OMP - Earnings call transcript Q4 2018 | Oasis Midstream Partners LP

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Operator

Good morning. My name is Allison and I will be your conference operator today. At this time, I'd like to welcome everyone to the Fourth Quarter 2018 Earnings Release and Operations Update for Oasis Midstream Partners. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. this being note Please Instructions] event recorded. is [Operator call Richard the Robuck, would now Midstream's to the turn begin I Oasis over CFO conference. to you. Thank

You begin your may conference.

Richard Robuck

both are earnings Reform have risks among risks as forward-looking any the conference in to be include we Litigation This Act. Thank Taylor XXXX XX-Q. full-year advised on as Reid joined our Petroleum reports operational to other that the disclaim release cause to currently statements Lou, those Richard that of release morning that call we Allison. delighted others Form XX-K our including and update our Commission from matters to everyone. and forward-looking These and disclosed We're our that actual subject as annual members you Midstream you, forward-looking Form our meaning including and could our Oasis be within Robuch. quarter be statements Securities Partners, Michael on well your in Good described and materially results on well we Oasis uncertainties and Those Private call. different as and financial Today Exchange questions to with by have are our team. results. remarks Securities and today. reporting believe of fourth am We is answers on I filings to statements. quarterly the earnings the obligation these in Please statements our the include report

release our can that, presentation, current measures I'll With in and reference over may also financial which to Web call reconciliations GAAP the site. our site. make applicable find investor conference Taylor. reference on this We earnings Web to measures may found you During can our turn be which on non-GAAP we to call, our certain

Taylor Reid

joining a and of everyone, thanks for by highlighting thought our handful start key would We today points. morning call. Good we

outlook quite proving remains resilient. financial Midstream Oasis strong is Partners' First, and

Our and Basin program combination with hit in strong party backdrop us additional gives we targets. sponsor's can third a financial Wild confidence deals provides our

new the OMP's in day in Second, us early natural Williston processor million XXX foot came the plant Basin. online second gas December, per largest making cubic

will greater a provides we strong new discuss to tailwind significant our Congratulations the helps detail, team diversify base. As in for customer plant accomplishments and financial the here. their

of DevCos. has development contracts. our Third, we be capacity continued of Bobcat We additional fourth additional gas will interest scale plant acquisition successfully parties. enhancing end team increase during puts its simultaneously by to the party the closed of filled and the deal quarter XX% OMP in business outlook. estimate a Fourth, our third signing while XXXX, XX% by new coverage the Beartooth This in to its accretive third position

to we have expenditure to Oasis capital with look Michael As into XXXX, our we an that more arrangement in ownership further later. entered increase in detail Bobcat discuss agreement a through will

beyond. and have of Finally, the look our XXXX from OMP distribution the Had guidance. X.XX coverage executing And opportunity. reported growth we us we increasing been coverage quarter, X.XX X.X investment distribution times would really drop, separate fourth we the to our In plan [Indiscernible] a the versus times. not and coverage forward remains done compelling pack. in

as ordinary operated intermittently the a through December, At The We DevCo Bighorn coverage keeping X% annualized worked distribution in versus startup at facility. cubic began through foot natural quarter fourth However, X.XX for the units adjusting ownership growth quarter, times. rate. processing incremental we OMP for full new the been few and on XXX track grew debt XX% would gas December new have our distribution the our targeted and forma our to new issued million interest us pro issues. meet the plant

and volumes We over up some consisting in the is mostly some plant two past third February. Oasis approximated has fought weeks Now XX% of cold and briefly through The the extreme party utilization earlier running. well. as

Following Williston utilization gas above remains be we XX% the November by processing yearend our update. versus third Natural we signed, to in at Basin XX% incremental now party expect deals the tight.

December, gas of gas by core overall bcf to rising gas a by first per accommodate was desire is and production a X.XX Williston processing reduce thing The combination to basin across plant As bcf result North team's GORs knowledge, day gave advantage is and do startup. the which strategic actually new the bcf mover per and the up planning, of us to flaring subsurface capturing and production as our process day overall only X.X of right of Dakota building X.X Basin. while day, per

active to We strong XXXX flare across reduce projection the remain remain our despite and on in and the investment. to in commodity Bobcat we by multiple regarding to will pullback parties growing continue On looking Bighorn Ramp as seek volumes our activity. behind drivers financial growth OMP's in additional gas that sponsor's development program to major third continue plant with while opportunities party the supported and which XXXX, largely producer are note second strategic up significant prices in resilient Basin the associated Williston. our Williston overall the capitalizing be

