Oasis Petroleum Inc. Announces Quarter and Year Ending December 31, 2019 Earnings and Provides an Operational Update and 2020 Outlook
HOUSTON, Feb. 25, 2020 /PRNewswire/ -- Oasis Petroleum Inc. (Nasdaq: OAS) ("Oasis" or the "Company") today announced financial and operational results for the quarter and year ended December 31, 2019 and provided its 2020 outlook.
"Fourth quarter results demonstrate continued execution and progress towards reducing leverage," said Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer. "Volumes exceeded expectations while spending was lower, driven by a relentless focus on efficiency. A combination of free cash flow and asset sales led Oasis to reduce E&P debt by $188 million over the course of 2019. I'm proud of the Oasis team for rising to the challenge and driving significant cost savings and efficiencies in the back half of 2019. These efforts positioned our 2020 plan to be more capital efficient, especially when we factor in lower well costs and improved cycle times in the Delaware Basin. Oasis is in a compelling position to grow modestly while generating free cash flow and continuing to pay down debt."
2019 Highlights
-- Produced 87.4 MBoepd in 4Q19, 2% above the upper range of November
guidance, with oil volumes at 60.1 MBopd, at the top end of guidance.
-- Delivered net cash provided by operating activities of $892.9 million
for YE19 and $253.0 million for 4Q19 and Adjusted EBITDA((1)) of
$1,039.5 million for YE19 and $264.0 million for 4Q19.
-- LOE per Boe averaged $6.95 per Boe in 2019, approximately 7% below
original guidance.
-- Crude oil differentials were strong over 2019 averaging $1.68 off of
NYMEX WTI.
-- E&P CapEx((2)) was $598.0 million for 2019, 4-5% below the $620-640
million plan.
-- 2019 G&A((3)) of $123.5 million was 10% below February 2019 guidance.
-- OMP delivered approximately $159 million in net Adjusted EBITDA((4)) in
2019, 4% above original midpoint guidance.
((1) )Non-GAAP financial measure. See "Non-GAAP Financial Measures" below for definitions of all non-GAAP financial measures included herein and reconciliations to the most directly comparable measures under United States generally accepted accounting principles ("GAAP").
((2) )E&P CapEx excludes capitalized interest, midstream CapEx and acquisitions for both 2019 actual and plan.
((3) )Full year 2019 G&A excludes one-time litigation contingency expense of $20 million.
((4)) Refer to Oasis Midstream Partners press release dated February 25, 2020 for definition of non-GAAP financial measure and reconciliation.
2020 Plan
Oasis continues to drive towards moderate growth, free cash generation and debt reduction. The Company constructed its 2020 plan based on being free cash flow positive at $50 NYMEX WTI. Total consolidated CapEx is expected to range between $685 and $715 million with E&P and Other CapEx expected to range between $575 and $595 million. Oasis is directing approximately 55-65% of its capital to the Williston Basin and approximately 35-45% to the Delaware Basin. The Company expects approximately 80-90% of its E&P and Other CapEx to be invested in drilling and completions activities, including:
-- Completing 45 to 55 gross operated wells with a working interest of
approximately 66% in the Williston Basin.
-- Completing 20 to 25 gross operated wells with a working interest of
approximately 88% in the Delaware Basin.
-- 1Q20 CapEx is expected to approximate 30% of full-year guidance.
Other highlights of the 2020 plan include:
-- 1Q20 total volumes are expected to approximate 78 to 79 MBoepd with oil
cut to approximate 68-69%.
-- Expect mid-single-digit year-over-year volume growth (Boe and oil) from
4Q19 to 4Q20.
-- Expect to be E&P free cash flow positive assuming average NYMEX WTI
prices above $50/barrel.
-- 85-90% of 1H20 oil production hedged with an average floor of $55.46.
Metric
Range
Production (MBoepd)(1)
Full Year 2020
82.5 - 86.5
Full Year Financial Metrics
Differential to NYMEX WTI ($ per
Bbl)
$2.50 - $3.50
Natural gas realized price (as a %
of Henry Hub) 90% - 100%
LOE ($ per Boe)
$7.00 - $7.75
MT&G ($ per Boe)
$4.00 - $4.25
E&P Cash G&A ($ in millions)(2)
$60 - $65
Production taxes (% of oil and gas
revenues) 8.0% - 8.3%
2020 CapEx Plan ($ in millions)
E&P & Other CapEx(3)
$575 - $595
Midstream CapEx
110 - 120
Midstream CapEx attributable to
Oasis (included in Midstream CapEx
above)
42 - 45
(1) Average oil production percentage of
approximately 69% in 2020.
(2) E&P Cash G&A represents general and
administrative ("G&A") expenses
less non-cash equity-based
compensation expenses and other
non-cash charges included in the
Company's exploration and
production segment. Total Cash G&A
for Oasis estimated at $75 million
to $80 million, which excludes non-
cash amortization of equity-based
compensation of approximately $33
million to $35 million. See "Non-
GAAP Financial Measures" below.
(3) Other CapEx includes administrative
capital and excludes capitalized
interest of approximately $12.5
million.
