Shares of Oasis Petroleum Inc. OAS have gone down 3% since the first-quarter 2022 earnings release on May 4.
The stock depreciation occurred despite Oasis Petroleum’s better-than-expected first-quarter top line and earnings. The downtrend shown in the share price could only be attributed to the overall bearishness prevailing in markets.
Behind the Earnings Headlines
The Williston Basin-focused oil and gas producer, OAS, reported first-quarter 2022 adjusted earnings per share (EPS) of $8.32, beating the Zacks Consensus Estimate of $7.13 and also improving from the quarter-ago profit of $4.34, due to higher price realization as a result of the surging energy prices in the reported quarter.
Oasis Petroleum’s total operating revenues of $653 million beat the Zacks Consensus Estimate of $372 million. The top line also improved from the sequential quarter’s figure of $522 million. This can be attributed to higher commodity prices and the overall bullishness of the energy sector.
Among the other encouraging metrics of Oasis Petroleum, adjusted EBITDA and adjusted free cash flow totaled $287.4 million and $217.5 million, respectively.
Oasis Petroleum announced that it would pay its base dividend of 58.5 cents ($2.34 per share annualized) on Jun 1, 2022 to shareholders of record as of May 20, 2022.
In good news for investors, Oasis Petroleum declared a variable dividend of $2.94 per share to shareholders of record as of Jun 1, 2022, payable on Jun 15, 2022. The base dividend and the variable dividend are in line with OAS' previously announced proposal to return $70 million of capital to shareholders per quarter.
Oasis Petroleum Inc. Price, Consensus and EPS Surprise
Oasis Petroleum Inc. Price, Consensus and EPS Surprise
Oasis Petroleum Inc. price-consensus-eps-surprise-chart | Oasis Petroleum Inc. Quote
Production & Price Realizations
The total production (comprising 64.6% oil) jumped 21.7% from the quarter-ago level to 69.606 oil-equivalent barrels per day (MBOE/d). While the oil volume came in at 44.975 thousand barrels per day (up 22.2% from the last year’s quarter), natural gas totaled 147.783 thousand cubic feet per day (up 20.7% year over year).
The average realized crude oil price in the first quarter was $95.34 per barrel, reflecting a 70% increase from the prior year’s first-quarter realization of $56.09. The average realized natural gas price was $8.09 per thousand cubic feet, increasing about 49.5% from the year-ago quarter’s figure.
Total Expenses
Total operating expenses in the quarter ascended to $362.6 million from the year-ago quarter’s $226 million. This increase in expenses was mainly due to a rise in lease operating expenses, depreciation and purchased oil and gas expenses, which were up 23.5%, 45.2% and 104.7%, respectively, from the corresponding year-ago quarter’s levels. Oasis Petroleum’s lease operating expenses also rose to $10.07 per barrel of oil equivalent (Boe) from the quarter-ago figure of $9.63 per Boe.
Financial Position
Capital spending totaled $62.9 million in the quarter. Oasis Petroleum recorded $265.6 million in the net cash flow provided by operations.
As of Mar 31, this Bakken-focused operator had $410.2 million in cash and cash equivalents. The company had long-term debt of $393.9 million, representing a debt-to-capitalization of about 21.4%.
Guidance
Oasis Petroleum declared that it is expecting to close the pending merger with Whiting sometime in the third quarter of 2022.
Oasis Petroleum’s guidance for the year remains unchanged since February. For 2022, Oasis Petroleum anticipates its E&P Capex estimate of around $295 million. OAS expects 2022 EBITDA of $860 million, with a free cash flow of more than $500 million.
No change has been made in the production guidance for the year, which remains in the band of 65-70 MBOE/d for the entire year.
Zacks Rank & Stocks to Consider
Oasis Petroleum currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the energy sector might look at the following companies that turned in a strong bottom line in the first quarter.
Diamondback Energy FANG reported first-quarter 2022 adjusted EPS of $5.20, beating the Zacks Consensus Estimate of $4.74. The outperformance can be attributed to the surge in energy prices in the first quarter, which led to higher oil, natural gas and natural gas liquid sales.
In good news for investors, Diamondback raised its regular quarterly payout by almost 17% to 70 cents a share and declared a variable dividend of $2.35, bringing the total distribution to $3.05. The payout will be made on May 23. FANG also executed $6.7 million of share repurchases in the first quarter of 2022 at $117.34 apiece.
Pioneer Natural Resources Company PXD reported first-quarter 2022 earnings of $7.74 per share (excluding one-time items), beating the Zacks Consensus Estimate of $7.32. The strong quarterly earnings were aided by higher oil-equivalent production volumes and commodity price realizations.
For the second quarter, Pioneer Natural announced a dividend payment of $7.38 per share of common stock, which includes a variable dividend of $6.60 per share and a base dividend of 78 cents per share. This suggests a 95.2% increase from the prior dividend of $3.78 per share.
ConocoPhillips COP reported first-quarter 2022 adjusted EPS of $3.27, beating the Zacks Consensus Estimate of $3.24. The strong quarterly results have been aided by increased oil-equivalent production volumes and realized commodity prices.
ConocoPhillips hiked its expected 2022 return of capital to shareholders. The new guidance is pegged at $10 billion, reflecting an increase from the aforementioned $8 billion. The incremental returns to stockholders will get distributed through share repurchases and VROC tiers.
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