Oasis Petroleum Inc. Announces Quarter Ending June 30, 2013 Earnings

HOUSTON, Aug. 6, 2013 /PRNewswire/ -- Oasis Petroleum Inc. (NYSE: OAS) ("Oasis" or the "Company") today announced financial results for the quarter ended June 30, 2013.

Highlights for the second quarter of 2013, include:

  • Increased average daily production to 30,171 barrels of oil equivalent per day ("Boepd"), a 48% increase over the second quarter of 2012. Average daily production was relatively flat as compared to the first quarter of 2013 and within the Company's guidance range of 29,000 to 31,000 Boepd.
  • Increased revenue to $254.6 million in the second quarter of 2013, an increase of $105.5 million over the second quarter of 2012 and a sequential increase of $6.3 million over the first quarter of 2013.
  • Completed and placed on production 20 gross (14.0 net) operated wells in the second quarter of 2013.
  • Began pad drilling operations, which increased the number of gross operated wells waiting on completion to 37 as of the end of the second quarter of 2013.
  • Grew Adjusted EBITDA to $185.5 million, an increase of $77.0 million over the second quarter of 2012 and a sequential decrease of $5.9 million over the first quarter of 2013. 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.

"Oasis continues to deliver on expectations, as we managed the logistics of pad drilling operations and spring break up during the second quarter," said Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer. "We completed 20 gross operated wells with an average working interest of 70%, which is in line with what we projected.  This allowed us to keep production relatively flat quarter over quarter.  We completed 14.7 net operated and non-operated wells in the second quarter of 2013, while our backlog of wells waiting on completion grew significantly as we began pad drilling during the quarter.  Through pad drilling and other operational efficiencies, we drove down operated well costs on the wells completed in the second quarter of 2013 to approximately $8.2 million, excluding the impact of Oasis Well Services ("OWS"). OWS reduced capital expenditures for the Company by $6.4 million in the second quarter of 2013, which equates to approximately $0.4 million per net operated well completed. We also recently picked up two additional drilling rigs and now have 11 rigs operating to capitalize on the efficiencies of pad development and favorable weather conditions." 

Mr. Nusz added, "Completion activity should increase in the third quarter as we work off the backlog of wells waiting on completion that resulted from pad drilling activities.  We plan on completing 40 to 45 gross operated wells and expect production to range between 31,500 Boepd and 34,500 Boepd in the third quarter of 2013.  We are also tightening our full year production guidance range to 31,500 Boepd to 33,500 Boepd.  Lastly, based on encouraging data from our lower bench core work, we will spud two wells this quarter into the lower benches of the Three Forks - one in Indian Hills and one in North Cottonwood."

Operational and Financial Update

Average daily production by project area is listed in the following table:



Quarter Ended:



6/30/2013


3/31/2013


6/30/2012

Average daily production (Boepd)







West Williston


18,257


19,021


13,715

East Nesson


9,312


8,384


4,494

Sanish


2,602


2,748


2,144

Total


30,171


30,153


20,353

Percent Oil


90.6%


91.5%


90.8%

The following table describes the Company's producing wells by project area in the Williston Basin as of June 30, 2013:



Bakken/Three Forks Producing Wells 



West Williston


East Nesson


Sanish


Total Williston Basin



Gross


Net


Gross


Net


Gross


Net


Gross


Net

Producing on or before 3/31/2013: (1)

















           Operated


177


143.1


84


70.5




261


213.6

           Non-Operated


55


4.6


82


6.3


278


22.4


415


33.3

Production started in Q2 2013:

















           Operated


10


6.7


10


7.3




20


14.0

           Non-Operated




8


0.4


12


0.3


20


0.7

Total Producing Wells on 6/30/2013:

















           Operated


187


149.8


94


77.8




281


227.6

           Non-Operated


55


4.6


90


6.7


290


22.7


435


34.0



(1)

Well counts include changes that occurred in the current reporting period for wells producing on or before March 31, 2013.

