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Oasis Petroleum explores sale of Bakken midstream water unit

By MATTHEW MONKS and ZAIN SHAUK
Bloomberg

Oasis Petroleum Inc., the North Dakota oil producer that lost almost 70% of its value since June, is considering divesting a water disposal unit in the Bakken shale basin, according to people familiar with the matter.

The Houston-based company is considering selling Oasis Midstream Services LLC, a subsidiary that handles water used for fracking wells, said the people, who asked not to be identified because the matter is private.

Falling oil prices and a $2.6 billion debt burden have weighed heavily on Oasis shares, making it the fourth-worst performing energy company in the Russell 1000 Index last year. The shares, which rose as much as 9% Friday, slid 0.2% to $16.84 at the close in New York -- giving the company a market value of $1.81 billion.

It’s not clear how much the unit is worth. Oasis generated $36.5 million in midstream revenue in the first nine months of 2014, and $15.9 million in income before taxes, according to its third-quarter report.

Oil explorers have been seeking to unload pipelines, processing plants, and non-drilling infrastructure as the oil slump squeezes profits. Another Bakken producer, Whiting Petroleum, is also in the process of selling its interest in oil and gas processing plants in North Dakota, people familiar with the matter have said.

A spokesman for Oasis didn’t respond to requests for comment.

Oasis Chief Executive Thomas Nusz said the company could eventually monetize Oasis Midstream Services when it established the unit in 2013.

“We’re putting it into the separate subsidiary to give us options in the future, but it’s a bit early to figure out where we go with that,” Nusz said in an earnings call with investors in May 2013, according to a transcript compiled by Bloomberg.


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