News Releases

Oasis Petroleum Inc. Announces Quarter Ended March 31, 2018 Earnings

HOUSTON, May 7, 2018 /PRNewswire/ -- Oasis Petroleum Inc. (NYSE: OAS) ("Oasis" or the "Company") today announced financial results for the quarter ended March 31, 2018 and provided an operational update.

Recent Highlights:

  • Produced 76.8 thousand barrels of oil equivalent per day ("MBoepd") in the first quarter of 2018, representing an increase of 22% over the first quarter of 2017.
  • Completed and placed on production 17 gross (11.2 net) operated wells, including 16 gross (10.2 net) operated wells in the Williston Basin and 1 gross (1.0 net) operated well in the Delaware Basin, in the first quarter of 2018.
  • Oil differentials improved to $1.67 off of NYMEX West Texas Intermediate crude oil index price ("WTI") in the first quarter of 2018, approximately a 65% decrease over the first quarter of 2017.
  • Lease operating expenses ("LOE") per barrels of oil equivalent ("Boe") decreased over 15% to $6.48 in the first quarter of 2018 compared to $7.71 per Boe in the first quarter of 2017.
  • Exploration and production ("E&P") capital expenditures ("CapEx") were $176.9 million for the three months ended March 31, 2018.
  • Closed on the Permian Basin Acquisition from Forge Energy on February 14, 2018, adding an average of approximately 3.6 MBoepd of production and approximately 22,000 net undeveloped acres.
  • Delivered net cash provided by operating activities was $228.4 million and Adjusted EBITDA of $232.9 million for the first quarter of 2018. For a definition of Adjusted EBITDA and reconciliations of Adjusted EBITDA to net income (loss) including non-controlling interests and net cash provided by operating activities, see "Non-GAAP Financial Measures" below.

"Oasis delivered a formidable start to the year by growing volumes to 76,800 Boe per day in the first quarter while maintaining top tier capital efficiency and recycle ratio," said Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer. "Our strong start to the year enables the company to stand by its projection of being free cash flow positive on our E&P business for the year, while continuing to grow volumes 15% to 20% year over year. Internally controlled infrastructure through OMS supported flow assurance, reduced costs, and provided access to liquid marketing points. This combination resulted in reduced downtime and per barrel operating costs in spite of abnormally difficult winter conditions. Also, our access to liquid marketing points as a result of strategic investments in our integrated midstream infrastructure continue to help us realize improved price differentials. We closed the Permian Basin Acquisition on February 14, 2018 and we have now taken over operations. Expansion of our service partnerships developed in the Williston Basin has helped us secure critical services at market competitive prices. Continued positive results of our wells and offsets give us confidence in our plan. Our completion cadence is on track, if not a little ahead, and we have secured a second rig for the Permian which should spud by the end of May. We have increased our full year guidance to 81.0 to 84.0 MBoepd and expect production in the second quarter of 2018 to be 76.0 to 80.5 MBoepd, with the Williston being between 72.5 and 76.5 MBoepd and the Delaware being around 3.5 to 4.0 MBoepd."

Operating Guidance Update

The following table presents actual results for the first quarter of 2018 as well as updated full year 2018 guidance for certain operating data:

Metric

1Q 2018 Actual


Prior
Full Year Guidance


Updated
Full Year Guidance

Production (MBoepd)

76.8


80.0 - 83.0


81.0 - 84.0

Differential to WTI ($ per Bbl)

$1.67


$1.50 - $2.00


$1.50 - $2.00

LOE ($ per Boe)

$6.48


$7.00 - $7.50


$6.50 - $7.50

Marketing, transportation and gathering expenses ("MT&G") ($ per Boe)(1)

$3.01


$2.75 - $3.00


$2.75 - $3.00

Production taxes (% of oil & gas revenue)

8.5%


8.1% - 8.4%


8.2% - 8.5%

General and administrative expenses ("G&A") ($ in millions)

$27.9


$105.0 - $115.0


$105.0 - $115.0

CapEx ($ in millions)






E&P CapEx

$176.9


$815.0 - $855.0


$815.0 - $855.0

OMS and OWS CapEx

$93.1


$235.0 - $275.0


$235.0 - $275.0

Other CapEx

$6.3


$40.0


$40.0



(1)

Excludes non-cash valuation charges on pipeline imbalances.