Additionally, the Company also has a backlog of gross operated wells waiting on completion ("WOC") and wells that were drilling as of June 30, 2013, as shown below: 



Gross Operated Wells



WOC


Drilling

         West Williston


18


5

         East Nesson


19


6

Total


37


11

The Company's average price per barrel of oil, without realized derivatives, was $91.15 in the second quarter of 2013, compared to $82.36 in the second quarter of 2012 and $93.33 in the first quarter of 2013. The Company's average price differential compared to NYMEX West Texas Intermediate ("WTI") crude oil index prices was 3% in the second quarter of 2013, compared to 12% in the second quarter of 2012 and 1% in the first quarter of 2013. As the premium at coastal markets contracted each month during the second quarter of 2013, the Company's price differentials relative to WTI increased. More recently, as pricing on pipelines has become more attractive than pricing on rail, the Company has increased the volumes of its crude oil transported by pipeline.

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



Quarter Ended:



6/30/2013


3/31/2013


6/30/2012

Revenues ($ in thousands):







        Oil 


$226,848


$231,675


$138,559

        Bulk oil sale


5,777



        Natural gas


9,217


9,976


6,644

        Well services (OWS)


11,461


5,715


3,861

        Midstream (OMS)


1,279


938


               Total revenues


$254,582


$248,304


$149,064

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



Quarter Ended:



6/30/2013


3/31/2013


6/30/2012

Operating expenses ($ in thousands):







        Lease operating expenses (LOE)


$18,266


$19,489


$12,029

        Well services (OWS)


6,420


2,682


1,207

        Midstream (OMS)


224


232


        Marketing, transportation and gathering expenses (1)


4,977


3,340


1,970

           Bulk oil purchase 


5,777



           Non-cash valuation charge


25


49


                 Total operating expenses


$35,689


$25,792


$15,206

Operating expenses ($ per Boe):







           Lease operating expenses (LOE)


$6.65


$7.18


$6.49

           Marketing, transportation and gathering expenses (1)


$1.82


$1.25


$1.06



(1)

Excludes bulk oil purchase and non-cash valuation charge.

The sequential quarter-over-quarter decrease in lease operating expenses ("LOE") per barrel of oil equivalent ("BOE") was primarily due to additional cost savings from Oasis Midstream Services ("OMS") in the second quarter of 2013. The formation of OMS in the first quarter of 2013 resulted in a portion of income related to salt water disposal activity being included in well services and midstream revenues, rather than as a reduction to LOE. Excluding the impact of OMS, LOE would have been $5.90 per Boe and $6.58 per Boe in the second and first quarter of 2013, respectively, compared to $6.49 per Boe in the second quarter of 2012.

The increase in marketing, transportation and gathering expenses from the first quarter of 2013 to the second quarter of 2013 is due to a $5.8 million bulk oil purchase coupled with higher operated volumes flowing through third party oil gathering pipelines in the second quarter of 2013. Currently, the Company is flowing approximately 85% 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 our oil price differential for sales at the wellhead.

Production taxes as a percentage of oil and gas revenues were 9.1% in the second quarter of 2013, 9.5% in the second quarter of 2012 and 9.1% in the first quarter of 2013. The Company's production tax rate decreased in the second quarter of 2013 compared to the second quarter of 2012, primarily as a result of additional new Montana wells subject to lower incentivized production tax rates.

Depreciation, depletion and amortization expenses ("DD&A") totaled $66.8 million in the second quarter of 2013, $44.2 million in the second quarter of 2012  and $66.3 million in the first quarter of 2013. DD&A was $24.33 per Boe in the second quarter of 2013, $23.87 per Boe in the second quarter of 2012 and $24.42 per Boe in the first quarter of 2013.

General and administrative ("G&A") expenses totaled $16.7 million in the second quarter of 2013, $13.5 million in the second quarter of 2012 and $13.9 million in the first quarter of 2013. The overall increase in G&A expenses from the first quarter of 2013 to the second quarter of 2013 was primarily due to increased employee compensation expenses due to our organizational growth and increased amortization of our restricted stock awards and performance share units. G&A expenses were $6.07 per Boe in the second quarter of 2013, $7.31 per Boe in the second quarter of 2012 and $5.10 per Boe in the first quarter of 2013. Amortization of stock-based compensation, which is included in the aggregate G&A expenses, was $3.1 million, or $1.12 per Boe, in the second quarter of 2013 as compared to $2.3 million, or $1.25 per Boe, in the second quarter of 2012 and $2.3 million, or $0.84 per Boe, in the first quarter of 2013.

