2014

Oasis Petroleum Inc. Announces Quarter Ending September 30, 2012 Earnings

HOUSTON, Nov. 7, 2012 /PRNewswire/ -- Oasis Petroleum Inc. (NYSE: OAS) ("Oasis" or the "Company") today announced financial results for the quarter ended September 30, 2012.

Highlights for the three months ended September 30, 2012 include:

  • Increased average daily production to 24,257 barrels of oil equivalent per day ("Boepd"), a 109% increase over the third quarter of 2011.  Average daily production increased by 19% compared to the second quarter of 2012 and exceeded our guidance range of 22,000 to 24,000 Boepd.
  • Increased revenue to $184.7 million in the third quarter of 2012, up from $87.6 million in the third quarter of 2011 and $149.1 million in the second quarter of 2012, for an increase of 111% and 24%, respectively.
  • Completed and brought on production 34 gross operated wells in the third quarter 2012 compared to 22 gross operated wells in the third quarter of 2011 and 26 gross operated wells in the second quarter of 2012.
  • Grew Adjusted EBITDA to $139.2 million, an increase of $76.3 million over the third quarter of 2011 and a sequential increase of $30.7 million over the second quarter of 2012.  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.

"The momentum of our operational success continued into the third quarter, as we again exceeded our production guidance and drove down our capital cost per well," said Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer.  "The team has done a great job minimizing downtime and has continued to deliver on our completion schedule, which has allowed us to bring the total operated wells on first production to 86 for the first nine months of 2012.  As production continues to grow, we now believe that the fourth quarter average daily production will range between 26.0 MBoepd and 28.0 MBoepd, and our new full-year guidance is 22.1 MBoepd to 22.6 MBoepd.  Operated well costs averaged $9.0 million this quarter, including $0.3 million per well savings related to Oasis Well Services, compared to $10.5 million for the first half of the year. Even before taking into account the benefit of Oasis Well Services, our current well costs are in-line where we said we would be by year-end 2012, at an average cost of $8.8 million per well. Oasis Well Services has proven itself to be a robust value driver for Oasis on numerous fronts, including driving down well costs and increasing the efficiency and quality of our fracs. Additionally, we recently brought wells online in our Indian Hills infill pilot programs in advance of our transition to development mode, which we expect to occur in 2013."

"We have approximately 60% of our gross operated oil volumes on our third party gathering system and expect this to grow to north of 80% by mid-year 2013 as we connect our wells in East Nesson.  This gathering system provides access to numerous rail and pipeline delivery points," Mr. Nusz added.

Operational and Financial Update

Average daily production for the third quarter of 2012 was 24,257 Boepd, an increase of 109% as compared to 11,583 Boepd in the third quarter of 2011. Sequential quarter-over-quarter average daily production increased 3,904 Boepd, or 19%. In the third quarter of 2012, 93% of production was from oil.

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


Average Daily Production for the Quarter Ended (Boepd):

Project Area

Sept 30, 2012


Jun 30, 2012


Change


% Change

   West Williston 

16,605


13,715


2,890


21%

   East Nesson 

5,336


4,494


842


19%

   Sanish 

2,316


2,144


172


8%

Total Company

24,257


20,353


3,904


19%

The Company's average price per barrel of oil, without realized derivatives, was $83.71 in the third quarter of 2012, compared to $83.52 in the third quarter of 2011 and $82.36 in the second quarter of 2012.  The Company's average price differential compared to West Texas Intermediate ("WTI") crude oil index prices was 9% in the third quarter of 2012, compared to 6% in the third quarter of 2011 and 12% in the second quarter of 2012.  The Company's differentials continued to improve in the third quarter of 2012 compared to the second quarter of 2012 due to higher quoted prices relative to WTI for Bakken crude in markets such as Clearbrook, Minnesota and Guernsey, Wyoming.  This was a result of transportation capacity additions in the Williston Basin outpacing production growth along with fewer refinery constraints.

Total revenue for the third quarter of 2012 was $184.7 million compared to $87.6 million for the third quarter of 2011, an increase of 111%.  Sequential quarter-over-quarter revenue growth was $35.6 million, or 24%. This increase is primarily due to a 19% increase in production and a $2.1 million increase in well services revenues in the third quarter of 2012 compared to the second first quarter of 2012.   

