The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" contained in our
Annual Report on Form 10-K for the year ended December 31, 2019 ("2019 Annual
Report"), as well as the unaudited condensed consolidated financial statements
and notes thereto included in this Quarterly Report on Form 10-Q.
              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. These
forward-looking statements are subject to a number of risks and uncertainties,
many of which are beyond our control. Forward-looking statements give our
current expectations, contain projections of results of operations or of
financial condition or provide forecasts of future events. Words such as "may,"
"assume," "forecast," "position," "predict," "strategy," "expect," "intend,"
"plan," "estimate," "anticipate," "believe," "project," "budget," "potential,"
"continue" and other similar expressions are used to identify forward-looking
statements.
Forward-looking statements can be affected by the assumptions used or by known
or unknown risks or uncertainties. Consequently, no forward-looking statements
can be guaranteed. When considering these forward-looking statements, you should
keep in mind the risk factors and other cautionary statements discussed below
and detailed under Part II, Item 1A. "Risk Factors" in this Quarterly Report on
Form 10-Q. Actual results may vary materially. Although forward-looking
statements reflect our good faith beliefs at the time they are made, you are
cautioned not to place undue reliance on any forward-looking statements. You
should also understand that it is not possible to predict or identify all such
factors and you should not consider the following list to be a complete
statement of all potential risks and uncertainties. In addition, our
forward-looking statements address the various risks and uncertainties
associated with the extraordinary market environment and impacts resulting from
the novel coronavirus 2019 ("COVID-19") pandemic and the actions of foreign oil
producers (most notably Saudi Arabia and Russia) to increase crude oil
production and the expected impact on our businesses, operations, earnings and
results. Factors that could cause our actual results to differ materially from
the results contemplated by such forward-looking statements include but are not
limited to:
•the continuation of a swift and material decline in global crude oil demand and
crude oil prices for an uncertain period of time that correspondingly may lead
to a significant reduction of domestic crude oil and natural gas production,
which in turn could result in significant declines in the actual or expected
volumes transported through our pipelines and/or the reduction of commercial
opportunities that might otherwise be available to us;
•developments in the global economy as well as the public health crisis related
to the COVID-19 virus and resulting demand and supply for crude oil and natural
gas;
•uncertainty regarding the length of time it will take for the U.S. and the rest
of the world to slow the spread of the COVID-19 virus to the point where
applicable authorities are comfortable easing current restrictions on various
commercial and economic activities; such restrictions are designed to protect
public health but also have the effect of significantly reducing demand for
crude oil and natural gas;
•uncertainty regarding the future actions of foreign oil producers such as Saudi
Arabia and Russia and the risk that they take actions that will prolong or
exacerbate the current over-supply of crude oil;
•uncertainty regarding the timing, pace and extent of an economic recovery in
the U.S. and elsewhere, which in turn will likely affect demand for crude oil
and natural gas and therefore the demand for the midstream services we provide
and the commercial opportunities available to us;
•the effect of an overhang of significant amounts of crude oil and natural gas
inventory stored in the U.S. and elsewhere and the impact that such inventory
overhang ultimately has on the timing of a return to market conditions that
support increased drilling and production activities in the U.S.;
•an inability of Oasis Petroleum or our other customers to meet their
operational and development plans on a timely basis or at all;
•the execution of our business strategies;
•the demand for and price of crude oil and natural gas, on an absolute basis and
in comparison to the price of alternative and competing fuels;
•the fees we charge, and the margins we realize, from our midstream services;
•the cost of achieving organic growth in current and new markets;
•our ability to make acquisitions of other midstream infrastructure assets or
other assets that complement or diversify our operations;
•our ability to make acquisitions of other assets on economically acceptable
terms from Oasis Petroleum;
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•our inability to perform our obligations under our contracts, whether due to
non-performance by third parties, including our customers or other
counterparties, market constraints, third-party constraints, legal constraints
(including governmental orders or guidance), or other factors;
•the lack of asset and geographic diversification;
•the suspension, reduction or termination of our commercial agreements with
Oasis Petroleum;
•labor relations and government regulations;
•competition and actions taken by third party producers, operators, processors
and transporters;
•outcomes of litigation and regulatory investigations, proceedings or inquiries;
•the demand for, and the costs of developing and conducting, our midstream
infrastructure services;
•general economic conditions, including the risk of a prolonged economic
slowdown or decline, or the risk of delay in a recovery, which can affect the
long-term demand for natural gas and crude oil and related services;
•the price and availability of equity and debt financing;
•operating hazards, natural disasters, weather-related delays, casualty losses
and other matters beyond our control;
•potential effects arising from cyber threats, terrorist attacks and any
consequential or other hostilities;
•interruption of our operations due to social, civil or political events or
unrest;
•changes in environmental, safety and other laws and regulations;
•the effects of accounting pronouncements issued periodically during the periods
covered by forward-looking statements;
•changes in our tax status;
•uncertainty regarding our future operating results; and
•certain factors discussed elsewhere in this Quarterly Report on Form 10-Q.
