Wednesday, February 19, 2014

Seeking Alpha: Oasis Petroleum Offers A Familiar Story In The Bakken

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

No comments: