Oasis Midstream Partners LP (NYSE:OMP) Q4 2018 Earnings Conference Call - Final Transcript

Feb 27, 2019 • 12:30 pm ET

Previous

Oasis Midstream Partners LP (NYSE:OMP) Q4 2018 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Q & A
Operator
Operator

Thank you. We will now begin the question-and-answer session. (Operator Instructions) The first question will come from Crawford Kob of Tudor, Pickering & Holt. Please go ahead.

Analyst
Crawford Kob

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

Executive
Taylor L. Reid

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

Analyst
Crawford Kob

All right. Got it, that's helpful. And then next on the capital expenditure agreement announced last night, do you see this type of agreement extending beyond 2019? So in other words, maybe shifting to more ratable shifts in DevCo ownership versus larger discreet dropdowns?

Executive
Taylor L. Reid

Yes, we think this is a great structure for OMP. It continues to bring in that DevCo ownership. It allows us to use a lot of the excess coverage that we're seeing on top of distributions for levels that are pretty darn close to build multiples and so we really like this structure from an OMP standpoint. And I think it's good for the parent as well. This agreement is only signed for 2019. We'll kind of see how it works this year. If it works along with expectations, it's something that obviously we'll continue to work with the parent on in terms of whether or not we continue that going forward or not.

Analyst
Crawford Kob

Got it. And with the increase in the 2019 capital budget is the expectation that the extra $80 million will be funded at the credit facility?

Executive
Michael H. Lou

Yes, that's the plan. To fund that under the credit facility, but with increasing coverage through the year, you're obviously also offsetting the increase to the overall revolver through the year. So we feel like we still will have below $400 million under the credit facility exiting the year.

Analyst
Crawford Kob

Okay, got it. That's helpful. And last one for me. So, with Oasis slowing down their Williston net production growth in 2019, how does that impact how you are thinking about the previous guidance of the organic 20% distribution per unit growth beyond year end 2021?

Executive
Richard N. Robuck

Yes, I think that that's a great question. The reality is the kind of crux of the OMP asset base is right in the heart of Wild Basin, right, and that is where there's a