Operational and Financial Update
Select operational and financial statistics are included in the following table for the periods presented:
4Q19 3Q19 YE19 YE18
Production data:
Crude oil (Bopd) 60,108 62,816 62,532 63,151
Natural gas (Mcfpd) 163,762 155,391 153,167 116,246
Total production
(Boepd) 87,401 88,715 88,061 82,525
Percent crude oil 68.8 70.8
%
%
% % 71.0 76.5
Average sales prices:
Crude oil, without
derivative settlements
($ per Bbl) $
53.66 $
55.12 $
55.27 $
61.84
Differential to WTI ($
per Bbl) 3.23 1.30 1.68 2.88
Crude oil, with
derivative settlements
($ per Bbl)(1)(2) 54.96 56.03 55.89 52.65
Crude oil derivative
settlements -net cash
receipts (payments) ($
in millions)(1) 7.2 5.2 14.3 (211.7)
Natural gas, without
derivative settlements
($ per Mcf)(3) 2.77 1.81 2.64 3.88
Natural gas, with
derivative settlements
($ per Mcf)(1)(2)(3) 2.85 1.95 2.72 3.84
Natural gas derivative
settlements -net cash
receipts (payments) ($
in millions)(2) 1.2 1.9 4.8 (1.8)
Selected financial data
($ in millions):
Revenues:
Crude oil revenues $
296.8 $
318.6 $
1,261.4 $
1,425.4
Natural gas revenues 41.8 25.9 147.4 164.6
Purchased oil and gas
sales(4) 71.6 79.4 408.8 550.3
Midstream revenues(4) 62.6 50.0 212.2 120.5
Well services revenues 11.2 8.9 42.0 61.1
Total revenues $
484.0 $
482.8 $
2,071.8 $
2,321.9
Net cash provided by
operating activities $
253.0 $
251.0 $
892.9 $
996.4
Adjusted EBITDA $
264.0 $
256.6 $
1,039.5 $
958.7
Select operating
expenses:
LOE $
58.4 $
50.3 $
223.4 $
193.9
Midstream expenses(4) 15.1 13.0 62.1 32.7
Well services expenses 7.2 6.2 28.8 41.2
MT&G 32.6 32.7 126.4 102.9
Non-cash valuation
charges 0.1 (0.1) 2.4 4.3
Purchased oil and gas
expenses(4) 71.0 78.7 409.2 553.5
Production taxes 26.4 28.5 112.6 133.7
Depreciation, depletion
and amortization
("DD&A") 209.2 210.8 787.2 636.3
Total select operating
expenses $
420.0 $
420.1 $
1,752.1 $
1,698.5
Select operating
expenses data:
LOE ($ per Boe) $
7.26 $
6.16 $
6.95 $
6.44
MT&G ($ per Boe) 4.07 4.00 4.01 3.56
Cash MT&G ($ per
Boe)(5) 4.05 4.01 3.93 3.41
DD&A ($ per Boe) 26.01 25.83 24.49 21.12
E&P G&A ($ per Boe)(6) 2.37 5.68 3.69 3.40
E&P Cash G&A ($ per
Boe)(5) 1.51 2.22 2.07 2.48
Production taxes (% of 7.8 8.3
oil and gas revenue) % % 8.0
% 8.4
%
(1) Realized prices include gains or
losses on cash settlements for
commodity derivatives, which do not
qualify for or were not designated
as hedging instruments for
accounting purposes.
(2) Cash settlements represent the
cumulative gains and losses on the
Company's derivative instruments
for the periods presented and do
not include a recovery of costs
that were paid to acquire or modify
the derivative instruments that
were settled.
(3) Natural gas prices include the value
for natural gas and natural gas
liquids.
(4) For the year ended December 31,
2018, midstream revenues and
midstream expenses have been
adjusted to include $1.5 million
and $0.8 million, respectively, for
certain sales and expenses which
were previously recognized in
purchased oil and gas sales and
purchased oil and gas expenses,
respectively, on the Company's
Consolidated Statements of
Operations.
(5) Cash MT&G, a non-GAAP financial
measure, is defined as marketing,
transportation and gathering
expenses excluding non-cash
valuation charges on pipeline
imbalances. E&P Cash G&A, a non-
GAAP financial measure, represents
G&A expenses less non-cash equity-
based compensation expenses and
other non-cash charges included in
the Company's exploration and
production segment. See "Non-GAAP
Financial Measures" below for
reconciliations to the most
directly comparable measures under
GAAP.
(6) Includes $20.0 million of litigation
contingency expenses in 3Q19 and
YE19. Excluding this accrual, E&P
G&A per Boe would have been $3.23
and 3.07 in 3Q19 and YE19,
respectively.
G&A expenses totaled $25.3 million in 4Q19, and $143.5 million in YE19. Amortization of equity-based compensation, which is included in G&A expenses, was $7.2 million, or $0.90 per Boe, in 4Q19 and $33.6 million, or $1.05 per Boe, for YE19. G&A expenses for the Company's E&P segment totaled $19.0 million in 4Q19 and $118.7 million for YE19. E&P Cash G&A expenses (non-GAAP), excluding non-cash equity-based compensation expenses and other non-cash charges, were $1.51 per Boe in 4Q19 and $2.07 per Boe for YE19. For a definition of E&P Cash G&A expenses and a reconciliation of E&P G&A to E&P Cash G&A, see "Non-GAAP Financial Measures" below.
