HOUSTON, Nov. 8, 2018 /PRNewswire/ — Oasis Petroleum Inc. (NYSE: OAS) (“Oasis” or the “Company”) today announced that it has entered into a definitive agreement to sell additional interests in Bobcat DevCo LLC (“Bobcat DevCo”) and Beartooth DevCo LLC (“Beartooth DevCo”) to Oasis Midstream Partners LP (NYSE: OMP) (“OMP” or the “Partnership”) for $250 million, subject to customary purchase price adjustments. The divested assets include a 15% interest in Bobcat DevCo and 30% interest in Beartooth DevCo. The consideration is expected to consist of $125 million in cash from borrowings under OMP’s credit facility, with the remainder to come from, depending on market conditions, proceeds from any capital market transactions and/or the issuance of common units representing limited partner interests in OMP to Oasis.
“Through this transaction, we were able to enhance the financial profiles of both Oasis and OMP, while strengthening our competitive position,” said Thomas B. Nusz, Oasis’ Chairman and Chief Executive Officer. “The drop is accretive to Oasis and further improves Oasis’ leverage position. The Williston Basin remains one of the premier oil basins in the U.S. and both companies are well positioned to grow and generate strong returns through the commodity cycle.”
Bobcat DevCo’s assets are focused in the Wild Basin operating area and include gas gathering, compression and gas lift, crude oil gathering and produced water gathering and disposal. Bobcat DevCo is a particularly strategic midstream asset, as it has been a key contributor to the early success of connecting third-party volumes to OMP’s gas plants. Oasis and OMP have invested heavily in Bobcat DevCo in 2018, positioning the DevCo for over 50% EBITDA growth in 2019. These investments have been to support both Oasis’ volume growth as well as third-party opportunities at attractive build multiples.
The Beartooth DevCo owns significant water infrastructure assets across most of Oasis’ core operating areas. These assets, which gather and dispose of produced water, deliver freshwater for well completions and deliver freshwater for production optimization services, are predominately located in Oasis’ Alger, Cottonwood, Hebron, Indian Hills and Red Bank operating areas. Substantially all of the area around the Beartooth DevCo’s acreage dedication can be serviced by these assets, with minimal additional expansion capital expenditures given the reach of our widely dispersed infrastructure systems currently in place. Beartooth DevCo’s infrastructure can easily service additional wells through low-cost connections. Beartooth DevCo’s extensive footprint has allowed OMP to secure agreements with third-parties related to water sourcing and disposal.