1 

# Produced Water Reuse Initiative October 2013 Examining the Costs of Pipeline vs. Trucking to Determine if There is an Economic Benefit to Using Pipelines as the Primary Form of Transport2 

# Forward*Looking"/"Cau3onary"Statements" Forward*Looking"Statements" This%presenta,on%contains% forward2looking%statements%within% the%meaning%of%Sec,on%27A%of% the%Securi,es%Act%of%1933%and%Sec,on%21E%of% the%Securi,es%Exchange%Act%of%1934.%All% statements,%other%than%statements%of%historical%facts,%included%in%this%presenta,on%that%address%ac,vi,es,%events%or%developments%that%the%Company%expects,%believes%or%an,cipates% will%or%may%occur%in%the%future%are%forward2looking%statements.%Without%limi,ng%the%generality%of%the%foregoing,%forward2looking%statements%contained%in%this%presenta,on%specifically% include% the% expecta,ons% of% plans,% strategies,% objec,ves% and% an,cipated% financial% and% opera,ng% results% of% the% Company,% including% the% Company's% drilling% program,% produc,on,% deriva,ve%instruments,%capital%expenditure%levels%and%other%guidance%included%in%this%presenta,on.%These%statements%are%based%on%certain%assump,ons%made%by%the%Company%based% on%management's%experience%and%percep,on%of%historical%trends,%current%condi,ons,%an,cipated%future%developments%and%other%factors%believed%to%be%appropriate.%Such%statements% are%subject%to%a%number%of%assump,ons,%risks%and%uncertain,es,%many%of%which%are%beyond%the%control%of%the%Company,%which%may%cause%actual%results%to%differ%materially%from%those% implied%or%expressed%by%the%forward2looking%statements.%These%include,%but%are%not%limited%to,%the%Company’s%ability%to%complete%the%West%Williston%and%East% Nesson %Acquisi,ons,%the% Company’s%ability%to%integrate%acquired%proper,es%into%its%exis,ng%business,%changes%in%oil%and%natural%gas%prices,%weather%and%environmental%condi,ons,%the%,ming%of%planned%capital% expenditures,% availability% of% acquisi,ons,% uncertain,es% in% es,ma,ng% proved% reserves% and% forecas,ng% produc,on% results,% opera,onal% factors% affec,ng% the% commencement% or% maintenance% of% producing% wells,% the% condi,on% of% the% capital%markets% generally,% as% well% as% the% Company's% ability% to% access% them,% the% proximity% to% and% capacity% of% transporta,on% facili,es,%and%uncertain,es%regarding%environmental%regula,ons%or%li,ga,on%and%other%legal%or%regulatory%developments%affec,ng%the%Company's%business%and%other%important%factors% that%could%cause%actual%results%to%differ%materially%from%those%projected%as%described%in%the%Company's%reports%filed%with%the%SEC.% Any% forward2looking%statement%speaks%only%as%of% the%date%on%which%such%statement%is%made%and% the%Company%undertakes%no%obliga,on% to%correct%or%update%any% forward2looking% statement,%whether%as%a%result%of%new%informa,on,%future%events%or%otherwise,%except%as%required%by%applicable%law. Cau3onary"Statement"Regarding"Oil"and"Gas"Quan33es"" The% SEC% requires% oil%and% gas% companies,% in% their% filings%with% the% SEC,% to% disclose% proved% reserves,%which%are% those% quan,,es% of% oil%and% gas,%which,% by%analysis% of% geoscience%and% engineering% data,% can% be% es,mated% with% reasonable% certainty% to% be% economically% producible—from% a% given% date% forward,% from% known% reservoirs,% and% under% exis,ng% economic% condi,ons%(using% unweighted %average%122month%first%day%of%the%month%prices),%opera,ng%methods,%and%government%regula,ons—prior%to%the%,me%at%which%contracts%providing%the% right%to%operate%expire,%unless%evidence%indicates%that%renewal%is%reasonably%certain,%regardless%of%whether%determinis,c%or%probabilis,c%methods%are%used%for%the%es,ma,on.