Oasis Petroleum

With the market dislocations brought on in 2020-21, many if not most E&Ps have been reexamining their strategies and making changes. A common result has been a deemphasis on capex and expansion and a renewed focus on increasing free cash flow — and with that excess cash reducing or eliminating debt and rewarding shareholders through dividends and stock buybacks. A prime example of a producer taking this approach is Oasis Petroleum, a Bakken-focused E&P that a year ago this week emerged from COVID-induced bankruptcy filing and has since taken a number of additional steps to position itself as a reliable money-maker, even if crude oil prices were to slide to significantly lower levels. In today’s RBN blog, we discuss the ongoing trend among producers to rethink and rework their strategies as energy markets recover.

Oil-Weighted exploration and production companies (E&Ps) are slashing capital spending in 2015, as they need to regain control of their costs in today’s lower oil price environment. With robust oil prices over the past three years, these companies only posted middling profitability as capital and operating costs ate up much of their incremental revenue. The Large Oil Weighted E&Ps are cutting back less than the Small/Mid-Sized Oil Weighted E&Ps as they are more financially secure and have more ability to spend through the price cycle. The Small/Mid-Sized Oil Weighted E&Ps are focused on getting their spending in line with cash flows and to get to a point where they are self-funding their capital investment. Today we explore how each of the companies in the two oil-weighted peer groups is trying to resolve these issues.