EBITDA. and and are rigs versus barrel, OMP's where per which activity Basin, and now five and oil gathering $XX from the Oasis assets processing growth oil know run were The in two of balance Bakken to nearing three is to concentrated in gas this prices as is party situated. comes plan Wild our you associated year, volumes While third

operations. on OMP. turn our in over on first We quarter As to and XXXX ranging to a XXXX times. front exceeded ramp we X.X expected from X.X times now every Michael the phenomenal about a company over position for still call and beyond. go little I'll X is of up year a expectations throughout times. more the coverage detail to of This look put strong the year for the was expect to XXXX, we virtually to

Michael Lou

to exceeded X% by review wanted transition the Bighorn, during plans fourth quarter the And then, quarter. I into guidance Taylor. crude start for midpoint volume. with At XXXX. of Thanks, volume

QX gas expectation, water online. of levels. about issue grew of natural came of versus flat. approximately While a DevCo, and quarter while grew the and increased were was plant and crude about XX% this fell X% when flat was a At water the sequentially at quarter timing Beartooth XX% Bobcat largely volumes gas high bit At the third DevCo, short volumes gas with fourth water XXXX two-thirds interest with all-time volumes remain parties. Beartooth Oasis water beneficial OMP for has Oasis, associated capital the capital the contributing. in OMP one-third Oasis's both rolling and increase essentially calendar exchange growth Bobcat's volumes and and fresh agreed growth the XXXX portion our in higher CapEx for an which XXXX We're unique out based arrangement and approximately third of with that to to its year a water fund plans produced for related increasing on both has ownership is volumes

funding from in XXXX the drop this increase using million Net consideration estimate to we're ownership contribution growth would called November XX% Bobcat OMP, year. call the of million. approximate interest but on company for $X a million for $XXX to on arrangement, to are increased a of $X.X in EBITDA is of scheduled of public from $XXX million expenses. to increasing three year-end. result to now of to was XXX% million We including time our it increase $XXX $XXX million the growth going throughout we XX% in related into EBITDA $XXX approximate CapEx helpful initial their on XXXX, ownership before this $XXX $XXX our are remain Bobcat expenses to to another to OMP, forecasting million. after expect XX% month by our Bobcat drop basis would million to after $XXX to Growth by our EBITDA November going total at million approximately a %XXX capital growth expected EBITDA Beartooth's about Net the DevCo in and updated to $X normally Bobcat thoughts about Taking XXX% our public of is the DevCo's ownership which million capital OMP million initial the we we process. up a to we to company expect Bobcat arrangement. it We EBITDA each In to of due capital. based million. our guide to OMP's million In on do XXXX, to our Taking Bobcat the interest net by full-year break and forecasts $XX million OMP think changing capital, ownership increase unchanged and capital thoughts expenditure with As $XXX capital outlined XX% our to XXXX, adjusting in the below would

gross For Beartooth EBITDA deliver XX%, XXXX, to Oasis volumes of Bobcat to to into expect year-over=year XXX%.Driven Bighorn third to from XXX% XX% of expected and of planet million about $XXX parties. million. by $XXX and we growth second represent the Bighorn is XX%

We in are volumes XXXX. primarily to gas targeting XX% XX% for to increase Bobcat, related growth

EBITDA fashion in Oasis in decline about year-over-year. is similar of party Basin into a any as the focus in its Lastly, will in Beartooth baking directed water third fresh guidance. In less be our XX% about volumes year, not XX% a Wild we're last activity completion activity to incremental resulting

over decrease gross Basin. about XXXX. EBITDA That the So, is million to fresh of of X% EBITDA produce representing outside the decline $X in implies about to I'll Beartooth in related water is to With that, EBITDA water have million of balance call $X going about to Richard. from in X.X% XXXX to Wild

Richard Robuck

in generate strong from having Michael. at benefit assets economic even the OMP concentrated -- prices. low to Thanks, core continues area very

growth surpass the fourth are It approximate resiliency. a diversify increasing to XXXX. versus net of of We year. in XX% our an We target. and financial with EBITDA quarter distribution which the quarter fourth consistent of X% third quarter revenue distribution and the their estimate provides declared party team XX% a to continues $X.XX of unit by execute stream Third volumes will annualized third expectations. increase well party well this OMP and The was XX% of as

EBITDA be is EBITDA ownership, would if to exclude improving that XXXX year-on-year organic up about XXXX XX% with And to on an Bobcat be November rapidly basis, were about the the still to from of the is XXX% even growing XX%. and we XXXX, dissolution the expected impact levels drop with coverage XXX% increasing For growth.