The following table describes the Company's producing wells by project area in the Williston Basin as of September 30, 2012:

Bakken/Three Forks Wells


West Williston


East Nesson


Sanish


Total Williston Basin


Gross

Net


Gross

Net


Gross

Net


Gross

Net

Total producing wells on 6/30/12












Operated

111

88.7


55

43.4


-

-


166

132.2

Non-Operated

43

3.3


53

4.4


212

16.4


308

24.1

Production started  in Q3 2012












Operated (1)

27

21.6


7

8.2


-

-


34

29.7

Non-Operated

5

0.7


5

0.4


24

2.0


34

3.2

Total Producing Wells on 9/30/12:












Operated

138

110.3


62

51.5


-

-


200

161.9

Non-Operated

48

4.0


58

4.9


236

18.4


342

27.3


























(1)

Includes approximately 2.4 net wells related to acquisitions and working interest changes in the third quarter of 2012.

Additionally, the Company also has a backlog of wells waiting on completion and drilling as of September 30, 2012, as shown below:


Gross Operated Wells


Waiting on
Completion


Drilling (1)

West Williston

17


6

East Nesson

8


5

Total

25


11










(1)

Includes one rig that was drilling on a two well pad.

Lease operating expenses ("LOE") per Boe decreased $1.77, or 20%, to $7.23 per Boe in the third quarter of 2012 compared to the third quarter of 2011, and increased $0.74 per Boe, or 11%, in the third quarter of 2012 compared to the second quarter of 2012.  Sequential quarter-over-quarter LOE trended up due to increased costs related to wells coming on in areas without infrastructure, and an increase in non-operated LOE incurred in the third quarter of 2012.  

Marketing, transportation and gathering expense per Boe was $1.23 in the third quarter of 2012 compared to $0.23 in the third quarter 2011 and $1.06 in the second quarter of 2012. The 16% increase from the second to the third quarter of 2012 is due to higher operated volumes flowing through third party oil gathering pipelines. While transporting volumes through third party oil gathering pipelines increases marketing, transportation and gathering expenses, it improves oil price realizations by eliminating trucking costs, which are reflected in the oil price differential rather than as an expense.

Production taxes as a percent of oil and gas revenues were 9.2% in the third quarter of 2012, 10.1% in the third quarter of 2011, and 9.5% in the second quarter of 2012. The Company's effective production tax rate decreased in the third 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 $57.7 million in the third quarter of 2012, $20.9 million in the third quarter of 2011, and $44.2 million in the second quarter of 2012. DD&A was $25.85 per Boe in the third quarter of 2012, $19.57 per Boe in the third quarter of 2011, and $23.87 per Boe in the second quarter of 2012. The increase in DD&A of $1.98 per Boe in the third quarter of 2012 over the second quarter of 2012 was a result of the increase in well costs in the first half of 2012 outpacing the increase in associated reserves and the addition of infrastructure assets, including Company-owned salt water disposal assets.

General and administrative expenses ("G&A") totaled $13.9 million in the third quarter of 2012, $7.3 million in the third quarter of 2011, and $13.5 million in the second quarter of 2012.  The overall increase in G&A expenses from the second quarter of 2012 to the third quarter of 2012 was primarily due to higher compensation costs from organizational growth. G&A expenses were $6.22 per Boe in the third quarter of 2012, $6.86 per Boe in the third quarter of 2011, and $7.31 per Boe in the second quarter of 2012.  Amortization of restricted stock-based compensation, which is included in the aggregate G&A expense, was $2.7 million, or $1.22 per Boe, in the third quarter of 2012 as compared to $1.0 million, or $0.96 per Boe, in the third quarter of 2011 and $2.3 million, or $1.25 per Boe, in the second quarter of 2012.

As a result of the Company's derivative activities, it incurred a net cash settlement gain of $5.2 million and a net cash settlement loss of $0.2 million in the third quarters of 2012 and 2011, respectively.  In the second quarter of 2012, the Company incurred a net cash settlement loss of $1.2 million.  As a result of forward oil price changes, the Company recognized a non-cash unrealized mark-to-market net derivative loss of $27.7 million and a non-cash unrealized mark-to-market net derivative gain of $71.4 million for the third quarters of 2012 and 2011, respectively. The Company recognized a non-cash unrealized mark-to-market net derivative gain of $75.8 million in the second quarter of 2012.

