Investment stories on Oasis.
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From Zach's:
Meanwhile, one can look at Oasis Petroleum Inc and Sanchez Energy Corporation as good buying options. The exploration and production firms – sporting a Zacks Rank #1 (Strong Buy) – have solid secular growth stories with the potential to rise significantly from the current levels.From Zach's:
This oil and natural gas exploration and production company delivered positive earnings surprises in the last 4 quarters with an average beat of 11.73%. Oasis Petroleum has witnessed an upward revision in earnings estimates on the back of strong first quarter results.
Oasis Petroleum’ first quarter 2013 earnings per share came in at 67 cents, surpassing the Zacks Consensus Estimate by 31.37%. Oasis Petroleum continues to perform well with its daily production touching 30,153 boepe a 71% increase over the first quarter of 2012.
Higher oil production along with improvement in realized prices boosted the top line of the company. Total revenue at the end of the first quarter was $248.3 million, surpassing the year-ago number by 79.1% and the Zacks Consensus Estimate of $219 million by 13.2%.At Barron's:
According to his analysis, better-than-expected production will fuel earnings outperformance, and he sees Newfield, Oasis, and Southwestern as the most likely candidates for second quarter beats. With most of the basis in development mode, Chandra writes, cost efficiencies, free cash flow visibility and depth of inventory will act as catalysts for the stocks.
Chandra writes that companies are continuing to ramp up efficiency gains in shale, which in turn means lower well costs and faster production growth.
Read his thoughts on the individual names below:
Newfield, Poised To Overdeliver, Bear Case Diminishes. Comfortable with international sales in the range of $1.3 – $1.5B which we consider achievable given value for probable inventory. This is enough to fund almost two years of outspend. Major SCOOP efficiency gains around the corner as shedding intermediate casing in some test wells worked. Could shave $750,000 off well costs.
I don't know if that is a misprint -- "6x6/section." I wonder if they meant "6x6/spacing unit." If they go to 6x6 per section, that would be 12x12/spacing unit in most areas -- i.e., 24 wells per spacing unit. I think they meant "spacing unit," not section.Oasis, More Of The Same Momentum. No new extensional TFS wells this quarter, but confidence in 6×6 development scheme is gaining (6 Bakken/6 TFS wells per section). Company had only 21 net TFS wells booked as proved undeveloped in 2012 reserves.There could be 800 TFS locations ultimately. The number of locations could rise still as the company’s current working interest is higher than what is in the presentation. A Lower Bench TFS well will be drilled this year, quicker than we’d expected.
Zenergy Omlid l (18-151-97) came out of tighthole this week. It is a 3rd Bench Three Forks well. It IP'd at 2000 plus barrels per day and produced 17,000 BO in 28 days in April.
ReplyDeleteThis well has 1st Bench Three Forks off-setting on the west, south, east, northeast, but it is the first 3rd Bench in this immediate area. The nearest 3rd Bench I am aware of is the CLR Charlotte 3H about 11 miles to the northwest in the Banks Field. This strong lower Three Forks zone will be interesting to watch.
I did not know it was a TF3 (hopefully that's the right shorthand for Third Bench, Three Forks). Thank you.
DeleteMike Filloon has a great article on the Three Forks today; I have to link it.
This is going to be a real challenge keeping track of which formation/which bench any given well is targeting. I will do a stand-alone post on this. Thank you.