Intrinsic value of Oasis Petroleum - OAS

Previous Close

$8.49

  Intrinsic Value

$2.65

stock screener

  Rating & Target

str. sell

-69%

Previous close

$8.49

 
Intrinsic value

$2.65

 
Up/down potential

-69%

 
Rating

str. sell

We calculate the intrinsic value of OAS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  1,997
  3,086
  4,615
  6,697
  9,448
  12,989
  17,434
  22,893
  29,457
  37,207
  46,202
  56,487
  68,086
  81,009
  95,252
  110,801
  127,633
  145,722
  165,037
  185,551
  207,236
  230,069
  254,034
  279,118
  305,320
  332,641
  361,094
  390,697
  421,478
  453,470
Variable operating expenses, $m
  989
  1,528
  2,285
  3,315
  4,677
  6,429
  8,630
  11,332
  14,581
  18,417
  22,870
  27,961
  33,702
  40,099
  47,150
  54,846
  63,178
  72,132
  81,693
  91,848
  102,582
  113,884
  125,747
  138,164
  151,133
  164,657
  178,741
  193,395
  208,632
  224,468
Fixed operating expenses, $m
  508
  519
  531
  542
  554
  566
  579
  592
  605
  618
  631
  645
  660
  674
  689
  704
  719
  735
  751
  768
  785
  802
  820
  838
  856
  875
  894
  914
  934
  955
Total operating expenses, $m
  1,497
  2,047
  2,816
  3,857
  5,231
  6,995
  9,209
  11,924
  15,186
  19,035
  23,501
  28,606
  34,362
  40,773
  47,839
  55,550
  63,897
  72,867
  82,444
  92,616
  103,367
  114,686
  126,567
  139,002
  151,989
  165,532
  179,635
  194,309
  209,566
  225,423
Operating income, $m
  501
  1,039
  1,800
  2,840
  4,217
  5,993
  8,226
  10,969
  14,271
  18,172
  22,701
  27,881
  33,724
  40,235
  47,413
  55,250
  63,735
  72,854
  82,592
  92,935
  103,869
  115,383
  127,467
  140,117
  153,330
  167,109
  181,458
  196,388
  211,912
  228,048
EBITDA, $m
  1,350
  2,351
  3,762
  5,686
  8,232
  11,513
  15,635
  20,699
  26,791
  33,985
  42,337
  51,887
  62,660
  74,664
  87,895
  102,340
  117,979
  134,786
  152,733
  171,794
  191,944
  213,162
  235,431
  258,742
  283,091
  308,481
  334,923
  362,434
  391,040
  420,773
Interest expense (income), $m
  138
  143
  267
  448
  701
  1,047
  1,503
  2,091
  2,828
  3,734
  4,823
  6,109
  7,602
  9,308
  11,233
  13,377
  15,740
  18,320
  21,113
  24,115
  27,320
  30,723
  34,321
  38,110
  42,086
  46,249
  50,596
  55,129
  59,850
  64,762
  69,870
Earnings before tax, $m
  358
  772
  1,353
  2,138
  3,170
  4,490
  6,135
  8,141
  10,537
  13,348
  16,592
  20,279
  24,416
  29,003
  34,036
  39,510
  45,415
  51,741
  58,478
  65,616
  73,146
  81,061
  89,357
  98,031
  107,082
  116,513
  126,329
  136,538
  147,150
  158,178
Tax expense, $m
  97
  209
  365
  577
  856
  1,212
  1,656
  2,198
  2,845
  3,604
  4,480
  5,475
  6,592
  7,831
  9,190
  10,668
  12,262
  13,970
  15,789
  17,716
  19,749
  21,887
  24,126
  26,468
  28,912
  31,458
  34,109
  36,865
  39,730
  42,708
Net income, $m
  261
  564
  987
  1,561
  2,314
  3,277
  4,478
  5,943
  7,692
  9,744
  12,112
  14,804
  17,823
  21,172
  24,846
  28,842
  33,153
  37,771
  42,689
  47,899
  53,396
  59,175
  65,231
  71,562
  78,170
  85,054
  92,220
  99,672
  107,419
  115,470

