A sharp jump in production helped Oasis Petroleum Inc. turn a profit in the first quarter.
The Houston independent reported net income of $16.4 million from the first quarter, up from a loss of $6.8 million year over year and a loss of $13.4 million quarter over quarter.
Oasis produced 17,633 barrels of oil equivalent per day during the quarter — up 118 percent year over year and up 16 percent quarter over quarter — beating the high end of its guidance for the quarter by 7 percent. The company now expects production to grow to between 18,000 and 19,500 barrels of oil equivalent per day during the second quarter.
Oasis completed and brought 26 gross (19.9 net) wells online in the Bakken during the quarter and was drilling another seven gross (five net) wells at the end of the quarter. The company plans to run 10 rigs in the Williston basin through the remainder of the year, eight in the West Williston area that straddles the North Dakota-Montana state line and two in the East Nesson area in Mountrail and Burke counties in western North Dakota.
“We exited the quarter with momentum, as we continue to improve rig efficiency and frac times,” Chairman and CEO Thomas B. Nusz said in a prepared statement.
Lease operating expenses down
Lease operating expenses in the first quarter fell 21 percent to $6.12 per barrel of oil equivalent year over year, primarily because of reduced produced water handling costs, and spud-to-spud cycle times fell to 23 days on average (and a low of 18 days) in the first quarter, down from an average of 27 days in 2011 and 29 days in 2010. Oasis is spending between $9.2 million and $10 million per well depending on completion techniques.
“Price differentials for Bakken crude were volatile again in the first quarter of 2012, but Oasis Petroleum Marketing did a great job moving oil and transitioning our takeaway to a mix of about 50 percent rail and 50 percent pipeline,” Nusz said. “Differentials have also improved dramatically from the widest levels experienced in February 2012.” The company attributed that improvement to “lower quoted prices for Bakken crude in markets such as Clearbrook, MN, and Guernsey, WY, as a result of increased production from the Williston Basin and from Canada and temporary refinery constraints.”
Oasis plans to spend $758 million this year drilling 192 gross (80 net wells).
