Oasis Petroleum Inc. (NYSE:OAS) Q3 2019 Earnings Conference Call - Final Transcript

Nov 06, 2019 • 11:00 am ET


Oasis Petroleum Inc. (NYSE:OAS) Q3 2019 Earnings Conference Call - Final Transcript


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Michael Lou

For full year 2020 we would expect the divestiture impact to be about 1.1 MBOEs per day. Volumes for 2020 are still expected to be higher than our fourth quarter average. On 2020 capital last quarter we had discussed the consolidated number of about $800 million and given the progress that we've made in reducing costs. We now believe consolidated capex could be approximately $750 million. This reduction would be a combination of lower well costs on the E&P side and optimization of capital on the midstream side. And given the trends of well cost this number could continue to be biased downward. Clearly the teams has been focused on the capital and operating cost side and are doing an incredible job. On the revenue side Williston crude differentials remain strong in the third quarter as our marketing team consistently delivers superior realizations. In the Delaware crude differentials generally are at parity or premium to WTI as several new long haul pipes came online this year. Looking in to the fourth quarter differentials are expected to widen modestly from the strong level seen year-to-date but it looks like our full year diffs will be better than our full year guidance. As we've discussed we generated significant free cash flow which allowed us to repay a $125 million under our Oasis credit facility.

We are further securing our future free cash flow generation with over 80% of the remainder of 2019 estimated oil production hedged at a weighted average floor price of $66 per barrel. For 2020 we've added additional colors and swaps the details of which can be found in the in the appendix of our investor presentation. Turning to Midstream we're excited to report Oasis executed final agreements for the dedication of certain Delaware acreage to OMP via the Panther DevCo. Additionally Oasis has continued to move closer to towards a long-term agreement for gas gathering and processing in the Delaware and we will likely be in a position to elaborate more early next year. Total midstream capex was $37 million in the third quarter and we are trending below our previous full year guidance range. Net capex to Oasis attributable to its retained interest is expected to range between $14 million and $15 million. This excludes Delaware spending which will be in reimbursed by OMP in the fourth quarter. We'll be talking in more detail on the O&P call shortly and I would also direct you to our O&P press release for more color on our continued success on the midstream front. To sum things up Oasis has a laser focus on increasing operational efficiency reducing costs and maximizing profitability. The team continues to execute well and we're in a strong position to deliver repeatable long-term growth significant free cash flow generation and continued reduction of debt.

With that I'll turn the call back over to Chad to open the line for questions.