Oasis Petroleum Inc. Announces Quarter and Year Ending December 31, 2013 Earnings - WDRB 41 Louisville News

Oasis Petroleum Inc. Announces Quarter and Year Ending December 31, 2013 Earnings

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SOURCE Oasis Petroleum Inc.

HOUSTON, Feb. 25, 2014 /PRNewswire/ -- Oasis Petroleum Inc. (NYSE: OAS) ("Oasis" or the "Company") today announced financial results for the quarter and year ended December 31, 2013.

Financial Highlights in 2013:

  • Increased revenue by 66% to $1,142.0 million in 2013, up from $686.7 million in the prior year.
  • Grew Adjusted EBITDA by 60% to $821.9 million in 2013, up from $512.3 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 49% to $228.0 million in 2013, up from $153.4 million in the prior year.

Financial Update

The Company's revenues are detailed in the following table:



Quarter Ended:


Year Ended:



12/31/2013


9/30/2013


12/31/2013


12/31/2012

Revenues ($ in thousands)









Oil


$

295,903


$

273,663


$

1,028,089


$

641,925

Bulk oil sale


-


-


5,777


1,521

Natural gas


18,064


13,289


50,546


27,045

Well services (OWS)


17,579


17,090


51,845


16,177

Midstream (OMS)


2,069


1,456


5,742


-

Total revenues


$

333,615


$

305,498


$

1,141,999


$

686,668

Total revenues for the fourth quarter of 2013 increased by 9% compared to the third quarter of 2013, primarily due to higher production as a result of the Company's well completions and its acquisition of certain properties in its West Williston project area in the fourth quarter of 2013.

The Company's operating expenses are detailed in the following table:



Quarter Ended:


Year Ended:



12/31/2013


9/30/2013


12/31/2013


12/31/2012

Operating expenses ($ in thousands):









  Lease operating expenses


$

35,048


$

21,831


$

94,634


$

54,924

  Well services (OWS)


10,228


9,929


29,259


11,774

  Midstream (OMS)


608


390


1,454


-

  Marketing, transportation and gathering expenses(1)


5,286


5,173


18,777


8,566

     Bulk oil purchase


-


-


5,776


1,383

     Non-cash valuation charge


782


515


1,371


(692)

   Select operating expenses


$

51,952


$

37,838


$

151,271


$

75,955

Operating expenses ($ per Boe):









  Lease operating expenses


$

9.05


$

7.18


$

7.65


$

6.68

  Marketing, transportation and gathering expenses(1)



1.36



1.70



1.52



1.04












(1)

Excludes bulk oil purchase and non-cash valuation charges.

The sequential quarter-over-quarter increase in lease operating expenses per barrel of oil equivalent ("Boe") was primarily due to additional workover costs, which include costs to protect producing wells from wells that are being completed, coupled with higher cost structures on wells acquired by the Company in the fourth quarter of 2013.

Marketing, transportation and gathering expenses, excluding non-cash valuation charges, was $5.3 million. The 20% sequential quarter-over-quarter decrease per Boe was primarily due to wells acquired in the fourth quarter of 2013 that were not connected to third-party infrastructure.

Production taxes for the fourth quarter of 2013 totaled $30.2 million, or 9.6% of oil and gas revenues, compared to 9.4% of oil and gas revenues for the third quarter of 2013. The sequential quarter-over-quarter increase in production taxes as a percentage of oil and gas revenues was due to the acquisition of wells in North Dakota, which imposes a higher production tax rate compared to Montana, which has lower incentivized production tax rates on certain new wells.

Depreciation, depletion and amortization for the fourth quarter of 2013 totaled $26.14 per Boe, compared to $23.91 per Boe in the third quarter of 2013. The increase per Boe was primarily due to costs related to the acquisition of certain properties in the Company's West Williston project area.

General and administrative ("G&A") expenses for the fourth quarter of 2013 totaled $28.1 million compared to $16.7 million in the third quarter of 2013. This increase was primarily due to the impact of the Company's organizational growth on employee compensation, additional end-of-year compensation expenses and acquisition-related costs. These increases were coupled with lower Oasis Well Services ("OWS") activity due to inclement weather at the end of the fourth quarter of 2013, which caused OWS G&A expenses to be $3.0 million higher in the fourth quarter of 2013 as compared to the third quarter of 2013.