All forward-looking statements speak only as of the date of this Quarterly
Report on Form 10-Q. We disclaim any obligation to update or revise these
statements unless required by securities law. Although we believe that our
plans, intentions and expectations reflected in or suggested by the
forward-looking statements we make in this Quarterly Report on Form 10-Q are
reasonable, we can give no assurance that these plans, intentions or
expectations will be achieved. Some of the key factors which could cause actual
results to vary from our expectations include, but are not limited to, commodity
price volatility, inflation, environmental risks, drilling and other operating
risks, regulatory changes, the uncertainty inherent in projecting future
throughput volumes, cash flow and access to capital, the timing of development
expenditures and the other risks described under Part II, Item 1A. "Risk
Factors" in this Quarterly Report on Form 10-Q.
Overview
We are a growth-oriented, fee-based master limited partnership formed by our
sponsor, Oasis Petroleum Inc. ("Oasis Petroleum") (Nasdaq: OAS), to own,
develop, operate and acquire a diversified portfolio of midstream assets in
North America that are integral to the crude oil and natural gas operations of
Oasis Petroleum and are strategically positioned to capture volumes from other
producers. Our midstream operations are performed within the Williston Basin and
the Delaware Basin. We generate the majority of our revenues through long-term,
fixed-fee contracts pursuant to which we provide crude oil, natural gas and
water-related midstream services for Oasis Petroleum. We expect to grow
acquisitively through accretive, dropdown acquisitions, as well as organically
as Oasis Petroleum continues to develop its acreage. Additionally, we expect to
grow by continuing to offer our services to third parties and through
acquisitions of midstream assets from third parties.
In the Williston Basin, we divide our operations into two primary areas with
developed midstream infrastructure, both of which are supported by significant
acreage dedications from Oasis Petroleum. In Wild Basin, we have acreage
dedications from Oasis Petroleum in which we have the right to provide crude
oil, natural gas and water services to support Oasis Petroleum's existing and
future volumes. Outside of Wild Basin, we have acreage dedications from Oasis
Petroleum for produced and flowback water services and freshwater services. In
the Delaware Basin, we have acreage dedications from Oasis Petroleum for crude
oil gathering and produced and flowback water gathering and disposal services.
We have also received certain commitments and acreage dedications from third
parties in the Williston Basin and the Delaware Basin, in which we have the
right to provide our full suite of midstream services to support existing and
future third party volumes.
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We conduct our business through our ownership of our DevCos, two of which are
jointly-owned with Oasis Petroleum. As of March 31, 2020, we own a 100% equity
interest in Bighorn DevCo LLC ("Bighorn DevCo"), a 35.3% equity interest in
Bobcat DevCo LLC ("Bobcat DevCo"), a 70% equity interest in Beartooth DevCo LLC
("Beartooth DevCo") and a 100% equity interest in Panther DevCo LLC ("Panther
DevCo"). As of March 31, 2020, Oasis Petroleum owns a 64.7% and 30%
non-controlling equity interest in Bobcat DevCo and Beartooth DevCo,
respectively.
We are party to long-term, fixed-fee contracts with wholly-owned subsidiaries of
Oasis Petroleum for natural gas services (gathering, compression, processing,
gas lift and natural gas liquids ("NGLs") storage), crude oil services
(gathering, stabilization, blending and storage), produced and flowback water
services (gathering and disposal) and freshwater services (fracwater and
flushwater supply and distribution). We are also a party to the long-term,
Federal Energy Regulatory Commission ("FERC") regulated transportation services
agreement governing the transportation of crude oil via pipeline from the Wild
Basin area to Johnson's Corner. The amount of revenue we generate primarily
depends on the volume of crude oil, natural gas and water for which we provide
midstream services. We generate a substantial majority of our revenues through
these contracts, which minimizes our direct exposure to commodity prices.
While we have increased our customer diversification by entering into multiple
agreements and transactions with third parties to provide our full suite of
midstream services, we are largely dependent on Oasis Petroleum as our most
significant customer. Based on the current commodity price environment, Oasis
Petroleum has expressed substantial doubt about its ability to continue to
operate as a going concern, and financial distress at Oasis Petroleum could have
a material adverse effect on the Partnership's results of operations (see Item
1. "Financial Statements (Unaudited) - Note 2 - Summary of Significant
Accounting Policies - Risks and Uncertainties"). However, an event of default or
bankruptcy of Oasis Petroleum would not trigger an automatic acceleration of
indebtedness under our Revolving Credit Facility, as there are not any
cross-acceleration or cross-default provisions between the Oasis Petroleum
credit agreement and our Revolving Credit Facility.
Our operating and financial results are substantially dependent on our ability
to maintain or increase existing throughput volumes on our systems. Throughput
volumes are affected by changes in the supply of and demand for crude oil and
natural gas in the markets served directly or indirectly by our assets.
Beginning in the first quarter of 2020, commodity prices declined significantly
as a result of macroeconomic factors, including demand impacts due to global
disruptions resulting from COVID-19 and supply impacts related to production
increases by members of the Organization of Petroleum Exporting Countries
("OPEC") and other non-OPEC, oil producing countries, including Russia. In
response to these events, U.S. onshore producers have announced plans which
could adversely impact our ability to maintain or increase existing throughput
volumes, including reductions to capital spending, changes to development plans
and delays in production. We cannot predict whether or when crude oil production
and economic activities will return to normalized levels. The commodity price
environment is expected to remain depressed based on over-supply, decreasing
demand and a potential global economic recession, discussed further below.
