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What’s Causing Oasis Petroleum’s Stock Rise?


Nov. 20 2020, Updated 11:57 a.m. ET

Oasis Petroleum stock

Oasis Petroleum (OAS) stock rose significantly in the run-up to the company’s Q1 2018 earnings release in early May, which didn’t disappoint. Its Q1 2018 earnings and revenue were higher YoY (year-over-year) and beat analysts’ expectations. Oasis’s production rose 22% YoY during the quarter.

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Why does the market like OAS stock?

During the first quarter, Oasis’s CFO (cash flow from operations) rose YoY from $108 million to $228.4 million—the highest quarterly operating cash flow seen since Q2 2014’s ~$278 billion. Meanwhile, its capital expenditure was ~$177 million, translating into free cash flow of $51.3 million.

Peers with a market capitalization similar to Oasis’s ($2 billion–$4 billion) include Whiting Petroleum (WLL), PDC Energy (PDCE), and Carrizo Oil & Gas (CRZO). In Q1 2018, WLL’s CFO rose YoY from $80 billion to $232 billion, PDCE’s CFO rose YoY from ~$140 million to $205 million, and CRZO’s CFO rose from $76.4 million to ~$139 million.

Additionally, after the close of its Permian acquisition in Q1 2018, OAS stated that it believes itself well positioned to “transferring our Williston expertise to the Delaware Basin.” It added, “Due to our long-term relationships that we’ve developed with our service partners in the Williston, Oasis has secured critical services at market competitive prices in the Delaware. We see many service providers, both large and small, that want to partner with Oasis early on and grow with us as we ramp up operations in the Delaware.”

OAS closed its Permian Basin acquisition from Forge Energy on February 14. The acquisition gave it approximately 3.6 Mboepd (thousand barrels of oil equivalent per day) of production and ~22,000 net undeveloped acres.

Year-over-year performance

OAS stock has risen 44% YoY, while the Energy Select Sector SPDR ETF (XLE) has risen ~13% YoY and the S&P 500 SPDR ETF (SPY) has risen ~14% YoY.


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