Operational and Financial Update

The following table presents select operational and financial data for the periods presented:


Quarter Ended:


3/31/2018


12/31/2017


3/31/2017

Production data:






Oil (Bopd)

58,713



57,238



49,281


Natural gas (MMcfpd)

108,635



95,812



83,470


Total production (Boepd)

76,819



73,207



63,192


Percent Oil

76.4

%


78.2

%


78.0

%

Average sales prices:






Oil, without derivative settlements ($ per Bbl)

$

61.20



$

54.97



$

47.03


Differential to WTI ($ per Bbl)

1.67



0.50



4.88


Oil, with derivative settlements ($ per Bbl)(1)(2)

54.18



53.41



45.24


Oil derivative settlements - net cash payments ($ in millions)(2)

(37.1)



(8.2)



(8.0)


Natural gas, without derivative settlements ($ per Mcf)(3)

4.12



4.64



3.81


Natural gas, with derivative settlements ($ per Mcf)(1)(2)(3)

4.13



4.72



3.82


Natural gas derivative settlements - net cash receipts ($ in millions)(2)

0.1



0.7




Selected financial data ($ in millions):






Revenues:






Oil revenues

$

323.4



$

289.5



$

208.6


Natural gas revenues

40.3



40.9



28.7


Purchased oil and gas sales

18.0



31.1



27.6


Midstream revenues

27.9



23.8



14.6


Well services revenues

11.6



19.2



5.6


Total revenues

$

421.2



$

404.5



$

285.1


Net cash provided by operating activities

228.4



209.1



107.8


Adjusted EBITDA

232.9



236.2



150.6


Select operating expenses:






LOE

$

44.8



$

43.3



$

43.9


Midstream operating expenses

8.0



6.7



3.3


Well services operating expenses(5)

7.4



13.4



4.6


MT&G(4)

20.8



19.0



10.1


Non-cash valuation charges

0.2



(1.3)



0.9


Purchased oil and gas expenses

18.0



31.6



28.0


Production taxes

31.0



27.8



20.3


Depreciation, depletion and amortization ("DD&A")

149.3



146.6



126.7


Total select operating expenses

$

279.5



$

287.1



$

237.8


Select operating expenses data:






LOE ($ per Boe)

$

6.48



$

6.42



$

7.71


MT&G ($ per Boe)(4)

3.01



2.83



1.77


DD&A ($ per Boe)

21.59



21.76



22.27


E&P G&A ($ per Boe)

3.40



2.93



3.54


Production taxes (% of oil and gas revenue)

8.5

%


8.4

%


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.

(2)

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.

(5)

For the three months ended March 31, 2017, well services operating expenses have been adjusted to include $0.7 million for certain well services direct field labor compensation expenses which were previously recognized in general and administrative expenses on the Company's Condensed Consolidated Statements of Operations.

G&A totaled $27.9 million in the first quarter of 2018, $23.2 million in the first quarter of 2017 and $24.6 million in the fourth quarter of 2017. Amortization of equity-based compensation, which is included in G&A, was $6.8 million, or $0.98 per Boe, in the first quarter of 2018 as compared to $6.7 million, or $1.18 per Boe, in the first quarter of 2017 and $6.1 million, or $0.90 per Boe, in the fourth quarter of 2017. G&A for the Company's E&P segment totaled $23.5 million in the first quarter of 2018, $20.1 million in the first quarter of 2017 and $19.7 million in the fourth quarter of 2017.

Interest expense was $37.1 million for the first quarter of 2018 as compared to $36.3 million for the first quarter of 2017 and $36.3 million for the fourth quarter of 2017. Capitalized interest totaled $4.5 million for the first quarter of 2018, $2.8 million for the first quarter of 2017 and $4.0 million for the fourth quarter of 2017. Cash Interest totaled $37.2 million for the first quarter of 2018, $35.1 million for the first quarter of 2017 and $35.9 million for the fourth 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 March 31, 2018, the Company recorded an income tax expense of $0.8 million, resulting in an 18.2% effective tax rate as a percentage of its pre-tax income for the quarter. The Company recorded an income tax benefit of $202.8 million, resulting in a 271.5% effective tax rate as a percentage of its pre-tax loss for the three months ended December 31, 2017.

