Oasis Petroleum Inc. Announces Quarter Ended June 30, 2014 Earnings

Aug 05, 2014, 18:07 ET from Oasis Petroleum Inc.

HOUSTON, Aug. 5, 2014 /PRNewswire/ -- Oasis Petroleum Inc. (NYSE: OAS) ("Oasis" or the "Company") today announced financial results for the quarter ended June 30, 2014 and provided an operational update.

Highlights include:

  • Increased average daily production to 43,668 barrels of oil equivalent per day ("Boepd"), a 45% increase over the second quarter of 2013 and a 6% sequential quarter increase, excluding production from Sanish.
  • Grew Adjusted EBITDA to $254.7 million in the second quarter of 2014, an increase of $69.2 million over the second quarter of 2013 and a sequential increase of $14.9 million over the first quarter of 2014. 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.
  • Invested capital expenditures ("CapEx") of $351.8 million in the second quarter of 2014.
  • Completed and placed on production 41 gross (30.8 net) operated wells in the second quarter of 2014.
  • Started operating Oasis Well Services' ("OWS") second fracturing fleet.

"Oasis continues to execute on its full-year plan to enhance shareholder value through completion technique changes and resource expansion initiatives," said Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer. "Our first slickwater wells in Indian Hills have continued to produce well above our type curve. In addition, early production results from our first Three Forks slickwater well in Red Bank and a slickwater Bakken well in Montana are expanding the completion technique's applicability across more of our inventory. Both of these Oasis wells are producing 35% or more over comparable wells completed with our base completion design."

Mr. Nusz added, "Even as we move to completing 70% of our wells with different technology than our base design, our expectation of investing a total of $1.25 billion for drilling and completions during 2014 remains unchanged. Our base design well cost of $7.3 million in the first half of 2014, which includes the beneficial impact of OWS, provides us the ability to complete more intense frac jobs while remaining within our budget. While completions were pushed back a bit and we completed six fewer wells than planned, we were able to grow production 6% over the sequential quarter.  We expect production to range between 47,000 and 49,000 Boepd in the third quarter of 2014.  In addition, we have increased both frac spreads and cleanout crews, which will support the additional work we are doing in the second half of the year."

Operational and Financial Update

The Company's average daily production by project area is listed in the following table:

Quarter Ended:

6/30/2014

3/31/2014

6/30/2013

Average daily production (Boepd)

West Williston

30,381

28,227

18,257

East Nesson

13,287

12,980

9,312

Sanish (1)

1,649

2,602

Total

43,668

42,856

30,171

Percent Oil

89.1%

89.4%

90.6%

(1)

Includes production from certain non-operated properties in the Company's Sanish project area and other non-operated leases adjacent to its Sanish position until March 1, 2014. These properties were sold on March 5, 2014 (the "Sanish Divestiture").

The following table describes the Company's producing wells by project area in the Williston Basin as of June 30, 2014:

Bakken/Three Forks Producing Wells

West Williston

East Nesson

Total Williston Basin

Gross

Net

Gross

Net

Gross

Net

Producing on or before 3/31/2014: (1)

Operated

338

260.1

158

125.0

496

385.1

Non-Operated

162

13.3

98

7.1

260

20.4

Production started in Q2 2014:

Operated

26

20.0

15

10.8

41

30.8

Non-Operated

14

0.9

3

0.1

17

1.0

Total Producing Wells on 6/30/2014:

Operated

364

280.1

173

135.8

537

415.9

Non-Operated

176

14.2

101

7.2

277

21.4

(1)

Well counts include changes that occurred in the current reporting period for wells producing on or before March 31, 2014.

Additionally, the Company had approximately 16 rigs running during the second quarter of 2014, and as of June 30, 2014, had an inventory of gross operated wells waiting on completion of 35 wells in West Williston and 32 wells in East Nesson.

The Company's average price per barrel of oil, without derivative settlements, was $94.48 in the second quarter of 2014, compared to $91.15 in the second quarter of 2013 and $89.66 in the first quarter of 2014. The Company's average price differential compared to NYMEX West Texas Intermediate ("WTI") crude oil index prices was 8% in the second quarter of 2014, compared to 3% in the second quarter of 2013 and 9% in the first quarter of 2014.