Ultimately, a prolonged period of lower commodity prices may adversely affect
our operating results and cash flows through lower throughput volumes on our
assets, which could result in future impairment charges. If constraints continue
such that storage becomes unavailable to our customers, including Oasis
Petroleum, or commodity prices remain depressed, they may be forced or elect to
shut-in some or all of their production or delay or discontinue drilling plans,
which would result in a further decline in demand for our services. In addition,
we generate the majority of our revenues pursuant to fee-based agreements, and
producers could seek to amend existing contracts to reduce the volumetric fees
we charge.
We routinely evaluate the existence of triggering events which could indicate
the carrying amount of our property, plant and equipment may not be recoverable.
Impairment indicators include, but are not limited to, sustained decreases in
commodity prices, a decline in customer well results and lower throughput
forecasts, changes in customer development plans and/or increases in
construction or operating costs. We determined that lower forecasted throughput
volumes, resulting from changes to customers' development plans due to expected
sustained significant decreases in commodity prices, which began during the
first quarter of 2020, was an impairment indicator and completed a Step 1
impairment analysis by comparing the undiscounted future cash flows to the
carrying amounts for each of our crude oil, natural gas, freshwater and produced
and flowback water asset groups in the Williston Basin and the Delaware Basin.
We determined the carrying amounts of our crude oil and freshwater asset groups
in the Williston Basin and our crude oil and produced and flowback water asset
groups in the Delaware Basin were not recoverable and recorded impairment
charges of $101.8 million (see Item 1. "Financial Statements (Unaudited) - Note
6 - Property, Plant and Equipment"). If commodity prices continue to decline or
remain at depressed levels for a prolonged period of time, if there are shut-ins
of production from our customers' existing producing wells or if there are
significant changes in the future development plans of our customers, including
Oasis Petroleum, to the extent they affect our operations, such circumstances
may necessitate assessment of the carrying amount of our affected assets for
recoverability and may result in additional impairment charges in the future. If
the United States oil and gas industry continues to experience an imbalance of
supply and demand as it endured during the first quarter of 2020, it is likely
that our operations will be so affected and future impairment charges will be
incurred.
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COVID-19
On March 13, 2020, the United States declared the COVID-19 pandemic a national
emergency, and several states, including Texas, North Dakota and Montana, and
municipalities have declared public health emergencies. Along with these
declarations, there have been extraordinary and wide-ranging actions taken by
international, federal, state and local public health and governmental
authorities to contain and combat the outbreak and spread of COVID-19 in regions
across the United States and the world, including mandates for many individuals
to substantially restrict daily activities and for many businesses to curtail or
cease normal operations. These containment measures, while aiding in the
prevention of further outbreak of COVID-19, have resulted in a severe drop in
energy demand and general economic activity. To the extent COVID-19 continues or
worsens, governments may impose additional similar restrictions. We have taken,
and continue to take, proactive steps to manage any disruption in our business
caused by COVID-19. For instance, even though our operations were not required
to close, we were early adopters in employing a work-from-home system and have
deployed additional safety protocols at our operating sites in order to keep our
employees and contractors safe and to keep our operations running without
material disruption.
The rapid and unprecedented decreases in energy demand have impacted certain
elements of our distribution channels. We are also experiencing impacts from
downstream markets, as certain pipelines no longer have the ability to transport
production as refineries reduce activity or exercise force majeure clauses.
Additionally, inventory surpluses have overwhelmed U.S. storage capacity,
leading to a further strain on the supply chain. The constraints to the supply
chain could force our customers, including Oasis Petroleum, to shut in
production of certain U.S. onshore wells in the future, which would result in a
further decline in demand for our services.
Due to a combination of the foregoing COVID-19 pandemic-related pressures and
geopolitical pressures on the global supply and demand balance for crude oil and
related products, commodity prices have significantly declined in recent months.
In response, we have revised our planned capital program for 2020 and will
continue to evaluate our level of capital spending throughout the year. Please
see "Cash flows used in investing activities - 2020 Revised Capital Program"
below for a further description of our revised 2020 capital program.
Highlights:
Significant financial and operating results for the three months ended March 31,
2020 include:
•Net cash from operating activities was $61.7 million. Adjusted EBITDA was $72.9
million and Adjusted EBITDA attributable to the Partnership was $46.4 million.
Adjusted EBITDA is a non-GAAP financial measure. See "Non-GAAP Financial
Measures" below.
•Declared the quarterly cash distribution of $0.54 per unit for the first
quarter of 2020.
•Natural gas processing volumes were 242.4 MMscfpd, and approximately 30% of
these volumes were from third parties.
•Commenced third-party produced water gathering and disposal services in Wild
Basin.
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The following table summarizes the throughput volumes, operating income (loss),
depreciation, amortization and impairment and capital expenditures of each of
our DevCos for the three months ended March 31, 2020 and 2019. The amounts shown
in the table below are presented on a gross basis.
                                                                      Three Months Ended March 31,
                                                                       2020                      2019

