Is he cheating on me with his best friend?

Well, he is definitely being very honest and open with you about it. He doesn't hide the fact that shes there with him, where their going, or anything like that so thats good. I can see where you are coming from and being worried because I think I would feel the same. If my boyfriend was alone with a beautiful girl I would be like WTF? Even though I trust his word and all, it still leaves me to be suspicious. I really do not think you have anything to worry about! If he starts to hide things, then I would freak but I don't think he's cheating on you. Communicate with him how you feel and whats on your heart, it may be awkward but at least you can let it out and he can understand how you feel - that will mean a lot to the both of you. Take care!