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

Quarter Ended:

6/30/2014

3/31/2014

6/30/2013

Revenues ($ in thousands):

Oil

$

334,559

$

309,231

$

226,848

Bulk oil sale

5,777

Natural gas

19,623

22,616

9,217

Well services (OWS)

14,878

15,827

11,461

Midstream (OMS)

3,318

1,845

1,279

Total revenues

$

372,378

$

349,519

$

254,582

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

Quarter Ended:

6/30/2014

3/31/2014

6/30/2013

Operating expenses ($ in thousands):

Lease operating expenses (LOE)

$

40,553

$

39,989

$

18,266

Well services (OWS)

7,200

10,359

6,420

Midstream (OMS)

1,569

561

224

Marketing, transportation and gathering expenses (1)

6,996

5,932

4,977

Bulk oil purchase

5,777

Non-cash valuation charges

118

(746)

25

Total operating expenses

$

56,436

$

56,095

$

35,689

Operating expenses ($ per Boe):

Lease operating expenses (LOE)

$

10.21

$

10.37

$

6.65

Marketing, transportation and gathering expenses (1)

1.76

1.53

1.82

(1)

Excludes bulk oil purchase and non-cash valuation charges on pipeline imbalances.

The sequential quarter-over-quarter decrease in lease operating expenses ("LOE") per barrel of oil equivalent ("Boe") was primarily due to higher workover costs in the first quarter of 2014 related to restoring wells that were down due to winter weather conditions.

The increase in marketing, transportation and gathering expenses from the first quarter of 2014 to the second quarter of 2014 is primarily due to higher operated volumes flowing through third-party oil gathering pipelines in the second quarter of 2014. Currently, the Company is flowing approximately 75% of its gross operated oil production through these gathering systems. While transporting volumes through third-party oil gathering pipelines increases marketing, transportation and gathering expenses, it improves oil price realizations by reducing transportation costs included in the Company's oil price differential for sales at the wellhead.

Production taxes as a percentage of oil and gas revenues were 9.7% in the second quarter of 2014, 9.1% in the second quarter of 2013 and 9.6% in the first quarter of 2014. The Company's production tax rate increased in the second quarter of 2014 compared to the second quarter of 2013 due to the increased weighting of production in North Dakota compared to Montana, which has lower production tax rates.

Depreciation, depletion and amortization expenses ("DD&A") totaled $97.3 million in the second quarter of 2014, $66.8 million in the second quarter of 2013 and $91.3 million in the first quarter of 2014. DD&A was $24.48 per Boe in the second quarter of 2014, $24.33 per Boe in the second quarter of 2013 and $23.66 per Boe in the first quarter of 2014. During the first two months of 2014, the Company had production from the wells sold in the Sanish Divestiture, but these wells were not depreciated because the assets were held for sale, which lowered DD&A by $0.78 per Boe in the first quarter of 2014.

General and administrative ("G&A") expenses totaled $20.8 million in the second quarter of 2014, $16.7 million in the second quarter of 2013 and $23.5 million in the first quarter of 2014. The sequential quarter-over-quarter decrease in G&A expenses was primarily due to lower consolidated OWS G&A expenses in the second quarter of 2014 compared to the first quarter of 2014. G&A expenses were $5.22 per Boe in the second quarter of 2014, $6.07 per Boe in the second quarter of 2013 and $6.10 per Boe in the first quarter of 2014. Amortization of stock-based compensation, which is included in G&A expenses, was $5.2 million, or $1.30 per Boe, in the second quarter of 2014 as compared to $3.1 million, or $1.12 per Boe, in the second quarter of 2013 and $4.5 million, or $1.17 per Boe, in the first quarter of 2014. The sequential increase in amortization of stock-based compensation is primarily due to growth in headcount.