                                                               (In thousands, except throughput volumes)
Bighorn DevCo
Crude oil services volumes (MBopd)                                          44.0                   50.6
Natural gas services volumes (MMscfpd)                                     242.4                  193.0
Operating income                                              $            1,325            $    10,564
Depreciation, amortization and impairment                                 21,644                  3,735

Capital expenditures                                                       3,629                  6,955
Bobcat DevCo
Crude oil services volumes (MBopd)                                          33.0                   42.5
Natural gas services volumes (MMscfpd)                                     280.3                  241.0
Water services volumes (MBowpd)                                             61.4                   51.2
Operating income                                              $           12,422            $    23,914
Depreciation, amortization and impairment                                 21,343                  2,919

Capital expenditures                                                      11,776                 34,533
Beartooth DevCo
Water services volumes (MBowpd)                                            133.4                  133.1
Operating income (loss)                                       $          (19,903)           $    13,509
Depreciation, amortization and impairment                                 35,656                  2,275

Capital expenditures                                                        (575)                 8,955
Panther DevCo
Crude oil services volumes (MBopd)                                           4.1                    0.5
Water services volumes (MBowpd)                                             30.2                   26.2
Operating income (loss)                                       $          (32,060)           $     1,295
Depreciation, amortization and impairment                                 33,321                     63

Capital expenditures                                                       9,610                  5,665
Oasis Midstream Partners LP
DevCo operating income (loss)                                 $          (38,216)           $    49,282
Public company expenses                                                      844                    900
Operating income (loss)                                                  (39,060)                48,382
Depreciation, amortization and impairment                                111,964                  8,992

Equity-based compensation expenses                                            66                    119
Capitalized interest                                                         249                     62
Maintenance capital expenditures                                           2,004                  4,390
Expansion capital expenditures                                            22,436                 51,718
Total capital expenditures                                                24,689                 56,170




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Items Affecting Comparability
2019 Delaware Acquisition. On November 1, 2019, we entered into an agreement
with Oasis Petroleum to acquire certain crude oil gathering and produced and
flowback water gathering and disposal assets in the Delaware Basin (the "2019
Delaware Acquisition"). The 2019 Delaware Acquisition was accounted for as a
transfer of net assets between entities under common control. As a result, the
financial information for the period prior to the effective date of November 1,
2019 has been recast. See Note 2 to our unaudited condensed consolidated
financial statements.
Results of Operations
Revenues
We categorize our revenues as either service revenues or product sales to the
respective line items described below.
•Midstream services - Oasis Petroleum. We record service revenues for fee-based
arrangements with Oasis Petroleum for midstream services, including: (i) natural
gas gathering, compression, processing, gas lift and NGL storage services;
(ii) crude oil gathering, stabilization, blending, storage and transportation
services; and (iii) produced and flowback water gathering and disposal services.
•Midstream services - third parties. We record service revenues from third
parties for produced and flowback water gathering and disposal services provided
to non-affiliated customers.
•Product sales - Oasis Petroleum. We record product sales for the sale of
residue gas and NGLs to certain subsidiaries of Oasis Petroleum, which we
generate from natural gas purchase agreements with third parties. We also record
product sales for the sale of freshwater supply and distribution to Oasis
Petroleum.
•Product sales - third parties. We record product sales from third parties for
the sale of freshwater supply and distribution to non-affiliated customers.
The following table summarizes our revenues for the periods presented:
                                              Three Months Ended March 31,
                                           2020           2019          Change

