Photo credit: Flickr/Lindsey G

Oasis Petroleum (NYSE:OAS) recently reported fourth-quarter and full-year results. Those results show that the company's big bet on the Bakken Shale continues to pay off. Let's take a closer look.

Drilling down into the numbers that matter
For the full year, Oasis Petroleum reported adjusted EBITDA of $821.9 million. That was up 60% from the $512.3 million the company reported in 2012. Fourth-quarter growth was strong, as well, as adjusted EBITDA rose 38% from last year's fourth quarter, to $225.4 million. Those represent pretty solid financial results for the company. 

A combination of higher oil production, which was sold for higher prices, helped boost the bottom line at Oasis Petroleum in 2013. For the full year, the company saw its daily oil production jump from 22,469 barrels of oil per day, or BOE/d, to 33,904 BOE/d. Meanwhile, the price the company sold its oil for rose from $86.09 per barrel to $91.61 per barrel. Oil prices slipped in the fourth quarter, as Oasis Petroleum was only able to realize an average sale price of $85 per barrel.

Lower fourth-quarter oil prices are a trend to watch when Whiting Petroleum Corp (NYSE:WLL) and Kodiak Oil & Gas Corp (NYSE: KOG) report later this week. Whiting Petroleum is expected to deliver earnings on Wednesday after the market closes, while Kodiak Oil and Gas is expected to report after market close on Thursday. If either company disappoints, it could be due to lower realized oil prices.


Photo credit: Flickr/Lindsey G

Wrapping up 2013 and looking ahead
Oasis Petroleum spent a lot of money in 2013 in order to position the company for future growth. Including acquisitions, which totaled more than $1.5 billion, the company spent just more than $2.5 billion last year to grow its position in the Bakken Shale. That's quite a lot of money for a company with a total enterprise value of under $7 billion. However, it has been money well spent as Oasis grew its proved reserves by 59% last year.

To date, Oasis Petroleum has amassed just more than half a million net acres in the Bakken Shale. The company believes those acres hold more than 2,616 net drilling locations, which should enable the company to continue drilling for the next 17 years on its current rig plan. That's a lot of growth. To put it into perspective, investors should note that Kodiak Oil and Gas has just 173,000 net acres and 1,300 net drilling locations, while Whiting Petroleum has 729,732 net acres and its drilling inventory is just over 1,900 future drilling locations in the Bakken Shale area. Clearly, Oasis Petroleum is emerging as a major player in the region.

Because of its robust opportunity, Oasis Petroleum's 2014 plan has the company accelerating its rig count to 16 rigs. Excluding any potential acquisitions, the company plans to spend about $1.4 billion. That will enable it to drill 155.5 net wells, which should grow Oasis Petroleum's production from an average daily production rate of 33,900 BOE/d in 2013 to upwards of 50,000 BOE/d this year. Again, that's pretty strong growth for the company, with plenty more in future years. 

Investor takeaway
Oasis Petroleum is quietly becoming one of the bigger players in the Bakken Shale. Not only is the company's production surging, but its opportunity set continues to grow, as well. That makes the company a pretty compelling way to play the American energy boom, especially for investors looking for an oil-focused Bakken Shale driller.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.