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



Quarter Ended:



6/30/2013


3/31/2013


6/30/2012

Derivative activities (1) ($ in thousands) 







         Derivative settlements


$1,246


$1,686


($1,174)

         Non-cash change in unrealized gain (loss) on derivative instruments


11,345


(16,298)


75,769

                  Net gain (loss) on derivative instruments


$12,591


($14,612)


$74,595



(1)

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

The Company recorded non-cash charges for the impairment of oil and natural gas properties of $0.2 million in the second quarter of 2013 related to unproved property leases that expired or have been forecasted to expire under current drilling plans, as compared to $2.2 million in the second quarter of 2012 and $0.5 million in the first quarter of 2013.

Interest expense increased $7.3 million to $21.4 million for the second quarter of 2013 compared to the second quarter of 2012  and decreased $0.2 million compared to the first quarter of 2013. The $7.3 million increase was the result of additional interest expense from the Company's issuance of 6.875% senior unsecured notes in July 2012. Capitalized interest totaled $1.1 million for the second quarter of 2013 and $0.8 million for the second quarter of 2012.

Income tax expense was $37.8 million for the three months ended June 30, 2013, resulting in an effective tax rate of 36.0%. The Company's income tax expense for the three months ended June 30, 2012 was recorded at 37.4% 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 2013 was $185.5 million, an increase of $77.0 million, or 71%, over the second quarter of 2012 of $108.5 million, and a 3% decrease from the first quarter of 2013 of $191.4 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 2013, the Company reported net income of $67.1 million, or $0.72 per diluted share, as compared to net income of $76.0 million, or $0.82 per diluted share, for the second quarter of 2012. The Company's second quarter 2013 results were impacted by several non-cash items, including an $11.3 million unrealized gain on derivative instruments and a $0.2 million impairment of oil and gas properties. Excluding these items and their tax effect, the second quarter 2013 Adjusted Net Income (non-GAAP) was $60.1 million, or $0.65 per diluted share. Excluding similar non-cash items and their tax effect, Adjusted Net Income (non-GAAP) for the second quarter of 2012 was $30.0 million, or $0.33 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") capital expenditures ("CapEx") by project area and total CapEx by category:


1Q 2013


2Q 2013


YTD 2013

CapEx ($ in thousands):






E&P CapEx by Project Area






West Williston

$

136,370


$

85,939


$

222,309

East Nesson

82,429


92,576


175,005

Sanish

19,943


5,577


25,520







Total E&P CapEx (1)

238,742


184,092


422,834

OWS

302


2,559


2,861

Non E&P (2)

1,303


2,340


3,643







Total Company CapEx (3)

$

240,347


$

188,991


$

429,338









(1)

Total E&P CapEx include $6.0 million for OMS, primarily related to salt water disposal systems.

(2)

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

(3)

CapEx reflected in the table above differ 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, 2013, Oasis had total cash and cash equivalents of $161.6 million and no short-term investments. As of June 30, 2013, the Company had no outstanding indebtedness and $2.2 million of outstanding letters of credit issued under its revolving credit facility, resulting in an unused borrowing base capacity of $897.8 million. On April 5, 2013, the Company entered into a second amended and restated credit agreement (the "Second Amended Credit Facility") and completed its semi-annual redetermination of the Company's borrowing base. Pursuant to the Second Amended Credit Facility, the Company's borrowing base increased from $750 million to $1,250 million. However, the Company elected to limit the lenders' aggregate commitment to $900 million. The lenders' aggregate commitment can be increased to the full $1,250 million borrowing base by increasing the commitment of one or more lenders.

Hedging Activity

As of August 6, 2013, the Company had the following outstanding commodity derivative contracts, all of which are priced off of WTI and settle monthly:





Weighted Average Prices ($/Bbl)




Total

Current Hedged Volumes


Remaining Term


Sub-Floor


Floor


Ceiling


Swaps


BOPD


Barrels

2013















   Swaps


5 Months (Aug-Dec)








$95.40


8,000


1,224,000

   Two-way collars


5 Months (Aug-Dec)




$86.82


$97.75




5,500


841,500

   Three-way collars


5 Months (Aug-Dec)


$65.92


$92.45


$111.45




6,130


937,890

   Put spread (no ceiling)


