Oasis Petroleum Inc. said it plans to spend an additional $80 million this year on capital expenditures (capex) in the Williston Basin, home to most of its assets, as it looks to take advantage of existing infrastructure and better price differentials than those in the Permian Basin's Delaware sub-basin, where it holds fewer assets and takeaway capacity is constrained.

The Houston-based company also bumped up its full-year production guidance to 83,000-84,500 boe/d, a 4% increase at the midpoint of previous guidance that takes into account divestitures of about 2,000 boe/d. Oasis said it expects oil to account for 75-76% of full-year production.

Oasis was a pure-play operator in the Williston until last December, when it acquired more than 20,000 net acres in the oil window of the Delaware for $946 million.

"Our measured approach to our new Delaware asset has played out as we had originally planned," CEO Thomas Nusz said during an earnings call Tuesday to discuss 2Q2018. "Delaware well performance remains strong. Our subsurface knowledge is growing and we've been able to secure the services needed to execute on our plan. We continue to gather the necessary information needed to formulate the optimal long-term development plan for this tremendous asset."

Total production in 2Q2018 was within guidance at 79,437 boe/d and marked a 28.2% increase year/year, with oil accounting for 76.3% of production (60,632 b/d). Broken down by play, Oasis produced 75,200 boe/d in the Williston and 4,200 boe/d in the Delaware during the quarter.

Despite the increased capex spend in the Williston, Oasis raised its 4Q2018 production guidance for the Delaware by 20%, to 6,000 boe/d.

"The well performance has really been good and we continue to see outperformance relative to that 1.2 million bbl type curve for the Wolfcamp," COO Taylor Reid said during Tuesday's call. "In terms of timing, the cadence has been about what we planned. The wells are, on average, performing better than we expected."

With an eye toward its expanding presence in the Delaware, Oasis also announced that it had secured 10,000 boe/d of takeaway capacity on the proposed Gray Oak Pipeline system, a joint venture between Phillips 66 Partners LP (PSXP) and Andeavor. The pipeline would have initial capacity of 800,000 b/d and transport crude from the Permian and the Eagle Ford Shale to PSXP's Sweeny Hub near Houston and a new terminal in South Texas near Corpus Christi.

Oasis announced capacity of 10,000 b/d of oil on the Gray Oak Pipeline system. The Gray Oak Pipeline will provide crude oil transportation from West Texas to destinations in the Corpus Christi and Sweeny/Freeport markets. The Company continues to have a prudent development program in the Delaware Basin that is sculpted to deliver increased growth once the long haul oil pipe is constructed and in-service

Oasis said it expects 3Q2018 production to range from 85,000-88,000 boe/d, a figure that accounts for divestitures closing during the third quarter. It also expects 4Q2018 production to range from 91,000-94,000 boe/d, and for production exiting 2019 to be approximately 15% higher than the exit rate for 2018. Oil is expected to make up 74% of production in 2019.

The company ran a five- to seven-rig drilling program during 2Q2018, with four to five rigs deployed in the Williston and one to two rigs set up in the Delaware. Oasis completed and placed into production 37 gross (27.8 net) operated wells during the quarter, of which 35 gross (25.8 net) were in the Williston and the remainder were in the Delaware. The company expects to complete about 110 gross operated wells in the Williston in 2018, and six to eight gross operated wells in the Delaware.

Reid said the company was still discussing whether to possibly add one or two rigs to the Williston in 2019.

"Really the driver in terms of the activity is cash flows," Reid said. "We're going to spend within the [exploration and production] cash flow. If you start with the Delaware, we're going to have a metered program there -- kind of two rigs running next year and likely picking up a third rig late in the year or later in the year. As the pipeline bottlenecks are eliminated there, we'll ramp activity in the second half of 2019.

"The incremental cash flow left above that we will spend up in Williston. With the additional volumes and the growth that we've talked about today, we obviously have incremental cash flow that will allow us to run more rigs than what we're doing this year. We started the year at five [rigs], dropped to four, and will likely pick up two rigs next year. In terms of timing, maybe one early in the year and a second in the middle, but we're still working through exactly what that looks like."

Since last December, Oasis has entered into or closed agreements totaling $360 million from the sale of noncore assets. The company signed two separate deals to sell 65,000 net acres in the Williston for a combined $283 million in June.

Oasis reported a net loss of $320.2 million (minus $1.02/share) in 2Q2018, compared to net income of $16.6 million (7 cents) in the year-ago quarter. Total revenues nearly doubled, reaching $501.3 million in 2Q2018, compared to $254.1 million in 2Q2017.