MT&G expenses totaled $32.7 million in 4Q19 and $128.8 million in YE19. Cash MT&G (non-GAAP), which excludes non-cash valuation charges on pipeline imbalances, totaled $32.6 million in 4Q19 and $126.4 million in YE19. Non-cash valuation charges on pipeline imbalances were $0.1 million and $2.4 million for 4Q19 and YE19, respectively. For a definition of Cash MT&G and a reconciliation of MT&G to Cash MT&G, see "Non-GAAP Financial Measures" below.
Interest expense was $44.7 million in 4Q19 and $176.2 million in YE19. Capitalized interest totaled $2.5 million in 4Q19 and $12.0 million in YE19. Cash Interest (non-GAAP) totaled $40.7 million in 4Q19 and $167.2 million in YE19. For a definition of Cash Interest and a reconciliation of interest expense to Cash Interest, see "Non-GAAP Financial Measures" below.
The Company recorded an income tax benefit of $23.9 million in 4Q19, resulting in an effective tax rate of 27.1% as a percentage of its pre-tax loss for the quarter. The Company's income tax benefit for YE19 was recorded at $32.7 million, or 26.5% of its pre-tax loss.
The Company reported net loss attributable to Oasis of $76.4 million and $128.2 million in 4Q19 and YE19, respectively. Excluding certain non-cash items and their tax effect, Adjusted Net Loss Attributable to Oasis (non-GAAP) was $5.4 million, or $0.02 per diluted share, in 4Q19 and Adjusted Net Income Attributable to Oasis (non-GAAP) was $9.2 million, or $0.03 per diluted share, in YE19. For a definition of Adjusted Net Income (Loss) Attributable to Oasis and a reconciliation of net income (loss) attributable to Oasis to Adjusted Net Income (Loss) Attributable to Oasis, see "Non-GAAP Financial Measures" below.
The Company completed and placed on production 8 gross (5.1 net) operated wells in 4Q19 and 78 gross (51.5 net) operated wells in YE19.
Capital Expenditures
The following table depicts the Company's total capital expenditures ("CapEx") by category:
YE19
(In millions)
CapEx
E&P (excluding acquisitions) $
594.2
Well Services 0.3
Other(1) 15.5
Total CapEx before acquisitions and midstream 610.0
Midstream(2) 212.4
Total CapEx before acquisitions 822.4
Acquisitions 21.0
Total CapEx(3) $
843.4
(1) Other CapEx includes administrative
capital of $3.5 million and
capitalized interest of $12.0
million.
(2) Midstream CapEx attributable to OMP
was $198.6 million for YE19.
(3) Total CapEx (including acquisitions)
reflected in the table above
differs from the amounts shown in
the statements of cash flows in the
Company's consolidated financial
statements because amounts
reflected in the table above
include changes in accrued
liabilities from the previous
reporting period for CapEx, while
the amounts presented in the
statements of cash flows are
presented on a cash basis.
Liquidity and Balance Sheet
As of YE19, Oasis had cash and cash equivalents of $20.0 million, total elected commitments under the Oasis Credit Facility of $1,100.0 million and a borrowing base under the OMP Credit Facility of $575.0 million. In addition, Oasis had $337.0 million of borrowings and $15.1 million of outstanding letters of credit issued under the Oasis Credit Facility and $458.5 million of borrowings and $1.7 million of outstanding letters of credit under the OMP Credit Facility, resulting in an unused borrowing capacity of $862.7 million for both revolving credit facilities as of YE19.
Hedging Activity
As of February 24, 2020, the Company's crude oil hedge position remained unchanged compared to the update included in the press release dated January 30, 2020. The December 2019 crude oil derivative contracts settled at a net $2.0 million paid in January 2020 and will be included in the Company's 1Q20 derivative settlements.
Conference Call Information
Investors, analysts and other interested parties are invited to listen to the conference call:
Date:
Wednesday, February 26, 2020
Time:
10:00 a.m. Central Time
Live Webcast:
https://www.webcaster4.com/Webcast/Page/1052/32923
OR:
Dial-in:
888-317-6003
Intl. Dial in:
412-317-6061
Conference ID: 2472167
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, March 4, 2020 by dialing:
Replay dial-in:
877-344-7529
Intl. replay:
412-317-0088
Replay code: 10138757
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, derivatives activities, 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 crude oil and natural gas prices, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, the ability to realize the anticipated benefits from the previously announced Delaware midstream assets assignment from Oasis to OMP, 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 Securities and Exchange Commission.
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 onshore, unconventional crude oil and natural gas resources in the United States. For more information, please visit the Company's website at www.oasispetroleum.com.
