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Oasis Petroleum Inc. Announces Acquisition of Williston Basin Assets

Oasis Petroleum Inc reported Quarter 1 EPS of $4.34, $1.78 which is better than the analyst estimate of $2.56. Revenue for the quarter came in at $355.5 million versus the consensus estimate of $225 million.

Oasis Petroleum Inc announced it entered into a definitive agreement under which Oasis will acquire select Williston Basin assets from Diamondback Energy in a cash transaction valued at $745MM, subject to customary purchase price adjustments. The consideration is expected to be financed through cash on hand of $106MM as of March 31, 2021, revolver borrowings will be around $450MM elected commitment on $500MM borrowing base, none drawn as of March 31, 2021, and a $500MM fully committed underwritten bridge loan. The transaction was approved by the Board of Directors of each company. The effective date of the acquisition will be April 1, 2021, and the closing is expected to occur in July 2021, subject to customary closing conditions.

Oasis Petroleum Inc is also updating its February FY21 volume and CapEx guidance to reflect 1Q21 actual performance and the Williston acquisition. For guidance, the acquisition is modeled to close on June 30, 2021. At $55/bbl WTI and $2.50/mmBtu NYMEX gas, it is expecting more than $200MM of free cash flow in 2021, including the impacts of hedges.

The accretive transaction and the Company’s dedication to shareholder returns support an approximately 33% increase in the dividend post-closing to $0.50/share ($2.00 annualized). In 2021 CapEx increased $5MM to $10MM reflecting an accumulative workover associated with acquired assets. The company is evaluating various development scenarios for 2022 and beyond to optimize operational efficiency, returns on capital, and sustainable free cash generation.

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