The Company's derivative activities are detailed in the following table:



Quarter Ended:


Year Ended:



12/31/2013


9/30/2013


12/31/2013


12/31/2012

Derivative activities(1) ($ in thousands)








Derivative settlements


$

(2,998)


$

(8,067)


$

(8,133)


$

6,545

Change in fair value of derivative instruments


9,404


(31,750)


(27,299)


27,619

Net gain (loss) on derivative instruments


$

6,406


$

(39,817)


$

(35,432)


$

34,164



(1)

The Company's derivative instruments do not qualify for and were not designated as hedging instruments for accounting purposes.

Adjusted EBITDA for the fourth quarter of 2013 was $225.4 million, an increase of $61.9 million, or 38%, over the fourth quarter of 2012 of $163.5 million. Adjusted EBITDA for the full year 2013 was $821.9 million, an increase of $309.6 million, or 60%, over the full year 2012 of $512.3 million.

The Company reported net income of $54.5 million in the fourth quarter of 2013 compared to $42.6 million in the fourth quarter of 2012. For the full year 2013, Oasis reported net income of $228.0 million compared to $153.4 million for the full year 2012. Excluding certain non-cash items and their tax effect in the fourth quarters of 2013 and 2012, Adjusted Net Income (non-GAAP) was $49.7 million, or $0.52 per diluted share, and $45.2 million, or $0.49 per diluted share, respectively. Excluding certain non-cash items and their tax effect for the years ending December 31, 2013 and 2012, Adjusted Net Income (non-GAAP) was $247.0 million, or $2.64 per diluted share, and $138.4 million, or $1.50 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 $1,699.6 million for the fourth quarter of 2013 and $2,506.3 million for the year ending December 31, 2013.

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



2013



1Q


2Q


3Q


4Q


FY

CapEx ($ in thousands)











E&P CapEx











  West Williston


$

136,370


$

80,385


$

135,363


$

145,503


$

497,621

  East Nesson


82,429


92,576


97,881


105,654


378,540

  Sanish


19,943


5,577


9,964


5,083


40,567

Acquisitions(1)


-


5,554


127,660


1,430,197


1,563,411

  Total E&P CapEx(2)


$

238,742


$

184,092


$

370,868


$

1,686,437


$

2,480,139

OWS


302


2,559


3,399


8,957


15,217

Other Non E&P(3)


1,303


2,340


3,107


4,192


10,942

 Total Company CapEx(4)


$

240,347


$

188,991


$

377,374


$

1,699,586


$

2,506,298



(1)

Reflects all acquisitions in 2013, including $1,551.7 million for four separate acquisitions of an aggregate of approximately 161,000 net acres in the Company's West Williston and East Nesson project areas.

(2)

Total E&P capital expenditures include:


  • $855.8 million of drilling and completion (including production-related equipment) CapEx for operated and non-operated wells, including savings from services provided by OWS and Oasis Midstream Services ("OMS");
  • $26.5 million for maintaining and expanding the Company's leasehold position;
  • $22.3 million for constructing infrastructure to support production in the Company's core project areas, primarily related to salt water disposal systems;
  • $10.2 million for field facilities; and
  • $1.9 million for micro-seismic work, purchase of seismic data and other test work.




(3)

Non-E&P CapEx include such items as administrative capital and capitalized interest.

(4)

CapEx (including acquisitions) reflected in the table above differ from the amounts for capital expenditures and acquisition of oil and gas properties shown in the statement of cash flows in the Company's 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. In addition, acquisitions reflected in the table include inventory purchased as part of acquisitions, which is included in net cash provided by operating activities in the statement of cash flows in the Company's consolidated financial statements.

