Condensed Consolidating Financial Information

The Notes (see Note 8 – Long-Term Debt) are guaranteed on a senior unsecured basis by the Guarantors, which are 100% owned by the Company. These guarantees are full and unconditional and joint and several among the Guarantors. Certain of the Company’s immaterial wholly-owned subsidiaries do not guarantee the Notes (“Non-Guarantor Subsidiaries”).

The following financial information reflects consolidating financial information of the parent company, Oasis Petroleum Inc. (“Issuer”), and its Guarantors on a combined basis, prepared on the equity basis of accounting. The Non-Guarantor Subsidiaries are immaterial and, therefore, not presented separately. The information is presented in accordance with the requirements of Rule 3-10 under the SEC’s Regulation S-X. The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the Guarantors operated as independent entities. The Company has not presented separate financial and narrative information for each of the Guarantors because it believes such financial and narrative information would not provide any additional information that would be material in evaluating the sufficiency of the Guarantors.

Condensed Consolidating Balance Sheet



	March 31, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets
Cash and cash equivalents	$	90		$	19,307		$	—		$	19,397
Accounts receivable – oil and gas revenues	—			92,684			—			92,684
Accounts receivable – joint interest and other	—			104,512			—			104,512
Accounts receivable – affiliates	1,348			150,125			(151,473		)	—
Inventory	—			10,723			—			10,723
Prepaid expenses	139			7,272			—			7,411
Derivative instruments	—			91,590			—			91,590
Other current assets	—			46			—			46
Total current assets	1,577			476,259			(151,473		)	326,363
Property, plant and equipment
Oil and gas properties (successful efforts method)	—			6,327,027			—			6,327,027
Other property and equipment	—			477,343			—			477,343
Less: accumulated depreciation, depletion, amortization and impairment	—			(1,627,201		)	—			(1,627,201		)
Total property, plant and equipment, net	—			5,177,169			—			5,177,169
Assets held for sale	—			25,845			—			25,845
Investments in and advances to subsidiaries	4,541,136			—			(4,541,136		)	—
Derivative instruments	—			7,521			—			7,521
Deferred income taxes	213,270			—			(213,270		)	—
Other assets	—			23,370			—			23,370
Total assets	$	4,755,983		$	5,710,164		$	(4,905,879	)	$	5,560,268
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	—		$	10,101		$	—		$	10,101
Accounts payable – affiliates	150,125			1,348			(151,473		)	—
Revenues and production taxes payable	—			115,412			—			115,412
Accrued liabilities	216			126,549			—			126,765
Accrued interest payable	24,255			22			—			24,277
Derivative instruments	—			1,018			—			1,018
Advances from joint partners	—			4,390			—			4,390
Other current liabilities	—			500			—			500
Total current liabilities	174,596			259,340			(151,473		)	282,463
Long-term debt	2,136,938			65,000			—			2,201,938
Deferred income taxes	—			793,796			(213,270		)	580,526
Asset retirement obligations	—			36,088			—			36,088
Liabilities held for sale	—			10,155			—			10,155
Derivative instruments	—			1,558			—			1,558
Other liabilities	—			3,091			—			3,091
Total liabilities	2,311,534			1,169,028			(364,743		)	3,115,819
Stockholders’ equity
Capital contributions from affiliates	—			3,375,186			(3,375,186		)	—
Common stock, $0.01 par value: 300,000,000 shares authorized; 181,298,001 shares issued and 180,582,855 shares outstanding	1,774			—			—			1,774
Treasury stock, at cost: 715,146 shares	(14,652		)	—			—			(14,652		)
Additional paid-in-capital	1,687,261			8,743			(8,743		)	1,687,261
Retained earnings	770,066			1,157,207			(1,157,207		)	770,066
Total stockholders’ equity	2,444,449			4,541,136			(4,541,136		)	2,444,449
Total liabilities and stockholders’ equity	$	4,755,983		$	5,710,164		$	(4,905,879	)	$	5,560,268