                                                     (In thousands)
Revenues
Midstream services - Oasis Petroleum   $  81,993       $ 77,063       $  4,930
Midstream services - third parties         3,846          1,127          2,719
Product sales - Oasis Petroleum           20,788         15,652          5,136
Product sales - third parties                  -             10            (10)
Total revenues                         $ 106,627       $ 93,852       $ 12,775



Three months ended March 31, 2020 as compared to three months ended March 31,
2019
Total midstream revenues increased $12.8 million to $106.6 million during the
three months ended March 31, 2020 as compared to the three months ended March
31, 2019. This increase was driven by a $5.1 million increase in product sales
and a $7.7 million increase in service revenues.
The increase in product sales was driven by a $4.2 million increase in natural
gas product sales to Oasis Petroleum resulting from an increase in gas volumes
supplied from third-party producers. In addition, there was a $0.9 million
increase in freshwater product sales due to an increase in freshwater deliveries
to Oasis Petroleum for well completions.
The increase in service revenues was driven by a $4.9 million increase in
natural gas service revenues due to an increase in natural gas volumes gathered
and processed from Oasis Petroleum, coupled with a $2.3 million increase in
produced and flowback water service revenues due to the commencement of
third-party produced water gathering and disposal services in Wild Basin. This
was offset by a $1.1 million decrease in crude oil service revenues due to fewer
crude oil volumes gathered and transported in Wild Basin.
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Operating expenses and other expenses
The following table summarizes our operating expenses and other expenses for the
periods presented:

Three Months Ended March 31,


                                                                      2020              2019              Change

                                                                                   (In thousands)
Operating expenses
Costs of product sales                                            $   8,432          $  8,065          $     367
Operating and maintenance                                            16,840            19,690             (2,850)
Depreciation and amortization                                        10,197             8,991              1,206
Impairment                                                          101,767                 -            101,767
General and administrative                                            8,451             8,723               (272)
Total operating expenses                                            145,687            45,469            100,218
Operating income (loss)                                             (39,060)           48,383            (87,443)
Other expenses
Interest expense, net of capitalized interest                       (30,257)           (3,969)           (26,288)
Other income (expense)                                                  (42)                -                (42)
Total other expenses, net                                           (30,299)           (3,969)           (26,330)
Net income (loss)                                                   (69,359)           44,414           (113,773)
Less: Net income attributable to Delaware Predecessor                     -             1,075             (1,075)
Less: Net income attributable to non-controlling interests            2,040            21,796            (19,756)

Net income (loss) attributable to Oasis Midstream Partners LP (71,399)

           21,543            (92,942)
Less: Net income attributable to General Partner                      1,008               238                770
Net income (loss) attributable to limited partners                $

(72,407) $ 21,305 $ (93,712)





Three months ended March 31, 2020 as compared to three months ended March 31,
2019
Costs of product sales. Costs of product sales increased $0.4 million for the
three months ended March 31, 2020 as compared to the three months ended March
31, 2019. The increase was primarily driven by a $1.0 million increase in
freshwater costs due to an increase in the volume of freshwater purchases for
deliveries to Oasis Petroleum, offset by a $0.7 million decrease in natural gas
product sale costs driven by lower residue gas prices and NGLs prices.
Operating and maintenance. Operating and maintenance expenses decreased $2.9
million to $16.8 million for the three months ended March 31, 2020. The decrease
was primarily driven by a $1.5 million decrease in natural gas operating and
maintenance expenses due to a reduction in gas processing expenses, coupled with
a $1.4 million decrease in crude oil operating and maintenance expenses
primarily due to a reduction in crude oil trucking in Wild Basin.
Depreciation and amortization. Depreciation and amortization expenses increased
$1.2 million to $10.2 million for the three months ended March 31, 2020. This
increase was a result of additional assets placed into service.
Impairment. We recorded impairment charges of $101.8 million for the three
months ended March 31, 2020 due to lower forecasted throughput volumes as a
result of changes in customers' development plans due to the significant decline
in commodity prices. No impairment charges were recorded for the three months
ended March 31, 2019.
General and administrative ("G&A") expenses. G&A expenses decreased $0.3 million
to $8.5 million for the three months ended March 31, 2020. The decrease was
primarily a result of a reduction in allocated charges from Oasis Petroleum for
G&A services.
Interest expense, net of capitalized interest. Interest expense, net of
capitalized interest, increased $26.3 million to $30.3 million for the three
months ended March 31, 2020 as compared to the three months ended March 31,
2019. The increase was primarily due to an additional interest charge of $25.9
million pursuant to the Limited Waiver (defined below in "Liquidity and Capital
Resources - Cash flows used in financing activities").
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Liquidity and Capital Resources
Our primary sources of liquidity are cash flows generated from operations and
borrowings under our Revolving Credit Facility. We believe cash generated from
these sources will be sufficient to meet our short-term working capital needs,
long-term capital expenditure requirements and quarterly cash distributions. We
expect to fund future expansion capital expenditures and acquisitions primarily
through a combination of borrowings under our Revolving Credit Facility and, if
necessary, the issuance of additional equity or debt securities. Our primary
uses of cash have been for capital expenditures towards our midstream
infrastructure, dropdown acquisitions from Oasis Petroleum, distributions to our
unitholders, payment of operating costs and interest payments on outstanding
debt. We expect our future cash requirements relating to working capital,
maintenance capital expenditures and quarterly cash distributions to our
unitholders will be funded from cash flows internally generated from our
operations. We expect to have adequate liquidity to meet our future cash
requirements; however, extended disruptions in the financial markets and/or
energy price volatility that adversely affect our business may have a material
adverse effect on our financial position, results of operations or cash flows,
as well as our ability to access sources of capital. Please see Part II. Item
1A. "Risk Factors" for more information regarding such risks.
Oasis Petroleum has expressed substantial doubt about its ability to continue to
operate as a going concern. We are largely dependent on Oasis Petroleum as our
most significant customer, and the impact of financial distress at Oasis
Petroleum could have a material adverse effect on our results of operations. We
believe we will continue to provide midstream services pursuant to our
commercial agreements with Oasis Petroleum, and we expect to have sufficient
liquidity to meet our obligations as they come due during the next twelve
months. We do not have any near-term debt maturities, as our Revolving Credit
Facility matures on September 25, 2022, and there are not any cross-acceleration
or cross-default provisions between the Oasis Petroleum credit agreement and our
Revolving Credit Facility. We do not expect a violation of any financial
covenants contained in our Revolving Credit Facility during the next twelve
months.
Our cash flows for the three months ended March 31, 2020 and 2019 are presented
below:
                                                                     Three Months Ended March 31,
                                                                       2020                  2019

