Watch List: OAS

[dan_s]

Oasis Petroleum (OAS) has been on our Watch List for a few months. I'm watching it closely as it appears to be a good fit for the Sweet 16 (Strong Balance Sheet, Strong Technical Team and excellent near-term growth potential). I'm waiting for the year-end financials and reserves report before I work up a company profile and forecast on it. However, I want to bring it to your attention. - Dan

Oasis is focused on developing properties in the Williston Basin, where the company has 292,000 net acres spread across three areas. These include the West Williston, East Nesson and Sanish, where it is targeting the Bakken and Three Forks formations.

The company participated in 44 gross wells in 2010 and ended the year operating six rigs. It spent approximately $350 million in capital during the year, including drilling, completion costs and acquisitions.

Oasis is also growing production from its properties fairly quickly. The company produced an average of 3,295 barrels of oil equivalent (BOE) per day in the first quarter of 2010, and it estimates that average production in the Q4 will range between 7,200 and 7,600 BOE per day.

Acquisitions
Despite the large inventory of drilling locations, Oasis is still adding to its position in the basin. The company made two separate acquisitions in Montana in November, adding 16,700 net acres in Roosevelt County for $49.9 million and 10,000 net acres in Richland County for $30 million.

Balance Sheet
Oasis ended the year with a pristine balance sheet to fund future development of this acreage. The company reported cash and cash equivalents of $270 million and no debt as of September 30, and it estimates that it can fund most of its 2011 capital program without any borrowing.