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Oasis Petroleum Goes Public In 2010
Oasis Petroleum (NYSE:OAS) transitioned to a public exploration and production company in 2010 through a successful initial public offering (IPO), as the company benefited from the strong investor preference for stocks with oil exposure.
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Initial Public Offering
Oasis Petroleum went public in June, selling 48.3 million shares at $14 per share. Oasis was up by 80% through mid-December, as the market has favored exploration and production companies in 2010 that are levered to oil and liquids development.
Not all IPOs in the energy sector went as well for investors. China Hydroelectric (NYSE:CHC) went public in January 2010 at $16 per share. The stock has since underperformed the market and is down 45% year to date.
Williston Basin
Oasis is focused on developing properties in the Williston Basin, where the company has 292,000 net acres spread across three areas. These include the West Williston, East Nesson and Sanish, where it is targeting the Bakken and Three Forks formations.
The company participated in 44 gross wells in 2010 and ended the year operating six rigs. It spent approximately $350 million in capital during the year, including drilling, completion costs and acquisitions.
Oasis is also growing production from its properties fairly quickly. The company produced an average of 3,295 barrels of oil equivalent (BOE) per day in the first quarter of 2010, and it estimates that average production in the Q4 will range between 7,200 and 7,600 BOE per day.
Acquisitions
Despite the large inventory of drilling locations, Oasis is still adding to its position in the basin. The company made two separate acquisitions in Montana in November, adding 16,700 net acres in Roosevelt County for $49.9 million and 10,000 net acres in Richland County for $30 million.
Occidental Petroleum (NYSE:OXY) also made an acquisition in the Bakken in 2010, purchasing 180,000 net acres from a private company for $1.4 billion. The properties have current production of 5,500 BOE per day, and Occidental plans to increase this to at least 30,000 BOE per day within five years.
Balance Sheet
Oasis also ended the year with a pristine balance sheet to fund future development of this acreage. The company reported cash and cash equivalents of $270 million and no debt as of September 30, and it estimates that it can fund most of its 2011 capital program without any borrowing.
Another exploration and production company with no debt on the balance sheet is Evolution Petroleum (NYSE:EPM), which operates in Texas, Louisiana and Oklahoma.
2010 Recap
Oasis Petroleum went public in 2010, as it sought to take advantage of the current investor infatuation with companies that have exposure to oil and liquids plays. The company will continue with this type of development in 2011. (Thinking of investing here? We give you five tips to remember. See The Murky Waters Of The IPO Market.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
IN PICTURES: Learn To Invest In 10 Steps
Initial Public Offering
Oasis Petroleum went public in June, selling 48.3 million shares at $14 per share. Oasis was up by 80% through mid-December, as the market has favored exploration and production companies in 2010 that are levered to oil and liquids development.
Not all IPOs in the energy sector went as well for investors. China Hydroelectric (NYSE:CHC) went public in January 2010 at $16 per share. The stock has since underperformed the market and is down 45% year to date.
Williston Basin
Oasis is focused on developing properties in the Williston Basin, where the company has 292,000 net acres spread across three areas. These include the West Williston, East Nesson and Sanish, where it is targeting the Bakken and Three Forks formations.
The company participated in 44 gross wells in 2010 and ended the year operating six rigs. It spent approximately $350 million in capital during the year, including drilling, completion costs and acquisitions.
Acquisitions
Despite the large inventory of drilling locations, Oasis is still adding to its position in the basin. The company made two separate acquisitions in Montana in November, adding 16,700 net acres in Roosevelt County for $49.9 million and 10,000 net acres in Richland County for $30 million.
Occidental Petroleum (NYSE:OXY) also made an acquisition in the Bakken in 2010, purchasing 180,000 net acres from a private company for $1.4 billion. The properties have current production of 5,500 BOE per day, and Occidental plans to increase this to at least 30,000 BOE per day within five years.
Balance Sheet
Oasis also ended the year with a pristine balance sheet to fund future development of this acreage. The company reported cash and cash equivalents of $270 million and no debt as of September 30, and it estimates that it can fund most of its 2011 capital program without any borrowing.
Another exploration and production company with no debt on the balance sheet is Evolution Petroleum (NYSE:EPM), which operates in Texas, Louisiana and Oklahoma.
2010 Recap
Oasis Petroleum went public in 2010, as it sought to take advantage of the current investor infatuation with companies that have exposure to oil and liquids plays. The company will continue with this type of development in 2011. (Thinking of investing here? We give you five tips to remember. See The Murky Waters Of The IPO Market.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Eric Fox
Eric J. Fox, CFA, is a freelance financial writer and has previous experience working in the asset management industry as an equity analyst and portfolio manager on the buy side. His favorite area to write on is the energy sector and he keeps current on the industry by reading Haynesville Shale, Permian Oil and Gas and various other blogs.
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