The Company recorded non-cash charges for the impairment of oil and natural gas properties of $36 thousand in the third quarter of 2012 related to unproved property leases that expired during the period or have been forecasted to expire under current drilling plans, as compared to $0.4 million in the third quarter of 2011 and $2.2 million in the second quarter of 2012.

Interest expense increased $14.2 million to $21.0 million for the third quarter of 2012 compared to the third quarter of 2011 and increased $6.9 million compared to the second quarter of 2012. The $6.9 million increase was the result of additional interest expense from the Company's issuance of 6.875% senior unsecured notes in July of 2012. Capitalized interest totaled $0.9 million in the third quarter of 2012, $1.1 million in the third quarter of 2011, and $0.8 million in the second quarter of 2012.

Income tax expense was $11.5 million for the three months ended September 30, 2012, resulting in an effective tax rate of 38.5%. The Company's income tax expense for the three months ended September 30, 2011 was recorded at 37.0% 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 state rate of the states in which the Company conducts business.

Adjusted EBITDA for the third quarter of 2012 was $139.2 million, an increase of $76.3 million, or 121%, over the third quarter of 2011 of $62.9 million, and a 28% increase over the second quarter of 2012 of $108.5 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 third quarter of 2012, the Company reported net income of $18.3 million, or $0.20 per diluted share, as compared to net income of $66.3 million, or $0.72 per diluted share, for the third quarter of 2011. The Company's third quarter 2012 results were impacted by several non-cash items, including a $27.7 million unrealized loss on derivative instruments and a $36 thousand impairment of oil and gas properties. Excluding these items and their tax effect, the third quarter 2012 Adjusted Net Income (non-GAAP) was $35.4 million, or $0.38 per diluted share. Excluding similar non-cash items and their tax effect, Adjusted Net Income (non-GAAP) for the third quarter of 2011 was $21.6 million, or $0.23 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
Oasis' exploration and production ("E&P") capital expenditures were $316.8 million for the third quarter of 2012 and $872.3 million year-to-date. The following table depicts the Company's E&P capital expenditures by project area and total capital expenditures by category for the first, second and third quarters of 2012: 

CapEx ($ in millions)

1Q 2012


2Q 2012


3Q 2012


YTD 2012

E&P Capital by Project Area








West Williston

$   204.0


$   188.0


$   189.2


$      581.2

East Nesson

50.1


56.5


106.0


212.6

Sanish

12.9


18.7


16.2


47.8

Total E&P Capital

$  267.0


$  263.2


$  311.4


$    841.6

Non E&P (1)

21.3


4.0


5.4


30.7

Total Company Capital Expenditures (2)

$  288.3


$  267.2


$  316.8


$    872.3










(1)

Non-E&P capital expenditures include such items as capital expenditures related to Oasis Well Services ("OWS"), district tools, administrative capital and capitalized interest. Capital expenditures for OWS for the nine months ended September 30, 2012 were $12.9 million.

(2)

Capital expenditures 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 September 30, 2012, Oasis had total cash and cash equivalents of $280.3 million and short-term investments of $126.2 million. During the third quarter of 2012, Oasis issued $400 million of 6.875% senior unsecured notes due 2023. As of September 30, 2012, the Company had no outstanding indebtedness under its revolving credit facility, which had a $500 million borrowing base on September 30, 2012. Subsequent to the end of the third quarter of 2012, the semi-annual redetermination of the Company's borrowing base was completed, which resulted in an increase to the borrowing base of its revolving credit facility from $500 million to $750 million. However, the Company elected to have the lenders' aggregate commitment remain at $500 million.

