Q2 2020 Oasis Midstream Partners LP Earnings Call

[noise]. Good morning, My name is mix and I'll be your conference operator today.

Tom I'd like to welcome everyone looks like a quarter 2020 earnings release, it operations update for a waitress midstream partners.

[noise] oysters management will discuss second quarter 2020 results the current environment.

Please note that this event is being recorded.

About what the told the conference over to Mr., Richard Robach voices midstream CFO to begin the conference. Thank you.

Thanks, Nick Good morning, everyone. This is Richard Roberts, they were reporting our second quarter 2020 financial and operational results.

Why did have you ever cool I'm joined on the call today by Taylor read and Michael Lou.

Please be advised her remarks on valuations petroleum bad voices Midstream partners include statements that we believed to be forward looking statements and then the meaning of the private Securities Litigation Reform Act.

Forward looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those currently disclosed our earnings release and conference call. Those risks include among others matters that we have described in our earnings releases as well as our filings with the Securities and Exchange Commission, including Art 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 also make references to certain non-GAAP financial measures reconciliations to the a clinical got measures can be found in our earnings release and on our website.

Not be hosting acuity session on our call today, but the team will be available after the call as needed.

That I'll turn the call over to Taylor.

Good morning, everyone and thanks for joining our call.

We continue to live in extraordinary times and remain focused on the health and safety of our employees contractors a community.

Second quarter was one of the most challenging I've seen it almost four decades in the industry.

And the on T O M. P team performed exceptionally well given the circumstances.

I think everything in their power to a job.

Including lowering capital and reducing cost.

Importantly, Oh I P entered this period of lower leverage that many gathering and processing peers, which gives us significant flexibility to manage the weaker period.

Also operationally I won't be as been executing well performing preventative maintenance minimizing turnarounds and maximizing uptime, all of which contribute to the bottom line and give us confidence in our ability to manage through difficult times.

Okay, thank or buy assets situated in two of the best oil basins in the U.S.

It has it had a strong track record and making accretive investments.

And leveraging our scale by securing third party customers now numbering into double digits.

I should note the team recently added another third party crude gathering deal in the Delaware.

Second quarter results were impacted by shut ins, which most of you know were pervasive across the Wilson.

The basin hit a low point on volumes in May as global supply and demand disruptions were compounded by regional impact, which led to very weak pricing into bucket.

However in mid to late May the situation improved considerably up allowing many operators.

Including our sponsored to partially resumed shut in production.

And boys recovered steadily through June or July.

On that note second quarter performance was stronger than our original expectations.

Largely reflecting the resumption to shut in volumes are just alluded to.

In addition, operational performance was solid as operating costs and maintenance capital were kept in check.

This performance, while I don't want Peter declare a second quarter distribution of 54 cents per year.

With approximately coverage of approximately 1.2 times when adjusting for onetime interest charges.

We will continue to monitor the environment and evaluate operational by its performance to informed decisions on future distributions.

Tighten the range on a 2020 capital guidance.

Still expect Miss your spending levels to fall about two thirds below the original budget.

$25 million to $30 million net Oh a piece.

We continue to take the prudent approach to the current environment in an effort to preserve the balance sheet and maintain old piece what ability.

Capture rates were strongest quarter as all these systems experienced little downtime.

In the latter sponsor to maintain its purely performance in gas capture as well as oil and water captured on pipeline.

As opposed to truck.

Wallpaper gas capture was about 99% in the second quarter, which compares to approximately 89% across North Dakota.

I commend the operating team for strong performance in both cost control.

And product capture and I challenged to keep up the good work.

I'll now turn the call over to Michael to get into a little more operational details.

Thanks, Taylor I want the remains focused on a on what it can control executing operationally cost reduction in protecting value for its customers.

During the second quarter direct operating and maintenance costs fell 34% sequentially, while total net capital expenditures fell 86%.

Volumetrically as Taylor mentioned conditions were challenged versus the prior quarter.

However, operationally performance was strong leading our customers to capture almost 100% of their gas I.

Additionally, approximately 95% of water volumes were captured on pipeline and almost 100% of oil.

At Panther performance benefited from bringing on multiple wells in one p. dedicated acreage, bringing volumes to record levels for Panther.

Looking to the remainder of 2020, our sponsors indicated most of shut in volumes were back online as of July and third quarter production levels should average higher than the second.

Their volumes are expected to be steady through the remainder of 2020.

Separately, we've engaged with third parties to get a sense of their programs as well.

Given our current outlook, we expect Olympias 2020, EBITDA to range between 130 million to $140 million.

Well, we believe this environment is transitory and ultimately prices and the industry activity will improve the timing is such a recoveries uncertain and we will continue to manage the business prudently to conserve capital and preserve the balance sheet.

With that I'll hand, the call over to Richard.

Thanks, Michael.

Selling piece financial position remains strong.

Net debt to trailing 12 month EBITDA was 2.8 times with 486 million drawn on our revolver and 27 million of cash.

June Thirtyth, we currently expect leverage to remain at similar levels through the end of the year in closing as a challenging quarter for us and the industry would own p. rose to the challenge and once again executed exceptionally well given the circumstances conditions have improved over the past several months, but volatility remains high.

And he will manage the business prudently by keeping a laser focus on cost and maintaining flexibility.

Ill now hand, the call back over to tailor for his closing remarks.

Thanks Richard.

In closing second quarter results were solid, especially considering the unprecedented conditions. The team was forced to work through.

As always we will make ourselves available for any follow up questions.

Thanks again for joining the call today.

[noise] Conference has now concluded.

Thank you for attending today's presentation.

You may now disconnect.