Simons upgrades Oasis Petroleum (NYSE: OAS) from Neutral to Overweight.
My Fair Value Estimate for OAS is $27.50.
Near the end of 2014 there was growing concern that Oasis was over-leveraged and would not be able to
survive an extended period of low oil prices. Analyst seemed to ignore the fact that Oasis had ~74% of
their crude oil production hedged at $89.30/bbl for the first half of 2015. They have 54% of second half oil
production hedged at $82.49/bbl. Cash flows from operations combined with their equity offering that
closed in March, will more than cover this year’s capital program.
I think OAS is a Prime Takeover Target.
We recently updated our profile on this Sweet 16 company. You can download it from the EPG website.