5 Months (Aug-Dec)


$71.03


$91.03






4,870


745,110

Total 2013 hedges (weighted average)


$68.18


$90.15


$104.97


$95.40


24,500


3,748,500

2014















Partial Year















   Swaps


6 Months (Jan-Jun)








$97.17


1,000


181,000

   Three-way collars


6 Months (Jan-Jun)


$70.00


$90.00


$103.98




2,000


362,000

Full Year















   Swaps


12 Months (Jan-Dec)








$93.07


3,500


1,277,500

   Swaps with sub-floor


12 Months (Jan-Dec)


$70.00






$92.60


6,000


2,190,000

   Two-way collars


12 Months (Jan-Dec)




$90.00


$94.90




1,000


365,000

   Three-way collars


12 Months (Jan-Dec)


$70.59


$90.59


$105.25




8,500


3,102,500

Total 2014 hedges (weighted average)


$70.32


$90.48


$104.14


$92.99




7,478,000

Implied total volume hedged (BOPD) for balance of 2014








20,488



 

Conference Call Information

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




Date:


Wednesday, August 7, 2013

Time:


10:00 a.m. Central Time

Dial-in:


855-384-2828

Intl. Dial in:


706-634-0151

Conference ID:


18477148

Website:


www.oasispetroleum.com

A recording of the conference call will be available beginning at 1:00 p.m. Central Time on the day of the call and will be available until Wednesday, August 14, 2013 by dialing:




Replay dial-in:


855-859-2056

Intl. replay:


404-537-3406

Conference ID:


18477148

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.
Richard Robuck, (281) 404-9600
Director – Finance

 

Oasis Petroleum Inc.

Condensed Consolidated Balance Sheet

(Unaudited)






June 30, 2013


December 31, 2012


(In thousands, except share data)

ASSETS




Current assets




Cash and cash equivalents

$

161,601



$

213,447


Short-term investments



25,891


Accounts receivable — oil and gas revenues

130,518



110,341


Accounts receivable — joint interest partners

92,785



99,194


Inventory

16,385



20,707


Prepaid expenses

6,121



1,770


Advances to joint interest partners

1,319



1,985


Derivative instruments

7,353



19,016


Other current assets

5



335


Total current assets

416,087



492,686


Property, plant and equipment




Oil and gas properties (successful efforts method)

2,675,902



2,348,128


Other property and equipment

144,518



49,732


Less: accumulated depreciation, depletion, amortization and impairment

(514,567)



(391,260)


Total property, plant and equipment, net

2,305,853



2,006,600


Derivative instruments

10,554



4,981


Deferred costs and other assets

25,650



24,527


Total assets

$

2,758,144



$

2,528,794


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities




Accounts payable

$

30,682



$

12,491


Advances from joint interest partners

15,583



21,176


Revenues and production taxes payable

102,661



71,553


Accrued liabilities

180,988



189,863


Accrued interest payable

29,133



30,096


Derivative instruments



1,048


Deferred income taxes

1,030



4,558


Other current liabilities

688




Total current liabilities

360,765



330,785


Long-term debt

1,200,000



1,200,000


Asset retirement obligations

26,268



22,956


Derivative instruments

291



380


Deferred income taxes

249,172



177,671


Other liabilities

2,435



1,997


Total liabilities

1,838,931



1,733,789


Commitments and contingencies




Stockholders' equity




Common stock, $0.01 par value; 300,000,000 shares authorized; 93,693,829 issued and 93,554,121 outstanding at June 30, 2013; 93,432,712 issued and 93,303,298 outstanding at December 31, 2012

925



925


Treasury stock, at cost; 139,708 and 129,414 shares at June 30, 2013 and December 31, 2012, respectively

(4,160)



(3,796)


Additional paid-in-capital

663,545



657,943


Retained earnings

258,903



139,933


Total stockholders' equity

919,213



795,005


Total liabilities and stockholders' equity

$

2,758,144



$

2,528,794


 

 



Oasis Petroleum Inc.