Condensed Consolidating Balance Sheet



	December 31, 2015
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets
Cash and cash equivalents	$	777		$	8,953		$	—		$	9,730
Accounts receivable – oil and gas revenues	—			96,495			—			96,495
Accounts receivable – joint interest and other	15			100,899			—			100,914
Accounts receivable – affiliates	1,248			247,488			(248,736		)	—
Inventory	—			11,072			—			11,072
Prepaid expenses	278			7,050			—			7,328
Derivative instruments	—			139,697			—			139,697
Other current assets	—			50			—			50
Total current assets	2,318			611,704			(248,736		)	365,286
Property, plant and equipment
Oil and gas properties (successful efforts method)	—			6,284,401			—			6,284,401
Other property and equipment	—			443,265			—			443,265
Less: accumulated depreciation, depletion, amortization and impairment	—			(1,509,424		)	—			(1,509,424		)
Total property, plant and equipment, net	—			5,218,242			—			5,218,242
Assets held for sale	—			26,728			—			26,728
Investments in and advances to subsidiaries	4,573,172			—			(4,573,172		)	—
Derivative instruments	—			15,776			—			15,776
Deferred income taxes	205,174			—			(205,174		)	—
Other assets	100			23,243			—			23,343
Total assets	$	4,780,764		$	5,895,693		$	(5,027,082	)	$	5,649,375
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	—		$	9,983		$	—		$	9,983
Accounts payable – affiliates	247,488			1,248			(248,736		)	—
Revenue and production taxes payable	—			132,356			—			132,356
Accrued liabilities	10			167,659			—			167,669
Accrued interest payable	49,340			73			—			49,413
Advances from joint interest partners	—			4,647			—			4,647
Other current liabilities	—			6,500			—			6,500
Total current liabilities	296,838			322,466			(248,736		)	370,568
Long-term debt	2,164,584			138,000			—			2,302,584
Deferred income taxes	—			813,329			(205,174		)	608,155
Asset retirement obligations	—			35,338			—			35,338
Liabilities held for sale	—			10,228			—			10,228
Other liabilities	—			3,160			—			3,160
Total liabilities	2,461,422			1,322,521			(453,910		)	3,330,033
Stockholders’ equity
Capital contributions from affiliates	—			3,369,895			(3,369,895		)	—
Common stock, $0.01 par value: 300,000,000 shares authorized; 139,583,990 shares issued and 139,076,064 shares outstanding	1,376			—			—			1,376
Treasury stock, at cost: 507,926 shares	(13,620		)	—			—			(13,620		)
Additional paid-in-capital	1,497,065			8,743			(8,743		)	1,497,065
Retained earnings	834,521			1,194,534			(1,194,534		)	834,521
Total stockholders’ equity	2,319,342			4,573,172			(4,573,172		)	2,319,342
Total liabilities and stockholders’ equity	$	4,780,764		$	5,895,693		$	(5,027,082	)	$	5,649,375

Condensed Consolidating Statement of Operations



	Three Months Ended March 31, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations		Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	117,315		$	—	$	117,315
Well services and midstream revenues	—			12,968			—		12,968
Total revenues	—			130,283			—		130,283
Operating expenses
Lease operating expenses	—			31,064			—		31,064
Well services and midstream operating expenses	—			4,389			—		4,389
Marketing, transportation and gathering expenses	—			8,552			—		8,552
Production taxes	—			10,753			—		10,753
Depreciation, depletion and amortization	—			122,449			—		122,449
Exploration expenses	—			363			—		363
Impairment	—			3,562			—		3,562
General and administrative expenses	7,451			16,915			—		24,366
Total operating expenses	7,451			198,047			—		205,498
Operating loss	(7,451		)	(67,764		)	—		(75,215		)
Other income (expense)
Equity in loss of subsidiaries	(37,327		)	—			37,327		—
Net gain on derivative instruments	—			14,375			—		14,375
Interest expense, net of capitalized interest	(34,832		)	(3,907		)	—		(38,739		)
Gain on extinguishment of debt	7,016			—			—		7,016
Other income	43			436			—		479
Total other income (expense)	(65,100		)	10,904			37,327		(16,869		)
Loss before income taxes	(72,551		)	(56,860		)	37,327		(92,084		)
Income tax benefit	8,096			19,533			—		27,629
Net loss	$	(64,455	)	$	(37,327	)	$	37,327	$	(64,455	)

Condensed Consolidating Statement of Operations



	Three Months Ended March 31, 2015
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	173,859		$	—		$	173,859
Well services and midstream revenues	—			6,528			—			6,528
Total revenues	—			180,387			—			180,387
Operating expenses
Lease operating expenses	—			39,125			—			39,125
Well services and midstream operating expenses	—			1,952			—			1,952
Marketing, transportation and gathering expenses	—			7,278			—			7,278
Production taxes	—			16,621			—			16,621
Depreciation, depletion and amortization	—			118,478			—			118,478
Exploration expenses	—			843			—			843
Rig termination	—			1,080			—			1,080
Impairment	—			5,321			—			5,321
General and administrative expenses	8,619			14,705			—			23,324
Total operating expenses	8,619			205,403			—			214,022
Operating loss	(8,619		)	(25,016		)	—			(33,635		)
Other income (expense)
Equity in earnings of subsidiaries	12,619			—			(12,619		)	—
Net gain on derivative instruments	—			47,072			—			47,072
Interest expense, net of capitalized interest	(35,221		)	(3,563		)	—			(38,784		)
Other expense	(1		)	(69		)	—			(70		)
Total other income (expense)	(22,603		)	43,440			(12,619		)	8,218
Income (loss) before income taxes	(31,222		)	18,424			(12,619		)	(25,417		)
Income tax benefit (expense)	13,181			(5,805		)	—			7,376
Net income (loss)	$	(18,041	)	$	12,619		$	(12,619	)	$	(18,041	)

