Gathering and processing master limited partnership Oasis Midstream Partners (OMG) announced this week it agreed to acquire all remaining interests in Bobcat DevCo and Beartooth DevCo. Accordingly, the alliance agreed to acquire the entities for around $510m.
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Oasis Midstream Partners on acquiring Bobcat DevCo and Beartooth DevCo remaining interests
This week, Oasis Midstream Partners announced it will acquire all remaining interests in US midstream entities Bobcat DevCo and Beartooth DevCo. In fact, the acquisition was from Oasis Petroleum for around $510m. Accordingly, the parties signed a contribution and simplification agreement.
Under the deal, Oasis Midstream Partners will pay $229m in cash. Moreover, the partnership will issue 14.8 million of its standard units to Oasis Petroleum.
Additionally, the deal eliminates incentive distribution rights from the capital structure of Oasis Midstream Partners.
Accordingly, the midstream partnership, through simplification, will increase the partnership’s stake in Bobcat DevCo to 100% from 35%. Also, from 70% to 100% in Beartooth DevCo.
Besides, the simplification includes a right of first refusal in favor of Oasis Midstream Partners. In fact, it was pertaining to midstream opportunities in the Painted Woods and City of Williston operating areas of its sponsor company.
Reception and forecasts
In this regard, Oasis Midstream Partners CEO Taylor Reid said: “This accretive transaction enhances our scale. Besides, it strengthens OMP’s attractive position in the core of the Williston Basin. In fact, OMP is uniquely positioned to benefit from Oasis’s development program and capture additional third-party business.”
Furthermore, “volumes from both Oasis and third parties provide a solid foundation through 2021 and beyond. Thus, this transaction is extremely attractive for our investors by allowing OMP to increase its scale in an accretive manner. All of this, while improving its competitive position to capitalize on future opportunities.”
Oasis Petroleum’s board chair and CEO Douglas Brooks said: “The Simplification increases Oasis’s transparency of midstream ownership. Furthermore, it highlights significant value within Oasis while improving OMP’s scale and competitive positioning.
Finally, “this transaction is a compelling proposition for both Oasis and OMP investors. Moreover, it was unanimously approved by the board of directors of Oasis and the general partner of OMP and its conflicts committee. Therefore, OMP remains a valuable investment for Oasis. Thus, we will continue evaluating additional options for further value enhancement.”
Subject to customary closing conditions, the parties expect to close the deal by the end of this month.
Finally, Bobcat DevCo’s assets in the transaction include crude oil and natural gas gathering and compression. Also, a natural gas lift system and a water gathering and disposal system.
On the other hand, Beartooth DevCo’s assets include pipeline systems, freshwater sourcing and distribution, and disposal wells.