How Has Oasis Petroleum’s Stock Fared before Its 4Q15 Earnings?



Oasis Petroleum’s stock performance

Oasis Petroleum’s (OAS) stock was highly volatile in 1H15. However, in July 2015, the stock began a falling trend that lasted until October. The rise in October was short-lived as crude oil prices began sinking lower and eventually fell below $40 per barrel in early December.

On a YoY (year-over-year) basis, OAS has fallen ~73% since February 2015, and crude oil prices have fallen ~45%. The Energy Select Sector SPDR Fund (XLE) has fallen 32% in the same period.

OAS’s peers Whiting Petroleum (WLL), EP Energy (EPE), and Energen Corporation (EGN) have seen their stock prices fall 88%, ~82%, and ~68%, respectively, on a year-over-year basis. OAS, WLL, and EGN make up ~0.62% of the Vanguard Energy ETF (VDE).

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OAS’s key highlights

On January 26, 2016, OAS launched an equity offering to fund a portion of its 2016 capex. The company anticipated raising $160 million by selling 34 million shares. The offering included a 30-day option for underwriters to purchase an additional 5.1 million shares. The decision to issue a fairly large number of shares when crude oil is trading at multiyear lows was born out of dwindling cash flows due to lower energy prices.

Oasis Petroleum noted in its January 26, 2016, press release that it had a positive free cash flow in 4Q15. Increased well performance and momentum in cost reductions enabled the company to lower the break-even point for positive free cash flow in 2016.


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