HOUSTON, March 22, 2021
/PRNewswire/ -- Oasis Petroleum Inc. (Nasdaq: OAS) ("Oasis" or the
"Company") today announced that it has entered into a contribution
and simplification agreement pursuant to which it would contribute
all of its remaining interests in Bobcat DevCo LLC ("Bobcat DevCo")
and Beartooth DevCo LLC ("Beartooth DevCo") to Oasis Midstream
Partners LP (Nasdaq: OMP) ("OMP" or the "Partnership") as well as
eliminate its incentive distribution rights ("IDRs") in exchange
for $229 million in cash and 14.8
million OMP common units for total consideration of approximately
$510 million based on OMP's 20 day
volume weighted average price ending on March 19, 2021 (the "Simplification"). The
Simplification is accretive to both Oasis and OMP and reduces
Oasis' net debt at year-end 2020 to approximately $16 million, pro forma for the cash proceeds of
the Simplification and before taxes and expenses.
Oasis also announced today that its board of directors has
authorized a new $100 million
share-repurchase program, in addition to its recently announced
dividend of $1.50/share per year.
This share-repurchase program expires on December 31, 2022.
"The Oasis team is excited to announce the Simplification of OMP
and a share-repurchase program," said Douglas E. Brooks, Oasis' Board Chair and Chief
Executive Officer. "Today's announcements are the latest of a
series of value-focused initiatives that management and the board
of directors have delivered this year. Through this Simplification,
we were able to enhance the financial profiles of both Oasis and
OMP, while strengthening our competitive position. Oasis'
share-repurchase program announced today further demonstrates the
strength of our assets and our commitment to find ways to return
cash and value to our shareholders."
Douglas E. Brooks continued, "The
Simplification increases transparency of Oasis' midstream ownership
and highlights significant value within Oasis while improving OMP's
scale and competitive positioning. This transaction is a compelling
proposition for both Oasis and OMP investors and was unanimously
approved by the board of directors of Oasis and the general partner
of OMP as well as its conflicts committee. OMP remains a valuable
investment for Oasis and we will continue evaluating additional
options for further value enhancement."
After the Simplification, all cash flows from OMP to Oasis will
be through Oasis' ownership in OMP common units. The general
partner's Class B Units issued as equity incentives will be
exchanged for 155,780 OMP common units, further aligning management
and public unitholder incentives for value creation. Oasis is
expected to own 37.5 million OMP common units, or 77.1%, of the OMP
common units outstanding pro forma for the Simplification. Oasis
originally guided to $53 million
annual EBITDA derived from OMP limited partner and general partner
distributions plus another $81
million to $84 million of
EBITDA from its ownership in Bobcat DevCo and Beartooth DevCo for
2021. Upon completion of the Simplification, Oasis expects
cash flows from OMP limited partner distributions of approximately
$81 million for 2021, as OMP has
indicated its current operational and financial outlook supports
holding the current $0.54/unit per
quarter distribution flat.
The divested assets include the Partnership's IDRs, an
approximate 65% interest in Bobcat DevCo, and a 30% interest in
Beartooth DevCo. The transaction is expected to close before the
end of March, subject to customary closing conditions. Citigroup
Global Markets Inc. is serving as financial advisor to Oasis and
Vinson & Elkins L.L.P. is serving as legal advisor to Oasis.
The Company posted an updated investor presentation to its website
at www.oasispetroleum.com.
OAS Revolving Credit Facility
In conjunction with the Simplification, Oasis completed its
second amendment to its credit agreement. The amendment
includes a reduction of the borrowing base from $575 million to $500
million to account for the Simplification and reduces
elected commitment amounts to $450
million. Additionally, the amendment provides the
ability to initiate share-repurchases that were otherwise prevented
until the Company reported third quarter 2021 covenant compliance.
Lastly, the rolling hedging requirement is reduced, and incremental
flexibility is added to allow for restructuring Oasis' existing
hedge position.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All
statements, other than statements of historical facts, included in
this press release that address activities, events or developments
that the Company expects, believes or anticipates will or may occur
in the future are forward-looking statements. Without limiting the
generality of the foregoing, forward-looking statements contained
in this press release specifically include the expectations
surrounding the closing of the Simplification as well as the
benefits of it and related transactions, as well as plans,
strategies, objectives and anticipated financial and operating
results of the Company, including the Company's derivatives
activities, levels of indebtedness and anticipated EBITDA
contribution from OMP and other guidance included in this press
release. These statements are based on certain assumptions made by
the Company based on management's experience and perception of
historical trends, current conditions, anticipated future
developments and other factors believed to be appropriate. Such
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of the Company,
which may cause actual results to differ materially from those
implied or expressed by the forward-looking statements. These
include, but are not limited to, closing of the Simplification and
related transactions, changes in crude oil and natural gas prices,
weather and environmental conditions, the timing of planned capital
expenditures, availability of acquisitions, uncertainties in
estimating proved reserves and forecasting production results,
operational factors affecting the commencement or maintenance of
producing wells, the condition of the capital markets generally, as
well as the Company's ability to access them, the proximity to and
capacity of transportation facilities, and uncertainties regarding
environmental regulations or litigation and other legal or
regulatory developments affecting the Company's business and other
important factors that could cause actual results to differ
materially from those projected as described in the Company's
reports filed with the Securities and Exchange Commission.
Any forward-looking statement speaks only as of the date on
which such statement is made and the Company undertakes no
obligation to correct or update any forward-looking statement,
whether as a result of new information, future events or otherwise,
except as required by applicable law.
About Oasis Petroleum Inc.
Oasis is an independent exploration and production company
focused on the acquisition and development of onshore,
unconventional crude oil and natural gas resources in the United States. For more information,
please visit the Company's website at www.oasispetroleum.com.
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SOURCE Oasis Petroleum Inc.; Oasis Midstream Partners LP