%The%SEC% also%permits% the%disclosure%of% separate%es,mates%of%probable%or%possible% reserves% that%meet%SEC%defini,ons% for% such% reserves;%however,%we%currently%do%not%disclose%probable%or% possible%reserves%in%our%SEC%filings.%% In%this%presenta,on,%proved%reserves%at%June%30,%2013%are%es,mated%u,lizing%SEC%reserve%recogni,on%standards%and%pricing%assump,ons%based%on%the%trailing%122month%average%first2 day2of2the2month%prices%of%$91.53%per%barrel%of%oil%and%$3.44%per% MMBtu %of%natural%gas.%The%reserve%es,mates%for%the%Company%at%June%30,%2013%presented%in%this%presenta,on%are% based%on%internal%es,mates,%approximately%93%%of%which%have%been%audited%by% DeGolyer %and% MacNaughton %(“D&M”),%independent%reserve%engineers.%The%reserve%es,mates%for%the% Company%at%December%31,%2012,%2011%and%2010%and%for%the%West%Williston%Acquisi,on%at%June%30,%2013%presented%in%this%presenta,on%are%based%on%reports%prepared%by%D&M.% We%may%use% the% terms%"unproved% reserves,"%"EUR%per%well"%and%"upside%poten,al"% to%describe%es,mates%of%poten,ally% recoverable%hydrocarbons% that% the%SEC% rules%prohibit% from% being% included% in% filings% with% the% SEC.% These% are% the% Company’s% internal% es,mates% of% hydrocarbon% quan,,es% that% may% be% poten,ally% discovered% through% exploratory% drilling% or% recovered% with% addi,onal% drilling% or% recovery% techniques.% These% quan,,es% may% not% cons,tute% "reserves"% within% the% meaning% of% the% Society% of% Petroleum% Engineer’s% Petroleum% Resource%Management% System% or% SEC% rules%and% do% not% include%any% proved% reserves.%EUR%es,mates%and% drilling% loca,ons% have% not% been% risked% by% Company%management.%Actual% loca,ons%drilled%and%quan,,es% that%may%be%ul,mately% recovered% from% the%Company’s%interests%will%differ%substan,ally.%There%is%no%commitment%by% the%Company% to%drill%all%of% the% drilling%loca,ons%which%have%been%afributed%to%these%quan,,es.%Factors%affec,ng%ul,mate%recovery%include%the%scope%of%our%ongoing%drilling%program,%which%will%be%directly%affected% by% the% availability% of% capital,% drilling% and% produc,on% costs,% availability% of% drilling% services% and% equipment,% drilling% results,% lease% expira,ons,% transporta,on% constraints,% regulatory% approvals%and%other%factors;%and%actual%drilling%results,%including%geological%and%mechanical%factors%affec,ng%recovery%rates.%Es,mates%of%unproved%reserves,%per%well%EUR%and%upside% poten,al%may%change%significantly%as%development%of%the%Company’s%oil%and%gas%assets%provide%addi,onal%data.%% Our% produc,on% forecasts%and%expecta,ons% for% future% periods%are% dependent% upon%many%assump,ons,%including%es,mates% of% produc,on% decline% rates% from%exis,ng%wells%and% the% undertaking%and%outcome%of%future%drilling%ac,vity,%which%may%be%affected%by%significant%commodity%price%declines%or%drilling%cost%increases.%%3 