Oasis Petroleum Inc. Financial Statements
OASIS PETROLEUM INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31,
2019 2018
---
(In thousands, except share data)
ASSETS
Current assets
Cash and cash equivalents $
20,019 $
22,190
Accounts receivable, net 371,181 387,602
Inventory 35,259 33,128
Prepaid expenses 10,011 10,997
Derivative instruments 535 99,930
Intangible assets, net - 125
Other current assets 346 183
Total current assets 437,351 554,155
Property, plant and equipment
Oil and gas properties (successful
efforts method) 9,463,038 8,912,189
Other property and equipment 1,279,653 1,151,772
Less: accumulated depreciation,
depletion, amortization and
impairment (3,764,915) (3,036,852)
Total property, plant and equipment,
net 6,977,776 7,027,109
Assets held for sale, net 21,628
Derivative instruments 639 6,945
Long-term inventory 13,924 12,260
Operating right-of-use assets 18,497
Other assets 29,438 25,673
Total assets $
7,499,253 $
7,626,142
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $
17,948 $
20,166
Revenues and production taxes payable 233,090 216,695
Accrued liabilities 281,079 331,651
Accrued interest payable 37,388 38,040
Derivative instruments 19,695 84
Advances from joint interest partners 4,598 5,140
Current operating lease liabilities 6,182
Other current liabilities 2,903
Total current liabilities 602,883 611,776
Long-term debt 2,711,573 2,735,276
Deferred income taxes 267,357 300,055
Asset retirement obligations 56,305 52,384
Derivative instruments 120 20
Operating lease liabilities 17,915
Other liabilities 6,019 7,751
Total liabilities 3,662,172 3,707,262
Commitments and contingencies
Stockholders' equity
Common stock, $0.01 par value:
900,000,000 shares authorized;
324,198,057 shares issued and
321,231,319 shares outstanding at
December 31, 2019 and 320,469,049
shares issued and 318,377,161 shares
outstanding at December 31, 2018 3,189 3,157
Treasury stock, at cost: 2,966,738 and
2,091,888 shares at December 31, 2019
and December 31, 2018, respectively (33,881) (29,025)
Additional paid-in capital 3,112,384 3,077,755
Retained earnings 554,446 682,689
Oasis share of stockholders' equity 3,636,138 3,734,576
Non-controlling interests 200,943 184,304
Total stockholders' equity 3,837,081 3,918,880
Total liabilities and stockholders'
equity $
7,499,253 $
7,626,142
OASIS PETROLEUM INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended December 31, Year Ended December 31,
2019 2018 2019 2018
---
(In thousands, except per share data)
Revenues
Oil and gas revenues $
338,515 $
371,385 $
1,408,771 $
1,590,024
Purchased oil and gas
sales 71,579 181,586 408,791 550,344
Midstream revenues 62,591 32,053 212,208 120,504
Well services revenues 11,179 14,731 41,974 61,075
Total revenues 483,864 599,755 2,071,744 2,321,947
Operating expenses
Lease operating
expenses 58,399 56,456 223,384 193,912
Midstream expenses 15,082 8,433 62,146 32,758
Well services expenses 7,166 8,848 28,761 41,200
Marketing,
transportation and
gathering expenses 32,709 32,634 128,806 107,193
Purchased oil and gas
expenses 70,959 179,019 409,180 553,461
Production taxes 26,371 29,948 112,592 133,696
Depreciation, depletion
and amortization 209,169 170,477 787,192 636,296
Exploration expenses 4,289 3,731 6,658 27,432
Rig termination 384 384
Impairment 9,604 10,257 384,228
General and
administrative
expenses 25,261 30,317 143,506 121,346
Total operating
expenses 459,393 519,863 1,912,866 2,231,522
Gain (loss) on sale of
properties (505) (10,236) (4,455) 28,587
Operating income 23,966 69,656 154,423 119,012
Other income (expense)
Net gain (loss) on
derivative instruments (71,374) 268,402 (106,314) 28,457
Interest expense, net
of capitalized
interest (44,672) (41,469) (176,223) (159,085)
Gain (loss) on
extinguishment of debt 4,312 (150) 4,312 (13,848)
Other income (expense) (266) (25) 440 121
Total other income
(expense), net (112,000) 226,758 (277,785) (144,355)
Income (loss) before
income taxes (88,034) 296,414 (123,362) (25,343)
Income tax benefit
(expense) 23,880 (69,548) 32,715 5,843
Net income (loss)
including non-
controlling interests (64,154) 226,866 (90,647) (19,500)
Less: Net income
attributable to non-
controlling interests 12,252 4,889 37,596 15,796
Net income (loss)
attributable to Oasis $
(76,406) $
221,977 $
(128,243) $
(35,296)
Earnings (loss) per share:
Basic $
(0.24) $
0.71 $
(0.41) $
(0.11)
Diluted (0.24) 0.70 (0.41) (0.11)
Weighted average shares outstanding:
Basic 315,416 313,260 315,002 307,480
Diluted 315,416 315,098 315,002 307,480
OASIS PETROLEUM INC.
