as an expense.

Production taxes for the fourth quarter of 2012 totaled $19.5 million, or 9.4% of oil and gas revenues. For the full year 2012, production taxes totaled $63.0 million, or 9.4% of oil and gas revenues. Production taxes decreased in 2012 compared to the full year 2011, at 10.2% of oil and gas revenues, primarily due to the increased weighting of oil revenues in Montana, which has lower incentivized production tax rates on certain new wells for the first twelve months of production.

Depreciation, depletion and amortization for the fourth quarter of 2012 totaled $66.0 million, or $26.01 per Boe, compared to $27.2 million, or $19.40 per Boe, in the fourth quarter of 2011.  Depreciation, depletion and amortization for the full year 2012 totaled $206.7 million, or $25.14 per Boe, compared to $75.0 million, or $19.16 per Boe, for the full year 2011. The $131.8 million increase in DD&A expense for the year ended December 31, 2012 was primarily a result of our production increases from our 2012 well completions. The higher DD&A rate was a result of increased well costs in 2012, which outpaced the increase in associated reserves. The increased well costs were a result of increases in service costs in the Williston Basin during 2011 and the first half of 2012 and the addition of infrastructure assets, primarily our salt water disposal systems.

General and administrative expenses for the fourth quarter of 2012 totaled $17.6 million, or $6.93 per Boe, compared to $9.6 million, or$6.82 per Boe, in the fourth quarter of 2011.  General and administrative expenses for the full year 2012 totaled to $57.2 million, or$6.95 per Boe, as compared to $29.4 million, or $7.52 per Boe, for the full year 2011.  Of this $27.8 million year-over-year increase, approximately $20.3 million was due to the impact of the Company's organizational growth on employee compensation and approximately $6.7 million was due to the amortization of restricted stock awards and performance share units.  As of December 31, 2012, the Company had 281 full-time employees compared to 146 full-time employees as of December 31, 2011.

As a result of its derivative activities, the Company incurred net cash settlement gains of $3.8 million and $1.0 million in the fourth quarters of 2012 and 2011, respectively. As a result of forward oil price changes, the Company recognized non-cash unrealized mark-to-market derivative losses of $3.2 million and $66.5 million for the fourth quarters of 2012 and 2011, respectively. The Company incurred a net cash settlement gain of $6.5 million for the year ended December 31, 2012 and a net cash settlement loss of $3.8 million for the year ended December 31, 2011. In addition, as a result of forward oil price changes, the Company recognized non-cash unrealized mark-to-market derivative gains of $27.6 million and $5.4 million during the years ended December 31, 2012 and 2011, respectively.

Adjusted EBITDA for the fourth quarter of 2012 was $163.5 million, an increase of $77.6 million, or 90%, over the fourth quarter of 2011 of $85.9 million.  Adjusted EBITDA for the full year 2012 was $512.3 million, an increase of $277.8 million, or 118%, over the full year 2011 of $234.5 million.

The Company reported net income of $42.6 million in the fourth quarter of 2012 compared to a net loss of $13.4 million in the fourth quarter of 2011.  For the full year 2012, Oasis reported net income of $153.4 million compared to $79.4 million for the full year 2011.  Excluding certain non-cash items and their tax effect in the fourth quarters of 2012 and 2011, Adjusted Net Income (non-GAAP) was $45.2 million, or $0.49 per diluted share, and $28.0 million, or $0.30 per diluted share, respectively. Excluding certain non-cash items and their tax effect for the years ending December 31, 2012 and 2011, Adjusted Net Income (non-GAAP) was $138.4 million, or $1.50 per diluted share, and $78.2 million, or $0.85 per diluted share, respectively. For a definition of Adjusted Net Income and a reconciliation of net income to Adjusted Net Income, see "Non-GAAP Financial Measures" below.

Capital Expenditures
Oasis' capital expenditures ("CapEx") were $276.3 million for the fourth quarter of 2012 and $1,148.6 million for the year endingDecember 31, 2012. 

CapEx primarily consists of:

• $1,008 million of drilling and completion CapEx for operated and non-operated wells, including expected savings from services provided by OWS;
• $64 million for constructing infrastructure to support production in Oasis' core project areas, primarily related to salt water disposal systems;
• $37 million for maintaining and expanding the Company's leasehold position;
• $3 million for geology (micro-seismic);
• $16 million for OWS; and
• $21 million for other (facilities, district tools and administrative capital, including capitalized interest of $3 million).

The following table depicts the Company's CapEx for exploration and production ("E&P"), by project area, and non-E&P:

 

 

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 1:00 p.m. Central Time on the day of the call and will be available untilTuesday, March 5, 2013 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, derivatives activities, 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 changes in oil and natural gas prices, 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Measures

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, amortization, exploration expenses and other similar non-cash charges. 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. 

 

Adjusted Net Income 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 Net Income as net income after adjusting first for (1) the impact of non-cash items, including changes in unrealized gains and losses on derivative instruments, impairment of oil and gas properties and other similar non-cash charges, and then (2) the non-cash items' impact on taxes based on the Company's effective tax rates in the same period. Adjusted Net Income is not a measure of net income as determined by GAAP.

The following table provides a reconciliation of the GAAP financial measure of net income (loss) to the non-GAAP financial measure of Adjusted Net Income for the periods presented.

 

 

 

SOURCE Oasis Petroleum Inc.