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  10,569
  16,329
  24,419
  35,431
  49,988
  68,723
  92,246
  121,125
  155,858
  196,861
  244,457
  298,872
  360,242
  428,616
  503,977
  586,246
  675,306
  771,014
  873,213
  981,751
  1,096,485
  1,217,297
  1,344,093
  1,476,817
  1,615,448
  1,760,006
  1,910,549
  2,067,181
  2,230,042
  2,399,315
Adjusted assets (=assets-cash), $m
  10,569
  16,329
  24,419
  35,431
  49,988
  68,723
  92,246
  121,125
  155,858
  196,861
  244,457
  298,872
  360,242
  428,616
  503,977
  586,246
  675,306
  771,014
  873,213
  981,751
  1,096,485
  1,217,297
  1,344,093
  1,476,817
  1,615,448
  1,760,006
  1,910,549
  2,067,181
  2,230,042
  2,399,315
Revenue / Adjusted assets
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
  0.189
Average production assets, $m
  9,678
  14,952
  22,361
  32,445
  45,775
  62,930
  84,470
  110,915
  142,720
  180,267
  223,851
  273,679
  329,875
  392,486
  461,494
  536,828
  618,381
  706,021
  799,606
  898,994
  1,004,057
  1,114,685
  1,230,793
  1,352,329
  1,479,274
  1,611,646
  1,749,500
  1,892,928
  2,042,060
  2,197,064
Working capital, $m
  -188
  -290
  -434
  -629
  -888
  -1,221
  -1,639
  -2,152
  -2,769
  -3,497
  -4,343
  -5,310
  -6,400
  -7,615
  -8,954
  -10,415
  -11,997
  -13,698
  -15,514
  -17,442
  -19,480
  -21,626
  -23,879
  -26,237
  -28,700
  -31,268
  -33,943
  -36,726
  -39,619
  -42,626
Total debt, $m
  4,172
  6,995
  10,959
  16,355
  23,488
  32,668
  44,194
  58,345
  75,364
  95,456
  118,778
  145,441
  175,512
  209,016
  245,942
  286,254
  329,894
  376,790
  426,868
  480,052
  536,272
  595,469
  657,599
  722,634
  790,563
  861,396
  935,163
  1,011,912
  1,091,714
  1,174,658
Total liabilities, $m
  5,179
  8,001
  11,966
  17,361
  24,494
  33,674
  45,200
  59,351
  76,370
  96,462
  119,784
  146,447
  176,518
  210,022
  246,949
  287,261
  330,900
  377,797
  427,874
  481,058
  537,278
  596,475
  658,606
  723,640
  791,570
  862,403
  936,169
  1,012,919
  1,092,720
  1,175,664
Total equity, $m
  5,390
  8,328
  12,454
  18,070
  25,494
  35,049
  47,045
  61,774
  79,488
  100,399
  124,673
  152,425
  183,723
  218,594
  257,028
  298,986
  344,406
  393,217
  445,339
  500,693
  559,208
  620,821
  685,487
  753,177
  823,879
  897,603
  974,380
  1,054,262
  1,137,321
  1,223,650
Total liabilities and equity, $m
  10,569
  16,329
  24,420
  35,431
  49,988
  68,723
  92,245
  121,125
  155,858
  196,861
  244,457
  298,872
  360,241
  428,616
  503,977
  586,247
  675,306
  771,014
  873,213
  981,751
  1,096,486
  1,217,296
  1,344,093
  1,476,817
  1,615,449
  1,760,006
  1,910,549
  2,067,181
  2,230,041
  2,399,314