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

Quarter Ended:

6/30/2014

3/31/2014

6/30/2013

Derivative activities (1) ($ in thousands)

Derivative settlements

$

(11,405)

$

(2,239)

$

1,246

Non-cash change in fair value of derivative instruments

(54,165)

(15,364)

11,345

Net gain (loss) on derivative instruments

$

(65,570)

$

(17,603)

$

12,591

(1)

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

Interest expense was $39.0 million for the second quarter of 2014 compared to $21.4 million for the second quarter of 2013 and $40.2 million for the first quarter of 2014. The $1.2 million decrease from the first quarter of 2014 was primarily due to lower weighted average borrowings under the Company's revolving credit facility coupled with an increase in capitalized interest in the second quarter of 2014. Capitalized interest totaled $2.3 million for the second quarter of 2014, $1.1 million for the second quarter of 2013 and $1.6 million for the first quarter of 2014.

Income tax expense was $23.3 million for the three months ended June 30, 2014, resulting in an effective tax rate of 37.5%. The Company's income tax expense for the three months ended June 30, 2013 was recorded at 36.0% of pre-tax net income. The Company's effective tax rate is expected to continue to closely approximate the statutory rate applicable to the U.S. and the blended rate for each of the states in which the Company conducts business.

Adjusted EBITDA for the second quarter of 2014 was $254.7 million, a 37% increase over the second quarter of 2013 of $185.5 million, and an increase of 6% from the first quarter of 2014 of $239.8 million. 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.

For the second quarter of 2014, the Company reported net income of $38.8 million, or $0.39 per diluted share, as compared to net income of $67.1 million, or $0.72 per diluted share, for the second quarter of 2013. The Company's second quarter 2014 results were impacted by several non-cash items, including a $54.2 million non-cash mark-to-market loss on derivative instruments. Excluding these items and their tax effect, the second quarter 2014 Adjusted Net Income (non-GAAP) was $70.5 million, or $0.70 per diluted share. Excluding similar non-cash items and their tax effect, Adjusted Net Income (non-GAAP) for the second quarter of 2013 was $60.1 million, or $0.65 per diluted share. 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

The following table depicts the Company's exploration and production ("E&P") CapEx by project area and total CapEx by category:

1Q 2014

2Q 2014

YTD 2014

CapEx ($ in thousands):

 E&P CapEx by Project Area

West Williston

$

189,288

$

223,526

$

412,814

East Nesson

107,843

103,370

211,213

Total E&P CapEx (1)

297,131

326,896

624,027

OWS

6,410

18,903

25,313

Non E&P (2)

3,957

6,036

9,993

               Total Company CapEx (3)

$

307,498

$

351,835

$

659,333

(1)

Year-to-date total E&P CapEx includes $12.5 million for Oasis Midstream Services ("OMS"), primarily related to pipelines and salt water disposal systems.

(2)

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

(3)

CapEx reflected in the table above differs from the amounts shown in the statement of cash flows in the Company's condensed consolidated financial statements because amounts reflected in the table above include accrued liabilities for capital expenditures, while the amounts presented in the statement of cash flows are presented on a cash basis.

Liquidity

On June 30, 2014, Oasis had total cash and cash equivalents of $27.0 million. As of June 30, 2014, the Company had $100.0 million of LIBOR loans and $5.2 million of outstanding letters of credit issued under its revolving credit facility, resulting in an unused borrowing base capacity of $1,394.8 million.

Update to Outlook for Operating Metrics

Oasis is updating its full year 2014 guidance range for LOE to $8.50 to $10.00 per Boe and production taxes to 9.7% to 10.2%.

Hedging Activity

As of August 5, 2014, the Company had the following outstanding commodity derivative contracts, all of which are priced off of WTI and settle monthly:

Weighted Average Prices ($/Bbl)

Remaining Term

Sub-Floor

Floor

Ceiling

Swaps

BOPD

Total Barrels

2014

Full Year

Swaps

Jul - Dec

$

95.90

9,500

1,738,500

Swaps with sub-floors

Jul - Dec

$

70.00

$

92.60

6,000

1,098,000

Two-way collars

Jul - Dec

$

95.22

$

106.39

11,500

2,104,500

Three-way collars

Jul - Dec

$

70.59

$

90.59

$

105.25

8,500

1,555,500

Total 2014 hedges (weighted average)

