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press release

Nov. 5, 2019, 4:30 p.m. EST

Oasis Midstream Partners LP Announces Quarter Ended September 30, 2019 Earnings

HOUSTON, Nov. 5, 2019 /PRNewswire/ -- Oasis Midstream Partners LP /zigman2/quotes/209896981/lastsale OMP +16.75% ("OMP" or the "Partnership") today announced financial and operating results for the third quarter of 2019.

Highlights

  • Declared the quarterly cash distribution of $0.515 per unit for 3Q 2019, an approximate 5% increase from 2Q 2019.

  • Net income was $55.3 million and net cash from operating activities was $58.1 million in 3Q 2019.

  • Delivered $68.9 million of Adjusted EBITDA [(1)] and $42.0 million of net Adjusted EBITDA to the Partnership [(1) ] in 3Q 2019.

  • Generated $35.7 million of DCF [(1) ] in 3Q 2019, resulting in distribution coverage of 2.0x. Distribution coverage exceeded the top-end of 3Q 2019 guidance of 1.8x to 1.9x.

  • Continued to sign additional third-party agreements in the Delaware and Williston basins.

  • Oasis Petroleum and OMP executed commercial agreements for Panther DevCo, with the assets assigned to OMP in November 2019.

  • Water service volumes remain strong. Combined Bobcat and Beartooth water volumes of 198.4 MBowpd in 3Q 2019 increased 1% from 2Q 2019 and exceeded the top-end of 3Q 2019 guidance.

  • Exceeded 3Q 2019 guidance related to natural gas processing volumes in Bighorn DevCo. Gas processing volumes increased 17% from 2Q 2019 to 236.0 MMscfpd in 3Q 2019. Third-party gas volumes were approximately 32% of total gas processing volumes and increased 28% from 2Q 2019 to 75.7 MMscfpd in 3Q 2019.

(1) Non-GAAP measure. See "Non-GAAP Financial Measures" below for definitions of all non-GAAP measures included herein and reconciliations to the most directly comparable financial measures under United States generally accepted accounting principles ("GAAP").

"Oasis Midstream Partners executed extremely well in the third quarter, with the continued ramp up of our gas complex driving record high EBITDA and distribution coverage," said Taylor Reid, Chief Executive Officer of OMP. "We exceeded guidance across most commodity streams and remain on track to deliver a strong fourth quarter of 2019, while growing the distribution 20% year over year. The team has done an exceptional job growing third-party business, which is approximately 20% of our third quarter EBITDA and is projected to be approximately 20% in the fourth quarter as well. Looking forward, OMP stands to benefit from its diversified asset base, growing third-party business and strong operational momentum heading into 2020."

Outlook Update

  • Expect 2019 Adjusted EBITDA, net to the Partnership, to be $154 million to $158 million.

  • Expect 4Q 2019 distribution coverage of 1.9x to 2.0x.

  • Estimate gross Adjusted EBITDA by DevCo in 2019 – Bighorn DevCo: $72 million to $74 million, Bobcat DevCo: $124 million to $127 million, Beartooth DevCo: $64 million to $67 million, and Panther DevCo: less than $1 million due to the updated timing of the assignment.

  • Updated 2019 CapEx plan to a range of $197 to $206 million, net to OMP, a 3% decrease compared to prior guidance of $203 million to $214 million. CapEx in 4Q 2019 is expected to increase compared to 3Q 2019 with the closing of the Panther DevCo assignment.

Operational and Financial Update

The following table presents select operational and financial data:


3Q 2019

OMP Ownership(1)
Gross
Net









(In millions)
Bighorn DevCo




Operating income 100 %
$ 17.1
$ 17.1
Depreciation and amortization 100 %
3.1
3.1
Total CapEx 100 %
2.1
2.1
Bobcat DevCo




Operating income 34.4 %
$ 29.4
$ 9.8
Depreciation and amortization 34.4 %
3.5
1.2
Total CapEx(2) 34.4 %
22.9
22.5
Beartooth DevCo




Operating income 70 %
$ 14.1
$ 9.9
Depreciation and amortization 70 %
2.4
1.7
Total CapEx 70 %
4.1
2.8
Total OMP