Debt-to-equity ratio
  0.770
  0.840
  0.880
  0.910
  0.920
  0.930
  0.940
  0.940
  0.950
  0.950
  0.950
  0.950
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
Adjusted equity ratio
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  261
  564
  987
  1,561
  2,314
  3,277
  4,478
  5,943
  7,692
  9,744
  12,112
  14,804
  17,823
  21,172
  24,846
  28,842
  33,153
  37,771
  42,689
  47,899
  53,396
  59,175
  65,231
  71,562
  78,170
  85,054
  92,220
  99,672
  107,419
  115,470
Depreciation, amort., depletion, $m
  849
  1,312
  1,961
  2,846
  4,015
  5,520
  7,410
  9,729
  12,519
  15,813
  19,636
  24,007
  28,936
  34,429
  40,482
  47,090
  54,244
  61,932
  70,141
  78,859
  88,075
  97,779
  107,964
  118,625
  129,761
  141,372
  153,465
  166,046
  179,128
  192,725
Funds from operations, $m
  1,110
  1,875
  2,949
  4,407
  6,330
  8,798
  11,888
  15,672
  20,212
  25,557
  31,748
  38,810
  46,760
  55,600
  65,328
  75,932
  87,397
  99,703
  112,830
  126,759
  141,472
  156,954
  173,195
  190,188
  207,930
  226,427
  245,685
  265,719
  286,547
  308,195
Change in working capital, $m
  -70
  -102
  -144
  -196
  -259
  -333
  -418
  -513
  -617
  -728
  -846
  -967
  -1,090
  -1,215
  -1,339
  -1,462
  -1,582
  -1,700
  -1,816
  -1,928
  -2,038
  -2,146
  -2,253
  -2,358
  -2,463
  -2,568
  -2,675
  -2,783
  -2,893
  -3,007
Cash from operations, $m
  1,181
  1,978
  3,093
  4,603
  6,588
  9,130
  12,306
  16,185
  20,829
  26,286
  32,593
  39,777
  47,850
  56,815
  66,667
  77,394
  88,979
  101,403
  114,645
  128,687
  143,510
  159,100
  175,448
  192,546
  210,393
  228,995
  248,359
  268,501
  289,441
  311,202
Maintenance CAPEX, $m
  -530
  -849
  -1,312
  -1,961
  -2,846
  -4,015
  -5,520
  -7,410
  -9,729
  -12,519
  -15,813
  -19,636
  -24,007
  -28,936
  -34,429
  -40,482
  -47,090
  -54,244
  -61,932
  -70,141
  -78,859
  -88,075
  -97,779
  -107,964
  -118,625
  -129,761
  -141,372
  -153,465
  -166,046
  -179,128
New CAPEX, $m
  -3,631
  -5,274
  -7,409
  -10,084
  -13,330
  -17,155
  -21,540
  -26,444
  -31,806
  -37,547
  -43,584
  -49,828
  -56,196
  -62,611
  -69,008
  -75,334
  -81,553
  -87,640
  -93,585
  -99,388
  -105,063
  -110,627
  -116,108
  -121,536
  -126,945
  -132,372
  -137,854
  -143,428
  -149,133
  -155,004
Cash from investing activities, $m
  -4,161
  -6,123
  -8,721
  -12,045
  -16,176
  -21,170
  -27,060
  -33,854
  -41,535
  -50,066
  -59,397
  -69,464
  -80,203
  -91,547
  -103,437
  -115,816
  -128,643
  -141,884
  -155,517
  -169,529
  -183,922
  -198,702
  -213,887
  -229,500
  -245,570
  -262,133
  -279,226
  -296,893
  -315,179
  -334,132
Free cash flow, $m
  -2,981
  -4,146
  -5,628