$

70.34

$

93.25

$

105.91

$

94.62

35,500

6,496,500

2015

Full Year

Swaps

Jan - Dec

$

90.15

10,000

3,650,000

Two-way collars

Jan - Dec

$

86.00

$

103.42

5,000

1,825,000

First Half

Swaps

Jan - June

$

91.26

9,000

1,629,000

Deferred premium puts

Jan - June

$

90.00

6,000

1,086,000

Two-way collars

Jan - June

$

90.00

$

99.10

2,000

362,000

Total 2015 hedges (weighted average)

$

87.77

$

102.70

$

90.49

23,430

8,552,000

Total 1H15 hedges

32,000

Total 2H15 hedges

15,000

Conference Call Information

Investors, analysts and other interested parties are invited to listen to the conference call:

Date:

Wednesday, August 6, 2014

Time:

9:00 a.m. Central Time

Dial-in:

877-621-0256

Intl. Dial in:

706-634-0151

Conference ID:

74680357

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 Wednesday, August 13, 2014 by dialing:

Replay dial-in:

855-859-2056

Intl. replay:

404-537-3406

Conference ID:

74680357

The conference call will also be available for replay 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 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, but are not limited to, changes in oil and natural gas prices, weather and environmental conditions, 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 Manager – Finance and Investor Relations

 

Oasis Petroleum Inc. Condensed Consolidated Balance Sheet (Unaudited)

June 30, 2014

December 31, 2013

(In thousands, except share data)

ASSETS

Current assets

Cash and cash equivalents

$

26,957

$

91,901

Accounts receivable — oil and gas revenues

216,764

175,653

Accounts receivable — joint interest partners

147,056

139,459

Inventory

17,636

20,652

Prepaid expenses

8,907

10,191

Deferred income taxes

25,390

6,335

Derivative instruments

2,264

Advances to joint interest partners

97

760

Other current assets

421

391

Total current assets

443,228

447,606

Property, plant and equipment

Oil and gas properties (successful efforts method)

5,141,582

4,528,958

Other property and equipment

231,129

188,468

Less: accumulated depreciation, depletion, amortization and impairment

(823,500)

(637,676)

Total property, plant and equipment, net

4,549,211

4,079,750

Assets held for sale

137,066

Derivative instruments

1,333

Deferred costs and other assets

44,540

46,169

Total assets

$

5,036,979

$

4,711,924

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

$

32,402

$

8,920

Revenues and production taxes payable

217,414

146,741

Accrued liabilities

288,813

241,830

Accrued interest payable

49,444

47,910

Derivative instruments

62,415

8,188

Advances from joint interest partners

6,910

12,829

Other current liabilities

3,311

Total current liabilities

660,709

466,418

Long-term debt

2,300,000

2,535,570

Deferred income taxes

460,897

323,147

Asset retirement obligations

37,542

35,918

Derivative instruments

11,844

139

Other liabilities

1,963

2,183

Total liabilities

3,472,955

3,363,375

Commitments and contingencies

Stockholders' equity

Common stock, $0.01 par value: 300,000,000 shares authorized; 101,396,597 and 100,866,589 shares issued at June 30, 2014 and December 31, 2013, respectively

999

996

Treasury stock, at cost: 244,729 and 167,155 shares at June 30, 2014 and December 31, 2013, respectively

(8,677)

(5,362)

Additional paid-in capital

995,024

985,023

Retained earnings

576,678

367,892

Total stockholders' equity

1,564,024

1,348,549

Total liabilities and stockholders' equity

$

5,036,979

$

4,711,924

 

Oasis Petroleum Inc. Condensed Consolidated Statement of Operations (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2014

2013

2014

2013

(In thousands, except per share data)

Revenues

Oil and gas revenues

$

354,182

$

241,842

$

686,029

$

483,493

Well services and midstream revenues

18,196

12,740

35,868

19,393

Total revenues

372,378

254,582

721,897

502,886

Expenses

Lease operating expenses

40,553

18,266

80,542

37,755

Well services and midstream operating expenses

8,769

6,644

19,689

9,558

Marketing, transportation and gathering expenses

7,114

10,779

12,300

14,168

Production taxes

34,493

21,397

66,296

43,486

Depreciation, depletion and amortization

97,276

66,790

188,548

133,051

Exploration expenses

475

392

855

2,249

Impairment of oil and gas properties

42

208

804

706

General and administrative expenses

20,751

16,656

44,271

30,510

Total expenses

209,473

141,132

413,305

271,483

Gain on sale of properties

3,640

187,033

Operating income

166,545

113,450

495,625

231,403

Other income (expense)