                                                                            (In thousands)
Net cash provided by operating activities                        $      61,665           $   57,093
Net cash used in investing activities                                  (31,811)             (55,403)
Net cash used in financing activities                                  (10,121)              (3,080)
Increase (decrease) in cash and cash equivalents                 $      19,733           $   (1,390)


Cash flows provided by operating activities
Net cash provided by operating activities was $61.7 million and $57.1 million
for the three months ended March 31, 2020 and 2019, respectively. The
$4.6 million increase in cash flows from operating activities for the three
months ended March 31, 2020, as compared to 2019, was primarily due to higher
net income, offset by an increase in working capital.
Working capital. Our working capital fluctuates primarily as a result of changes
in accrued revenues and accrued operating costs and capital expenditures. As of
March 31, 2020, we had a working capital balance of $13.9 million. As of March
31, 2020, we had $109.7 million of liquidity available, including $23.9 million
in cash and cash equivalents and $85.8 million in unused borrowing capacity on
our Revolving Credit Facility. Our Revolving Credit Facility matures on
September 25, 2022. We expect to have adequate liquidity to meet our future
working capital requirements; however, extended disruptions in the financial
markets and/or energy price volatility that adversely affect our business may
have a material adverse effect on our financial position, results of operations
or cash flows.
Cash flows used in investing activities
Net cash used in investing activities was $31.8 million and $55.4 million for
the three months ended March 31, 2020 and 2019, respectively. The $23.6 million
decrease in net cash used in investing activities for the three months ended
March 31, 2020, as compared to 2019, was primarily attributable to a reduction
in capital spending on midstream infrastructure in Wild Basin.

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Capital expenditures.
Our capital expenditures are summarized in the following table, on a gross and
net basis, for the period presented:
                                            Three Months Ended March 31, 2020

                                                     (In thousands)
Capital expenditures                       Gross                              Net
Maintenance capital expenditures    $         2,004                       $

1,433


Expansion capital expenditures               22,436

15,566


Capitalized interest                            249

249


Total capital expenditures (1)      $        24,689                       $

17,248

___________________


(1)Capital expenditures reflected in the table above differ from capital
expenditures shown in the statement of cash flows in our unaudited condensed
consolidated financial statements because amounts reflected in the table above
include changes in accrued capital expenditures from the previous reporting
period, while amounts presented in the statements of cash flows are presented on
a cash basis.
Our capital expenditures by DevCo are summarized in the following table, on a
gross and net basis, for the period presented:
                                               Three Months Ended March 31, 2020

                                                       (In thousands)
                          OMP
DevCos                Ownership(2)            Gross                              Net
Bighorn DevCo             100%         $         3,629                       $  3,629
Bobcat DevCo             35.3%                  11,776                          4,163
Beartooth DevCo(3)        70%                     (575)                          (403)
Panther DevCo             100%                   9,610                          9,610
OMP Operating             100%                     249                            249
Total(1)                               $        24,689                       $ 17,248