For the first quarter of 2018, the Company reported net income of $0.6 million, or $0.00 per diluted share, as compared to a net income of $23.8 million, or $0.10 per diluted share, for the first quarter of 2017. Excluding certain non-cash items and their tax effect, Adjusted Net Income Attributable to Oasis (non-GAAP) was $30.2 million, or $0.10 per diluted share, in the first quarter of 2018, as compared to Adjusted Net Loss Attributable to Oasis of $11.5 million, or $0.05 per diluted share, in the first quarter of 2017. For a definition of Adjusted Net Income (Loss) Attributable to Oasis and a reconciliation of net income (loss) attributable to Oasis to Adjusted Net Income (Loss) Attributable to Oasis, see "Non-GAAP Financial Measures" below. Adjusted EBITDA for the first quarter of 2018 was $232.9 million, as compared to Adjusted EBITDA of $150.6 million for the first quarter of 2017. For a definition of Adjusted EBITDA and a reconciliation of net income (loss) including non-controlling interests 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:


1Q 2018

CapEx ($ in millions):


E&P

$

176.9


Well services

4.3


Other(1)

6.3


Total CapEx before acquisitions and midstream

187.5


Midstream

88.8


Total CapEx before acquisitions

276.3


Acquisitions

890.9


Total CapEx(2)

$

1,167.2















(1)

Other CapEx includes such items as administrative capital and capitalized interest.

(2)

Total CapEx reflected in the table above differs from the amounts for capital expenditures and acquisitions 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.

The Company's CapEx totaled $1,167.2 million for the three months ended March 31, 2018, of which $890.9 million was related to acquisitions. Excluding acquisitions, Oasis continues to expect total CapEx to be approximately $1,090 million and $1,170 million for the full year 2018.

Hedging Activity

As of May 7, 2018, 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:



Three Months Ending


Six Months Ending



June 30, 2018


December 31, 2018


June 30, 2019


December 31, 2019

Crude oil (Volume in MBblpd)

















Swaps









Volume


45.3



41.5



13.0



13.0


Price


$

52.80



$

53.00



$

53.47



$

53.47


Collars









Volume


3.0



3.0



1.0



1.0


Floor


$

48.67



$

48.67



$

50.00



$

50.00


Ceiling


$

53.07



$

53.07



$

71.00



$

71.00


3-way









Volume






10.0



9.0


Sub-Floor


$



$



$

40.50



$

40.00


Floor


$



$



$

51.00



$

50.56


Ceiling


$



$



$

68.56



$

67.80


Total Crude Oil Volume


48.3



44.5



24.0



23.0











Natural Gas (Volume in MMBtupd)









Swaps









Volume


23,000



29,000



3,000




Price


$

3.05



$

3.02



$

2.93



$


Total Natural Gas Volume


23,000



29,000



3,000




The March 2018 crude oil derivative contracts settled at a net $15.0 million paid in April 2018 and will be included in the Company's second quarter 2018 derivative settlements.

Conference Call Information

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

Date:


Tuesday, May 8, 2018

Time:


10:00 a.m. Central Time

Live Webcast:


https://www.webcaster4.com/Webcast/Page/1052/25387

OR:



Dial-in:


888-317-6003

Intl. Dial in:


412-317-6061

Conference ID:


3184311

Website:


www.oasispetroleum.com

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 Tuesday, May 15, 2018 by dialing:

Replay dial-in:


877-344-7529

Intl. replay:


412-317-0088

Replay code:


10119291

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 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)



March 31, 2018


December 31, 2017


(In thousands, except share data)