SELECTED FINANCIAL AND OPERATIONAL STATS
Three Months Ended December 31, Year Ended December 31,
2019 2018 2019 2018
Operating results ($ in
thousands):
Revenues
Crude oil revenues $
296,751 $
321,834 $
1,261,413 $
1,425,409
Natural gas revenues 41,764 49,551 147,358 164,615
Purchased oil and gas sales 71,579 181,586 408,791 550,344
Midstream revenues 62,591 32,053 212,208 120,504
Well services revenues 11,179 14,731 41,974 61,075
Total revenues $
483,864 $
599,755 $
2,071,744 $
2,321,947
Production data:
Crude oil (MBbls) 5,530 6,188 22,824 23,050
Natural gas (MMcf) 15,066 11,604 55,906 42,430
Oil equivalents (MBoe) 8,041 8,122 32,142 30,122
Average daily production (Boepd) 87,401 88,288 88,061 82,525
Average sales prices:
Crude oil, without derivative
settlements (per Bbl) $
53.66 $
52.01 $
55.27 $
61.84
Crude oil, with derivative
settlements (per Bbl)(1) 54.96 44.14 55.89 52.65
Natural gas, without derivative
settlements (per Mcf)(2) 2.77 4.27 2.64 3.88
Natural gas, with derivative
settlements (per Mcf)(1)(2) 2.85 4.02 2.72 3.84
Costs and expenses (per Boe of
production):
Lease operating expenses $
7.26 $
6.95 $
6.95 $
6.44
Marketing, transportation and
gathering expenses 4.07 4.02 4.01 3.56
Cash marketing, transportation
and gathering expenses(3) 4.05 3.55 3.93 3.41
Production taxes 3.28 3.69 3.50 4.44
Depreciation, depletion and
amortization 26.01 20.99 24.49 21.12
General and administrative
expenses 3.14 3.73 4.46 4.03
(1) Realized prices include gains or
losses on cash settlements for
commodity derivatives, which do not
qualify for or were not designated
as hedging instruments for
accounting purposes. Cash
settlements represent the
cumulative gains and losses on
derivative instruments for the
periods presented and do not
include a recovery of costs that
were paid to acquire or modify the
derivative instruments that were
settled.
(2) Natural gas prices include the value
for natural gas and natural gas
liquids.
(3) Cash MT&G, a non-GAAP financial
measure, is defined as marketing,
transportation and gathering
expenses excluding non-cash
valuation charges on pipeline
imbalances. See "Non-GAAP
Financial Measures" below for a
reconciliation of the Company's
MT&G to Cash MT&G.
OASIS PETROLEUM INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Year Ended December 31,
2019 2018
---
(In thousands)
Cash flows from operating activities:
Net loss including non-controlling
interests $
(90,647) $
(19,500)
Adjustments to reconcile net loss including non-controlling
interests to net cash provided by operating activities:
Depreciation, depletion and amortization 787,192 636,296
(Gain) loss on extinguishment of debt (4,312) 13,848
(Gain) loss on sale of properties 4,455 (28,587)
Impairment 10,257 384,228
Deferred income taxes (32,699) (5,866)
Derivative instruments 106,314 (28,457)
Equity-based compensation expenses 33,607 29,273
Deferred financing costs amortization and
other 27,263 29,057
Working capital and other changes:
Change in accounts receivable, net 13,729 (23,508)
Change in inventory (5,893) (14,346)
Change in prepaid expenses 325 (2,354)
Change in accounts payable, interest payable
and accrued liabilities 53,051 26,116
Change in other assets and liabilities, net (9,789) 221
Net cash provided by operating activities 892,853 996,421
Cash flows from investing activities:
Capital expenditures (869,221) (1,148,961)
Acquisitions (21,009) (581,650)
Proceeds from sale of properties 42,376 333,229
Costs related to sale of properties - (2,850)
Derivative settlements 19,098 (213,528)
Other - 224
Net cash used in investing activities (828,756) (1,613,536)
Cash flows from financing activities:
Proceeds from Revolving Credit Facilities 1,982,000 3,224,000
Principal payments on Revolving Credit
Facilities (1,972,500) (2,586,000)
Repurchase of senior unsecured notes (45,790) (423,340)
Proceeds from issuance of senior unsecured
notes - 400,000
Deferred financing costs (1,052) (13,862)
Proceeds from sale of Oasis Midstream common
units, net of offering costs - 44,503
Purchases of treasury stock (4,856) (6,846)
Distributions to non-controlling interests (21,270) (14,114)
Payments on finance lease liabilities (2,382)
Other (418) (1,756)
Net cash provided by (used in) financing
activities (66,268) 622,585
Increase (decrease) in cash and cash
equivalents (2,171) 5,470
Cash and cash equivalents:
Beginning of period 22,190 16,720
End of period $
20,019 $
22,190
Supplemental cash flow information:
Cash paid for interest, net of capitalized
interest $
155,833 $
141,196
Cash paid for income taxes 111 38
Cash received for income tax refunds 146 25
Supplemental non-cash transactions:
Change in accrued capital expenditures $
(82,414) $
68,946
Change in asset retirement obligations 4,917 3,880
Issuance of shares in connection with
acquisition - 371,220
Non-GAAP Financial Measures
E&P Cash G&A Reconciliation
E&P Cash G&A is a supplemental non-GAAP financial measure that is used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines E&P Cash G&A as the total general and administrative expenses included in the Company's exploration and production segment less non-cash equity-based compensation expenses and other non-cash charges included in the Company's exploration and production segment. E&P Cash G&A is not a measure of general and administrative expenses as determined by United States generally accepted accounting principles, or GAAP.