___________________


(1)Capital expenditures reflected in the table above differ from capital
expenditures shown in the statements of cash flows in our unaudited condensed
consolidated financial statements because amounts reflected in the table above
include changes in accrued capital expenditures from the previous reporting
period, while amounts presented in the statements of cash flows are presented on
a cash basis.
(2)Ownership interest as of March 31, 2020.
(3)Reflects immaterial differences between the estimated capital expenditures
accrued in a reporting period and actual capital expenditures recognized in a
subsequent reporting period.
2020 Revised Capital Program. We have revised our planned capital program as a
result of current market conditions, including changes to our customers'
development plans in response to significant decreases in commodity prices. Our
revised 2020 capital program, excluding acquisitions, will accommodate a gross
capital expenditure level of approximately $35.0 million to $40.0 million, with
approximately $22.2 million to $26.5 million attributable to the Partnership. We
expect to spend approximately 6% to 8% of EBITDA for maintenance capital
expenditures, which is included in our total capital expenditure program. We
will continue to evaluate the level of capital spending throughout the year
based on the following factors, among others:
•pace of our customers' development;
•operating and construction costs;
•our ability to achieve material supplier price reductions;
•indebtedness levels; and
•impact of new laws and regulations on our business practices.
We expect to fund our capital expenditures with cash on hand, cash generated
from operating activities and borrowings under our Revolving Credit Facility.
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Cash flows used in financing activities
Net cash used in financing activities was $10.1 million for the three months
ended March 31, 2020 and $3.1 million for the three months ended March 31, 2019.
The $7.0 million decrease in net cash from financing activities was primarily
attributable to a $4.0 million increase in distributions to non-controlling
interests, a $3.9 million increase in distributions to unitholders, offset by a
$2.0 million increase in net borrowings under our Revolving Credit Facility.
Revolving Credit Facility. The aggregate amount of commitments under the
Revolving Credit Facility was $575.0 million as of March 31, 2020. The Revolving
Credit Facility is available to fund working capital and to finance acquisitions
and other capital expenditures. At March 31, 2020, we had $487.5 million of
borrowings outstanding under the Revolving Credit Facility and an outstanding
letter of credit of $1.7 million. At March 31, 2020, the weighted average
interest rate related to outstanding borrowings under the Revolving Credit
Facility was 2.9%. The unused borrowing capacity on the Revolving Credit
Facility was $85.8 million as of March 31, 2020.
The Revolving Credit Facility also requires the Partnership to maintain the
following financial covenants as of the end of each fiscal quarter:
Consolidated Total Leverage Ratio: Prior to the date on which one or more of the
credit parties have issued an aggregate principal amount of at least $150.0
million of senior notes (as permitted under the Revolving Credit Facility) (such
date the "Covenant Changeover Date") and commencing with the fiscal quarter
ended December 31, 2017, the Partnership and OMP Operating's ratio of Total Debt
to EBITDA (each as defined in the Revolving Credit Facility) on a quarterly
basis may not exceed 4.50 to 1.00 (or during an acquisition period (as defined
in the Revolving Credit Facility), 5.00 to 1.00). On a quarterly basis following
the Covenant Changeover Date, the Partnership and OMP Operating's ratio of Total
Debt to EBITDA may not exceed 5.25 to 1.00.
Consolidated Senior Secured Leverage Ratio: On a quarterly basis, commencing
with the date the Covenant Changeover Date occurs, the Partnership and OMP
Operating's ratio of Consolidated Senior Secured Funded Debt to EBITDA (each as
defined in the Revolving Credit Facility) may not exceed 3.75 to 1.00.
Consolidated Interest Coverage Ratio: On a quarterly basis prior to the Covenant
Changeover Date and commencing with the fiscal quarter ended December 31, 2017,
the Partnership and OMP Operating's ratio of EBITDA to Consolidated Interest
Expense (each as defined in the Revolving Credit Facility) may not be less than
3.00 to 1.00 and on a quarterly basis following the Covenant Changeover Date,
the Partnership and OMP Operating's ratio of EBITDA to Consolidated Interest
Expense may not be less than 2.50 to 1.00.
The Partnership was in compliance with the covenants under the Revolving Credit
Facility at March 31, 2020, except as follows:
As a result of ongoing internal oversight processes, we identified that a
Control Agreement (as defined in the Revolving Credit Facility) had not been
executed for a certain bank account (the "JPM Account") held at JPMorgan Chase
Bank, N.A. ("JPMorgan"), who is a lender under the Revolving Credit Facility.
The Control Agreement serves to establish a lien in favor of the lenders under
the Revolving Credit Facility with respect to the JPM Account. On May 11, 2020,
we executed a Control Agreement with both the Administrative Agent and JPMorgan,
thereby completing the documentation required under the Revolving Credit
Facility. Despite the Control Agreement's execution, the failure to have had it
in place before the JPM Account was initially funded with cash represents a past
Event of Default (as defined in the Revolving Credit Facility). On May 15, 2020,
we entered into a limited waiver (the "Limited Waiver") of this past Event of
Default with the Majority Lenders (as defined in the Revolving Credit Facility),
which provides forbearance of additional interest owed arising from this past
Event of Default until the earlier of (i) November 10, 2020 and (ii) an Event of
Default. Pursuant to the Limited Waiver, we recorded an additional interest
charge of $25.9 million in the unaudited condensed consolidated financial
statements as of March 31, 2020. Additionally, the Limited Waiver excludes the
additional interest from the Consolidated Interest Coverage Ratio.