ASSETS




Current assets




Cash and cash equivalents

$

17,735



$

16,720


Accounts receivable, net

370,978



363,580


Inventory

23,039



19,367


Prepaid expenses

5,954



7,631


Derivative instruments



344


Intangible assets, net

958




Other current assets

193



193


Total current assets

418,857



407,835


Property, plant and equipment




Oil and gas properties (successful efforts method)

8,911,096



7,838,955


Other property and equipment

963,871



868,746


Less: accumulated depreciation, depletion, amortization and impairment

(2,688,361)



(2,534,215)


Total property, plant and equipment, net

7,186,606



6,173,486


Derivative instruments



9


Long-term inventory

12,506



12,200


Other assets

20,961



21,600


Total assets

$

7,638,930



$

6,615,130


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities




Accounts payable

$

16,127



$

13,370


Revenues and production taxes payable

245,198



213,995


Accrued liabilities

233,422



236,480


Accrued interest payable

20,681



38,963


Derivative instruments

149,657



115,716


Advances from joint interest partners

4,888



4,916


Other current liabilities

40



40


Total current liabilities

670,013



623,480


Long-term debt

2,696,534



2,097,606


Deferred income taxes

306,749



305,921


Asset retirement obligations

51,955



48,511


Derivative instruments

19,699



19,851


Other liabilities

7,822



6,182


Total liabilities

3,752,772



3,101,551


Commitments and contingencies




Stockholders' equity




Common stock, $0.01 par value: 450,000,000 shares authorized; 319,384,813 shares issued and 317,363,008 shares outstanding at March 31, 2018 and 270,627,014 shares issued and 269,295,466 shares outstanding at December 31, 2017

3,154



2,668


Treasury stock, at cost: 2,021,805 and 1,331,548 shares at March 31, 2018 and December 31, 2017, respectively

(28,200)



(22,179)


Additional paid-in capital

3,055,003



2,677,217


Retained earnings

718,575



717,985


Oasis share of stockholders' equity

3,748,532



3,375,691


Non-controlling interests

137,626



137,888


Total stockholders' equity

3,886,158



3,513,579


Total liabilities and stockholders' equity

$

7,638,930



$

6,615,130


 


Oasis Petroleum Inc.

Condensed Consolidated Statements of Operations

(Unaudited)



Three Months Ended March 31,


2018


2017


(In thousands, except per share data)

Revenues




Oil and gas revenues

$

363,671



$

237,252


Purchased oil and gas sales

18,037



27,631


Midstream revenues

27,922



14,606


Well services revenues

11,586



5,627


Total revenues

421,216



285,116


Operating expenses




Lease operating expenses

44,781



43,872


Midstream operating expenses

7,985



3,327


Well services operating expenses

7,387



4,560


Marketing, transportation and gathering expenses

21,013



10,951


Purchased oil and gas expenses

17,998



28,002


Production taxes

31,000



20,299


Depreciation, depletion and amortization

149,265



126,666


Exploration expenses

769



1,489


Impairment

93



2,682


General and administrative expenses

27,940



23,176


Total operating expenses

308,231



265,024


Operating income

112,985



20,092


Other income (expense)




Net gain (loss) on derivative instruments

(71,116)



56,075


Interest expense, net of capitalized interest

(37,146)



(36,321)


Other income (expense)

(183)



16


Total other income (expense)

(108,445)



19,770


Income before income taxes

4,540



39,862


Income tax expense

(828)



(16,037)


Net income including non-controlling interests

3,712



23,825


Less: Net income attributable to non-controlling interests

3,122




Net income attributable to Oasis

$

590



$

23,825


Earnings attributable to Oasis per share:




Basic

$

0.00



$

0.10


Diluted

0.00



0.10


Weighted average shares outstanding:




Basic

290,105



233,068


Diluted

291,738



237,900



 

Oasis Petroleum Inc.

