Moody's rates Oasis Midstream B2

Moody's Investors Service said it assigned first-time ratings to Oasis Midstream Partners LP, including a B2 corporate family rating, a B2-PD probability of default rating, a B3 rating to its planned $450 million of senior unsecured notes due 2029 and a SGL-3 speculative grade liquidity rating. The outlook is positive.

Moody's said the partnership’s B2 CFR reflects its substantial customer and geographic focus in the Williston Basin with modest scale midstream operations.

The proceeds and equity will be used to fund the acquisition of Oasis Petroleum Inc.'s remaining midstream assets and to repay a portion of outstanding borrowings under Oasis Midstream’s revolving credit facility.

Oasis Petroleum controls Oasis Midstream's general partner, and its ownership of midstream's limited partner interests should exceed 75% pro forma for the transaction.

"The acquisition will boost Oasis Midstream's cash flow while its leverage should remain moderate pro forma for the new notes," said Amol Joshi, a Moody's vice president and senior credit officer, in a press release. "OMP's scale remains modest and future growth will likely depend on additional third-party volumes or acquisitions, as Oasis Petroleum is not expected to meaningfully increase production and there are no midstream assets left at the parent to drop down to OMP."

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