# Agenda"


# • Introduc,on%to%Oasis%Petroleum% • Trucking%vs.%Infrastructure% • Infrastructure%Economics% • Long2term%Planning% • Result%–%Oasis%Midstream%Services%4 

# Introduc3on"to"Oasis"Petroleum"

• Combined%492,000%net%acres%

• ~43,000% Boepd %of%current%produc,on%

• Proved%reserves%of%215.6% MMBoe %with% PV210%of%$4.9%billion%

• 399%operated%drill%blocks%/%over%16%years% of%inventory%

• Driving%opera,onal%efficiencies%and% infrastructure+development+ 

## Project"Areas" Top"Pure"Play"in"the" Bakken Montana North"Dakota"

Oasis"stand*alone" Oasis"acquired"acreage" * Sanish +is+a+non4op+posi5on+5 

# The"Beginning"

• Bakken "Boom" • Boomtown%is%born,%exis,ng%infrastructure%is%overwhelmed%overnight% • Flights,%hotels,%rental%cars,%restaurants,%roads%all%stressed% • Personnel%is%limited%–%drilling,%comple,ons,%produc,on,%construc,on%



## • Major"Task"–"Lower"LOE" • Produc,on%water%handling% • Power%to%loca,ons%

%2%% %100,000%% %200,000%% %300,000%% %400,000%% %500,000%% %600,000%% %700,000%% %800,000%% %900,000%%Volume"(bbl/day)" 

## ND"Daily"Oil"Produc3on"6 

# The"Beginning"–"Produc3on"Water"Handling"

• Produc3on"water"handling"is"major"part"of"LOE"(~50%"average"water"cut)"

• Cost"of"hauling"and"disposal"for"produc3on"water"was"extremely"high" • Not%enough%SWDs%to%handle%the%increasing%volume% • Exis,ng%SWDs%not%as%efficient%as%they%could%be% • Not%enough%on2site%storage% • Not%enough%trucking%lanes/offload%points% 

### • Trucking%costs%were%high% • Shortage%of%trucks% • Long%distances%from%produc,on%wells%to%SWDs% • Wait%,mes%at%SWDs%


## • Op3ons"to"lower"the"produc3on"water"LOE:" • Add%SWDs% • Add%trucks% • Build+infrastructure+7 

# Agenda"


# • Introduc,on%to%Oasis%Petroleum% • Trucking%vs.%Infrastructure% • Infrastructure%Economics% • Long2term%Planning% • Result%–%Oasis%Midstream%Services%8 

# Trucking"vs."Infrastructure"

• Infrastructure"is"the"best"long*term"solu3on,"but"trucking"will"always"be"needed"for"the" following:" • Prior%to%infrastructure% buildout • Loca,ons%where% RoW ,%terrain,%distance,% etc %eliminate%the%infrastructure%op,on% • Temporary%issues%and/or%supplemen,ng%volumes%above%infrastructure%capacity% 

## Category" Trucking" Pipeline" CAPEX% Low% High% OPEX% High% Low% Startup%Timeline% Short% Long% Lifespan% Short% Long% Weather%Dependency% High% Low% Human%Interface% High% Low% Community%Impact% Constant% Short%(Installa,on)%9 

# Agenda"


# • Introduc,on%to%Oasis%Petroleum% • Trucking%vs.%Infrastructure% • Infrastructure%Economics% • Long2term%Planning% • Result%–%Oasis%Midstream%Services%10 

# Infrastructure"Economics"–"Costs"

• Right"of"Way" • Easements%–%Rising%rates,%absentee%land%owners,%difficult%land%owners% • Damages%–%Crops%(pre2plan,ng,%pre2harvest,%post2harvest),%open%field% • Broker%Fees%–%In%house% Landmen ,%brokers%


## • Material"–"Driven"by"design" • Opera,onal%philosophy% • Low2pressure%systems%–%Poly,%hybrids%( Flexsteel ,% Flexpipe ,% Fiberspar ,% etc ),%smaller%pumps% • High2pressure%systems%–%Hybrids,%steel,%larger%pumps% 

### • Capacity% • Long2term%produc,on%profile% • Desired%excess%capacity% • Future%growth/third%party%


## • Construc3on" • Summer%vs.%winter% • Weather% • Number%of%contractors,%crews,%inspectors%


## • OPEX"11 

# Infrastructure"Economics"–"Revenue"

• Flowrates • Total%volume%throughput% • U,liza,on% • Actual%vs.%Expected%


## • Commitments" • Volume%commitments% • Acreage%dedica,on% • Aid%in%construct%



## • Fees" • Market%rates% • Compe,,on%–%other%pipelines,%trucking%12 

# Infrastructure"Economics"–"Keys"to"Success"

• Have%a%long2term,%realis,c%,meline% • Build%largest%capacity%pipeline%that%the%budget%allows% • Put%a%good%construc,on%plan%in%place%to%efficiently%construct%and%start2up%the% pipeline% • Keep%the%pipeline%full%