During million net $XX.X EBITDA EBITDA the in the company added quarter, flow delivered public cash million. [Indiscernible] number. to EBITDA together was expenses million $XX.X of net including and gross fourth three DevCos of $XX.X OMP

As to $XXX is EBITDA. range million CapEx OMP's $XXX million X% CapEx representing to with about expected from maintenance of Michael X% net mentioned, to

of reflects XXX% capital growth pick capital. Our up Bobcat's we program will our assumption that

$XXX million XXXX, million As credit in and under $X.X capacity to conditions. outstanding million We the million. the borrowing up facility December to its resulting of revolving $XX cash of $XXX of retained borrowing XX, partnership under capacity million $XXX our of borrowing flexibility certain increase had

our As of will at occurred the annualized volumes through cash leverage EBITDA number to Partners. flows about improve. drop an it the XXXX X.Xx as exceptionally we exiting we and to In been fourth has the beginning if quarter fall was Oasis grow Debt Midstream the had quarter it strong year, below that forma to or to pro and continue Xx closing, expect XXXX. at year

even that team looking execution We distribution still and delivering have a growth XXXX. and trades in achievements impressive at another or discounted strong of distribution are of peers OMP for to the superior all profiles. similar forward its proud growth Despite and coverage, valuation of year less to are

investment Additionally, juncture. has strengthened make for the strategic, the Allison further of and since this profile questions. company, the call OMP believe to at the financial up financial open over and of I'll line our operating opportunity lofty qualities risk combination now compelling the hand the exceeding IPO a expectation we to

Operator

Holt. of and Instructions] Thank will Kob you. from first The [Operator Please go Crawford come ahead. question Tudor, Pickering

Crawford Kob

guys. Hey,

to side So Delaware, would from could how the gathering? if extend you're or thinking any and produced update participation the starting that gas natural it off or about so water there crude primarily potential to on be

Taylor Reid

know and will can some side. more what on it. program. the opportunity They're a however water products. Yes, take where a see kind can gas more that and Permian think is options in We be doing need big to bit party flush of there's all out. a don't side. do a opportunity the coming Delaware going it out range just full be bit side, OMP the with That in the oil, that change time figure the that We OMP be time on we We think third in to the at But a do is. that from to We opportunity should still little and doing, to the obviously, to on little they're bit allowing exactly options. parent considering of

Crawford Kob

All announced next discreet DevCo then right. do shifting in XXXX? agreement agreement beyond maybe shifts dropdowns? Got night, you And this So in words, expenditure it, last that's type the on helpful. extending to ratable ownership of capital see versus larger more other

Taylor Reid

Yes, bring we're close something of structure ownership. we really a a OMP so It use top great and the think if like exits year signed It's seeing of we whether on is works to we from for forward It OMP. XXXX. standpoint. coverage allows work parent to terms as pretty think distributions continue obviously We'll structure I for levels see to for for continue kind lot with the it's this DevCo good along with or And the are it is multiples that going an that that not agreement this in expectations. continues of that This on darn that not. to this build only us of how or we'll parent it works in well.

Crawford Kob

Got budget the capital extra is XXXX the the credit increase facility? be $XX funded in at the will the that million it. And with expectation

Taylor Reid

credit Yes, to also overall obviously through the increasing through under the the you're offsetting To plan. year. increase the that's fund that the but facility, with year, the coverage revolver

the So like year. million $XXX we the have still facility below feel exiting we will under credit

Crawford Kob

impact per [indiscernible] how Oasis last in about XXXX? Okay, net beyond me, the the distribution got XX% that how of growth And organic year-end slowing for thinking XXXX, it, does unit helpful. guidance so that's you're growth production one down, previous with

Taylor Reid

being The of in question. there's kind of as right, folks bunch great right other well. a work of activity Oasis, the rig the the of Wild That's just by reality that is is is not is crux Basin, and asset OMP heart a and base done but where

cash GORs year-over-year have our well as And asset Basin. completing see of from ability there And area, this the to inventory and Wild so with flow wells high still is in with we handful Oasis' strategic with inventory reality a we'll that continue Beartooth that in grow the of year. to activity, we kind the be position all

be So it's Basin. probably Wild XX of will of the XX outside

So to then actually the kind start that'll continue look up I start had to on further see as Beartooth think you'll we Beartooth, climb and out we to growth offset then declines support XXXX. back and in time, in of

Crawford Kob

now that's for from and Thanks questions. it helpful taking my That's Okay. me.

Taylor Reid

Thank you.

Richard Robuck

Thanks.

