ith concerns about oil prices, wider differentials, and rising costs
pushing down many oil and gas developers in high-growth areas like the
Bakken and Niobrara, Oasis Petroleum (OAS) isn't exactly a unique situation. Relative to companies like Whiting (WLL) or Continental (CLR)
I suppose you could call Oasis a "fast follower", but whatever you call
it, the company has more than half a million acres in the Bakken.
Oasis's acreage is company-operated to a very significant degree and a
significant amount of that property is in the attractive McKenzie County
in North Dakota.
Valuation is always an inexact science, and even
moreso in the case of oil and gas companies. If you assume that
double-digit differentials are temporary and that WTI oil prices won't
drop back below $80/barrel, Oasis looks attractive on a NAV basis.
Likewise, an EV/EBITDA approach would support the notion that a price in
the mid-to-high $50's is reasonable today.
Follow this link for more:
Oasis Petroleum Offers A Familiar Story In The Bakken
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