Flow%Rate%(daily) 2,500%%%%%%%%%%%%%%%%%%%%% Revenue%(bbl) 1.25 $%%%%%%%%%%%%%%%%%%%%% OPEX%(bbl) 0.25 $%%%%%%%%%%%%%%%%%%%%% CAPEX 5,000,000 $%%%%%%%%%% NPV$(10%) ($478,022.37) Rate$of$Return 6% Shorter$Timeline Flow%Rate%(daily) 3,500%%%%%%%%%%%%%%%%%%%%% Revenue%(bbl) 1.25 $%%%%%%%%%%%%%%%%%%%%% OPEX%(bbl) 0.25 $%%%%%%%%%%%%%%%%%%%%% CAPEX 6,000,000 $%%%%%%%%%% NPV$(10%) 1,870,139 $$$$$$$$$$$ Rate$of$Return 19% Build$to$Max$Budget Flow%Rate%(daily) 2,500%%%%%%%%%%%%%%%%%%%%% Revenue%(bbl) 1.25 $%%%%%%%%%%%%%%%%%%%%% OPEX%(bbl) 0.25 $%%%%%%%%%%%%%%%%%%%%% CAPEX 5,000,000 $%%%%%%%%%% NPV$(10%) 231,917 $$$$$$$$$$$$$$$ Rate$of$Return 11% Inefficient$Construction Flow%Rate%(daily) 2,000%%%%%%%%%%%%%%%%%%%%% Revenue%(bbl) 1.25 $%%%%%%%%%%%%%%%%%%%%% OPEX%(bbl) 0.25 $%%%%%%%%%%%%%%%%%%%%% CAPEX 5,000,000 $%%%%%%%%%% NPV$(10%) (359,921) $$$$$$$$$$$$$ Rate$of$Return 8% Low$Utilization Year 1 2 3 4 5 6 7 8 9 10 Flow%Rate%(daily) 2,500%%%%%%%%%%%%%%%%%%%%% Total%BBL 500,000%%%%%%%%%%%%%%%% 912,500%%%%%%%%%%%%%%%% 912,500%%%%%%%%%%%%%%%% 912,500%%%%%%%%%%%%%%%% 912,500%%%%%%%%%%%%%%%% 912,500%%%%%%%%%%%%%%%% 912,500%%%%%%%%%%%%%%%% 912,500%%%%%%%%%%%%%%%% 912,500%%%%%%%%%%%%%%%% 912,500%%%%%%%%%%%%%%%% Revenue%(bbl) 1.25 $%%%%%%%%%%%%%%%%%%%%% Revenue 625,000 $%%%%%%%%%%%%%% 1,140,625 $%%%%%%%%%% 1,140,625 $%%%%%%%%%% 1,140,625 $%%%%%%%%%% 1,140,625 $%%%%%%%%%% 1,140,625 $%%%%%%%%%% 1,140,625 $%%%%%%%%%% 1,140,625 $%%%%%%%%%% 1,140,625 $%%%%%%%%%% 1,140,625 $%%%%%%%%%% OPEX%(bbl) 0.25 $%%%%%%%%%%%%%%%%%%%%% OPEX (125,000) $%%%%%%%%%%%% (228,125) $%%%%%%%%%%%% (228,125) $%%%%%%%%%%%% (228,125) $%%%%%%%%%%%% (228,125) $%%%%%%%%%%%% (228,125) $%%%%%%%%%%%% (228,125) $%%%%%%%%%%%% (228,125) $%%%%%%%%%%%% (228,125) $%%%%%%%%%%%% (228,125) $%%%%%%%%%%%% CAPEX 5,000,000 $%%%%%%%%%% CAPEX (5,000,000) $%%%%%%%% Net (4,500,000) $%%%%%%%% 912,500 $%%%%%%%%%%%%%% 912,500 $%%%%%%%%%%%%%% 912,500 $%%%%%%%%%%%%%% 912,500 $%%%%%%%%%%%%%% 912,500 $%%%%%%%%%%%%%% 912,500 $%%%%%%%%%%%%%% 912,500 $%%%%%%%%%%%%%% 912,500 $%%%%%%%%%%%%%% 912,500 $%%%%%%%%%%%%%% NPV2(10%) 686,463 $22222222222222 Rate2of2Return 14% Base2Case13 

