Oasis Petroleum Inc. (NYSE: OAS) said Nov. 8 it agreed to sell midstream interests in a $250 million dropdown that the Houston-based company said will improve its leverage position.

Oasis, which primarily operates in the Williston and Permian basins, will sell the interests to its midstream affiliate Oasis Midstream Partners LP (NYSE: OMP).

The divested assets include a 15% interest in Bobcat DevCo LLC, which is focused in the Williston’s Wild Basin operating area, and 30% interest in Beartooth DevCo LLC, which owns significant water infrastructure assets across most of Oasis’ core operating areas in the Williston.

Oasis CEO Thomas B. Nusz said the dropdown is accretive to the company and further improves Oasis’ leverage position.

“Through this transaction, we were able to enhance the financial profiles of both Oasis and OMP, while strengthening our competitive position,” Nusz said in a statement.

Bobcat DevCo’s assets connect third-party volumes to Oasis Midstream’s gas plants and include gas gathering, compression and gas lift, crude oil gathering and produced water gathering and disposal. Oasis and its midstream affiliate have invested heavily in Bobcat DevCo in 2018, positioning the DevCo for over 50% EBITDA growth in 2019, according to the Oasis press release.

The Beartooth DevCo assets are predominately located in Oasis’ Alger, Cottonwood, Hebron, Indian Hills and Red Bank operating areas in the Williston Basin.

Consideration for the transaction will consist of $125 million cash from borrowings under Oasis Midstream’s credit facility. The remainder is expected to come from, depending on market conditions, proceeds from any capital market transactions and/or the issuance of common units representing limited partner interests in Oasis Midstream to Oasis, according to the release.

Onshore