Operator

The ahead. from next question of Amos will come David Heikkinen go Energy. Please

David Amos

Hey morning. guys, good

Taylor Reid

morning. Good

David Amos

you've announced. and drivers at versus outlook, you Delaware in the agreement five growth the LMP potential avenues, question, I appreciate want but think there information on Williston that and level, I the potential the for and opportunity, dropdown think that see XXXX the but sponsored and just the CapEx basin, Similar you third-party your -- to of I the that were a this maybe capacity ignoring that continuation Basin on if call, have about the they you and don't 'XX given you

are we how about where view? in XXXX growth you thinking be focused guys of broader strategically should that kind high-level, for within So

Richard Robuck

stable of I is one that business also to of flows the think the grow. cash tenets able core are just

And so services we again fantastic perspective. support that Oasis sponsor's supported Basin that by volumes year-over-year. from construct continued growth Wild provide The to is that

guide driven as deals. deals side our gas think on and for the and increase on opportunities and I running, been there's quarter this every but as up you've opportunity we've us and plant Secondly, as third-party saltwater third-party seen remains activity. also crude well got That's largely gas freshwater thoughts our new the

growth an in of basin will operators that and the we think So the incremental location around other us asset opportunities. provide in the

drops about basis. I we'll asked great this like was next capital about we a you then said it on a and -- just about reevaluate it the do year, only arrangement, think that Michael it one think, arrangement And year-to-year It's enter and well. we'll year, for for as year. was as there

those our and later then continue will would months to that's on in as and that. the we capital for might is plans not be going get opportunities clarity going capital but for asked Delaware do a XX and akin definitely you XX as two larger about drops there out will This be that's how that the to arrangement event we drop an about the to ability I our current side, drop as that, synonymous arrangement infrastructure. think, to and play I next well who is on we pretty think building a so monitor and the to to

like for do a lucky really I think, we'd to a of be future be engine that I get long-term, do big it I it's really we think business. the to it win supports going that it at And, we as OMP if if do, OMP. to our have business, growth

David Amos

Richard. follow-up indication in helpful. can and are you point a who to Oasis us this schedule you a it? where that gets could long the the give or as ultimately the as think out just That's what build that decision on goes governors to XXXX as do Thanks, or And dated for a timing Delaware on that Delaware. be decision at or decision? level Any near-term Do

Richard Robuck

a about a had with that's third off actually pushed we we programs. in talked level for end about level little program middle go going parent was rig of of we the a get obviously decision be by to little parent at the XXXX. bit to going that talked Delaware pushed a kind bit. at What the the a -- that's changing we're at the going made decision the the parent level that is end oil would of that in that at price We year. the that XXXX, us, little saying middle changing have the of the about talked the of bit changing we Yes, and just to year And were to

been where going that operated of is want best the part absolutely the well and close to takeaway well to you be wink side. [indiscernible] and infrastructure important the where up be see from is block base such that acid parent it's to side. just Delaware to So And of terms in trying being as for consolidated to as broad goes a the and having all it understand gas the set close

in this place gas, so, put And it's water, on great a gathering system and to oil.

OMP to And and this we part a little can competitive of a service to be to a a quality back at to the prove. goes definitely superior earlier I a offer get cost right. of service and have that that of continue that's a continue the too. we of is to that. prove we've to lot but options OMP has, level to bit, So that Well, got wants your certainty question mean, obviously then better to third-party service than parent other options, of the

all deal the an that think getting too. and the the it, them. them we of deals our do we as our best got service able thing Oasis, to side not the can are this obviously focus in on of sure to we've for only it's to so, out OMP of And customers so think but hope and Williston their level on that And that the and that customers of Williston all cost been partners. Oasis the then, that move drive our right continue side. Delaware But that all we will and they've that Williston certainly make the customers. third-party growing we we for quality, for with to into prove certainty, But do for at and for we hope on continue they're perspective And we from for build we

David Amos

at you That's really about guys the the helpful. look Thanks I for are thinking strategy, how that. appreciate

Richard Robuck

Thanks.

Operator

the this will conclude turn Reid gentlemen, remarks. to over time, At conference closing for this question-and-answer and session. Ladies our like I'd back any Taylor to

Taylor Reid

of OMP. will for closing, a In XXXX Alison. be harvesting year Thanks

remains expectations investors is any We a creation. will major growth capital always, for future. today. complete exceptional a tailwinds. the projects OMP great Thanks we dedication And we definitely a call greatly have. with strong ourselves in delivering make with might strong As value exceeded available The team's the benefit sponsor position. recipe coupled from forward and to follow-up for continue capital efficient for as Thank questions look financial competitive our in you for expertise subsurface you. and to again joining

Operator

has conference presentation. attending you now today's concluded. for The We thank

You may now disconnect lines. your

Oasis Midstream Partners (OMP) 27 Feb 192018 Q4 Earnings call transcript