The following table presents a reconciliation of the GAAP financial measure of general and administrative expenses included in the Company's exploration and production segment to the non-GAAP financial measure of E&P Cash G&A for the periods presented:
Exploration and Production
Three Months Ended December 31, Year Ended December 31,
2019 2018 2019 2018
---
(In thousands)
General and administrative
expenses $
19,036 $
25,057 $
118,701 $
102,482
Equity-based compensation
expenses (6,903) (7,345) (32,251) (27,910)
Litigation contingency
expenses(1) - (20,000)
E&P Cash G&A $
12,133 $
17,712 $
66,450 $
74,572
(1) In 2019, the Company incurred a
charge to establish a loss accrual
of $20.0 million, which the Company
believes is the estimable amount of
loss that could potentially be
incurred from its pending legal
proceedings based upon currently
available information.
Cash MT&G Reconciliation
Cash MT&G is defined as the total marketing, transportation and gathering expenses less non-cash valuation charges on pipeline imbalances. Cash MT&G is not a measure of marketing, transportation and gathering expenses as determined by GAAP. Management believes that the presentation of Cash MT&G provides useful additional information to investors and analysts to assess the cash costs incurred to get its commodities to market without regard for the change in value of its pipeline imbalances, which vary monthly based on commodity prices.
The following table presents a reconciliation of the GAAP financial measure of marketing, transportation and gathering expenses to the non-GAAP financial measure of Cash MT&G for the periods presented:
Three Months Ended December 31, Year Ended December 31,
2019 2018 2019 2018
(In thousands)
Marketing, transportation
and gathering expenses $
32,709 $
32,634 $
128,806 $
107,193
Pipeline imbalances (130) (3,774) (2,446) (4,331)
Cash MT&G $
32,579 $
28,860 $
126,360 $
102,862
Cash Interest Reconciliation
Cash Interest is a supplemental non-GAAP financial measure that is used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Cash Interest as interest expense plus capitalized interest less amortization and write-offs of deferred financing costs and debt discounts included in interest expense. Cash Interest is not a measure of interest expense as determined by GAAP.
The following table presents a reconciliation of the GAAP financial measure of interest expense to the non-GAAP financial measure of Cash Interest for the periods presented:
Three Months Ended December 31, Year Ended December 31,
2019 2018 2019 2018
(In thousands)
Interest expense $
44,672 $
41,469 $
176,223 $
159,085
Capitalized interest 2,500 4,017 11,964 17,226
Amortization of deferred
financing costs (3,378) (2,079) (8,832) (7,590)
Amortization of debt
discount (3,137) (2,919) (12,164) (11,120)
Cash Interest $
40,657 $
40,488 $
167,191 $
157,601
Adjusted EBITDA and Free Cash Flow Reconciliations
Adjusted EBITDA and Free Cash Flow are supplemental non-GAAP financial measures that are used by management and external users of the Company's 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. The Company defines Free Cash Flow as Adjusted EBITDA attributable to Oasis less Cash Interest and CapEx, excluding capitalized interest. Adjusted EBITDA and Free Cash Flow are not measures of net income (loss) or cash flows as determined by GAAP.
The following table presents reconciliations of the GAAP financial measures of net income (loss) including non-controlling interests and net cash provided by (used in) operating activities to the non-GAAP financial measures of Adjusted EBITDA and Free Cash Flow for the periods presented:
Three Months Ended December 31, Year Ended December 31,
2019 2018 2019 2018
(In thousands)
Net income (loss) including non-
controlling interests $
(64,154) $
226,866 $
(90,647) $
(19,500)
(Gain) loss on sale of
properties 505 10,236 4,455 (28,587)
(Gain) loss on extinguishment of
debt (4,312) 150 (4,312) 13,848
Net (gain) loss on derivative
instruments 71,374 (268,402) 106,314 (28,457)
Derivative settlements(1) 8,346 (51,515) 19,098 (213,528)
Interest expense, net of
capitalized interest 44,672 41,469 176,223 159,085
Depreciation, depletion and
amortization 209,169 170,477 787,192 636,296
Impairment 9,604 10,257 384,228
Rig termination 384 384
Exploration expenses 4,289 3,731 6,658 27,432
Equity-based compensation
expenses 7,237 7,687 33,607 29,273
Income tax (benefit) expense (23,880) 69,548 (32,715) (5,843)
Litigation contingency
expenses(2) 20,000
Other non-cash adjustments 719 3,878 3,035 4,435
