Oasis outlines plan to generate cash from Bakken, Delaware

By Luke Geiver | March 04, 2019

Oasis Petroleum is focusing on generating free cash flow at oil prices in the $50/barrel West Texas Intermediate range. The Williston Basin and Delaware Basin operator will spend less capital this year compared to last to generate free cash flow operations. The push for free cash flow means Oasis will spend roughly $540 million to $560 million across its two operating basins. Three-fourths of its 2019 capital will be put towards the Williston Basin.

According to Taylor Reid, president, the Williston Basin will receive most of the company’s capital allocation for years to come. The cashflow generated from the Williston will, however, be used to fund Delaware operations. This year, Oasis intends to run two drilling rigs and complete roughly 11 wells as it works to hold acreage and delineate its acreage potential. Next year, the company could move closer to full-field development of its Permian assets.

In the Williston, Oasis will run fewer rigs this year at two to three instead of the five rigs it ran last year. Acreage definitions used by Oasis in the past have also changed. The company now considers a vast portion of its acreage Tier 1 and no longer relies on the term core or non-core. According to Reid, enhanced completion designs have proven to be effective in areas once considered non-core that the company now believes a higher percentage of its acreage is equal and should be considered what it used to refer to as core. Acreage that is outside that is not referred to areas with additional upside.

2018 was a busy year for Oasis as it acquired Permian acreage, brought the second largest gas processing plant in the Williston Basin online and sold other acreage. This year, the company intends to focus on generating free cash flow, and, if the price of oil goes up they don’t necessarily intend to ramp up activity. “Oasis has an enviable asset base. We are in a formidable position to generate significant free cash flow in 2019 through prudent capital spending reductions and operating efficiencies,” said Tommy Nusz, CEO.

Overall, oil production will remain relatively flat for Oasis this year.