DevCo operating income

$ 60.6
$ 36.8
Public company expenses

0.9
0.9
Partnership operating income

59.7
35.9
Depreciation and amortization

9.0
6.0
Equity-based compensation expense

0.1
0.1
Capitalized interest

0.2
0.2
Total CapEx(3)

29.3
27.6
Maintenance CapEx

2.7
1.8
Expansion CapEx

26.6
25.9

__________________
(1) Represents OMP's ownership in each DevCo as of September 30, 2019.
(2) Pursuant to the 2019 Capital Expenditures Arrangement, OMP is funding up to $80.0 million of expansion capital expenditures to Bobcat DevCo that Oasis Petroleum would otherwise be required to contribute during the 2019 calendar year. See "2019 Capital Expenditures Arrangement" below.
(3) Includes capitalized interest recorded on OMP Operating LLC of $0.2 million for 3Q 2019.

The following table shows actual volumes for 3Q 2019 and provides volumes guidance for 4Q 2019:



Metric
3Q 2019 Actual
4Q 2019 Guidance
Bighorn DevCo





Crude oil service volumes
MBopd
47.0
39 - 44
Natural gas service volumes
MMscfpd
236.0
240 - 250
Bobcat DevCo





Crude oil service volumes
MBopd
36.9
34 - 36
Natural gas service volumes
MMscfpd
277.7
280 - 295
Water service volumes
MBowpd
54.5
48 - 50
Beartooth DevCo





Water service volumes
MBowpd
143.9
120 - 140

2019 Capital Expenditures Arrangement

On February 22, 2019, the Partnership entered into a capital expenditures arrangement with Oasis Petroleum (the "2019 Capital Expenditures Arrangement"). Pursuant to this arrangement, in exchange for increasing its percentage ownership interest in Bobcat DevCo, the Partnership will cover up to $80.0 million of the capital contributions that Oasis Petroleum would otherwise be required to contribute to Bobcat DevCo during the 2019 calendar year. This arrangement provides an opportunity for the Partnership to increase its scale in an accretive manner while lowering the capital requirements of its sponsor. During the nine months ended September 30, 2019, the Partnership made capital contributions to Bobcat DevCo pursuant to the 2019 Capital Expenditures Arrangement of $66.2 million, and the Partnership's ownership interest in Bobcat DevCo increased from 25% as of December 31, 2018 to 34.4% as of September 30, 2019. The Partnership's average ownership interest in Bobcat DevCo during the third quarter of 2019 was approximately 33%.

Liquidity and CapEx

As of September 30, 2019, the Partnership had cash and cash equivalents of $4.7 million, $431.0 million of borrowings outstanding under its revolving credit facility and an $8.2 million outstanding letter of credit. On August 16, 2019, the Partnership entered an amendment to the credit agreement governing its revolving credit facility to (i) increase the aggregate amount of commitments from $475.0 million to $575.0 million and (ii) provide for the ability to further increase commitments to $775.0 million. The Partnership's unused borrowing capacity as of September 30, 2019 was $135.8 million.

Quarterly Distribution

On August 28, 2019, the Partnership paid the quarterly cash distribution of $0.49 per unit related to the second quarter of 2019.

On November 5, 2019, the Board of Directors of the General Partner declared the quarterly cash distribution for the third quarter of 2019 of $0.515 per unit. This distribution will be payable on November 27, 2019 to unitholders of record as of November 15, 2019. In addition, the General Partner will receive a cash distribution of $0.7 million attributable to the incentive distribution rights related to the earnings for the third quarter of 2019.

Delaware Midstream Assets

Effective on November 1, 2019, Oasis Petroleum agreed to assign to Panther DevCo LLC ("Panther DevCo"), an indirect, wholly-owned subsidiary of the Partnership, certain crude oil gathering and produced water gathering and disposal assets (the "Delaware Midstream Assets") under development to support Oasis Petroleum's production in the Delaware Basin. The Partnership has agreed to reimburse Oasis Petroleum for all capital expenditures previously made with respect to the Delaware Midstream Assets, which the Partnership expects to fund with borrowings under its revolving credit facility. Also effective November 1, 2019, Panther DevCo entered into long-term commercial agreements with Oasis Petroleum, including a Crude Oil Gathering Agreement and a Produced Water Gathering and Disposal Agreement, for crude oil and produced water midstream services in the Delaware Basin, which generally contain terms similar to those contained in the existing commercial agreements between the Partnership and Oasis Petroleum for midstream services in the Williston Basin.