Condensed Consolidated Statement of Operations

(Unaudited)








Three Months Ended June 30,


Six Months Ended June 30,



2013


2012


2013


2012



(In thousands, except per share data)

Revenues









        Oil and gas revenues


$241,842


$145,203


$483,493


$283,109

        Well services and midstream revenues


12,740


3,861


19,393


4,521

               Total revenues


254,582


149,064


502,886


287,630

Expenses









        Lease operating expenses


18,266


12,029


37,755


21,845

        Well services and midstream operating expenses


6,644


1,207


9,558


1,684

        Marketing, transportation and gathering expenses


10,779


1,970


14,168


4,539

        Production taxes


21,397


13,720


43,486


26,986

        Depreciation, depletion and amortization


66,790


44,213


133,051


83,099

        Exploration expenses


392



2,249


2,835

        Impairment of oil and gas properties


208


2,203


706


2,571

        General and administrative expenses


16,656


13,537


30,510


25,736

               Total expenses


141,132


88,879


271,483


169,295

Operating income


113,450


60,185


231,403


118,335

Other income (expense)









        Net gain (loss) on derivative instruments


12,591


74,595


(2,021)


56,009

        Interest expense, net of capitalized interest


(21,392)


(14,074)


(42,575)


(27,973)

        Other income


294


776


1,074


1,374

               Total other income (expense)


(8,507)


61,297


(43,522)


29,410

        Income before income taxes


104,943


121,482


187,881


147,745

        Income tax expense


37,824


45,439


68,911


55,261

Net income


$67,119


$76,043


$118,970


$92,484

Earnings per share:









Basic


$0.73


$0.82


$1.29


$1.00

Diluted


0.72


0.82


1.28


1.00

Weighted average shares outstanding:









Basic


92,399


92,176


92,387


92,153

Diluted


92,702


92,222


92,812


92,339

 

Oasis Petroleum Inc.

Selected Financial and Operational Statistics

(Unaudited)








Three Months Ended June 30,


Six Months Ended June 30,



2013


2012


2013


2012

Operating results ($ in thousands):









Revenues









        Oil


$232,625


$138,559


$464,300


$269,935

        Natural gas


9,217


6,644


19,193


13,174

        Well services and midstream


12,740


3,861


19,393


4,521

               Total revenues


254,582


149,064


502,886


287,630

Production data:









Oil (MBbls)


2,489


1,682


4,971


3,156

Natural gas (MMcf)


1,540


1,019


2,929


1,803

Oil equivalents (MBoe)


2,746


1,852


5,459


3,457

Average daily production (Boe/d)


30,171


20,353


30,162


18,993

Average sales prices:









Oil, without realized derivatives (per Bbl) (1)


$91.15


$82.36


$92.24


$85.04

Oil, with realized derivatives (per Bbl) (1) (2)


91.65


81.67


92.83


84.26

Natural gas (per Mcf) (3)


5.98


6.52


6.55


7.30










Costs and expenses (per Boe of production):









Lease operating expenses (4)


$6.65


$6.49


$6.92


$6.32

Marketing, transportation and gathering expenses (5)


1.82


1.06


1.54


1.31

Production taxes


7.79


7.41


7.97


7.81

Depreciation, depletion and amortization


24.33


23.87


24.37


24.04

General and administrative expenses


6.07


7.31


5.58


7.45

 

(1)

Average sales prices for oil are calculated using total oil revenues, excluding bulk oil sales, divided by oil production. Bulk oil sales totaled $5.8 million for the three and six months ended June 30, 2013 and $1.5 million for the six months ended June 30, 2012.

(2)

Realized prices include realized 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)

For the three and six months ended June 30, 2012, lease operating expenses include midstream income and operating expenses, which are included in well services and midstream revenues and well services and midstream operating expenses, respectively, for the three and six months ended June 30, 2013.

(5)

Excludes bulk oil purchase and non-cash valuation charge.

 

Oasis Petroleum Inc.

Condensed Consolidated Statement of Cash Flows

(Unaudited)






Six Months Ended June 30,



2013


2012



(In thousands)

Cash flows from operating activities:





Net income


$118,970


$92,484

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





        Depreciation, depletion and amortization


133,051


83,099

        Impairment of oil and gas properties


706


2,571

        Deferred income taxes


67,974


55,161

        Derivative instruments


2,021


(56,009)

        Stock-based compensation expenses


5,371


3,898

        Debt discount amortization and other


1,753


1,265

Working capital and other changes:





        Change in accounts receivable


(13,768)


(26,840)

        Change in inventory


(4,200)


(21,636)

        Change in prepaid expenses


(4,402)


