It has been about a month since the last earnings report for Oasis Petroleum (OAS - Free Report) . Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Oasis 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 Posts Q1 Loss, Beats Sales Estimates
Oasis Petroleum reported first-quarter loss per share — excluding one-time items — of 2 cents against the Zacks Consensus Estimate of a profit of 4 cents. The reported figure also compared unfavorably with the year-ago income of 10 cents. The weak results can be attributed to lower realized oil prices and high costs.
The company’s total operating revenues in the first quarter amounted to $575.7 million, increasing from $473.8 million a year ago on the back of higher production. The top line also surpassed the Zacks Consensus Estimate of $459 million.
Production & Realized Prices
Production of oil and natural gas averaged 91.7 thousand oil-equivalent barrels per day (MBOE/d) (26% oil), up 19.4% from a year ago and 3.6% above the midpoint of the company’s guidance.
Oasis Petroleum’s production of oil was 66 thousand barrels per day and natural gas output came in at 154,005 thousand cubic feet per day.
The average realized crude oil price during the first quarter was $53.52 per barrel, representing a decrease of 13.3% from the year-ago realization of $61.75. Moreover, the average realized natural gas price during the quarter under review was $3.66 per thousand cubic feet, down11.1% from the year-ago period.
Total operating expenses in the quarter surged 45% y/y to $522.4 million. Higher depreciation, impairment, marketing and purchase costs drove the total expenses. Depreciation costs totaled $189.8 million versus $149 million in the year-ago period.
The company’s lease operating expenses increased 9.3% y/y to $7.08 per barrel of oil equivalent (Boe). The company anticipates lease operating expenses per Boe in the band of $7-$7.75 for the remainder of the year.
Capital spending (before acquisitions) totaled $226.8 million in the quarter. Oasis Petroleum generated $174.9 million in net cash flow from operations, lower than the year-ago period’s $228.4 million.
As of Mar 31, the Bakken-focused operator — with a market capitalization of almost $2 billion — had $15.4 million in cash and cash equivalents. The company had a long-term debt of $2.8 billion, representing a debt-to-capitalization ratio of 42.2%.
Oasis Petroleum expects 2019 output levels in the range of 86-91 MBOE/d. The company expects capital spending within $540-$560 million from the upstream segment. Midstream spending is expected within $195-$219 million versus prior forecast of $150-$170 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -45.09% due to these changes.
Currently, Oasis has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Oasis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.