Oasis Petroleum Inc. (NYSE:OAS) Q2 2020 Earnings Conference Call - Final Transcript

Aug 05, 2020 • 11:00 am ET

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Oasis Petroleum Inc. (NYSE:OAS) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, my name is Jason and I will be the conference operator today. At this time, I'd like to welcome everyone to the Second Quarter 2020 Earnings Release and Operations Update for Oasis Petroleum. Today Oasis management will discuss second quarter 2020 results in the current environment. Please note this event is being recorded.

I will now turn the call over to Michael Lou, Oasis Petroleum's CFO, to begin the conference. Thank you.

Executive
Michael Lou

Thank you Jason. Good morning everyone. Today, we are reporting our second quarter 2020 financial and operational results. We're delighted to have you on our call. I'm joined today by Tommy Nusz and Taylor Reid as well as other members from our team.

Please be advised that our remarks on both Oasis Petroleum and Oasis Midstream Partners include statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those currently disclosed in our earnings releases and conference calls. Those risks include, among others, matters that we have described in our earnings releases as well as in our filings with the Securities and Exchange Commission including our annual report on Form 10-K and our quarterly reports on Form 10-Q. We disclaim any obligation to update these forward-looking statements.

During this conference call, we will make reference to non-GAAP measures, and reconciliations to the applicable GAAP measures can be found in our earnings releases and on our websites. We will not be hosting a Q&A session during today's call, but our team will be available after our call as needed.

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

Executive
Thomas Nusz

Thanks Michael. Good morning and thanks for joining our call. As you all know, the second quarter was one of the most volatile quarters we have ever witnessed in the industry given the unprecedented and dramatic changes in supply and demand brought about by various factors including the COVID-19 pandemic. I'm very proud of our team -- how our team has responded in what has been and continues to be very challenging circumstances while remaining focused on the health and safety of our employees, contractors and our communities. In the face of rapid change and macro conditions, we were able to power down our capital activity in an orderly manner with minimal cancellation penalties, similar to what we did in 2015. And similar to 2015, our cash flow was protected through our proactive hedging program.

Coming into the year, we had about 70% of our 2020 volumes hedged, basically with a floor of $54, and you will see that in our EBITDA. Additionally, we took aggressive steps to lower capital spend on our cost structure, including both operating and administrative costs, with full benefit on the administrative side to be recognized in subsequent quarters.

On the operating side this quarter, we quickly and effectively managed the curtailment and shut-in program to protect cash