OMP - Earnings call transcript Q2 2019 | Oasis Midstream Partners LP

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Operator

Good morning. My name is Sean, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Second Quarter 2019 Earnings Release and Operations Update for Oasis Midstream Partners. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask question. this being note Please Instructions] event recorded. is [Operator

turn over to to would the now Robuck, call to like CFO I Richard the Oasis Thank you. conference. begin Midstream's

your begin You may conference.

Richard Robuck

members and Today, Thank Sean. our XXXX as delighted call. on Good well have everyone. I'm Taylor other operational you, Michael we're joined Lou We're results. as from by morning, second reporting quarter you the our team. to financial Reid some and

those and our that Please meaning Partners, on be remarks Oasis be forward-looking uncertainties Petroleum release earnings disclosed your conference Securities Reform actual statements Midstream the in call. be Oasis cause includes forward-looking that and we to answers advised Private subject from of the to the to statements including that Act. both currently to could risks statements questions, within and believe These our results Litigation different are materially

we as Form the these in Exchange Form risks disclaim matters statements. described Annual Report on our our include, XX-K with to obligation any filings We have forward-looking our on and release that Quarterly earnings Securities including in our Reports others, among XX-Q. Commission, Those update and well

call, reconciliations be earnings certain references also will financial measures on our measures non-GAAP and release and conference make found this to During GAAP we applicable our the to can in website.

on We will also website. our find which current investor can reference our you presentation,

I'll that, call Taylor. the turn With over to

Taylor Reid

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

First, OMP's outlook financial exceptional. remains

anticipated mostly the downtime some offset demonstrates better resiliency as than temporary at Beartooth. second our Bighorn strength of and performance quarter was portfolio, by at The

XXXX compelling our to for our as simultaneously position in We as the remain unchanged. outlook remains coverage well second grow distribution half coverage. of Our a

Petroleum work final acreage Oasis toward Second, general the for continue of dedication Delaware of our agreements from OMP. executing certain to the Oasis to partner and Boards

a in sheet the As This the financial called for a keeping OMP unitholders, which expected enhances agreements the with Panther is third balance huge be reminder, strong. opportunity will quarter. outlook final while this for OMP, DevCo

business and the Williston we to third-party pursue Third, continue in both Delaware.

business our from attractive customers Our of EBITDA We job team to will QX XX% estimate tremendous leverage footprint. XX% XXXX a over to come done development our third-parties. securing has

opportunity, And remains improving pure double-digit our combination an of beyond. OMP value finally, represent attractive to coverage executing investment investors. forward distribution look a the a growth, We leading plan compelling yield near to XXXX in and in

would constraints first our coverage X.XXx growth grew X.Xx, the for Adjusting second from the reported of our annualized distribution quarter. improvement with sequential In quarter, in targeted a our top rate. X.Xx consistent in produced gas of the versus the plant We we XX% prior the quarter the guidance. above OMP distribution coverage the X% end approximated distribution have

incremental OpEx largely and Bobcat the both quarter, during of second in the Gas DevCo, per constrain and during we Bighorn to volumes during of into end in cubic feet and our and July. XX second impact day will The due plant early downtime spent million net both approximately was volumes quarter quarter. the turnaround the a second

at million release press by of higher in quarter our for announcement gas or volumes volumes the that Oasis for both month quarter, Altogether, and for of both last and to Bobcat. third adversely the were our as third in the the We gas end July. with boat quarter ranges high related about same were Bighorn above weeks few impacted $X EBITDA it their was the oil the second during

This a impressive Oasis strong of combination ramp reflects and third-parties. up

the Natural XX% utilization gas tight from have year-end Over basin. the as Williston XXXX. by to the operators be third-party volumes. second in you in numerous total We Bighorn's expect quarter, processing of remains heard XX% volumes above approximated still

Bcf per X.X North is a Dakota new gas X.X May, OMP's a day production while including plant. basin only day, processing in record Bcf to grew

continue remain reduce parties overall seek regarding multiple while flaring as to additional in our we opportunities, active capitalizing with on investment. to strategic We the Williston,

the to X.Xx. to in about improvement XXXX, we quarter an we to coverage third of As expect look X.Xx

stronger volumes, expect reflects quarter to the contributions addition the we coverage the up ramp new well Panther The as Beartooth our across at to DevCo. from Additionally, exit execution Bobcat Bighorn, complex Xx. year X.Xx and with including even fourth steady coverage as and of strong of gas third-party continued

go call operations. little a the detail to turn to I'll more on now over our over Michael