Cash Distributions
On May 18, 2020, the Board of Directors of the General Partner declared the
quarterly distribution for the first quarter of 2020 of $0.54 per unit. This
distribution will be payable on June 8, 2020 to unitholders of record as
of May 28, 2020. In addition, the General Partner will receive a cash
distribution of $1.0 million attributable to the incentive distribution rights
related to earnings for the first quarter of 2020.
As we continue to adjust our outlook for estimated impacts of an economic
downturn resulting from COVID-19 and unfavorable commodity demand and prices, we
could reevaluate our cash distributions to help preserve flexibility and
maintain balance sheet strength. The Board of Directors of our General Partner
may change our cash distribution policy at any time, and we do not have a legal
or contractual obligation to pay cash distributions quarterly or on any other
basis or at our minimum quarterly distribution rate.
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Non-GAAP Financial Measures
Cash Interest, Adjusted EBITDA and Distributable Cash Flow are supplemental
non-GAAP financial measures that are used by management and external users of
the Partnership's financial statements, such as industry analysts, investors,
lenders and rating agencies. These non-GAAP financial measures should not be
considered in isolation or as a substitute for interest expense, net income
(loss), operating income (loss), net cash provided by (used in) operating
activities or any other measures prepared under GAAP. Because Cash Interest,
Adjusted EBITDA and Distributable Cash Flow exclude some but not all items that
affect interest expense, net income and net cash provided by operating
activities and may vary among companies, the amounts presented may not be
comparable to similar metrics of other companies.
Cash Interest
Cash Interest is defined as interest expense plus capitalized interest less
amortization of deferred financing costs included in interest expense. Cash
Interest is not a measure of interest expense as determined by GAAP. Management
believes that the presentation of Cash Interest provides useful additional
information to investors and analysts for assessing the interest charges
incurred on the Partnership's debt, excluding non-cash amortization and the
Partnership's ability to maintain compliance with its debt covenants.
The following table presents a reconciliation of the GAAP financial measure of
interest expense, net of capitalized interest, to the non-GAAP financial measure
of Cash Interest for the periods presented:
                                                                                 Three Months Ended March 31,
                                                                                  2020(1)                2019

                                                                                        (In thousands)
Interest expense, net of capitalized interest                                $       30,257           $  3,969
Capitalized interest                                                                    249                 62
Amortization of deferred financing costs                                               (271)              (191)
Cash Interest                                                                        30,235              3,840
Less: Cash Interest attributable to Delaware Predecessor                                  -               (248)
Less: Cash Interest attributable to non-controlling interests(2)                         (3)                (2)
Cash Interest attributable to Oasis Midstream Partners LP                    $       30,232           $  3,590

__________________


(1)For the three months ended March 31, 2020, each of interest expense, Cash
Interest and Cash Interest attributable to Oasis Midstream Partners LP includes
an additional interest charge of $25.9 million pursuant to the Limited Waiver.
(2)Amounts represent Cash Interest attributable to non-controlling interests
associated with finance leases.
Adjusted EBITDA
Adjusted EBITDA is defined as earnings (loss) before interest expense (net of
capitalized interest), income taxes, depreciation, amortization, impairment,
equity-based compensation expenses and other similar non-cash adjustments.
Adjusted EBITDA attributable to Oasis Midstream Partners LP is defined as
Adjusted EBITDA less Adjusted EBITDA attributable to Oasis Petroleum's retained
interests in two of the Partnership's DevCos, Bobcat DevCo and Beartooth DevCo.
Adjusted EBITDA should not be considered an alternative to net income (loss),
net cash provided by operating activities or any other measure of financial
performance or liquidity presented in accordance with GAAP. Management believes
that the presentation of Adjusted EBITDA provides information useful to
investors and analysts for assessing the Partnership's results of operations,
financial performance and the Partnership's ability to generate cash from its
business operations without regard to the Partnership's financing methods or
capital structure, coupled with the Partnership's ability to maintain compliance
with its debt covenants. The GAAP measures most directly comparable to Adjusted
EBITDA are net income (loss) and net cash provided by operating activities.
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