Oasis Midstream Partners (OMP) has agreed to acquire all remaining interests in US midstream entities Bobcat DevCo and Beartooth DevCo from Oasis Petroleum for around $510m.
A contribution and simplification agreement has been signed by the parties.
Under the deal, Oasis Midstream Partners will pay $229m in cash and issue 14.8 million of its common units to Oasis Petroleum.
Additionally, the deal eliminates incentive distribution rights (IDRs) from the capital structure of Oasis Midstream Partners.
The midstream partnership, through simplification, will increase its stake in Bobcat DevCo to 100% from 35% and from 70% to 100% in Beartooth DevCo.
Oasis Midstream Partners is a gathering and processing master limited partnership formed by Oasis Petroleum.
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By GlobalDataOasis Midstream Partners CEO Taylor Reid said: “This accretive transaction enhances our scale and strengthens OMP’s attractive position in the core of the Williston Basin. OMP is uniquely positioned to benefit from Oasis’s development program and capture additional third-party business.
“Volumes from both Oasis and third parties provide a solid foundation through 2021 and beyond. This transaction is extremely attractive for our investors by allowing OMP to increase its scale in an accretive manner while improving its competitive position to capitalize on future opportunities.”
The simplification also includes a right of first refusal in favour of Oasis Midstream Partners pertaining to midstream opportunities in the Painted Woods and City of Williston operating areas of its sponsor company.
Oasis Petroleum board chair and CEO Douglas Brooks said: “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.”
Subject to customary closing conditions, the deal is expected to be closed by the end of this month.
Engaged in gathering infrastructure supporting Wild Basin, Bobcat DevCo assets include crude oil and natural gas gathering and compression, a natural gas lift system, and a water gathering and disposal system.
Beartooth DevCo’s assets include pipeline system, freshwater sourcing and distribution, and disposal wells.