Michael Lou

second projections guidance continues Thanks EBITDA performance OMP DevCo. incremental We updated account and add for quarter our to for to by value updated XXXX Taylor. its unitholders.

to drilling its beyond. for Our areas, direct outlook and dedicated OMP our of sponsor continues to XXXX a supporting substantial financial portion

we've mentioned, the a significant third business and of stream. Taylor fourth more becoming is our and amount in cash guidance this as third-party flow of Additionally, provided won of portion significant for We XXXX last a night. volumes quarter

new of growth plant remainder solid gas the Our EBITDA year. gross improved our from the forecast drive through volumes and margins

discussed. of bit continued and quarterly the At water, sponsor below to I'll guidance, from dive volume guidance. below the of into quarter, exceeded expectations before volumes. plant gas the volumes downtime At strong third-party end water a top At a incremental more the color the during contribution gas the exceeded our while reflecting on our guidance end expectations, were crude DevCo, due downtime. reflecting with Beartooth, exception giving we the top of Bighorn, were volumes XXXX Bobcat significantly details same volumes

net expects the third-party is Total our around $XXX plant capital, $XXX million. capturing X. range be finalized to budget quarter into OMP Panther million an to beginning financial infrastructure X% of with to third and incremental reflecting about the in to costs Turning higher largely adjusted acceleration expected to DevCo arrangement XXXX. gathering impacts we've OMP XXXX certain business, September CapEx from

spending to-date. Oasis for range sponsor capital spent against proceeding OMP, CapEx Capital of are as a expected. Our in at our reimbursing arrangement including reflects Panther Panther full-year Execution our with Bobcat

end ownership still is increase Bobcat year-end. by expected quarter. XX% Bobcat the in the its increased to of first at XX.X% DevCo to XX% interest XX.X% to to and OMP’s from OMP the approximately As

With that, Richard. I'll call over hand the to

Richard Robuck

sponsor by coupled and from our Thanks, accretive strong Michael. new OMP volumes. and is third-party benefiting program with a highly

amount of capture, sub-Xx $X.XX sponsor annualized quarter the third-party multiples. remain growth XX% unit. yield with build track the a economics, Given with we We our target, aggregate and quarter this being distribution including volumes third-party on both distribution second business

annualized of revolving throughout of under June about be exiting second As outstanding X.X the was the Debt It million the will $XXX EBITDA to XX, credit driven had around year, cash times. million drawn XXXX, partnership down $X quarter of its X.Xx. rest and facility.

the credit commitments increase at facility revolving ability committed to million. further $XXX remains Our $XXX to with million

we're planning OMP. strong continuing about our on In excited to very executing closing, drive and results at

to hand now back I'll call over the for questions. Sean

Operator

Jeremy come will Thank Instructions] Our you. go ahead. first Tonet Please question JPMorgan. with [Operator today from

Jeremy Tonet

morning. good Hi,

Taylor Reid

Good morning.

Jeremy Tonet

basis, to on want some strategic forward a about commentary should go relates just Basin there the some how start it seems that on and And could to Wild importance as to wondering Just the away. thinking be change there be with like call Oasis with it we regards rotating OMP?

Taylor Reid

Yes.

and backed proposition. of in. around we've XXXX it's a then XXXX, First, to Mike change, Richard been been midstream financing alternatives being we value life really up with respect is throughout what and in been and talking there's what open But begin I'll we really about the and can the the consistent stated all business. jump way and We've

strategic nature was nature upfront all the of Tommy always gas days. strategic component that was the probably still same super infrastructure their that getting from built There's as early not capture for But the Now of in a kind to asset talked as about. it strategic the a was level of but that open standpoint, the we've upstream alternatives. and and been the at idea for capture ownership gas

Michael Lou

you're asking, Is that what Jeremy?

Jeremy Tonet

Yes.

I the far standing double-digit a as high flexibility. the returning kind distribution coverage, capital point? quick as and far it where unitholders with consideration follow-up in repurchases Just level gives range, quite entering there is as you mix at is appreciate to yield But of lot to as – one was a here that the the unit this of that

Richard Robuck

not unit this At thought doing about point, we repurchases. Yes. have

the we that now, I think area X.Xx. it, we'd in and leverage like have that, right Xx

And it further march our to even year neighborhood. decrease and XXXX this is so it goal down into

balance foreseen this time. think desire buyback at we sheet conservative not this units prudent at so to and time is have managing And

Jeremy Tonet

me. That's taking for from all question. my Thanks

Taylor Reid

Thanks.