Hedging Activity
As of November 6, 2012, the Company had the following outstanding commodity derivative contracts, all of which are priced off of NYMEX WTI and settle monthly:





Weighted Average Prices ($/Bbl)





Type


Remaining Term


Sub-Floor


Floor


Ceiling


Swaps


BOPD


Total Barrels
















2012















Full Year















Swaps


3 Months (Oct-Dec)








$94.61


1,000


92,000

Two-Way Collars


3 Months (Oct-Dec)




$88.61


$105.59




9,000


828,000

Three-Way Collars


3 Months (Oct-Dec)


$66.25


$90.25


$110.04




10,000


920,000

Total 2012 Hedges






$89.47


$107.93






1,840,000

Implied total volume hedged (BOPD) for 2012








20,000
















2013















Partial Year















Put Spreads (No Ceiling)


6 Months (Jan-Jun)


$65.00


$95.00






500


90,500

Full Year















Swaps


12 Months (Jan-Dec)








$96.49


2,000


730,000

Two-Way Collars


12 Months (Jan-Dec)




$86.82


$97.75




5,500


2,007,500

Three-Way Collars


12 Months (Jan-Dec)


$65.92


$92.45


$111.45




6,130


2,237,450

Put Spreads (No Ceiling)


12 Months (Jan-Dec)


$71.03


$91.03






4,870


1,777,550

Total  2013 Hedges




$68.11


$90.22


$104.97






6,843,000

Implied total volume hedged (BOPD) for 2013








18,748
















2014















Full Year















Three-Way Collars


12 Months (Jan-Dec)


$71.00


$91.00


$108.56




5,000


1,825,000

Total  2014 Hedges




$71.00


$91.00


$108.56






1,825,000

Implied total volume hedged (BOPD) for 2014








5,000

 

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

Date:

Thursday, November 8, 2012

Time:

10:00 a.m. Central Time

Dial-in:

855-384-2828

Intl. Dial in:

706-634-0151

Conference ID:

46560593

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 Thursday, November 15, 2012 by dialing:

Replay dial-in:

855-859-2056

Intl. replay:

404-537-3406

Conference ID:

46560593

The conference call will also be available for replay for approximately 30 days 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. Financial Statements


Oasis Petroleum Inc.

Condensed Consolidated Balance Sheet

(Unaudited)






September 30,
 2012


December 31,
 2011


(In thousands, except share data)

ASSETS




Current assets 




Cash and cash equivalents 

$         280,303


$        470,872

Short-term investments

126,213


19,994

Accounts receivable — oil and gas revenues 

104,965


52,164

Accounts receivable — joint interest partners 

83,630


67,268

Inventory 

21,142


3,543

Prepaid expenses 

4,030


2,140

Advances to joint interest partners 

4,025


3,935

Derivative instruments 

17,320


-

Deferred income taxes

-


3,233

Other current assets

78


491

Total current assets 

641,706


623,640

Property, plant and equipment 




Oil and gas properties (successful efforts method) 

2,079,016


1,235,357

Other property and equipment 

45,261


20,859

Less: accumulated depreciation, depletion, amortization and impairment 

(320,478)


(176,261)

Total property, plant and equipment, net 

1,803,799


1,079,955

Derivative instruments 

10,047


4,362

Deferred costs and other assets 

25,349


19,425

Total assets

$      2,480,901


$     1,727,382





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities




Accounts payable 

$           30,954


$          12,207

Advances from joint interest partners 

26,572


9,064

Revenues and production taxes payable

64,091


19,468

Accrued liabilities 

200,544


119,692

Accrued interest payable 

22,481


15,774

Derivative instruments 

1,273


5,907

Deferred income taxes 

3,782


-

Other current liabilities

5,256


472

Total current liabilities 

354,953


182,584

Long-term debt 

1,200,000


800,000

Asset retirement obligations 

20,529


13,075

Derivative instruments 

360


3,505

Deferred income taxes 

152,617


92,983

Other liabilities 

2,078


997

Total liabilities 

1,730,537


1,093,144

Commitments and contingencies 




Stockholders' equity




Common stock, $0.01 par value; 300,000,000 shares authorized; 93,435,593 issued and 93,369,468 outstanding at September 30, 2012;  92,483,393 issued and 92,460,914 outstanding at December 31, 2011

923


921

Treasury stock, at cost; 66,125 and 22,479 shares at September 30, 2012 and December 31, 2011, respectively

(1,901)


(602)

Additional paid-in-capital 

653,999


647,374

Retained earnings (deficit)

97,343


(13,455)

Total stockholders' equity 

750,364


634,238

Total liabilities and  stockholders' equity 

$      2,480,901


$     1,727,382

 

 

 

Oasis Petroleum Inc.