Selected Financial and Operational Statistics

(Unaudited)



Three Months Ended March 31,


2018


2017

Operating results (in thousands):




Revenues




Oil revenues

$

323,386



$

208,594


Natural gas revenues

40,285



28,658


Purchased oil and gas sales

18,037



27,631


Midstream revenues

27,922



14,606


Well services revenues

11,586



5,627


Total revenues

$

421,216



$

285,116


Production data:




Oil (MBbls)

5,284



4,435


Natural gas (MMcf)

9,777



7,512


Oil equivalents (MBoe)

6,914



5,687


Average daily production (Boe per day)

76,819



63,192


Average sales prices:




Oil, without derivative settlements (per Bbl)

$

61.20



$

47.03


Oil, with derivative settlements (per Bbl)(1)

54.18



45.24


Natural gas, without derivative settlements (per Mcf)(2)

4.12



3.81


Natural gas, with derivative settlements (per Mcf)(1)(2)

4.13



3.82


Costs and expenses (per Boe of production):




Lease operating expenses

$

6.48



$

7.71


MT&G(3)

3.01



1.77


Production taxes

4.48



3.57


Depreciation, depletion and amortization

21.59



22.27


G&A(4)

4.04



4.08


E&P G&A

3.40



3.54















(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)

Excludes non-cash valuation charges on pipeline imbalances.

(4)

For the three months ended March 31, 2017, well services operating expenses have been adjusted to include $0.7 million for certain well services direct field labor compensation expenses which were previously recognized in general and administrative expenses on our Condensed Consolidated Statements of Operations.

 


Oasis Petroleum Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)



Three Months Ended March 31,


2018


2017


(In thousands)

Cash flows from operating activities:




Net income including non-controlling interests

$

3,712



$

23,825


Adjustments to reconcile net income including non-controlling interests to net cash provided by operating activities:




Depreciation, depletion and amortization

149,265



126,666


Impairment

93



2,682


Deferred income taxes

828



16,037


Derivative instruments

71,116



(56,075)


Equity-based compensation expenses

6,754



6,708


Deferred financing costs amortization and other

5,475



4,940


Working capital and other changes:




Change in accounts receivable, net

(5,708)



(22,478)


Change in inventory

(3,672)



(3,679)


Change in prepaid expenses

492



282


Change in other current assets



(110)


Change in long-term inventory and other assets

(315)



(4)


Change in accounts payable, interest payable and accrued liabilities

(244)



6,060


Change in other current liabilities



2,945


Change in other liabilities

563




Net cash provided by operating activities

228,359



107,799


Cash flows from investing activities:




Capital expenditures

(254,838)



(96,047)


Acquisitions

(520,728)




Derivative settlements

(36,974)



(7,960)


Advances from joint interest partners

(28)



(759)


Net cash used in investing activities

(812,568)



(104,766)


Cash flows from financing activities:




Proceeds from Revolving Credit Facilities

1,470,000



246,000


Principal payments on Revolving Credit Facilities

(875,000)



(241,000)


Deferred financing costs

(215)




Purchases of treasury stock

(6,021)



(5,419)


Distributions to non-controlling interests

(3,450)




Other

(90)



(55)


Net cash provided by (used in) financing activities

585,224



(474)


Increase in cash and cash equivalents

1,015



2,559


Cash and cash equivalents:




Beginning of period

16,720



11,226


End of period

$

17,735



$

13,785


Supplemental non-cash transactions:




Change in accrued capital expenditures

$

12,855



$

8,396


Change in asset retirement obligations

3,453



787


Issuance of shares in connection with the Permian Basin Acquisition

371,220





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:


Three Months Ended March 31,


2018


2017


(In thousands)

Interest expense

$

37,146



$

36,321


Capitalized interest

4,451



2,820


Amortization of deferred financing costs

(1,761)



(1,690)


Amortization of debt discount

(2,618)



(2,355)


Cash Interest

$

37,218



$

35,096


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 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 March 31,


2018


2017


(In thousands)

Net income including non-controlling interests

$

3,712



$

23,825


Net (gain) loss on derivative instruments

71,116



(56,075)


Derivative settlements(1)

(36,974)



(7,960)


Interest expense, net of capitalized interest

37,146



36,321


Depreciation, depletion and amortization

149,265



126,666


Impairment

93



2,682


Exploration expenses

769



1,489


Equity-based compensation expenses

6,754



6,708


Income tax expense

828



16,037


Other non-cash adjustments

209



912


Adjusted EBITDA

232,918



150,605


Adjusted EBITDA attributable to non-controlling interests

3,911




Adjusted EBITDA attributable to Oasis

229,007



150,605


Cash Interest

(37,218)



