August 6, 2019 - 4:55 PM EDT
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Oasis Midstream Partners LP Announces Quarter Ended June 30, 2019 Earnings

HOUSTON, Aug. 6, 2019 /PRNewswire/ -- Oasis Midstream Partners LP (NYSE: OMP) ("OMP" or the "Partnership") today announced financial and operating results for the second quarter of 2019.

2Q 2019 Highlights:

  • Declared the quarterly cash distribution of $0.49 per unit, an approximate 5% increase from 1Q 2019.
  • Net income was $49.0 million and net cash from operating activities was $56.0 million.
  • Delivered $61.9 million of Adjusted EBITDA(1) and $36.1 million of net Adjusted EBITDA to the Partnership(1).
  • Generated $28.8 million of DCF(1), resulting in distribution coverage of 1.7x.
  • Experienced operational downtime at the Wild Basin gas processing complex, which was fully restored beginning mid-July. Crude oil and natural gas volumes were adversely impacted by the downtime, resulting in lower than anticipated Adjusted EBITDA, DCF and distribution coverage. Adjusting for downtime, OMP would have realized distribution coverage of approximately 1.9x.
  • Exceeded guidance related to water service volumes. Volumes increased 13% from 2Q 2018 to 52.4 MBowpd in Bobcat DevCo and 3% from 2Q 2018 to 143.7 MBowpd in Beartooth DevCo.
  • Increased third-party natural gas volumes in Bighorn DevCo by approximately 94% from 1Q 2019 to 59.3 MMscfpd (30% of total natural gas volumes of 201.6 MMscfpd).

(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 measures under United States generally accepted accounting principles ("GAAP").

"Oasis Midstream Partners remains on track to deliver our targeted 20% annual growth in distributions per unit while simultaneously increasing coverage in coming quarters," said Taylor Reid, Chief Executive Officer of OMP. "We successfully delivered a strong second quarter performance, despite operational downtime at our gas complex. Our resilient financial results highlight the strength and diversity of our portfolio, with strong performance in most commodities offsetting transitory weakness in natural gas. Our coverage outlook remains strong and on track to range from 1.9x to 2.0x exiting 2019. We are ahead of schedule on most infrastructure projects and we continue to build out our Panther DevCo, which will support growth for years to come while maintaining strong coverage."

Outlook Update

  • Estimate 2019 Adjusted EBITDA, net to the Partnership, to be $154 million to $161 million, including 2Q 2019 performance.
  • Estimate gross Adjusted EBITDA by DevCo in 2019 – Bighorn DevCo: $74 million to $76 million, Bobcat DevCo: $124 million to $127 million, Beartooth DevCo: $61 million to $64 million, and Panther DevCo: $1 million to $3 million.
  • Panther DevCo is expected to be assigned to OMP by September 1, 2019.
  • Anticipate distribution coverage for 3Q 2019 of 1.8x to 1.9x and 4Q 2019 of 1.9x to 2.0x, unchanged from last update.
  • Updated 2019 CapEx plan to a range of $203 million to $214 million, net to OMP. Incremental spending primarily relates to capturing third-party business, incremental plant costs, and an acceleration of certain gathering infrastructure from 2020 to 2019. CapEx in 3Q 2019 is expected to increase compared to 2Q 2019 with the closing of the Panther DevCo assignment.
  • Expect maintenance CapEx for full year 2019 to range between 6% of Adjusted EBITDA and 8% of Adjusted EBITDA, with 3Q 2019 around 10% of Adjusted EBITDA.
  • OMP continues to pursue incremental third-party business in both the Williston and Delaware basins.

Operational and Financial Update

The following table presents select operational and financial data for the periods presented:


Three Months Ended June 30, 2019


OMP
Ownership(1)


Gross


Net




(In millions)

Bighorn DevCo






Operating income

100

%


$

13.1


$

13.1

Depreciation and amortization

100

%


3.0


3.0

Total CapEx

100

%


5.8


5.8

Bobcat DevCo






Operating income

32.5

%


$

26.0


$

7.6

Depreciation and amortization

32.5

%


3.2


1.0

Total CapEx(2)

32.5

%


63.7


60.0

Beartooth DevCo






Operating income

70

%


$

15.0


$

10.5

Depreciation and amortization

70

%


2.4


1.6

Total CapEx

70

%


7.0


4.9

Total OMP






DevCo operating income



$

54.1


$

31.2

Public company expenses



0.8


0.8

Partnership operating income



53.3


30.4

Depreciation and amortization



8.6


5.6

Equity-based compensation expense



0.1


0.1

Capitalized interest



0.2


0.2

Total CapEx(3)



76.7


70.9

Maintenance CapEx



7.2


3.2

Expansion CapEx



69.5


67.7


__________________

(1) Represents OMP's ownership in each DevCo as of June 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 to Bobcat DevCo 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 the three months ended June 30, 2019.

