Oasis Petroleum beats on earnings, could be an acquisition target

Posted by bakken

Oasis Petroleum Inc. (NYSE: OAS) announced financial and operational results for the quarter ended September 30, 2011 yesterday after the market closed.  In the quarter ending on September 30, 2011,  OAS grew average daily production to 11,583 barrels of oil equivalent per day (“Boepd”), a 110% increase over the third quarter of 2010. Daily production increased by 47% compared to the second quarter of 2011.  Increased Adjusted EBITDA to $62.9 million, an increase of $40.9 million over the third quarter of 2010 and a sequential increase of $18.4 million over the second quarter of 2011.    Thomas B. Nusz, Oasis’ Chairman and Chief Executive Officer stated

“Our multi-year inventory of oil drilling locations in the Williston Basin provides us with strong visible growth potential. Consistent with our plan, we just added our eighth and ninth operated rigs.”

Total revenue for the third quarter of 2011 was $87.6 million compared to $33.0 million for the third quarter of 2010, an increase of 166%. Sequential quarter-over-quarter revenue growth was $20.4 million, or 30%.   Lease operating expenses (“LOE”) increased $6.6 million to $9.8 million for the third quarter 2011 compared to the third quarter 2010 and increased by $3.6 million in the third quarter 2011 compared to the second quarter 2011.     With the latest earning report,  the forward 2012 PE for OASIS (OAS: 39.09 +1.37%) looks to be under 15.   This could be an attractive aquisition target with 300,000 plus acres in the Bakken region.   In an earlier Bloomberg report, Among companies drilling for Bakken shale oil, Oasis and Whiting now offer the greatest value per acre, according to data compiled by Bloomberg. Houston-based Oasis controls 303,000 net acres in the Bakken and has an enterprise value, or the sum of its equity and net debt, of about $2.87 billion.   Using Statoil’s deal offer of $12,082 per acre for Brigham, shares of Oasis and Whiting could now be worth at least 20 percent more in an acquisition, the data show.      Oasis is a likely takeover candidate because it has properties close to Brigham’s fields and is probably open to selling itself, Pritchard Capital’s Berman said.

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Tags: BEXP earnings OAS