(35,096)


Capital expenditures(2)

(1,167,228)



(109,795)


Capitalized interest

4,451



2,820


Free Cash Flow

$

(970,988)



$

8,534






Net cash provided by operating activities

$

228,359



$

107,799


Derivative settlements(1)

(36,974)



(7,960)


Interest expense, net of capitalized interest

37,146



36,321


Exploration expenses

769



1,489


Deferred financing costs amortization and other

(5,475)



(4,940)


Changes in working capital

8,884



16,984


Other non-cash adjustments

209



912


Adjusted EBITDA

232,918



150,605


Adjusted EBITDA attributable to non-controlling interests

3,911




Adjusted EBITDA attributable to Oasis

229,007



150,605


Cash Interest

(37,218)



(35,096)


Capital expenditures(2)

(1,167,228)



(109,795)


Capitalized interest

4,451



2,820


Free Cash Flow

$

(970,988)



$

8,534




(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 our 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 statement of cash flows are presented on a cash basis. Acquisitions totaled $891.0 million and $2.6 million for the three months ended March 31, 2018 and 2017, 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 our three reportable business segments on a gross basis for the periods presented:

Exploration and Production


Three Months Ended March 31,


2018


2017


(In thousands)

Income (loss) before income taxes including non-controlling interests

$

(28,184)



$

20,736


Gain on extinguishment of debt



(56,075)


Net loss on derivative instruments

71,116




Derivative settlements(1)

(36,974)



(7,960)


Interest expense, net of capitalized interest

36,884



36,321


Depreciation, depletion and amortization

145,203



124,409


Impairment

93



2,682


Exploration expenses

769



1,489


Equity-based compensation expenses

6,454



6,499


Other non-cash adjustments

209



912


Adjusted EBITDA

$

195,570



$

129,013




(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 March 31,


2018


2017


(In thousands)

Income before income taxes including non-controlling interests

$

31,979



$

20,761


Interest expense, net of capitalized interest

262




Depreciation, depletion and amortization

6,629



3,458


Equity-based compensation expenses

370



348


Adjusted EBITDA

$

39,240



$

24,567


 

Well Services


Three Months Ended March 31,


2018


2017


(In thousands)

Income (loss) before income taxes including non-controlling interests

$

8,107



$

(3,588)


Depreciation, depletion and amortization

3,690



3,164


Equity-based compensation expenses

385



396


Adjusted EBITDA

$

12,182



$

(28)



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 March 31,



2018


2017


(In thousands, except per share data)

Net income attributable to Oasis


$

590



$

23,825


Net (gain) loss on derivative instruments


71,116



(56,075)


Derivative settlements(1)


(36,974)



(7,960)


Impairment


93



2,682


Amortization of deferred financing costs


1,761



1,690


Amortization of debt discount


2,618



2,355


Other non-cash adjustments


209



912


Tax impact(2)


(9,217)



21,103


Adjusted Net Income (Loss) Attributable to Oasis


$

30,196



$

(11,468)







Diluted earnings attributable to Oasis per share


$

0.00



$

0.10


Net (gain) loss on derivative instruments


0.24



(0.24)


Derivative settlements(1)


(0.13)



(0.03)


Impairment


0.00



0.01


Amortization of deferred financing costs


0.01



0.01


Amortization of debt discount


0.01



0.01


Other non-cash adjustments


0.00



0.00


Tax impact(2)


(0.03)



0.09


Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share


$

0.10



$

(0.05)







Diluted weighted average shares outstanding(3)


291,738



233,068







Effective tax rate applicable to adjustment items


23.7

%


37.4

%














(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 Loss Attributable to Oasis Per Share for the three months ended March 31, 2017 because the effect was anti-dilutive due to adjusted net loss.

 

 

SOURCE Oasis Petroleum Inc.

For further information: Richard Robuck, SVP Finance & Treasurer, Oasis Petroleum Inc., (281) 404-9600


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