Oasis Midstream Partners LP 2019 Q4 - Results - Earnings Call Presentation

The following slide deck was published by Oasis Midstream Partners LP in conjunction with their 2019 Q4 earnings call.

Comments

[dlitten]

oas debt in default and omp rises 20%...

[Lenore Goldberg]

Obviously sold out my OMP puts this morning, leaving me exposed, but on a small position. I don't see any reason to sell that here.

Otherwise, trying to do some buying, not getting any closes. No one seems to want to sell at the prices being shown (this is after the trading halt).

[Lenore Goldberg]

Oops, I just closed ENCL at $2.11. I really like CNXM (no oil exposure), but even at an $8 bid, nothing so far (it's showing in the mid $7's). Ah, just closed WES at $7.72, so it's loosening up. I'm just looking at gas names, not going to touch anything else.

[tman1]

adding on EPD, this is beyond nuts

[Lenore Goldberg]

Concentrating on gas names, got some CNXM at $9.25, more WES at $7.09, that dropped.

I monetized all my OMP puts for a whopping profit, needless to say. That really filled the old cookie jar. My remaining OMP position is now exposed, but it's too small to worry about protecting anyway.

EPD . . . too much oil export stuff going on there. I don't think there's going to be that much excess production to export once shale decline sets in. Only the majors would drill in this atmosphere, and even they might slow their roll.

[dlitten]

$30 oil = no new wells in bakken

[Lenore Goldberg]

No wells anywhere.

[dlitten]

tru.
meaning $30 can't last very long.
question is can oas wait long enough.

[dlitten]

unfortunately, oas sold puts on approx 1/3 of their 2020 production at $40. so they are not exactly hedged; they got greedy thinking they ought to be speculating in oil options rather than focus on delevering...

[Lenore Goldberg]

An 18% yield, leverage under 2.5X, double coverage, 20% distribution growth . . . the yield security of the century. Except it could all come crashing down in a courtroom this summer. Sad.

[dlitten]

can also come crashing down when oas (currently 90% debt) becomes insolvent. thrn becomes question of whether contracts with oas are at market or above market.

[Lenore Goldberg]

Actually OMP is primarily built on handling gas and water, the big new "gas plant II" (dull name) driving their growth. They have oil gathering agreements, sure, but what will post Chapter 11 OAS do with those wells? Cap them?

[dlitten]

if oas falls, reorganized entity will seek market rates for gas processing.

initially, e&p has incentive to give margin to controlled midstream subsidiary. not sure how arms-length is current rates.