Hedging Activity

As of February 25, 2014, the Company had the following outstanding commodity derivate contracts, all of which are priced off NYMEX West Texas Intermediate crude oil index prices and settle monthly:





Weighted Average Prices ($/Bbl)





Current Hedged Volumes


Term


Sub-Floor


Floor


Ceiling


Swaps


BOPD


Total Barrels

2014















Full Year















Swaps


January - December








$

93.07


3,500


1,277,500

Swaps with sub-floor


January - December


$

70.00






$

92.60


6,000


2,190,000

Two-way collars


January - December




$

90.00


$

101.13




3,500


1,277,500

Three-way collars


January - December


$

70.59


$

90.59


$

105.25




8,500


3,102,500

First Half















Swaps


January - June








$

99.42


4,000


724,000

Three-way collars


January - June


$

70.00


$

90.00


$

103.98




2,000


362,000

Partial Year















Swaps


March - December








$

96.49


4,000


1,224,000

Total 2014 hedges (weighted average)


$

70.32


$

90.38


$

104.04


$

94.50


27,829


10,157,500

Remaining 1H14 Hedges (Mar-Jun)










31,500



Average 2H14 Hedges










25,500


















2015















Full Year















Swaps


January - December








$

88.80


2,000


730,000

First Half















Swaps


January - June








$

90.03


4,000


724,000

Total 2015 hedges (weighted average)








$

89.41


3,984


1,454,000

Total 1H15 Hedges










6,000



Total 2H15 Hedges










2,000



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 at www.oasispetroleum.com.

Contact:
Oasis Petroleum Inc.
Matt Ultis, (281) 404-9600

 

 

Oasis Petroleum Inc. Financial Statements

OASIS PETROLEUM INC.

CONSOLIDATED BALANCE SHEET




December 31,



2013


2012



(In thousands, except share data)

ASSETS





Current assets





Cash and cash equivalents


$

91,901


$

213,447

Short-term investments


-


25,891

Accounts receivable - oil and gas revenues


175,653


110,341

Accounts receivable - joint interest partners


139,459


99,194

Inventory


20,652


20,707

Prepaid expenses


10,191


1,770

Advances to joint interest partners


760


1,985

Derivative instruments


2,264


19,016

Deferred income taxes


6,335


-

Other current assets


391


335

Total current assets


447,606


492,686

Property, plant and equipment





Oil and gas properties (successful efforts method)


4,528,958


2,348,128

Other property and equipment


188,468


49,732

Less: accumulated depreciation, depletion, amortization and impairment


(637,676)


(391,260)

Total property, plant and equipment, net


4,079,750


2,006,600

Assets held for sale


137,066


-

Derivative instruments


1,333


4,981

Deferred costs and other assets


46,169


24,527

Total assets


$

4,711,924


$

2,528,794

LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities





Accounts payable


$

8,920


$

12,491

Advances from joint interest partners


12,829


21,176

Revenues and production taxes payable


146,741


71,553

Accrued liabilities


241,830


189,863

Accrued interest payable


47,910


30,096

Derivative instruments


8,188


1,048

Deferred income taxes


-


4,558

Total current liabilities


466,418


330,785

Long-term debt


2,535,570


1,200,000

Asset retirement obligations


35,918


22,956

Derivative instruments


139


380

Deferred income taxes


323,147


177,671

Other liabilities


2,183


1,997

Total liabilities


3,363,375


1,733,789

Commitments and contingencies





Stockholders' equity





Common stock, $0.01 par value; 300,000,000 shares authorized; 100,866,589 shares and 93,432,712 shares issued at December 31, 2013 and 2012, respectively


996


925

Treasury stock, at cost; 167,155 shares and 129,414 shares at December 31, 2013 and 2012, respectively


(5,362)


(3,796)

Additional paid-in-capital


985,023


657,943

Retained earnings


367,892


139,933

Total stockholders' equity


1,348,549


795,005

Total liabilities and stockholders' equity


$

4,711,924


$

2,528,794

 

OASIS PETROLEUM INC.

CONSOLIDATED STATEMENT OF OPERATIONS




Three Months Ended December 31,


Year Ended December 31,



2013


2012


2013


2012



(In thousands, except per share data)

Revenues









Oil and gas revenues


$

313,967


$

208,634


$

1,084,412


$

670,491

Well services and midstream revenues


19,648


5,693


57,587


16,177

Total revenues


333,615


214,327


1,141,999


686,668

Expenses









Lease operating expenses


35,048


16,945


94,634


54,924

Well services and midstream operating expenses


10,836


4,670


30,713


11,774

Marketing, transportation and gathering expenses


6,068


1,974


25,924


9,257

Production taxes


30,228


19,546


100,537


62,965

Depreciation, depletion and amortization


101,276


65,951


307,055


206,734

Exploration expenses


(452)


