Friday, January 27, 2017

Update Of Oasis -- Motley Fool -- January 27, 2017

Disclaimer: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on what you read here or what you think you may have read here. Data points from Motley Fool:

  • 2016, drilling budget: $200 million, "which was 57% lower than it spent in 2017." (sic)
  • 2016 drilling budget roughly matched anticipated cash flows at $35-oil
  • that spend would not be enough to keep production from declining
  • anticipated: a fall from 50K boepd to as low as 46K boepd, year-over-year
  • this was a very modest forecast (6% decline forecast) vs 10% and 14% decline anticipated by CLR, Whiting, respectively
  • actual production decline:
  • Oasis beat expectations; despite huge cut in drill spend, production guidance was 50K in 3Q16 -- incredible 
  • Oasis took advantage of that free cash flow; lowered total debt by $100 million
  • Oasis took strong balance sheet / surging stock price to acquire 55,000 net acres in the Bakken
  • acquired that acreage from SM Energy 
  • SM Energy deal added 12K boepd to Oasis production; increased drilling inventory by a whopping 25%
  • will ramp up activity
  • will double its rig count (Hess also plans to triple its rig count in the Bakken this year) as long as oil stays above $50
  • will add a 5th rig in 2018
  • on pace to deliver a compound annual production growth rate in the mid-teens through the end of next year; absolute production growth of 65% by the end of 2018 when factoring in the SM Energy transaction
Compare with CLR:
  • Oasis: mid-teens, then 65% production growth company-wide
  • CLR: will see only an increase of 4% this year (compared to Oasis "mid-teens" production growth
  • Continental plan requires $55 oil, and half of its well completions will come from the higher-return STACK and SCOOP plays in Oklahoma ("higher-return" -- financial return)
Compare with Hess:
  • Hess production will be up 5% this next year (again compared to Oasis "mid-teens" production growth (all forecast; estimates; mid-points)

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