Oasis Petroleum’s stock performance
Oasis Petroleum Corporation’s (OAS) stock was mostly in a falling trend in the second half of 2015. However, since the start of 2016, OAS has been mostly on an uptrend, mirroring the rally in crude oil prices (USO). Recently, the stock has seen a few dips even as energy prices remain volatile.
Year-over-year, Oasis Petroleum’s stock has fallen by ~21%. Crude oil prices have fallen ~9% during the same period. The broader energy ETF—the Energy Select Sector SPDER ETF (XLE)—has fallen by 3.6% in the same period.
OAS’s stock offering
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.
In a bid to boost liquidity amid lower prices, several companies have announced stock offerings to strengthen their positions, Oasis included. Other upstream companies to have taken this action include Newfield Exploration (NFX) and Devon Energy (DVN). These companies make up a combined 5% of the iShares US Oil & Gas Exploration & Production ETF (IEO).
Many upstream companies, including OAS, have also hedged their production volumes in 2016 to protect themselves against volatility in energy price movements. Approximately 75% of OAS’s estimated 2016 oil volumes are hedged at an average WTI (West Texas Intermediate) price of $50+per barrel.