79


2,260


3,250

Impairment of oil and gas properties


406


974


1,168


3,581

General and administrative expenses


28,072


17,568


75,310


57,190

Total expenses


211,482


127,707


637,601


409,675

Operating income


122,133


86,620


504,398


276,993

Other income (expense)









Net gain (loss) on derivative instruments


6,406


596


(35,432)


34,164

Interest expense, net of capitalized interest


(41,736)


(21,191)


(107,165)


(70,143)

Other income (expense)


119


2,339


1,216


4,860

Total other income (expense)


(35,211)


(18,256)


(141,381)


(31,119)

Income before income taxes


86,922


68,364


363,017


245,874

Income tax expense


32,432


25,774


135,058


92,486

Net income


$

54,490


$

42,590


$

227,959


$

153,388

Earnings per share:









Basic


$

0.58


$

0.46


$

2.45


$

1.66

Diluted


0.57


0.46


2.44


1.66

Weighted average shares outstanding:









Basic


94,228


92,226


92,867


92,180

Diluted


94,821


92,509


93,411


92,513

 

OASIS PETROLEUM INC.

SELECTED FINANCIAL AND OPERATIONAL STATS




Three Months Ended December 31,


Year Ended December 31,



2013


2012


2013


2012

Operating results ($ in thousands):











Revenues









Oil


$

295,903


$

199,761


$

1,033,866


$

643,446

Natural gas


18,064


8,873


50,546


27,045

Well services and midstream


19,648


5,693


57,587


16,177

Total revenues


$

333,615


$

214,327


$

1,141,999


$

686,668

Production data:









Oil (MBbls)


3,446


2,301


11,133


7,533

Natural gas (MMcf)


2,567


1,406


7,450


4,146

Oil equivalents (MBoe)


3,874


2,535


12,375


8,224

Average daily production (Boe/d)


42,106


27,556


33,904


22,469

Average sales prices:









Oil, without derivative settlements (per Bbl)(1)


$

85.87


$

86.82


$

92.34


$

85.22

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


85.00


88.45


91.61


86.09

Natural gas (per Mcf)(3)


7.04


6.31


6.78


6.52

Costs and expenses (per Boe of production):









Lease operating expenses(4)


$

9.05


$

6.68


$

7.65


$

6.68

Marketing, transportation and gathering expenses(5)


1.36


1.03


1.52


1.04

Production taxes


7.80


7.71


8.12


7.66

Depreciation, depletion and amortization


26.14


26.01


24.81


25.14

General and administrative expenses


7.25


6.93


6.09


6.95



(1)

For the years ended December 31, 2013 and 2012, average sales prices for oil are calculated using total oil revenues, excluding bulk oil sales of $5.8 million and $1.5 million, respectively, divided by oil production.

(2)

Realized prices include gains or losses on cash settlements for commodity derivatives, which do not qualify for and were not designated as hedging instruments for accounting purposes.

(3)

Natural gas prices include the value for natural gas and natural gas liquids.

(4)

For the year ended December 31, 2012, lease operating expenses include midstream income and operating expenses, which are included in well services and midstream revenues and well services and midstream operating expenses, respectively, for the year ended December 31, 2013.

(5)

Excludes bulk oil purchase and non-cash valuation charges.

 

OASIS PETROLEUM INC.

CONSOLIDATED STATEMENT OF CASH FLOWS




Year Ended December 31,



2013


2012



(In thousands)

Cash flows from operating activities:





Net income


$

227,959


$

153,388

Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation, depletion and amortization


307,055


206,734

Impairment of oil and gas properties


1,168


3,581

Deferred income taxes


134,583


92,479

Derivative instruments


35,432


(34,164)

Stock-based compensation expenses


11,982


10,333

Debt discount amortization and other


4,248


2,810

Working capital and other changes:





Change in accounts receivable


(107,473)


(90,103)

Change in inventory


(13,941)


(29,313)

Change in prepaid expenses


(8,191)


346

Change in other current assets


(56)


156

Change in other assets


(3,248)


(95)

Change in accounts payable and accrued liabilities


107,451


76,706

Change in other current liabilities


-


(472)