Qualified Notice

This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of the Partnership's distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, the Partnership's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate.

Conference Call Information

Investors, analysts and other interested parties are invited to listen to the webcast and call:

Date:
Wednesday, November 6, 2019
Time:
11:30 a.m. Central Time
Live Webcast:
https://www.webcaster4.com/Webcast/Page/1777/32113
Website:
www.oasismidstream.com

Sell-side analysts with a question may use the following dial-in:

Dial-in:
888-317-6003
Intl. Dial in:
412-317-6061
Conference ID:
1033646

A recording of the conference call will be available beginning at 1:30 p.m. Central Time on the day of the call and will be available until Wednesday, November 13, 2019 by dialing:

Replay dial-in:
877-344-7529
Intl. replay:
412-317-0088
Replay code:
10136377

The conference call will also be available for replay for approximately 30 days at www.oasismidstream.com .

Contact:

Oasis Midstream Partners LP Bob Bakanauskas, (281) 404-9600 Director, Investor Relations

Forward-Looking Statements

This press release contains forward-looking statements. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Partnership, including the Partnership's capital expenditure levels and other guidance included in this press release. These statements are based on certain assumptions made by the Partnership based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include, but are not limited to, the Partnership's ability to integrate acquisitions into its existing business, the ability to integrate the Delaware Midstream Assets and realize the anticipated benefits therefrom, changes in crude oil and natural gas prices, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, uncertainties in the estimates of proved reserves and forecasted production results of the Partnership's customers, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as the Partnership's ability to access them, the proximity to and capacity of transportation facilities, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the Partnership's business and other important factors. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Partnership's actual results and plans could differ materially from those expressed in any forward-looking statements.

Any forward-looking statement speaks only as of the date on which such statement is made and the Partnership undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

About Oasis Midstream Partners LP

Oasis Midstream Partners LP is a growth-oriented, fee-based master limited partnership formed by its sponsor, Oasis Petroleum Inc. to own, develop, operate and acquire a diversified portfolio of midstream assets in North America that are integral to the crude oil and natural gas operations of Oasis Petroleum Inc. and are strategically positioned to capture volumes from other producers. For more information, please visit the Partnership's website at www.oasismidstream.com .

 

OASIS MIDSTREAM PARTNERS LP



September 30, 2019
December 31, 2018





(In thousands, except unit data)
ASSETS


Current assets


Cash and cash equivalents $ 4,672
$ 6,649
Accounts receivable 7,793
2,481
Accounts receivable – Oasis Petroleum 77,393
80,805
Prepaid expenses 964
1,418
Other current assets 1,810
22
Total current assets 92,632
91,375
Property, plant and equipment 1,089,696
933,155
Less: accumulated depreciation and amortization (89,129)
(62,730)
Total property, plant and equipment, net 1,000,567
870,425
Operating lease right-of-use assets 5,945
Other assets 3,383
2,452
Total assets $ 1,102,527
$ 964,252
LIABILITIES AND EQUITY


Current liabilities


Accounts payable $ 2,855
$ 2,180
Accounts payable – Oasis Petroleum 26,769
33,014
Accrued liabilities 47,533
57,657
Accrued interest payable 273
442
Current operating lease liabilities 2,973
Other current liabilities 9
Total current liabilities 80,412
93,293
Long-term debt 431,000
318,000
Asset retirement obligations 1,596
1,514
Operating lease liabilities 2,979
Other liabilities 557
Total liabilities 516,544
412,807
Equity


Limited partners


Common units (20,045,196 and 20,029,026 issued and outstanding at September 30, 2019 and December 31, 2018, respectively) 213,468
192,581
Subordinated units (13,750,000 units issued and outstanding at September 30, 2019 and December 31, 2018) 57,989
45,937
General Partner 745
112
Total partners' equity 272,202
238,630
Non-controlling interests 313,781
312,815
Total equity 585,983
551,445
Total liabilities and equity $ 1,102,527
$ 964,252