Operator

come will Dounis with question from next Spiro Suisse. Our Credit Please ahead. go

Spiro Dounis

Hey, good How are afternoon, you? guys.

Taylor Reid

Good.

Spiro Dounis

Great.

around And cash about drive the of up drop the question and impact that Any to vein, back we an free to some last position. Could be sponsor? revision, some how believe one that should to sponsor see of surrounding talk it? there's maybe then flow would been guess about accelerated the think Just think trying I to through the downs monetization helpful. I OMP? color cash in the we Just

Richard Robuck

Yes.

of at parent. there's flow cash still is free at cash free actually you'll the flow significant of a parent, terms in see So amount the that what

talked around of excess the on So to the little and the do adjustments call and deflation free to of at because the more parent a that going. keep bit they about flow the on case cash revolved Delaware a and the ability $XX between $XX generation amount level efficiencies

partnership a kind of way so the parent, that work. and areas level the at it in of really And change activity doesn't how terms that's different thought the will great in the process around

the of to service what of parent mentioned maybe In and Basin OMP. access same of all enjoys as a infrastructure basin sponsor terms our the in the changing you're for kind of a of that importance, the Wild whole producers nature bit strategic not terms is seeing Taylor little in through availability have

obviously area at with still few level important. further so Wild it part that it And more of a lot of partnership. there's to years were And is in acreage acquisitions inventory increased the dedicated and massively Basin the that E&P that still back, a done

running of Wild still to of business. lot in core be the the and a that's going a part still there's So room Basin

full In fact, continue Basin Wild like in to it going things that keep looks to asset. they're

very where also difference sponsor make in that and areas. dedications, We where currently think is partnership could Woods can we as really for where continues that be off other maybe a There level areas some where become we the not dedicated other the terms parent. a current really Painted sponsor rolling support can level, the interesting for of and are partnership contracts aren't the at to or there's

of through be that could value front. some drop focus come at that strategic on how quite a say In asset, this play exactly there What think of know don't can which is other like It down. could that alternatives, amount that it value the get I you get further of and they're will how significant you we and still the heard form could the the how large assets on terms eventually be initiative that where said, parent value, they out. a holding in true to level is broader sponsor that is of downs

are those of the about So things on we talked I of sponsor spectrum think kind the call. that

Spiro Dounis

Got seems it. very be That to helpful.

Second one Panther. just around

important what and trying a sponsor's pipeline sponsor? do build of the to be basin, water to I to the LOEs that sense or LOE getting respect specifically internally get Just ability I'm at recycling of infrastructure. critical sort is, this do to to your the how or with What for in And sponsor? could sort out guess maybe may does the

Taylor Reid

as talked – these shale definitely operating on expense. terms of in we've is cost is plays, number all the about water lease one It

way the And the well so down to and is pipeline put efficient having road, trucks, it. pipeline eliminate the most the can network you it off into them handle the you efficient inject take then everything an where

sponsor the to important down. and because that drives run built efficiently that is LOE it really have out to it infrastructure So

Richard Robuck

can't water that where can basin, And but water impact times see weather the in of with your across consistently, years the and well. a that move your roads kind not especially production are and Basin the we over only kind in in as closed, way the volumes side where you across huge gas if of all constraints oil saw the on on people you infrastructure Williston side,

roads too a out in In Williston, fairly manner you of congestion think but build dissimilar, the weather the the that may it's of not well. the in infrastructure the the I for kind on Delaware Delaware, you as need in and fluctuations well-documented, same have not there the have the

it's roads So lot to certainly getting built, more and water are while and get it's better a pipeline reliable by this cheaper certainly moved too.

really and think for impact makes we a both of lot it LOE sense parent. can in So the basins

Spiro Dounis

think about think Got a bit how But when in I mass? that to little it. will of timing, ultimately, contribute we around terms like critical XXXX. And should Panther timing hits

Michael Lou

the I you'll that – Yeah, slowly see years. up of mean, continue ramp next over couple

as capital the about growing of I for deck implication over Panther. build slide we they our spend. time think Clearly, multiples a and talks have relate to investor spend capital time that EBITDA is on over kind that

it. outside So that's

XXXX, on that cumulative and of or by timeframe. EBITDA basis, divide – in levels timeframe, so just a a to So million that you would $XXX the have get four that spent divide capital by XXXX you four

So material as march it's time. really starting to you get through

Spiro Dounis

Great, Okay, time, the so That's that. steady that's guys. ramp it from helpful. Thanks up for into me.