Condensed Consolidated Statement of Operations

(Unaudited)






Three Months Ended September 30,


Nine Months Ended September 30,


2012


2011


2012


2011


(In thousands, except per share data)

Revenues








Oil and gas revenues

$178,748


$  87,596


$   461,857


$213,546

Well services revenues

5,963


-


10,484


-

Total revenues 

184,711


87,596


472,341


213,546

Expenses








Lease operating expenses 

16,134


9,597


37,979


21,178

Well services operating expenses 

5,420


-


7,104


-

Marketing, transportation and gathering expenses 

2,744


238


7,283


797

Production taxes 

16,433


8,873


43,419


22,041

Depreciation, depletion and amortization 

57,684


20,859


140,783


47,771

Exploration expenses 

336


54


3,171


345

Impairment of oil and gas properties 

36


396


2,607


3,313

General and administrative expenses 

13,886


7,306


39,622


19,870

Total expenses 

112,673


47,323


281,968


115,315

Operating income 

72,038


40,273


190,373


98,231

Other income (expense)








Net gain (loss) on derivative instruments 

(22,441)


71,224


33,568


67,105

Interest expense 

(20,979)


(6,786)


(48,952)


(18,745)

Other income 

1,147


524


2,521


1,215

Total other income (expense) 

(42,273)


64,962


(12,863)


49,575

Income before income taxes 

29,765


105,235


177,510


147,806

Income tax expense

11,451


38,946


66,712


55,015









Net income 

$18,314


$66,289


$110,798


$92,791









Earnings per share:








Basic and diluted 

$      0.20


$      0.72


$         1.20


$      1.01









Weighted average shares outstanding:








Basic

92,186


92,060


92,164


92,052

Diluted

92,416


92,164


92,343


92,208

  

 

Oasis Petroleum Inc.

Selected Financial and Operational Statistics

(Unaudited)






Three Months Ended September 30,


Nine Months Ended September 30,


2012


2011


2012


2011

Operating results (in thousands):




Revenues:








Oil 

$173,752


$85,870


$443,686


$208,442

Natural gas 

4,996


1,726


18,171


5,104

Well services

5,963


-


10,484


-

Total revenues 

184,711


87,596


472,341


213,546









Production data:








Oil (MBbls) 

2,076


1,028


5,232


2,407

Natural gas (MMcf) 

937


225


2,740


627

Oil equivalents (MBoe) 

2,232


1,066


5,688


2,512

Average daily production (Boe/d) 

24,257


11,583


20,761


9,201









Average sales prices:








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

$    83.71


$  83.52


$    84.52


$    86.58

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

86.24


83.35


85.05


84.58

Natural gas (per Mcf) (3)

5.33


7.66


6.63


8.14









Cost and expense (per Boe of production):








Lease operating expenses (4)

$      7.23


$    9.00


$      6.68


$      8.43

Marketing, transportation and gathering expenses

1.23


0.23


1.28


0.32

Production taxes 

7.36


8.33


7.63


8.77

Depreciation, depletion and amortization 

25.85


19.57


24.75


19.02

General and administrative expenses

6.22


6.86


6.97


7.91

 












(1)

For the nine months ended September 30, 2012, average sales prices for oil are calculated using total oil revenues, excluding bulk purchase sales of $1.5 million, divided by oil production.

(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 nine months ended September 30, 2011, lease operating expenses exclude marketing, transportation and gathering expenses to conform such amounts to current year classifications.

 

 

Oasis Petroleum Inc.

Condensed Consolidated Statement of Cash Flows

(Unaudited)




Nine Months Ended September 30,


2012


2011


(In thousands)

Cash flows from operating activities:




Net income  

$ 110,798


$   92,791

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







Depreciation, depletion and amortization 

140,783


47,771

Impairment of oil and gas properties 

2,607


3,313

Deferred income taxes 

66,648


55,015

Derivative instruments 

(33,568)


(67,105)

Stock-based compensation expenses 

6,627


2,592

Debt discount amortization and other 

2,038


1,041

Working capital and other changes:




Change in accounts receivable 

(69,163)


(41,286)

Change in inventory 

(26,790)


(1,850)

Change in prepaid expenses 

(2,009)


(297)

Change in other current assets 

413


(337)

Change in other assets 

(119)


(103)

Change in accounts payable and accrued liabilities 

79,079


47,820

Change in other current liabilities 

4,784


-

Change in other liabilities 

-


317

Net cash provided by operating activities 

282,128


139,682

Cash flows from investing activities:




Capital expenditures 

(777,426)


(386,927)

Derivative settlements 

2,784


(4,831)

Purchases of short-term investments 

(126,213)


(164,913)

Redemptions of short-term investments 

19,994


39,974

Advances to joint interest partners 

(90)


(408)

Advances from joint interest partners 

17,508


8,093

Net cash used in investing activities 

(863,443)


(509,012)

Cash flows from financing activities:




Proceeds from issuance of senior notes

400,000


400,000

Purchases of treasury stock

(1,299)


(562)

Debt issuance costs 

(7,955)


(10,027)

Net cash provided by financing activities 

390,746


389,411

Increase (decrease) in cash and cash equivalents 

(190,569)


20,081

Cash and cash equivalents:




Beginning of period 

470,872


143,520

End of period 

$ 280,303


$ 163,601





Supplemental non-cash transactions:




Change in accrued capital expenditures 

$   71,572


$   23,422

Change in asset retirement obligations 

7,774


3,925

 

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. 

 

Adjusted EBITDA Reconciliations









Three Months Ended September 30,


Nine Months Ended September 30,



2012


2011


2012


2011



(In thousands)

Adjusted EBITDA reconciliation to Net Income: 






Net income 


$     18,314


$  66,289


$   110,798


$     92,791

Change in unrealized (gain) loss on derivative instruments


27,690


(71,403)


(30,784)


(71,936)

Interest expense


20,979


6,786


48,952


18,745

Depreciation, depletion and amortization


57,684


20,859


140,783


47,771

Impairment of oil and gas properties


36


396


2,607


3,313

Exploration expenses


336


54


3,171


345

Stock-based compensation expenses


2,729


1,021


6,627


2,592

Income tax expense 


11,451


38,946


66,712


55,015

Adjusted EBITDA


$139,219


$62,948


$348,866


$148,636










Adjusted EBITDA reconciliation to Net Cash Provided by Operating Activities:






Net cash provided by operating activities


$   110,268


$  37,587


$   282,128


$   139,682

Realized gain (loss) on derivative instruments


5,249


(179)


2,784


(4,831)

Interest expense


20,979


6,786


48,952


18,745

Exploration expenses


336


54


3,171


345

Debt discount amortization and other


(773)


(393)


(2,038)


(1,041)

Income taxes


(36)


-


64


-

Changes in working capital


3,196


19,093


13,805


(4,264)

Adjusted EBITDA


$139,219


$62,948


$348,866


$148,636

 

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 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 item's 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 United States generally accepted accounting principles, or GAAP. 

The following table provides a reconciliation of net income (GAAP) to Adjusted Net Income (non-GAAP) for the three and nine months ended September 30, 2012 and 2011.

 

Adjusted Net Income Reconciliation








Three Months Ended September 30,


Nine Months Ended September 30,


2012


2011


2012


2011


(In thousands, except per share amounts)







Net income  - as reported

$  18,314


$  66,289


$110,798


$  92,791

Change in unrealized (gain) loss on derivative instruments

27,690


(71,403)


(30,784)


(71,936)

Impairment of oil and gas properties

36


396


2,607


3,313

Tax impact (1)

(10,667)


26,279


10,590


25,542









Adjusted Net Income

$35,373


$21,561


$93,211


$49,710









Adjusted earnings per share:








Basic & diluted

$      0.38


$      0.23


$      1.01


$      0.54









Weighted average shares outstanding:








Basic

92,186


92,060


92,164


92,052

Diluted

92,416


92,164


92,343


92,208









Effective Tax Rate

38.5%


37.0%


37.6%


37.2%









(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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