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Oasis Petroleum Inc. (OAS) Down 1.3% Since Last Earnings Report: Can It Rebound?

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  • OAS
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A month has gone by since the last earnings report for Oasis Petroleum Inc. (OAS). Shares have lost about 1.3% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Oasis Petroleum Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Oasis Petroleum Q3 Earnings and Revenues Beat Estimates

Oasis Petroleum reported third-quarter 2021 adjusted earnings per share of $3.16, comfortably beating the Zacks Consensus Estimate of $1.95 and improving from the quarter-ago profit of $2.76. The outperformance can be attributed to higher commodity prices and better-than-expected production.

OAS’ total operating revenues of $402 million beat the Zacks Consensus Estimate of $262 million. The top line also improved from the sequential quarter’s figure of $393 million.

Among other encouraging metrics of Oasis Petroleum, adjusted EBITDA, and exploration and production (E&P) free cash flow totaled $116 million and $65 million, respectively. OAS paid a quarterly dividend of 50 cents per share ($2 annualized) in the third quarter of 2021, indicating a hike from the sequential quarter’s dividend of 37.5 cents.

Production & Price Realizations

Total production (comprising 61.6% oil) slipped 4.5% from the quarter-ago level to 51.804 thousand oil-equivalent barrels per day (MBOE/d) and surpassed the Zacks Consensus Estimate of 50.83 MBOE/d. While oil volume came in at 31.896 thousand barrels per day (down 8% year over year), natural gas totaled 119,448 thousand cubic feet per day (up 2%).

The average realized crude oil price during the third quarter was $70.12 per barrel, reflecting a 7% increase from the prior-quarter realization of $65.52. The average realized natural gas price was $6.91 per thousand cubic feet, surging 52.5% from the quarter-earlier period’s figure.

Total Expenses

Total operating expenses in the quarter descended to $203.9 million from the sequential quarter’s $240.5 million. This upside was mainly on account of a drop in depreciation, depletion and amortization outlays, and purchased oil and gas expenses, which were down13.7% and 37%, respectively, from the corresponding sequential quarter’s levels. OAS’ lease operating expenses also fell to $9.42 per barrel of oil equivalent (Boe) from the quarter-ago figure of $10.21 per Boe.

Financial Position

Capital spending totaled $42.6 million in the quarter. Oasis Petroleum recorded $294 million in net cash flow provided by operations.

As of Jun 30, this Bakken-focused operator had $448.61 million in cash and cash equivalents. The company had long-term debt of $104 billion, representing a debt-to-capitalization of 48.8%.

Guidance

For the fourth quarter of 2021, Oasis Petroleum reiterates its E&P capex estimate in the $65-$75 million range. OAS retains its current-year E&P capex outlook in the $200-$215 million band.

Management maintains its average volume view of 74.5-77.5 MBOE/d for the December quarter.






 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 8.71% due to these changes.

VGM Scores

Currently, Oasis Petroleum Inc. has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Oasis Petroleum Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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