Press Releases

Oasis Midstream Partners LP Announces Quarter Ended March 31, 2018 Earnings and Distribution

HOUSTON, May 7, 2018 /PRNewswire/ -- Oasis Midstream Partners LP (NYSE: OMP) (the "Partnership" or "OMP") today announced financial results and cash distribution for the quarter ended March 31, 2018 and provided an operational update.

Recent Highlights:

  • Declared the quarterly cash distribution for the first quarter of 2018 of $0.3925 per unit, a 4.7% increase over the fourth quarter of 2017, in line with forecasted 20% annualized increase in cash distributions.
  • Net income was $31.5 million for the three months ended March 31, 2018 and net cash from operating activities was $74.8 million for the three months ended March 31, 2018.
  • Adjusted EBITDA was $38.2 million for the three months ended March 31, 2018 and net Adjusted EBITDA to the Partnership was $13.7 million for the three months ended March 31, 2018. See "Non-GAAP Financial Measures" below.
  • Distributable Cash Flow was $11.9 million for the three months ended March 31, 2018, resulting in distribution coverage of 1.11x, which was greater than guidance for the first quarter of 1.10x. See "Non-GAAP Financial Measures" below.

"Oasis Midstream Partners started the year off strong, continuing to grow volumes in our respective DevCos, which allows for our continued support of strong coverage and keeps us on track to meet our targeted 20% annual distribution per unit growth," said Taylor Reid, Chief Executive Officer of OMP. "OMP continues to grow volumes above and beyond our initial forecast, which will allow for higher distributable cash flow and higher distribution coverage over time. We have made significant progress on our new 200 MMscfpd gas plant in Wild Basin, which remains on time and on budget, and are looking at growing throughput volumes via higher Oasis Petroleum volumes and volumes from third parties. As wells get bigger and more rigs are returning to work, there is a lot of activity in the core of the Williston Basin, and OMP is uniquely positioned to capitalize on that opportunity. We are beginning to see incremental third party opportunities across all three of our DevCos, giving us further comfort in our projected distribution growth. We continue to expect fourth quarter 2018 coverage to exceed 1.2x and now expect the first quarter of 2019 coverage to exceed 1.3x."

Other Key Developments:

  • Realized improved natural gas processing volumes in Bighorn DevCo totaling 98.0 million standard cubic feet per day ("MMscfpd") during the three months ended March 31, 2018, an increase of 40% from the fourth quarter of 2017.
  • Increased natural gas volumes in Bobcat DevCo to 140.4 MMscfpd during the three months ended March 31, 2018, a 29% increase from the fourth quarter of 2017, reflecting the early realization of improved growth opportunities identified during the fourth quarter of 2017 due to increased gas volumes in Wild Basin.
  • Spent $35.4 million on Gas Plant II in Bighorn DevCo, with the project approximately 65% complete and on schedule to begin operations in late 2018.
  • Spent $17.1 million on additional gathering system infrastructure in Bobcat DevCo to capitalize on additional growth opportunities identified due to increased natural gas volumes and incremental oil and water in Wild Basin in the first quarter of 2018. OMP anticipates natural gas volumes for Bobcat DevCo to grow to 137 - 142 MMscfpd in 2018 and for natural gas volumes to exceed 200 MMscfpd by mid 2019.
  • Increased volumes in spite of a challenging North Dakota winter. OMP had higher operating expenses related to difficult winter conditions. In addition, OMP incurred incremental operating expenses related to equipment and facility upgrades during the three months ended March 31, 2018 to mitigate the impact of abnormally difficult conditions experienced both this year and potentially in the future.

Operational and Financial Update

Select operational and financial statistics are in the following table:



March 31, 2018



OMP Ownership


Gross


Net

Bighorn DevCo




(In millions)

Operating income


100

%


$

5.0



$

5.0


Depreciation and amortization


100

%


2.5



2.5


Total CapEx


100

%


42.2



42.2


Bobcat DevCo







Operating income


10

%


$

16.9



$

1.7


Depreciation and amortization


10

%


2.1



0.2


Total CapEx


10

%


27.8



2.8


Beartooth DevCo







Operating income


40

%


$

10.6



$

4.2


Depreciation and amortization


40

%


1.7



0.7


Total CapEx


40

%


11.2



4.5


Total OMP







DevCo operating income




$

32.5



$

10.9


Public company expenses




0.7



0.7


OMP operating income




31.8



10.2


Depreciation and amortization




6.3



3.4


Equity-based compensation expense




0.1



0.1


Total CapEx




81.2



49.5


Maintenance CapEx




2.3



0.8


Growth CapEx




78.9



48.7


 