  -7,443
  -9,588
  -12,040
  -14,754
  -17,669
  -20,706
  -23,781
  -26,803
  -29,687
  -32,353
  -34,732
  -36,769
  -38,422
  -39,664
  -40,481
  -40,871
  -40,842
  -40,412
  -39,602
  -38,440
  -36,955
  -35,177
  -33,138
  -30,867
  -28,392
  -25,738
  -22,930
Issuance/(repayment) of debt, $m
  1,939
  2,822
  3,965
  5,396
  7,133
  9,180
  11,526
  14,151
  17,019
  20,092
  23,322
  26,663
  30,071
  33,504
  36,927
  40,312
  43,640
  46,897
  50,078
  53,183
  56,220
  59,198
  62,130
  65,035
  67,929
  70,833
  73,766
  76,749
  79,802
  82,944
Issuance/(repurchase) of shares, $m
  1,753
  2,374
  3,139
  4,055
  5,110
  6,277
  7,518
  8,785
  10,022
  11,167
  12,162
  12,948
  13,475
  13,699
  13,587
  13,115
  12,268
  11,040
  9,433
  7,455
  5,118
  2,439
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  3,692
  5,196
  7,104
  9,451
  12,243
  15,457
  19,044
  22,936
  27,041
  31,259
  35,484
  39,611
  43,546
  47,203
  50,514
  53,427
  55,908
  57,937
  59,511
  60,638
  61,338
  61,637
  62,130
  65,035
  67,929
  70,833
  73,766
  76,749
  79,802
  82,944
Total cash flow (excl. dividends), $m
  711
  1,051
  1,476
  2,008
  2,655
  3,417
  4,290
  5,267
  6,335
  7,478
  8,681
  9,925
  11,193
  12,471
  13,745
  15,005
  16,243
  17,456
  18,640
  19,796
  20,926
  22,034
  23,690
  28,080
  32,752
  37,695
  42,900
  48,358
  54,064
  60,014
Retained Cash Flow (-), $m
  -2,014
  -2,938
  -4,126
  -5,616
  -7,424
  -9,554
  -11,997
  -14,728
  -17,714
  -20,912
  -24,274
  -27,752
  -31,298
  -34,871
  -38,434
  -41,957
  -45,421
  -48,811
  -52,122
  -55,354
  -58,515
  -61,614
  -64,666
  -67,689
  -70,702
  -73,724
  -76,777
  -79,882
  -83,059
  -86,329
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -1,303
  -1,887
  -2,651
  -3,608
  -4,769
  -6,138
  -7,707
  -9,461
  -11,379
  -13,433
  -15,593
  -17,827
  -20,105
  -22,401
  -24,689
  -26,953
  -29,177
  -31,355
  -33,482
  -35,558
  -37,589
  -39,579
  -40,976
  -39,609
  -37,950
  -36,029
  -33,878
  -31,524
  -28,995
  -26,315
Discount rate, %
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.12
  16.93
  17.78
  18.67
  19.60
  20.58
  21.61
  22.69
  23.82
  25.01
  26.26
  27.58
PV of cash for distribution, $m
  -1,221
  -1,647
  -2,140
  -2,676
  -3,224
  -3,751
  -4,222
  -4,602
  -4,866
  -4,997
  -4,990
  -4,849
  -4,590
  -4,235
  -3,811
  -3,346
  -2,866
  -2,396
  -1,956
  -1,557
  -1,210
  -917
  -668
  -444
  -285
  -177
  -106
  -61
  -34
  -18
Current shareholders' claim on cash, %
  60.6
  39.1
  26.6
  18.9
  14.0
  10.7
  8.4
  6.8
  5.7
  4.8
  4.2
  3.7
  3.3
  3.1
  2.8
  2.7
  2.5
  2.4
  2.4
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3

