Oasis Declares Special Dividend & Redemption of OMP Common Stock; OAS Shares Jump 4%

Oasis Petroleum Inc. (OAS), an independent exploration and production company, declared a special dividend of $4.00 per share. It will be payable on July 21 to shareholders of record on July 9. Shares jumped 4% to close at $100.55 on June 30. (See Oasis Petroleum stock chart on TipRanks)

Additionally, Oasis stated that it had redeemed 3,623,188 units of common stock of Oasis Midstream Partners LP (OMP), thereby reducing its approximate ownership in OMP from 77.1% to 69.6%.

The company also intends to increase its annual fixed dividend by 33% to $2.00 per share, post completion of its Williston acquisition in late July.

Danny Brown, the company’s CEO said, “The OMP common unit offering accomplishes the mutually beneficial objectives of increasing OMP’s public ownership and liquidity while highlighting the value of Oasis’s ownership.”

Piper Sandler analyst Kashy Harrison recently initiated coverage of the stock with a Buy rating and a price target of $115, implying 14.4% upside potential to current levels.

Harrison believes the new management has proven its commitment to a shareholder-return business model. He added that the company’s strategy of a single basin operating model enables it to benefit from its scale and size in the Bakken Formation, where OAS produces crude oil.

Based on 4 Buys, 1 Hold, and 1 Sell, the stock has a Moderate Buy consensus rating. The average Oasis Petroleum price target of $109.50 implies 8.9% upside potential to current levels.