Metric


1Q18 Actual


2Q18 Guidance


FY18 Guidance

Bighorn DevCo









Crude oil service volumes


Mbopd


41.5



40 - 42


40 - 42

Natural gas service volumes


MMscfpd


98.0



98 - 103


100 - 107

Bobcat DevCo









Crude oil service volumes


Mbopd


36.3



33 - 36


34 - 36

Natural gas service volumes


MMscfpd


140.4



135 - 140


137 - 142

Water service volumes


Mbowpd


43.0



43 - 47


46 - 50

Beartooth DevCo









Water service volumes


Mbowpd


108.4



107 - 112


107 - 112

Liquidity

As of March 31, 2018, OMP had cash and cash equivalents of $4.0 million and $117.0 million of borrowings outstanding under its revolving credit facility with an unused borrowing capacity of $83.0 million.

Quarterly Distribution

On February 26, 2018, the Partnership paid the initial quarterly cash distribution to its unitholders of $0.0245 per unit related to the six days ended September 30, 2017 and $0.3750 per unit related to the three months ended December 31, 2017. The third quarter distribution was prorated from the closing of the Partnership's initial public offering on September 25, 2017. Both distributions equate to the minimum quarterly distribution of $0.3750 per unit on a full-quarter basis.

On May 7, 2018, the Board of Directors of OMP GP LLC, the general partner of the Partnership, declared the quarterly cash distribution of $0.3925 per unit for the first quarter of 2018. The first quarter distribution reflects a 4.7% increase over the fourth quarter of 2017, or 20% annualized. The distribution will be payable on May 29, 2018 to unitholders of record as of May 17, 2018.

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:


Tuesday, May 8, 2018

Time:


11:30 a.m. Central Time

Live Webcast:


https://www.webcaster4.com/Webcast/Page/1777/25388

OR:



Dial-in:


888-317-6003

Intl. Dial in:


412-317-6061

Conference ID:


6444678

Website:


www.oasismidstream.com

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 Tuesday, May 15, 2018 by dialing:

Replay dial-in:


877-344-7529

Intl. replay:


412-317-0088

Replay code:


10119292

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

Contact:

Oasis Midstream Partners LP
Richard Robuck, (281) 404-9602
CFO & SVP Finance

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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, changes in 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 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

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)



March 31, 2018


December 31, 2017


(In thousands)

ASSETS




Current assets




  Cash and cash equivalents

$

4,048



$

883


  Accounts receivable

920



834


  Accounts receivable from Oasis Petroleum

57,144



85,818


  Prepaid expenses

747



778


Total current assets

62,859



88,313


Property, plant and equipment

743,578



653,928


Less: accumulated depreciation and amortization

(40,696)



(34,348)


Total property, plant and equipment, net

702,882



619,580


Other assets

1,899



2,013


Total assets

$

767,640



$

709,906


LIABILITIES AND EQUITY




Current liabilities




Accounts payable

$

593



$


Accounts payable to Oasis Petroleum

15,533



11,638


Accrued liabilities

67,239



58,818


Accrued interest payable

73



114


Total current liabilities

83,438



70,570


Long-term debt

117,000



78,000


Asset retirement obligations

1,332



1,316


Total liabilities

201,770



149,886


Commitments and contingencies




Partners' Equity




Limited Partner




Common units (13,774 units outstanding at March 31, 2018)

166,943



167,401


Subordinated units (13,750 units outstanding at March 31, 2018)

78,657



79,173


General Partner




Total partners' equity

245,600



246,574


Non-controlling interests

320,270



313,446


Total equity

565,870



560,020


Total liabilities and equity

$

767,640



$

709,906


 

OASIS MIDSTREAM PARTNERS LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)



Three Months Ended March 31,


2018


2017


(In thousands, except per unit data)