The following table shows actual volumes for the second quarter of 2019, provides volumes guidance for the third quarter of 2019 and updates volumes guidance for the full year 2019:



Metric


2Q19 Actual


3Q19 Guidance


FY19 Guidance

Bighorn DevCo









Crude oil service volumes


MBopd


51.8


43 - 48


46 - 49

Natural gas service volumes


MMscfpd


201.6


220 - 235


215 - 225

Bobcat DevCo









Crude oil service volumes


MBopd


41.3


38 - 43


39 - 42

Natural gas service volumes


MMscfpd


241.7


270 - 290


260 - 270

Water service volumes


MBowpd


52.4


47 - 50


49 - 52

Beartooth DevCo









Water service volumes


MBowpd


143.7


110 - 120


120 - 130

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 six months ended June 30, 2019, the Partnership made capital contributions to Bobcat DevCo pursuant to the 2019 Capital Expenditures Arrangement of $52.8 million, and the Partnership's ownership interest in Bobcat DevCo increased from 25% as of December 31, 2018 to 32.5% as of June 30, 2019. The Partnership's average ownership interest in Bobcat DevCo during the second quarter of 2019 was approximately 31.2%.

Liquidity and CapEx

As of June 30, 2019, the Partnership had cash and cash equivalents of $6.2 million, $408.0 million of borrowings outstanding under its revolving credit facility and an $8.2 million outstanding letter of credit under its revolving credit facility. The Partnership's unused borrowing capacity as of June 30, 2019 was $58.8 million.

Quarterly Distribution

On May 29, 2019, the Partnership paid the quarterly cash distribution of $0.47 per unit related to the first quarter of 2019. On August 6, 2019, the Board of Directors of the General Partner declared the quarterly cash distribution for the second quarter of 2019 of $0.49 per unit. In addition, the General Partner will receive a cash distribution of $0.5 million attributable to the incentive distribution rights related to the earnings for the second quarter of 2019. These distributions will be payable on August 28, 2019 to unitholders of record as of August 16, 2019.

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, August 7, 2019

Time:


11:30 a.m. Central Time

Live Webcast:


https://www.webcaster4.com/Webcast/Page/1777/31146




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:


5196987

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, August 14, 2019 by dialing:

Replay dial-in:


877-344-7529

Intl. replay:


412-317-0088

Replay code:


10133702

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 consummate the Delaware Midstream Opportunity 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

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)




June 30, 2019


December 31, 2018


(In thousands, except unit data)

ASSETS




Current assets




Cash and cash equivalents

$

6,246


$

6,649

Accounts receivable

6,010


2,481

Accounts receivable - Oasis Petroleum

80,088


80,805

Prepaid expenses

1,267


1,418

Other current assets


22

Total current assets

93,611


91,375

Property, plant and equipment

1,060,379


933,155

Less: accumulated depreciation and amortization

(80,160)


(62,730)

Total property, plant and equipment, net

980,219


870,425

Operating lease right-of-use assets

3,642


Other assets

3,385


2,452

Total assets

$

1,080,857


$

964,252

LIABILITIES AND EQUITY




Current liabilities




Accounts payable

$

1,522


$

2,180

Accounts payable - Oasis Petroleum

34,873


33,014

Accrued liabilities

56,930


57,657

Accrued interest payable

293


442

Current operating lease liabilities

2,051


Other current liabilities

610


Total current liabilities

96,279


93,293

Long-term debt

408,000


318,000

Asset retirement obligations

1,564


1,514

Operating lease liabilities

1,597


Other liabilities

553


Total liabilities

507,993


412,807

Equity




Limited partners




Common units (20,045,196 and 20,029,026 issued and outstanding at June 30, 2019 and December 31, 2018, respectively)

205,009


192,581

   Subordinated units (13,750,000 units issued and outstanding at June 30, 2019 and December 31, 2018)

52,233


45,937

General Partner

491


112

Total partners' equity

257,733


238,630

Non-controlling interests

315,131


312,815

Total equity

572,864


551,445

Total liabilities and equity

$

1,080,857


$

964,252

 

OASIS MIDSTREAM PARTNERS LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)



Three Months Ended June 30,


Six Months Ended June 30,


2019


2018


2019


2018


(In thousands, except per unit data)

