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 Transport 
2

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"
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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%
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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%) $22222222222222686,463

Rate2of2Return 14%

Base2Case
13

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%