Revenues




Midstream services for Oasis Petroleum

$

60,853



$

37,367


Midstream services for third parties

568



273


Total revenues

61,421



37,640


Operating expenses




Direct operating

17,116



9,023


Depreciation and amortization

6,364



3,458


General and administrative

6,150



4,396


Total operating expenses

29,630



16,877


Operating income

31,791



20,763


Other income (expense)




Interest expense, net of capitalized interest

(262)



(1,217)


Other income (expense)



(2)


Total other income (expense)

(262)



(1,219)


Income before income taxes

31,529



19,544


Income tax expense



(7,295)


Net income

31,529



$

12,249


Less: Net income attributable to non-controlling interests

21,575




Net income attributable to Oasis Midstream Partners LP

$

9,954




Earnings per limited partner unit — Basic and Diluted




Common units

$

0.36




Subordinated units

0.36




Weighted average number of limited partner units outstanding — Basic




Common units

13,750




Subordinated units

13,750




Weighted average number of limited partner units outstanding — Diluted




Common units

13,754




Subordinated units

13,750





Non-GAAP Financial Measures

Cash Interest

Cash Interest is a supplemental non-GAAP financial measure that is used by management and external users of the Partnership's financial statements, such as industry analysts, investors, lenders and rating agencies. We define Cash Interest 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 United States generally accepted accounting principles, or GAAP. Management believes that the presentation of Cash Interest provides useful additional information to investors and analysts for assessing the interest charges incurred on our debt, excluding non-cash amortization, and our ability to maintain compliance with our 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 Ended March 31,


2018


2017


(In thousands)

Interest expense, net of capitalized interest

$

262



$

1,531


Capitalized interest

835



289


Amortization of deferred financing costs

(116)




Cash Interest

$

981



$

1,820


Adjusted EBITDA

Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of the Partnership's financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDA as earnings before interest expense (net of capitalized interest), income taxes, depreciation, amortization, equity-based compensation expenses and other similar non-cash adjustments. 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 our results of operations, financial performance and our ability to generate cash from our business operations without regard to our financing methods or capital structure, coupled with our ability to maintain compliance with our debt covenants. The GAAP measures most directly comparable to Adjusted EBITDA are net income and net cash provided by operating activities, respectively.

Distributable Cash Flow ("DCF")

DCF is a supplemental non-GAAP financial measure that is used by management and external users of the Partnership's financial statements, such as industry analysts, investors, lenders and rating agencies. We define DCF as Adjusted EBITDA attributable to the Partnership less Cash Interest and maintenance capital expenditures attributable to the Partnership. Maintenance capital expenditures are cash expenditures (including expenditures for the construction or development of new capital assets or the replacement, improvement or expansion of existing capital assets) made to maintain, over the long term, system operating capacity, operating income or revenue. 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 our results of operations, financial performance and our ability to generate cash from our business operations without regard to our financing methods or capital structure, coupled with our ability to make distributions to our unitholders. The GAAP measures most directly comparable to DCF are net income and net cash provided by operating activities, respectively.

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 measure of Adjusted EBITDA and DCF for the periods presented:


Three Months Ended March 31,


2018


2017


(In thousands)

Net income

$

31,529



$

12,249


Income tax expense



7,295


Depreciation and amortization

6,364



3,458


Equity-based compensation expense

63



348


Interest expense, net of capitalized interest

262



1,217


Adjusted EBITDA

38,218



$

24,567


Less: Adjusted EBITDA attributable to non-controlling interests

24,496




Adjusted EBITDA attributable to Oasis Midstream Partners LP

13,722




Cash Interest attributable to Oasis Midstream Partners LP

981




Maintenance capital expenditures

796




Distributable Cash Flow attributable to Oasis Midstream Partners LP

$

11,945








Net cash provided by operating activities

$

74,751



$

20,379


Current tax expense



5,358


Interest expense, net of capitalized interest

262



1,217


Changes in working capital

(36,681)



(2,387)


Other non-cash adjustments

(114)




Adjusted EBITDA

38,218



$

24,567


Less: Adjusted EBITDA attributable to non-controlling interests

24,496




Adjusted EBITDA attributable to Oasis Midstream Partners LP

13,722




Cash Interest attributable to Oasis Midstream Partners LP

981




Maintenance capital expenditures

796




Distributable Cash Flow attributable to Oasis Midstream Partners LP

$

11,945




 

SOURCE Oasis Midstream Partners LP