Oasis Petroleum (OAS)

[dan_s]

An updated Net Income & Cash Flow Forecast model for OAS has been posted under the Sweet 16 Tab.

I have gained increased confidence in my forecast model for this one. The company had a strong 2nd quarter and production will be ramping up sharply during the second half of this year. Second quarter production was 30,173 boepd (90.6% crude oil) and they are on-track to an exit rate over 39,000 boepd. My forecast is based on the mid-point of their full-year guidance.

Investors should take notice of how rapidly Oasis well services revenues are ramping up. Plus, having their own completion crews has significantly reduced their completed well costs. Lease operating costs continue to drop (on a per boe basis) as they reduce their saltwater disposal expense.

OAS is a pure plan on the Williston Basin (Bakken and Three Forks). North Dakota producers will get a big boost from the sharp increase in WTI oil prices this quarter.

I have raised my Fair Value Estimate to $58.00/share.

First Call's target price is $45.71. It should go up as analysts gain more confidence in oil prices and Oasis' ability to hit their production guidance.