Revenues








Midstream services – Oasis Petroleum

$

71,452


$

60,715


$

146,314


$

118,344

Midstream services – third parties

1,825


663


2,952


957

Product sales – Oasis Petroleum

24,348


3,909


40,000


7,393

Product sales – third parties

19


1,271


29


1,285

Total revenues

97,644


66,558


189,295


127,979

Operating expenses








Costs of product sales

12,022


1,641


20,087


2,761

Operating and maintenance

16,003


14,693


34,853


30,689

Depreciation and amortization

8,562


6,659


17,491


13,023

General and administrative

7,809


5,897


16,529


12,047

Total operating expenses

44,396


28,890


88,960


58,520

Operating income

53,248


37,668


100,335


69,459

Other expense








Interest expense, net of capitalized interest

(4,209)


(183)


(7,957)


(445)

Other expense

(4)



(4)


Total other expense

(4,213)


(183)


(7,961)


(445)

Net income

49,035


37,485


92,374


69,014

Less: Net income attributable to non-controlling interests

22,837


25,041


44,633


46,616

Net income attributable to Oasis Midstream Partners LP

26,198


12,444


47,741


22,398

Less: Net income attributable to General Partner

491



729


Net income attributable to limited partners

$

25,707


$

12,444


$

47,012


$

22,398

Earnings per limited partner unit








Common units – basic and diluted

$

0.76


$

0.45


$

1.39


$

0.81

Weighted average number of limited partner units outstanding








Common units – basic

20,024


13,750


20,020


13,750

Common units – diluted

20,034


13,761


20,037


13,761

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 (loss), operating income (loss), net cash provided by (used in) operating activities or any other measures prepared under United States generally accepted accounting principles, or 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 Ended June 30,


Six Months Ended June 30,


2019


2018


2019


2018


(In thousands)

Interest expense, net of capitalized interest

$

4,209


$

183


$

7,957


$

445

Capitalized interest

153


1,362


188


2,197

Amortization of deferred financing costs

(226)


(117)


(417)


(233)

Cash Interest

4,136


1,428


7,728


2,409

Less: Cash Interest attributable to non-controlling interests(1)

(3)



(5)


Cash Interest attributable to Oasis Midstream Partners LP

$

4,133


$

1,428


$

7,723


$

2,409


__________________

(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, 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 ("DCF")

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 Ended June 30,


Six Months Ended June 30,


2019


2018


2019


2018


(In thousands)

Net income

$

49,035


$

37,485


$

92,374


$

69,014

Depreciation and amortization

8,562


6,659


17,491


13,023

Equity-based compensation expense

100


103


219


166

Interest expense, net of capitalized interest

4,209


183


7,957


445

Adjusted EBITDA

61,906


44,430


118,041


82,648

Less: Adjusted EBITDA attributable to non-controlling interests

25,836


28,015


50,483


52,511

Adjusted EBITDA attributable to Oasis Midstream Partners LP

36,070


16,415


67,558


30,137

Less:








Cash Interest attributable to Oasis Midstream Partners LP

4,133


1,428


7,723


2,409

Maintenance capital expenditures attributable to Oasis Midstream Partners LP

3,167


497


4,834


1,293

Distributable Cash Flow attributable to Oasis Midstream Partners LP

$

28,770


$

14,490


$

55,001


$

26,435









Net cash provided by operating activities

$

56,043


$

41,396


$

112,093


$

116,147

Interest expense, net of capitalized interest

4,209


183


7,957


445

Changes in working capital

1,880


2,841


(1,592)


(33,840)

Other non-cash adjustments

(226)


10


(417)


(104)

Adjusted EBITDA

61,906


44,430


118,041


82,648

Less: Adjusted EBITDA attributable to non-controlling interests

25,836


28,015


50,483


52,511

Adjusted EBITDA attributable to Oasis Midstream Partners LP

36,070


16,415


67,558


30,137

Less:








Cash Interest attributable to Oasis Midstream Partners LP

4,133


1,428


7,723


2,409

Maintenance capital expenditures attributable to Oasis Midstream Partners LP

3,167


497


4,834


1,293

Distributable Cash Flow attributable to Oasis Midstream Partners LP

$

28,770


$

14,490


$

55,001


$

26,435









Distributions declared








Limited partners

$

16,560


$

11,287


$

32,443


$

22,090

Incentive distribution rights

491



729


Total distributions

$

17,051


$

11,287


$

33,172


$

22,090









DCF coverage ratio

1.7x


1.3x


1.7x


1.2x

















 

Cision View original content:http://www.prnewswire.com/news-releases/oasis-midstream-partners-lp-announces-quarter-ended-june-30-2019-earnings-300897559.html

SOURCE Oasis Midstream Partners LP


Source: PR Newswire (August 6, 2019 - 4:55 PM EDT)

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