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Oasis Petroleum (NYSE: OAS) is an independent exploration and production company headquartered in Houston, Texas. Oasis Petroleum concentrates on the acquisition and development of unconventional oil and natural gas resources in the Williston Basin in Montana and North Dakota. Of their approximately 506,000 net acres in the Williston Basin, the company’s primary focus is in the Bakken and Three Forks formations, as well as other significant potential horizons.
Thomas B. Nusz and Taylor L. Reid founded the company in 2007 when they bought 175,000 net acres and 1,000 barrels of oil equivalent per day (boepd) in West Williston for $83 million, with help from a private equity company. Over the next year they almost doubled their acreage and boepd. In June 2010, Oasis Petroleum went public with an initial public offering of 42,000,000 shares. This raised $400 million in gross proceeds for the company.
Oasis Petroleum operates under three different business segments: Exploration and Production, Well Services and Midstream Services, and is currently focused in the Williston Basin, West Williston and East Nesson. Through the Exploration and Production segment, Oasis Petroleum acquires and develops natural gas and oil. Through the Well Services segment, they perform completion services for the oil and gas wells operated by the company. And through the Midstream Services segment, they perform salt water gathering and disposal, as well as other midstream services. In 2012, Oasis created a subsidiary, Oasis Well Services (OWS), to take over their completion services. After realizing the significant cost savings of vertically integrating through this subsidiary, Oasis Petroleum created an additional subsidiary, Oasis Midstream Services (OMS), to focus on their midstream assets.
Oasis operates using what they call a “Resource Conversion” strategy. The Resource Conversion strategy is made up of four elements: aggressively developing their Williston Basin leasehold position, enhancing returns by focusing on operation and cost efficiencies, adopting and employing leading drilling and completion techniques and pursuing acquisitions with significant resource potential. The company believes they will be able to generate long-term value using this strategy and identifying, acquiring and producing repeatable drilling programs in oil-rich areas.
As a pure-play Bakken Shale producer, Oasis considers itself the premier operator in the Williston Basin. They have backed this up through their ability to stay ahead of other companies in the industry despite the decline in oil prices. At the end of 2015, when most companies were struggling, Oasis produced more oil than they had projected. They even did it at a lower cost than they had originally anticipated. They did this by cutting costs in some areas and intelligently investing in other areas. One of the ways they were able to cut costs was by lowering their lease operating expenses, which was significantly aided by the newly-created subsidiary, Oasis Midstream Services (OMS). By increasing the saltwater disposal volumes being transported through OMS pipelines and then disposing of the salt water in OMS saltwater disposal wells, Oasis was able to offset any higher costs they incurred.
Additionally, Oasis invested in new techniques to drill better-performing wells, which allowed them to produce more from the same well. Oasis increased the number of wells in which they used slickwater, or high intensity simulation, for completion. This gave them a greater return from each well, allowing production to be more efficient. Despite the 10 percent increase in the cost associated with completing a well this way, it gave Oasis a rise in production of anywhere from 20 percent to 50 percent, making it well worth the initial cost increase.
Oasis is committed to the safety of the people who work for them and for the community in which they operate. In fact, it is one of their top priorities. As such, they are very strict when it comes to their safety policies. They follow a system in which communication, collaboration, compliance and coordination are key. Through this process they give all employees the power to halt an operation if they see a safety issue. They encourage them to do so by calling it a “safety time-out.”
Oasis continually collaborates with insurance companies to evaluate and address safety issues. The EH&S team is constantly looking for new regulatory developments in the industry to ensure they are adopting them. The company’s primary safety objective is for everyone to go home in the same condition in which they arrived. Oasis realizes that maintaining safety procedures is much more efficient than injury and loss.
1001 Fannin Street, Suite 1500
Houston, Texas 77002