Adjusted EBITDA 263,953 214,125 1,039,549 958,682
Adjusted EBITDA attributable to
non-controlling interests 16,025 7,094 51,525 21,703
Adjusted EBITDA attributable to
Oasis 247,928 207,031 988,024 936,979
Cash Interest (40,657) (40,488) (167,191) (157,601)
Capital expenditures(3) (134,484) (305,348) (843,368) (2,203,453)
Capitalized interest 2,500 4,017 11,964 17,226
Free Cash Flow $
75,287 $
(134,788) $
(10,571) $
(1,406,849)
Net cash provided by operating
activities $
252,959 $
234,420 $
892,853 $
996,421
Derivative settlements(1) 8,346 (51,515) 19,098 (213,528)
Interest expense, net of
capitalized interest 44,672 41,469 176,223 159,085
Rig termination 384 384
Exploration expenses 4,289 3,731 6,658 27,432
Deferred financing costs
amortization and other (9,073) (8,983) (27,263) (29,057)
Current tax (benefit) expense (21) (4) (16) 23
Changes in working capital (38,323) (8,871) (51,424) 13,871
Litigation contingency
expenses(2) 20,000
Other non-cash adjustments 719 3,878 3,035 4,435
Adjusted EBITDA 263,952 214,125 1,039,548 958,682
Adjusted EBITDA attributable to
non-controlling interests 16,025 7,094 51,525 21,703
Adjusted EBITDA attributable to
Oasis 247,927 207,031 988,023 936,979
Cash Interest (40,657) (40,488) (167,191) (157,601)
Capital expenditures(3) (134,484) (305,348) (843,368) (2,203,453)
Capitalized interest 2,500 4,017 11,964 17,226
Free Cash Flow $
75,286 $
(134,788) $
(10,572) $
(1,406,849)
(1) Cash settlements represent the
cumulative gains and losses on the
Company's derivative instruments
for the periods presented and do
not include a recovery of costs
that were paid to acquire or modify
the derivative instruments that
were settled.
(2) In 2019, the Company incurred a
charge to establish a loss accrual
of $20.0 million, which the Company
believes is the estimable amount of
loss that could potentially be
incurred from its pending legal
proceedings based upon currently
available information.
(3) CapEx (including acquisitions)
reflected in the table above
differs from the amounts shown in
the statements of cash flows in the
Company's consolidated financial
statements because amounts
reflected in the table above
include changes in accrued
liabilities from the previous
reporting period for capital
expenditures, while the amounts
presented in the statements of cash
flows are presented on a cash
basis. Acquisitions totaled $12.7
million and $21.0 million for the
fourth quarter and full year 2019,
respectively, and $1.8 million and
$951.9 million for the fourth
quarter and full year 2018,
respectively. Additionally, CapEx
(including acquisitions) reflected
in the table above includes
consideration paid through the
issuance of common stock in
connection with an acquisition for
the year ended December 31, 2018.
Segment Adjusted EBITDA Reconciliations
The following tables present reconciliations of the GAAP financial measure of income (loss) before income taxes including non-controlling interests to the non-GAAP financial measure of Adjusted EBITDA for the Company's three reportable business segments on a gross basis for the periods presented:
Exploration and Production
Three Months Ended December 31, Year Ended December 31,
2019 2018 2019 2018
---
(In thousands)
Income (loss) before income
taxes including non-
controlling interests $
(147,931) $
256,177 $
(332,069) $
(167,292)
(Gain) loss on sale of
properties 505 10,226 4,455 (38,188)
(Gain) loss on extinguishment of
debt (4,312) 150 (4,312) 13,848
Net (gain) loss on derivative
instruments 71,374 (268,402) 106,314 (28,457)
Derivative settlements(1) 8,346 (51,515) 19,098 (213,528)
Interest expense, net of
capitalized interest 40,205 39,734 159,287 156,742
Depreciation, depletion and
amortization 203,551 165,319 766,959 618,402
Impairment 5,203 5,856 384,228
Exploration expenses 4,289 3,731 6,658 27,432
Rig termination 384 384
Equity-based compensation
expenses 6,903 7,345 32,251 27,910
Litigation contingency
expenses(2) - 20,000
Other non-cash adjustments 130 3,774 2,446 4,331
Adjusted EBITDA $
188,647 $
166,539 $
787,327 $
785,428
(1) Cash settlements represent the
cumulative gains and losses on the
Company's derivative instruments
for the periods presented and do
not include a recovery of costs
that were paid to acquire or modify
the derivative instruments that
were settled.
(2) In 2019, the Company incurred a
charge to establish a loss accrual
of $20.0 million, which the Company
believes is the estimable amount of
loss that could potentially be
incurred from its pending legal
proceedings based upon currently
available information.
