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 experien