 

OASIS MIDSTREAM PARTNERS LP


Three Months Ended September 30,
Nine Months Ended September 30,

2019
2018
2019
2018









(In thousands, except per unit data)
Revenues






Midstream services – Oasis Petroleum $ 78,327
$ 65,674
$ 224,641
$ 184,103
Midstream services – third parties 1,840
567
4,792
1,438
Product sales – Oasis Petroleum 20,517
3,189
60,517
10,591
Product sales – third parties 9
2,037
38
3,314
Total revenues 100,693
71,467
289,988
199,446
Operating expenses






Costs of product sales 7,001
2,704
27,088
5,465
Operating and maintenance 17,316
17,112
52,169
47,801
Depreciation and amortization 8,983
7,189
26,474
20,212
General and administrative 7,579
5,449
24,108
17,496
Total operating expenses 40,879
32,454
129,839
90,974
Operating income 59,814
39,013
160,149
108,472
Other expense






Interest expense, net of capitalized interest (4,512)
(163)
(12,469)
(608)
Other expense
(15)
(4)
(15)
Total other expense (4,512)
(178)
(12,473)
(623)
Net income 55,302
38,835
147,676
107,849
Less: Net income attributable to non-controlling interests 23,866
26,459
68,499
73,075
Net income attributable to Oasis Midstream Partners LP 31,436
12,376
79,177
34,774
Less: Net income attributable to General Partner 745

1,474
Net income attributable to limited partners $ 30,691
$ 12,376
$ 77,703
$ 34,774
Earnings per limited partner unit






Common units – basic $ 0.91
$ 0.45
$ 2.30
$ 1.27
Common units – diluted 0.91
0.45
2.30
1.26
Weighted average number of limited partner units outstanding






Common units – basic 20,027
13,751
20,022
13,750
Common units – diluted 20,038
13,769
20,039
13,764

Non-GAAP Financial Measures

Cash Interest, Adjusted EBITDA and Distributable Cash Flow are supplemental non-GAAP financial measures that are used by management and external users of the Partnership's financial statements, such as industry analysts, investors, lenders and rating agencies. These non-GAAP financial measures should not be considered in isolation or as a substitute for interest expense, net income, operating income, net cash provided by operating activities or any other measures prepared under GAAP. Because Cash Interest, Adjusted EBITDA and Distributable Cash Flow exclude some but not all items that affect interest expense, net income and net cash provided by operating activities and may vary among companies, the amounts presented may not be comparable to similar metrics of other companies.

Cash Interest

Cash Interest is defined as interest expense plus capitalized interest less amortization of deferred financing costs included in interest expense. Cash Interest is not a measure of interest expense as determined by GAAP. Management believes that the presentation of Cash Interest provides useful additional information to investors and analysts for assessing the interest charges incurred on the Partnership's debt, excluding non-cash amortization, and the Partnership's ability to maintain compliance with its debt covenants.

The following table presents a reconciliation of the GAAP financial measure of interest expense, net of capitalized interest, to the non-GAAP financial measure of Cash Interest for the periods presented:


Three Months EndedSeptember 30,
Nine Months Ended September 30,

2019
2018
2019
2018









(In thousands)
Interest expense, net of capitalized interest $ 4,512
$ 163
$ 12,469
$ 608
Capitalized interest 235
1,708
423
3,905
Amortization of deferred financing costs (243)
(128)
(660)
(361)
Cash Interest 4,504
1,743
12,232
4,152
Less: Cash Interest attributable to non-controlling interests(1) (3)

(8)
Cash Interest attributable to Oasis Midstream Partners LP $ 4,501
$ 1,743
$ 12,224
$ 4,152

__________________
(1) Amounts represent Cash Interest attributable to non-controlling interests associated with finance leases.