Net gain (loss) on derivative instruments

(65,570)

12,591

(83,173)

(2,021)

Interest expense, net of capitalized interest

(38,990)

(21,392)

(79,148)

(42,575)

Other income (expense)

135

294

288

1,074

Total other income (expense)

(104,425)

(8,507)

(162,033)

(43,522)

Income before income taxes

62,120

104,943

333,592

187,881

Income tax expense

23,287

37,824

124,806

68,911

Net income

$

38,833

$

67,119

$

208,786

$

118,970

Earnings per share:

Basic

$

0.39

$

0.73

$

2.10

$

1.29

Diluted

0.39

0.72

2.08

1.28

Weighted average shares outstanding:

Basic

99,663

92,399

99,612

92,387

Diluted

100,260

92,702

100,328

92,812

 

Oasis Petroleum Inc. Selected Financial and Operational Statistics (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2014

2013

2014

2013

Operating results ($ in thousands):

Revenues

Oil

$

334,559

$

232,625

$

643,790

$

464,300

Natural gas

19,623

9,217

42,239

19,193

Well services and midstream

18,196

12,740

35,868

19,393

Total revenues

372,378

254,582

721,897

502,886

Production data:

Oil (MBbls)

3,541

2,489

6,990

4,971

Natural gas (MMcf)

2,596

1,540

5,045

2,929

Oil equivalents (MBoe)

3,974

2,746

7,831

5,459

Average daily production (Boe/d)

43,668

30,171

43,264

30,162

Average sales prices:

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

$

94.48

$

91.15

$

92.10

$

92.24

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

91.26

91.65

90.15

92.83

Natural gas (per Mcf) (3)

7.56

5.98

8.37

6.55

Costs and expenses (per Boe of production):

Lease operating expenses

$

10.21

$

6.65

$

10.29

$

6.92

Marketing, transportation and gathering expenses (4)

1.76

1.82

1.65

1.54

Production taxes

8.68

7.79

8.47

7.97

Depreciation, depletion and amortization

24.48

24.33

24.08

24.37

General and administrative expenses

5.22

6.07

5.65

5.58

(1)

For the three and six months ended June 30, 2013, average sales prices for oil are calculated using total oil revenues, excluding bulk oil sales of $5.8 million, 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)

Excludes bulk oil purchase and non-cash valuation charges on pipeline imbalances.

 

Oasis Petroleum Inc. Condensed Consolidated Statement of Cash Flows (Unaudited)

Six Months Ended June 30,

2014

2013

(In thousands)

Cash flows from operating activities:

Net income

$

208,786

$

118,970

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

Depreciation, depletion and amortization

188,548

133,051

Gain on sale of properties

(187,033)

Impairment of oil and gas properties

804

706

Deferred income taxes

118,695

67,974

Derivative instruments

83,173

2,021

Stock-based compensation expenses

9,678

5,371

Debt discount amortization and other

3,220

1,753

Working capital and other changes:

Change in accounts receivable

(37,132)

(13,768)

Change in inventory

3,016

(4,200)

Change in prepaid expenses

1,284

(4,402)

Change in other current assets

(30)

330

Change in other assets

(1,477)

Change in accounts payable and accrued liabilities

91,543

48,701

Change in other current liabilities

3,311

688

Change in other liabilities

(132)

612

Net cash provided by operating activities

486,254

357,807

Cash flows from investing activities:

Capital expenditures

(606,924)

(428,630)

Acquisition of oil and gas properties

(8,116)

Proceeds from sale of properties

324,888

Costs related to sale of properties

(2,337)

Redemptions of short-term investments

25,000

Derivative settlements

(13,644)

2,932

Advances from joint interest partners

(5,919)

(5,593)

Net cash used in investing activities

(312,052)

(406,291)

Cash flows from financing activities:

Proceeds from revolving credit facility

100,000

Principal payments on revolving credit facility

(335,570)

Purchases of treasury stock

(3,315)

(364)

Debt issuance costs

(85)

(2,998)

Other

(176)

Net cash used in financing activities

(239,146)

(3,362)

Decrease in cash and cash equivalents

(64,944)

(51,846)

Cash and cash equivalents:

Beginning of period

91,901

213,447

End of period

$

26,957

$

161,601

Supplemental non-cash transactions:

Change in accrued capital expenditures

$

51,129

$

(6,085)

Change in asset retirement obligations

1,624

3,441

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 or non-recurring 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 table presents reconciliations 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.