Midstream
Three Months Ended December 31, Year Ended December 31,
2019 2018 2019 2018
---
(In thousands)
Income before income taxes
including non-controlling
interests $
67,235 $
40,248 $
224,096 $
141,001
Loss on sale of properties - 31 9,622
Interest expense, net of
capitalized interest 4,467 1,735 16,936 2,343
Depreciation, depletion and
amortization 9,732 8,380 37,152 29,282
Equity-based compensation
expenses 381 325 1,744 1,547
Adjusted EBITDA $
81,815 $
50,719 $
279,928 $
183,795
Well Services
Three Months Ended December 31, Year Ended December 31,
2019 2018 2019 2018
---
(In thousands)
Income (loss) before income
taxes including non-
controlling interests $
(4,560) $
5,708 $
(1,866) $
31,023
Depreciation, depletion and
amortization 3,138 4,138 13,631 15,698
Impairment 4,401 4,401
Equity-based compensation
expenses 267 439 1,397 1,588
Other non-cash adjustments 589 104 589 104
Adjusted EBITDA $
3,835 $
10,389 $
18,152 $
48,413
Adjusted Net Income (Loss) Attributable to Oasis and Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share Reconciliations
Adjusted Net Income (Loss) Attributable to Oasis and Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share are supplemental non-GAAP financial measures that are used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted Net Income (Loss) Attributable to Oasis as net income (loss) after adjusting for (1) the impact of certain non-cash and non-recurring items, including non-cash changes in the fair value of derivative instruments, impairment and other similar non-cash and non-recurring charges, (2) the impact of net income attributable to non-controlling interests and (3) the non-cash and non-recurring items' impact on taxes based on the Company's effective tax rate applicable to those adjusting items, excluding net income attributable to non-controlling interests, in the same period. Adjusted Net Income (Loss) Attributable to Oasis is not a measure of net income (loss) as determined by GAAP. The Company defines Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share as Adjusted Net Income (Loss) Attributable to Oasis divided by diluted weighted average shares outstanding. Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share is not a measure of diluted earnings (loss) per share as determined by GAAP.
The following table presents reconciliations of the GAAP financial measure of net income (loss) attributable to Oasis to the non-GAAP financial measure of Adjusted Net Income (Loss) Attributable to Oasis and the GAAP financial measure of diluted earnings (loss) attributable to Oasis per share to the non-GAAP financial measure of Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share for the periods presented:
Three Months Ended December 31, Year Ended December 31,
2019 2018 2019 2018
(In thousands, except per share data)
Net income (loss) attributable
to Oasis $
(76,406) $
221,977 $
(128,243) $
(35,296)
(Gain) loss on sale of
properties 505 10,236 4,455 (28,587)
(Gain) loss on extinguishment of
debt (4,312) 150 (4,312) 13,848
Net (gain) loss on derivative
instruments 71,374 (268,402) 106,314 (28,457)
Derivative settlements(1) 8,346 (51,515) 19,098 (213,528)
Impairment 9,604 10,257 384,228
Rig termination 384 384
Amortization of deferred
financing costs 3,378 2,079 8,832 7,591
Amortization of debt discount 3,137 2,919 12,164 11,120
Litigation contingency
expenses(2) 20,000
Other non-cash adjustments 719 3,878 3,035 4,435
Tax impact(3) (22,108) 71,365 (42,782) (35,759)
Adjusted Net Income (Loss)
Attributable to Oasis $
(5,379) $
(7,313) $
9,202 $
79,595
Diluted earnings (loss)
attributable to Oasis per share $
(0.24) $
0.70 $
(0.41) $
(0.11)
(Gain) loss on sale of
properties 0.03 0.01 (0.09)
(Gain) loss on extinguishment of
debt (0.01) (0.01) 0.04
Net (gain) loss on derivative
instruments 0.23 (0.85) 0.34 (0.09)
Derivative settlements(1) 0.03 (0.16) 0.06 (0.69)
Impairment 0.03 0.03 1.24
Rig termination
Amortization of deferred
financing costs 0.01 0.01 0.03 0.02
Amortization of debt discount 0.01 0.01 0.04 0.04
Litigation contingency
expenses(2) 0.06
Other non-cash adjustments 0.01 0.01 0.01
Tax impact(3) (0.08) 0.23 (0.13) (0.11)
Adjusted Diluted Earnings (Loss)
Attributable to Oasis Per Share $
(0.02) $
(0.02) $
0.03 $
0.26
Diluted weighted average shares
outstanding(4) 315,416 313,260 315,324 310,860
Effective tax rate applicable to 23.7 23.7
% 23.7
% 23.7
adjustment items % %
(1) Cash settlements represent the
cumulative gains and losses on the
Company's derivative instruments
for the periods presented and do
not include a recovery of costs
that were paid to acquire or modify
the derivative instruments that
were settled.
(2) In 2019, the Company incurred a
charge to establish a loss accrual
of $20.0 million, which the Company
believes is the estimable amount of
loss that could potentially be
incurred from its pending legal
proceedings based upon currently
available information.
(3) The tax impact is computed utilizing
the Company's effective tax rate
applicable to the adjustments for
certain non-cash and non-
recurring items. The tax impact was
not computed for the tax reform
rate change adjustments.
(4) The Company included 322,000 and
3,379,000 of unvested stock awards
for the years ended December 31,
2019 and 2018, respectively, in
computing Adjusted Diluted Earnings
Attributable to Oasis Per Share due
to the dilutive effect under the
treasury stock method. No unvested
stock awards were included in
computing Adjusted Diluted Loss
Attributable to Oasis Per Share for
the three months ended December 31,
2019 and 2018 because the effect
was anti-dilutive due to the
Company incurring an Adjusted Net
Loss Attributable to Oasis.
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SOURCE Oasis Petroleum Inc.