1,500

        Change in other current assets


330


490

        Change in other assets



(7,365)

        Change in accounts payable and accrued liabilities


48,701


40,022

        Change in other current liabilities


688


2,470

        Change in other liabilities


612


750

               Net cash provided by operating activities


357,807


171,860

Cash flows from investing activities:





        Capital expenditures


(429,296)


(440,781)

        Derivative settlements


2,932


(2,465)

        Redemptions of short-term investments


25,000


19,994

        Advances to joint interest partners


666


1,978

        Advances from joint interest partners


(5,593)


19,380

               Net cash used in investing activities


(406,291)


(401,894)

Cash flows from financing activities:





        Purchases of treasury stock


(364)


(1,206)

        Debt issuance costs


(2,998)


(746)

               Net cash used in financing activities


(3,362)


(1,952)

Decrease in cash and cash equivalents


(51,846)


(231,986)

Cash and cash equivalents:





Beginning of period


213,447


470,872

End of period


$161,601


$238,886

Supplemental non-cash transactions:





Change in accrued capital expenditures


($6,085)


$104,486

Change in asset retirement obligations


3,441


4,185

 

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 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 tables present a reconciliation 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,



2013


2012


2013


2012

Adjusted EBITDA reconciliation to Net Income ($ in thousands):









        Net income


$67,119


$76,043


$118,970


$92,484

        Net (gain) loss on derivative instruments


(12,591)


(74,595)


2,021


(56,009)

        Derivative settlements


1,246


(1,174)


2,932


(2,465)

        Interest expense


21,392


14,074


42,575


27,973

        Depreciation, depletion and amortization


66,790


44,213


133,051


83,099

        Impairment of oil and gas properties


208


2,203


706


2,571

        Exploration expenses


392



2,249


2,835

        Stock-based compensation expenses


3,082


2,307


5,371


3,898

        Income tax expense


37,824


45,439


68,911


55,261

        Other non-cash adjustments


25



74


Adjusted EBITDA


$185,487


$108,510


$376,860


$209,647

Adjusted EBITDA reconciliation to Net Cash Provided by Operating Activities ($ in thousands):









        Net cash provided by operating activities


$187,260


$109,095


$357,807


$171,860

        Derivative settlements


1,246


(1,174)


2,932


(2,465)

        Interest expense


21,392


14,074


42,575


27,973

        Exploration expenses


392



2,249


2,835

        Debt discount amortization and other


(1,007)


(617)


(1,753)


(1,265)

        Current tax expense


837


100


937


100

        Changes in working capital


(24,658)


(12,968)


(27,961)


10,609

        Other non-cash adjustments


25



74


Adjusted EBITDA


$185,487


$108,510


$376,860


$209,647

Adjusted Net Income 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 Net Income as net income after adjusting first for (1) the impact of certain non-cash items, including changes in unrealized gains and losses on derivative instruments, impairment of oil and gas properties, and other similar non-cash charges, and then (2) the non-cash items' impact on taxes based on the Company's effective tax rates in the same period. Adjusted Net Income is not a measure of net income as determined by GAAP.

The following table provides a reconciliation of net income (GAAP) to Adjusted Net Income (non-GAAP):



Three Months Ended June 30,


Six Months Ended June 30,



2013


2012


2013


2012



(In thousands, except per share amounts)

Net income


$67,119


$76,043


$118,970


$92,484

        Net (gain) loss on derivative instruments


(12,591)


(74,595)


2,021


(56,009)

        Derivative settlements


1,246


(1,174)


2,932


(2,465)

        Impairment of oil and gas properties


208


2,203


706


2,571

        Other non-cash adjustments


25



74


        Tax impact (1)


4,045


27,518


(2,145)


20,912

Adjusted Net Income


$60,052


$29,995


$122,558


$57,493

Adjusted earnings per share:









Basic 


$0.65


$0.33


$1.33


$0.62

Diluted


$0.65


$0.33


$1.32


$0.62

Weighted average shares outstanding:









Basic


92,399


92,176


92,387


92,153

Diluted


92,702


92,222


92,812


92,339

Effective Tax Rate


36.0%


37.4%


36.7%


37.4%



(1)

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

SOURCE Oasis Petroleum Inc.



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http://www.oasispetroleum.com

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