From Seeking Alpha
The following is a "small cap insight" column
by Sarfaraz A. Khan about a company with a market cap of less than $5 billion.
Oasis
Petroleum (OAS) is 6.5 years old
independent exploration and production company that is focused on developing
unconventional oil from Williston Basin. The region in already known for its
rich deposits of natural resources, particularly the shale reserves at Bakken
and Three Forks. Oasis Petroleum has highly concentrated 335,383 net acres in
the region. Over the years, the company has acquired and developed assets at
the heart of the play. This has then powered the company's stellar growth over
a brief period.
Stellar
Growth
Oasis
Petroleum is primarily an unconventional oil producer and gets more than 90% of
its revenues from oil. The company's acreage is spread across West Williston
(in Montana and North Dakota), East Nesson and Sanish (in North Dakota). Oasis
Petroleum only operates the West Williston and the East Nesson acreage.
(Figure a)
The company
is a growth story in the making. Since Q2-2011, the company's revenues have
grown by 278.8%, gross profits are up 221.7% and earnings per share have
doubled. As a result, Oasis Petroleum has seen a fivefold increase in its
return on equity from 4.76% in Q2-2011 to 22.24% in Q2-2013.
(Figure b)
All of this
has come on the back of more than 4x increase in production. In its humble
beginnings, Oasis Petroleum's average daily production in FY-2010 was 5,206
boepd. This has now grown to an impressive 30,171 boepd, and the business is on
track to produce 33,000 boepd in the current quarter.
(Figure c)
Oasis
Petroleum's average daily production is +34% as compared to … Read full article with figures