Oasis Petroleum Inc. is an independent exploration and production company. The Company is focused on the acquisition and development of unconventional oil and natural gas resources in the North Dakota and Montana regions of the Williston Basin. Its segments include Exploration and Production, Well Services, and Midstream Services. The exploration and production segment is engaged in the acquisition and development of oil and natural gas properties. The well services business segment (OWS) performs completion services for the Company's oil and natural gas wells operated by Oasis Petroleum North America LLC (OPNA). The midstream services business segment (OMS) performs salt water gathering and disposal services, fresh water services, natural gas gathering and processing and crude oil gathering and transportation and other midstream services for the Company's oil and natural gas wells operated by OPNA. The Company also operates a well services business and a midstream services business.

FINANCIAL RATIOS  of  Oasis Petroleum (OAS)

Valuation Ratios
P/E Ratio -8.3
Price to Sales 2.8
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow 8.8
Price to Free Cash Flow -2
Growth Rates
Sales Growth Rate -10.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 42.3%
Cap. Spend. - 3 Yr. Gr. Rate -13.2%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 78.6%
Total Debt to Equity 78.6%
Interest Coverage -2
Management Effectiveness
Return On Assets -2.6%
Ret/ On Assets - 3 Yr. Avg. 3.3%
Return On Total Capital -4.9%
Ret/ On T. Cap. - 3 Yr. Avg. 2.1%
Return On Equity -9.3%
Return On Equity - 3 Yr. Avg. 6.8%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 69.1%
Gross Margin - 3 Yr. Avg. 71.2%
EBITDA Margin 34.3%
EBITDA Margin - 3 Yr. Avg. 68.7%
Operating Margin -17.9%
Oper. Margin - 3 Yr. Avg. 4.7%
Pre-Tax Margin -52.8%
Pre-Tax Margin - 3 Yr. Avg. -0.4%
Net Profit Margin -34.5%
Net Profit Margin - 3 Yr. Avg. -1%
Effective Tax Rate 34.7%
Eff/ Tax Rate - 3 Yr. Avg. 33.7%
Payout Ratio 0%

OAS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the OAS stock intrinsic value calculation we used $1248.424 million for the last fiscal year's total revenue generated by Oasis Petroleum. The default revenue input number comes from 0001 income statement of Oasis Petroleum. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our OAS stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.7%, whose default value for OAS is calculated based on our internal credit rating of Oasis Petroleum, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Oasis Petroleum.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of OAS stock the variable cost ratio is equal to 49.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $497 million in the base year in the intrinsic value calculation for OAS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.4% for Oasis Petroleum.

Corporate tax rate of 27% is the nominal tax rate for Oasis Petroleum. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the OAS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for OAS are equal to 484.5%.

Life of production assets of 11.4 years is the average useful life of capital assets used in Oasis Petroleum operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for OAS is equal to -9.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3375.691 million for Oasis Petroleum - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 317.996 million for Oasis Petroleum is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Oasis Petroleum at the current share price and the inputted number of shares is $2.7 billion.

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COMPANY NEWS

▶ Oasis: 3Q Earnings Snapshot   [05:16PM  Associated Press]
▶ Oasis Petroleum Stock Jumps on Takeover Chatter   [Nov-01-18 03:20PM  TheStreet.com]
▶ Private Equity Shifting Shale Strategy to Long Haul   [Oct-22-18 08:10PM  Bloomberg]
▶ The Bakken Shale Is Quietly Staging a Comeback   [Sep-29-18 11:17AM  Motley Fool]
▶ Stock Indexes Mixed, While Two Groups Split Technology Sector   [Sep-25-18 01:35PM  Investor's Business Daily]
▶ 5 High-Yield Dividend Stocks to Watch   [Sep-09-18 09:39AM  Motley Fool]
▶ Oasis Petroleum Inc. to Host Earnings Call   [Aug-07-18 09:00AM  ACCESSWIRE]
▶ Oasis: 2Q Earnings Snapshot   [05:07PM  Associated Press]
▶ Energy: Marathon Oil and Transocean Look Like Buys   [Jul-09-18 10:23AM  Barrons.com]
▶ Houston energy co. sells part of Williston Basin acreage for $283M   [Jun-27-18 09:07AM  American City Business Journals]
▶ A Permian Basin Trade From Jefferies   [11:46AM  Benzinga]
▶ OPEC Adds U.S. Exit From Iran Nuclear Deal To 'Disruptive Concerns'   [May-14-18 09:51AM  Investor's Business Daily]
▶ Oasis: 1Q Earnings Snapshot   [May-07-18 07:09PM  Associated Press]
▶ Crude Oil Prices Are Up Sharply, But Is The Bakken Shale Play Back?   [Mar-29-18 02:23PM  Investor's Business Daily]

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