Change in other liabilities


887


-

Net cash provided by operating activities


697,856


392,386

Cash flows from investing activities:





Capital expenditures


(893,524)


(1,051,365)

Acquisition of oil and gas properties


(1,560,072)


-

Derivative settlements


(8,133)


6,545

Purchases of short-term investments


-


(126,213)

Redemptions of short-term investments


25,000


120,316

Advances from joint interest partners


(8,347)


12,112

Net cash used in investing activities


(2,445,076)


(1,038,605)

Cash flows from financing activities:





Proceeds from issuance of senior notes


1,000,000


400,000

Proceeds from revolving credit facility


600,000


-

Principal payments on revolving credit facility


(264,430)


-

Debt issuance costs


(22,910)


(8,012)

Proceeds from sale of common stock


314,580


-

Purchases of treasury stock


(1,566)


(3,194)

Net cash provided by financing activities


1,625,674


388,794

Decrease in cash and cash equivalents


(121,546)


(257,425)

Cash and cash equivalents:





Beginning of period


213,447


470,872

End of period


$

91,901


$

213,447

Supplemental cash flow information:





Cash paid for interest, net of capitalized interest


$

85,596


$

53,488

Cash paid for taxes


750


107

Supplemental non-cash transactions:





Change in accrued capital expenditures


$

34,354


$

59,878

Change in asset retirement obligations


13,201


10,230

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 and net cash provided by operating activities, respectively.

Adjusted EBITDA Reconciliations




Three Months Ended

December 31,




Year Ended

December 31,




2013


2012


2013


2012




(In thousands)


Adjusted EBITDA reconciliation to Net Income:














Net income


$

54,490



$

42,590



$

227,959



$

153,388


Change in fair value of derivative instruments



(9,404)



3,165



27,299



(27,619)


Interest expense, net of capitalized interest



41,736



21,191



107,165



70,143


Depreciation, depletion and amortization



101,276



65,951



307,055



206,734


Impairment of oil and gas properties



406



974



1,168



3,581


Exploration expenses



(452)



79



2,260



3,250


Stock-based compensation expenses



3,571



3,706



11,982



10,333


Income tax expense



32,432



25,774



135,058



92,486


Other non-cash adjustments



1,321



54



1,910



(2)


Adjusted EBITDA


$

225,376



$

163,484



$

821,856



$

512,294
















Adjusted EBITDA reconciliation to Net Cash Provided by Operating Activities:















Net cash provided by operating activities


$

161,175



$

110,258



$

697,856



$

392,386


Derivative settlements



(2,998)



3,761



(8,133)



6,545


Interest expense, net of capitalized interest



41,736



21,191



107,165



70,143


Exploration expenses



(452)



79



2,260



3,250


Debt discount amortization and other



(1,555)



(772)



(4,248)



(2,810)


Current tax expense



93



(57)



475



7


Changes in working capital



26,056



28,970



24,571



42,775


Other non-cash adjustments



1,321



54



1,910



(2)


Adjusted EBITDA


$

225,376



$

163,484



$

821,856



$

512,294


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 fair value of 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 to the non-GAAP financial measure of Adjusted Net Income for the periods presented.

Adjusted Net Income Reconciliation




Three Months Ended

December 31,


Year Ended

December 31,



2013


2012


2013


2012



(In thousands, except per share data)

Net income


$

54,490


$

42,590


$

227,959


$

153,388

Change in fair value of derivative instruments


(9,404)


3,165


27,299


(27,619)

Impairment of oil and gas properties


406


974


1,168


3,581

Other non-cash adjustments


1,321


54


1,910


(2)

       Tax impact(1)


2,864


(1,581)


(11,302)


9,043

Adjusted Net Income


$

49,677


$

45,202


$

247,034


$

138,391

Adjusted earnings per share:









Basic


$

0.53


$

0.49


$

2.66


$

1.50

Diluted


0.52


0.49


2.64


1.50

Weighted average shares outstanding:









Basic


94,228


92,226


92,867


92,180

Diluted


94,821


92,509


93,411


92,513

Effective tax rate


37.3%


37.7%


37.2%


37.6%



(1)

The tax impact is computed utilizing the Company's effective tax rate on the adjustments for certain non-cash items.

©2012 PR Newswire. All Rights Reserved.

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