Three Months Ended June 30,

Six Months Ended June 30,

2014

2013

2014

2013

(In thousands)

Adjusted EBITDA reconciliation to net income:

Net income

$

38,833

$

67,119

$

208,786

$

118,970

Gain on sale of properties

(3,640)

(187,033)

Non-cash change in fair value of derivative instruments

54,165

(11,345)

69,529

4,953

Interest expense

38,990

21,392

79,148

42,575

Depreciation, depletion and amortization

97,276

66,790

188,548

133,051

Impairment of oil and gas properties

42

208

804

706

Exploration expenses

475

392

855

2,249

Stock-based compensation expenses

5,173

3,082

9,678

5,371

Income tax expense

23,287

37,824

124,806

68,911

Other non-cash adjustments

118

25

(628)

74

Adjusted EBITDA

$

254,719

$

185,487

$

494,493

$

376,860

Adjusted EBITDA reconciliation to net cash provided by operating activities:

Net cash provided by operating activities

$

277,987

$

187,260

$

486,254

$

357,807

Derivative settlements

(11,405)

1,246

(13,644)

2,932

Interest expense

38,990

21,392

79,148

42,575

Exploration expenses

475

392

855

2,249

Debt discount amortization and other

(1,733)

(1,007)

(3,220)

(1,753)

Current tax expense

3,345

837

6,111

937

Changes in working capital

(53,058)

(24,658)

(60,383)

(27,961)

Other non-cash adjustments

118

25

(628)

74

Adjusted EBITDA

$

254,719

$

185,487

$

494,493

$

376,860

Adjusted Net Income and Adjusted Diluted Earnings Per Share are supplemental non-GAAP financial measures that are 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 certain non-cash and non-recurring items, including non-cash changes in the fair value of derivative instruments, impairment of oil and gas properties, and other similar non-cash and non-recurring charges, and then (2) the non-cash and non-recurring items' impact on taxes based on the Company's effective tax rate in the same period. Adjusted Net Income is not a measure of net income as determined by GAAP. The Company defines Adjusted Diluted Earnings Per Share as Adjusted Net Income divided by diluted weighted average shares outstanding.

The following table provides reconciliations of net income (GAAP) to Adjusted Net Income (non-GAAP) and diluted earnings per share (GAAP) to Adjusted Diluted Earnings Per Share (non-GAAP):

Three Months Ended June 30,

Six Months Ended June 30,

2014

2013

2014

2013

(In thousands, except per share data)

Net income

$

38,833

$

67,119

$

208,786

$

118,970

Non-cash change in fair value of derivative instruments

54,165

(11,345)

69,529

4,953

Gain on sale of properties

(3,640)

(187,033)

Impairment of oil and gas properties

42

208

804

706

Other non-cash adjustments

118

25

(628)

74

     Tax impact (1)

(19,000)

4,045

43,896

(2,145)

Adjusted Net Income

$

70,518

$

60,052

$

135,354

$

122,558

Diluted earnings per share

$

0.39

$

0.72

$

2.08

$

1.28

Non-cash change in fair value of derivative instruments

0.54

(0.12)

0.69

0.05

Gain on sale of properties

(0.04)

(1.86)

Impairment of oil and gas properties

0.01

0.01

Other non-cash adjustments

(0.01)

     Tax impact (1)

(0.19)

0.05

0.44

(0.02)

Adjusted Diluted Earnings Per Share

$

0.70

$

0.65

$

1.35

$

1.32

Diluted weighted average shares outstanding

100,260

92,702

100,328

92,812

Effective tax rate

37.5

%

36.0

%

37.4

%

36.7

%

(1)

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

 

SOURCE Oasis Petroleum Inc.



RELATED LINKS

http://www.oasispetroleum.com