Taylor Reid

Thanks.

Operator

next come from with go Our ahead. Energy. Pearce question Simmons will Hammond Please

Pearce Hammond

taking Good Midstream price the steep Partners. today? understand unit first My you about my morning for you decline drop significant or questions. given and given in this Oasis appreciate thank for not What think investors do fully the today this story, do question,

Richard Robuck

is plan opinion into also team overdone, capturing hasn't because of I not say think the a volume. would Yes, reaction I and job but XXXX, terms And and was quarter the initial changed. little bit humble third fourth doing the others just in the – out look volumes, only great Oasis's I really mainly as into

look is if growth, intact leverage and you and distribution levels So EBITDA and at coverage definitely everything

really OMP to safely year for of of other world as done six and quickly think on a it job bring a in the the of plant and continue could and And important super Oasis Michael it accreted December to the on will going XXXX the this I the first shareholders in the thing did able allowing team forward. call, flows value that OMP to said getting was is get as constrained cash heroic those and that, earlier that budget soon months do. and the they

make good over to some later folks look who and in basin, like bring to move accretive. the it it and to them dropping upstairs unitholders, not other OMP months and gas frankly, that into longer think it. decisions value and super And waiting well the ability it quickly, processing bring at seven still that took nine Those are on is to and building our I

we'd period the have we on downtime. earlier gas six earlier a the trade on future articulated normal We for have short here. months better is having versus to a plant kinks that And the make of in that for time not nine and from intact months some of so, and it day the you then ability EBITDA has yes, a a is for think of and guys did you bit we and get all plant little definitely a long, call to kind

Pearce Hammond

and helpful. thank on then reliance And a see the for reduce as you maybe do some even Well, color. you That's the to follow-up, that opportunities maybe accelerate third-party sponsor? of business

Richard Robuck

I all it XXXX about were to be that compelling. thought is this goal Yes, incremental in The to go value, the you to sponsor. goal that actually OMP is not the way to – we've so Oasis public bringing the add is order if think and is in service that think of by to just diversify business it going only volumes, necessarily capture I going wasn't

we've what out of We've faster done out help by BD would I could But on we've capture life sponsor the then one to initial evidenced working related a And than whole if compelling. MLPs be of out a third-party more all lot grow to EBITDA there. as our bring total fund percent today. backed that think commodities, three now we top incremental build volumes third-party got volumes most and capital a got the the to increase teams – a as to

Taylor Reid

we years up from Pearce, about with just primarily that did the on for number talked on standpoint, incredible the little IPO this just an sponsor we focused the an little operating growth parent a a job the bit team We had. keeping to add a and think our more. that of bit

third-party we've it's start is gone the said, reduce fill it of to At and year seen of never third-parties. is it. sponsor the going end upon Like look, to focusing really beginning job we're looked the significant reliance And on for that team we IPO, with said hey be that third-party minimal but by like that great pretty you've that pretty you at the where year, of from doing a growth, said, going the this XX% Richard where was to we've the what move. to continuing

that in well. that as the say end the we're would of I Delaware, on front

as area to that need about and huge that that think based in last those some sponsor – asset an so terms there volumes well. perspective third-party the all we are from best we some question and we of that in the really system in infrastructure talked And one think of the projections, can a in and Delaware that as play that add in sits of those we actually of parts is

only but continue to the not lot I think in we side, can of Bakken grow a opportunity So the Delaware. there's

Pearce Hammond

you Thank the for color. all

Taylor Reid

Sure.

Operator

turn remarks. This to like conference to question-and-answer back session. will today's for would Reid Taylor I over conclude closing the any

Taylor Reid

operator. strength the portfolio. the demonstrate results Thanks, In closing, second of and OMP quarter resiliency

outlook call and to financial and our an today. again proposition investors. Our for coverage attractive the Thanks profile joining remain specifically growth

As questions always, make have. will for any might definitely Thank we follow-up you. you available ourselves that

Operator

The today's you you Thank presentation. And now for disconnect. concluded. now attending conference has may

Oasis Midstream Partners (OMP) 7 Aug 192019 Q2 Earnings call transcript