# Agenda"


# • Introduc,on%to%Oasis%Petroleum% • Trucking%vs.%Infrastructure% • Infrastructure%Economics% • Long2term%Planning% • Result%–%Oasis%Midstream%Services%14 

# Long*Term"Planning"

• Infrastructure"Layout" • Establish%pipeline%corridors%that%maximize%efficiency%and%minimize%pipeline%length% • Put%drilling%pads%and/or%facili,es%along%pipeline%corridor% • Minimize%higher%risk%loca,ons%as%much%as%possible%(creeks,%lakes,%bad%terrain)% • Keep%pipelines%close%to%roads%as%much%as%possible%to%maintain%visual%on% RoW %and%keep%access%as%easy% as%possible% • Avoid%telescoping%as%much%as%possible,%be%prepared%for%easy%expansion%



## • Produc3on"Plan" • Push%for%company%long2term/strategic%produc,on%plan,%as%many%years%out%as%possible% • Make%infrastructure%a%key%part%of%the%planning%process%(maximize%u,liza,on)%



## • Opera3ons" • Establish%and%follow%an%opera,ons%plan%for%infrastructure% • Tes,ng/inspec,on%procedures% • Maintenance%procedures% • Emergency%response% 

### • Maintain%adequate%headcount%to%properly%manage%and%operate%the%assets%15 

# Agenda"


# • Introduc,on%to%Oasis%Petroleum% • Trucking%vs.%Infrastructure% • Infrastructure%Economics% • Long2term%Planning% • Result%–%Oasis%Midstream%Services%16 

# Result"–"Oasis"Midstream"Services" OMS"Assets"( Pre4Acquisi5on* )" • $86MM%of%net%book%value%

• SWD"Assets" • 17%SWDs% • ~165%miles%of%SWD%pipeline% • Disposal%average:%%~40,000%bbl/day% • Pipeline%average:%%~25,000%bbl/day%

• Freshwater"Assets" • ~165%miles%of%FW%pipeline% • Pipeline%average:%%~1,000%bbl/day%

• Natural"Gas"Assets" • ~3%miles%of%Natural%Gas%pipeline% • Pipeline%average:%%~140% mcf /day% *"Recent"acquisi-on"added"SWDs"and"pipeline" infrastructure" Indian"Hills" Red"Bank" Hebron" Target" North" Cogonwood"
South" Cogonwood"

Mondak Missouri" 

### Legend" SWD% Pipeline%17 

# Result"–"Oasis"Midstream"Services" SWD"Infrastructure" • 6%SWDs%via%Oasis%early%acquisi,ons%% • Oasis/OMS%permifed%and%started2up%11%new%SWDs% • 7%new%drill%SWDs% • 4%conversion%SWDs% 

## • Pipelines%are%628”%HDPE% • Recent%acquisi,on:% • 6%more%SWDs% • HDPE,% FlexSteel ,% FlexPipe ,%and% Fiberspar %pipelines% 

## FW"Infrastructure" • Pipelines%are%3210”%HDPE% • Various%water%sources% Natural"Gas"Infrastructure" • 10”%DR%11,%HDPE%18 

# Ques3ons" Tommy"Thompson"–" Senior%Facili,es%Engineer% Contact:%%281240429487%–%fhompson@oasispetroleum.com%