Adjusted EBITDA

Adjusted EBITDA is defined as earnings before interest expense (net of capitalized interest), income taxes, depreciation, amortization, impairment, equity-based compensation expenses and other similar non-cash adjustments. Adjusted EBITDA attributable to Oasis Midstream Partners LP is defined as Adjusted EBITDA less Adjusted EBITDA attributable to Oasis Petroleum's retained interests in two of the Partnership's DevCos, Bobcat DevCo and Beartooth DevCo. Adjusted EBITDA should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Management believes that the presentation of Adjusted EBITDA provides information useful to investors and analysts for assessing the Partnership's results of operations, financial performance and the Partnership's ability to generate cash from its business operations without regard to the Partnership's financing methods or capital structure, coupled with the Partnership's ability to maintain compliance with its debt covenants. The GAAP measures most directly comparable to Adjusted EBITDA are net income and net cash provided by operating activities.

Distributable Cash Flow

Distributable Cash Flow ("DCF") is defined as Adjusted EBITDA attributable to Oasis Midstream Partners LP less Cash Interest attributable to Oasis Midstream Partners LP and maintenance capital expenditures attributable to Oasis Midstream Partners LP. DCF should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Management believes that the presentation of DCF provides information useful to investors and analysts for assessing the Partnership's results of operations, financial performance and the Partnership's ability to generate cash from its business operations without regard to the Partnership's financing methods or capital structure, coupled with the Partnership's ability to make distributions to its unitholders. The GAAP measures most directly comparable to DCF are net income and net cash provided by operating activities.

The following table presents reconciliations of the GAAP financial measures of net income and net cash provided by operating activities to the non-GAAP financial measures of Adjusted EBITDA and DCF for the periods presented:


Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,

2019
2018
2019
2018









(In thousands)
Net income $ 55,302
$ 38,835
$ 147,676
$ 107,849
Depreciation and amortization 8,983
7,189
26,474
20,212
Equity-based compensation expense 84
114
303
280
Interest expense, net of capitalized interest 4,512
163
12,469
608
Adjusted EBITDA 68,881
46,301
186,922
128,949
Less: Adjusted EBITDA attributable to non-controlling interests 26,913
29,739
77,396
82,250
Adjusted EBITDA attributable to Oasis Midstream Partners LP 41,968
16,562
109,526
46,699
Less: Cash Interest attributable to Oasis Midstream Partners LP 4,501
1,743
12,224
4,152
Less: Maintenance capital expenditures attributable to Oasis Midstream Partners LP 1,760
418
6,594
1,711
Distributable Cash Flow attributable to Oasis Midstream Partners LP $ 35,707
$ 14,401
$ 90,708
$ 40,836








Net cash provided by operating activities $ 58,094
$ 40,753
$ 170,186
$ 156,900
Interest expense, net of capitalized interest 4,512
163
12,469
608
Changes in working capital 6,518
5,516
4,927
(28,324)
Other non-cash adjustments (243)
(131)
(660)
(235)
Adjusted EBITDA 68,881
46,301
186,922
128,949
Less: Adjusted EBITDA attributable to non-controlling interests 26,913
29,739
77,396
82,250
Adjusted EBITDA attributable to Oasis Midstream Partners LP 41,968
16,562
109,526
46,699
Less: Cash Interest attributable to Oasis Midstream Partners LP 4,501
1,743
12,224
4,152
Less: Maintenance capital expenditures attributable to Oasis Midstream Partners LP 1,760
418
6,594
1,711
Distributable Cash Flow attributable to Oasis Midstream Partners LP $ 35,707
$ 14,401
$ 90,708
$ 40,836








Distributions declared






Limited partners $ 17,405
$ 11,837
$ 49,848
$ 33,928
Incentive distribution rights 745

1,474
Total distributions $ 18,149
$ 11,837
$ 51,321
$ 33,928








DCF coverage ratio 2.0x
1.2x
1.8x
1.2x
















 

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SOURCE Oasis Midstream Partners LP

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/zigman2/quotes/209896981/lastsale
US : U.S.: Nasdaq
$ 4.95
+0.71 +16.75%
Volume: 227,193
March 31, 2020 4:00p
P/E Ratio
1.19
Dividend Yield
40.71%
Market Cap
$85.06 million
Rev. per Employee
$2.59M
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