Diamondback Energy, Inc. (NASDAQ:FANG) and Oasis Petroleum Inc. (NYSE:OAS) were both subjects of two Form 4 filings with the SEC. Diamondback investor Wexford Capital, managed by Charles Davidson, disposed of 1.03 million shares in that company through three separate transactions between January 23 and 27, lowering their total share ownership to 3.3 million. On the other hand, Oasis investor SPO Advisory Corp, managed by John H. Scully, acquired 1 million shares in one transaction, raising their stake to 12.47 million shares.
Let’s start with SPO’s transaction. SPO Advisory Corp, a privately-owned hedge fund which was co-founded in 1990 by Scully, has been extremely bullish on Oasis Petroleum Inc. (NYSE:OAS) since the fourth quarter of last year when they began amassing what is now a sizable position in the oil production company. That buying spree was initiated by plummeting oil prices, which have sent Oasis’ stuck tumbling alongside it.
With U.S crude supplies at 80-year highs, march crude oil has tumbled to just $44.55 per barrel, a 55% decline since last summer, and a 40% drop since November. Oasis’ stock has fared even worse, falling 77% since July, and 57% since late October. That slide is what prompted SPO to jump on an otherwise strong oil producer, which plans to increase capacity by 10% this year, and has $1.6 billion in liquidity.
SPO first disclosed ownership of Oasis Petroleum Inc. (NYSE:OAS) stock in a filing on December 29, which showed they had amassed over 7 million shares from more than three dozen transactions between November 4 and December 29, all of one of which were conducted in December. In early January we reported that SPO added more than 2.0 million additional shares, bringing their total to over 10 million shares. Just two days later they disclosed adding another 1.3 million shares, before this latest purchase of 1 million shares, which has lifted them to 12.47 million shares in total.
The buying spree now makes them the largest shareholder among institutional investors, though they’re hardly the only hedge fund taking notice of the opportunity; Dmitry Balyasny’s Balyasny Asset Management has also initiated a new position in Oasis recently, disclosing ownership of more than 5.3 million shares.