Condensed Consolidating Statement of Cash Flows



	Three Months Ended March 31, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities:
Net loss	$	(64,455	)	$	(37,327	)	$	37,327		$	(64,455	)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Equity in loss of subsidiaries	37,327			—			(37,327		)	—
Depreciation, depletion and amortization	—			122,449			—			122,449
Gain on extinguishment of debt	(7,016		)	—			—			(7,016		)
Impairment	—			3,562			—			3,562
Deferred income taxes	(8,096		)	(19,533		)	—			(27,629		)
Derivative instruments	—			(14,375		)	—			(14,375		)
Stock-based compensation expenses	6,547			183			—			6,730
Deferred financing costs amortization and other	1,701			3,365			—			5,066
Working capital and other changes:
Change in accounts receivable	(85		)	96,353			(97,263		)	(995		)
Change in inventory	—			349			—			349
Change in prepaid expenses	139			102			—			241
Change in other current assets	—			4			—			4
Change in other assets	77			—			—			77
Change in accounts payable, interest payable and accrued liabilities	(122,242		)	(39,077		)	97,263			(64,056		)
Change in other current liabilities	—			(6,000		)	—			(6,000		)
Change in other liabilities	—			(3		)	—			(3		)
Net cash provided by (used in) operating activities	(156,103		)	110,052			—			(46,051		)
Cash flows from investing activities:
Capital expenditures	—			(103,411		)	—			(103,411		)
Derivative settlements	—			73,313			—			73,313
Advances from joint interest partners	—			(257		)	—			(257		)
Net cash used in investing activities	—			(30,355		)	—			(30,355		)
Cash flows from financing activities:
Repurchase of senior unsecured notes	(22,308		)	—			—			(22,308		)
Proceeds from revolving credit facility	—			214,000			—			214,000
Principal payments on revolving credit facility	—			(287,000		)	—			(287,000		)
Deferred financing costs	—			(751		)	—			(751		)
Proceeds from sale of common stock	183,164			—			—			183,164
Purchases of treasury stock	(1,032		)	—			—			(1,032		)
Investment in / capital contributions from subsidiaries	(4,408		)	4,408			—			—
Net cash provided by (used in) financing activities	155,416			(69,343		)	—			86,073
Increase (decrease) in cash and cash equivalents	(687		)	10,354			—			9,667
Cash and cash equivalents at beginning of period	777			8,953			—			9,730
Cash and cash equivalents at end of period	$	90		$	19,307		$	—		$	19,397

Condensed Consolidating Statement of Cash Flows



	Three Months Ended March 31, 2015
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	(18,041	)	$	12,619		$	(12,619	)	$	(18,041	)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Equity in earnings of subsidiaries	(12,619		)	—			12,619			—
Depreciation, depletion and amortization	—			118,478			—			118,478
Impairment	—			5,321			—			5,321
Deferred income taxes	(13,180		)	5,804			—			(7,376		)
Derivative instruments	—			(47,072		)	—			(47,072		)
Stock-based compensation expenses	7,542			64			—			7,606
Deferred financing costs amortization and other	1,119			536			—			1,655
Working capital and other changes:
Change in accounts receivable	(251		)	11,255			52,309			63,313
Change in inventory	—			(602		)	—			(602		)
Change in prepaid expenses	149			1,743			—			1,892
Change in other current assets	—			5,539			—			5,539
Change in accounts payable, interest payable and accrued liabilities	27,293			(17,325		)	(52,309		)	(42,341		)
Change in other liabilities	—			(11		)	—			(11		)
Net cash provided by (used in) operating activities	(7,988		)	96,349			—			88,361
Cash flows from investing activities:
Capital expenditures	—			(359,113		)	—			(359,113		)
Derivative settlements	—			109,259			—			109,259
Advances from joint interest partners	—			(828		)	—			(828		)
Net cash used in investing activities	—			(250,682		)	—			(250,682		)
Cash flows from financing activities:
Proceeds from revolving credit facility	—			145,000			—			145,000
Principal payments on revolving credit facility	—			(480,000		)	—			(480,000		)
Proceeds from sale of common stock	463,218			—			—			463,218
Purchases of treasury stock	(1,520		)	—			—			(1,520		)
Investment in / capital contributions from subsidiaries	(453,712		)	453,712			—			—
Net cash provided by financing activities	7,986			118,712			—			126,698
Decrease in cash and cash equivalents	(2		)	(35,621		)	—			(35,623		)
Cash and cash equivalents at beginning of period	776			45,035			—			45,811
Cash and cash equivalents at end of period	$	774		$	9,414		$	—		$	10,188