How Oasis Petroleum Stock Reacted to 3Q17 Earnings
Oasis Petroleum’s stock performance
Following Oasis Petroleum’s (OAS) 3Q17 earnings release after the market closed on November 8, its stock rose to a high of $11.23 on November 9, ~4.7% higher than the November 8 close. However, OAS stock fell from those levels to $10.77, still 0.4% higher than November 8’s close.
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OAS stock rose on account of upbeat 3Q17 earnings and revenue. Read parts 1 and 2 of this series to learn more about OAS’s 3Q17 performance.
Another factor that has been driving OAS stock is crude oil prices (DBO). As you can see above, Oasis Petroleum stock has mostly mimicked crude oil price movements this year. Crude oil prices have consistently been rising since late September, driving the uptrend in OAS stock.
However, OAS’s relative performance has been dismal. While Oasis Petroleum stock has fallen 31.5% since the beginning of the year, crude oil prices have risen 9% during the same period.
Crude oil prices and natural gas prices have also driven the Energy Select Sector SPDR ETF’s (XLE) movements. XLE has fallen ~8.1% since the beginning of the year.
Since the beginning of the year, Oasis Petroleum stock and XLE have underperformed the broader market ETF (SPY)(SPX-INDEX), which has risen ~15% since the beginning of the year. The energy sector makes up ~6% of SPY.
Forward-looking management comments
OAS’s management noted in the 3Q17 earnings conference that its key focuses in 2018 would be financial discipline, shareholder returns, and capital efficiency. The company noted, “The continued improvements in the performance of our wells and the depth of our core inventory has led to continued capital efficient growth in 2017, and sets us up to continue that growth in 2018, while generating positive free cash flow on the E&P side of the business.”