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



	June 30, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets
Cash and cash equivalents	$	85		$	6,390		$	—		$	6,475
Accounts receivable – oil and gas revenues	—			109,121			—			109,121
Accounts receivable – joint interest and other	—			81,291			—			81,291
Accounts receivable – affiliates	1,348			198,702			(200,050		)	—
Inventory	—			9,018			—			9,018
Prepaid expenses	—			5,838			—			5,838
Derivative instruments	—			10,330			—			10,330
Other current assets	—			4,164			—			4,164
Total current assets	1,433			424,854			(200,050		)	226,237
Property, plant and equipment
Oil and gas properties (successful efforts method)	—			6,402,648			—			6,402,648
Other property and equipment	—			536,462			—			536,462
Less: accumulated depreciation, depletion, amortization and impairment	—			(1,752,376		)	—			(1,752,376		)
Total property, plant and equipment, net	—			5,186,734			—			5,186,734
Investments in and advances to subsidiaries	4,474,390			—			(4,474,390		)	—
Derivative instruments	—			64			—			64
Deferred income taxes	223,269			—			(223,269		)	—
Other assets	—			22,504			—			22,504
Total assets	$	4,699,092		$	5,634,156		$	(4,897,709	)	$	5,435,539
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	—		$	10,357		$	—		$	10,357
Accounts payable – affiliates	198,702			1,348			(200,050		)	—
Revenues and production taxes payable	—			138,451			—			138,451
Accrued liabilities	31			128,253			—			128,284
Accrued interest payable	47,643			28			—			47,671
Derivative instruments	—			20,891			—			20,891
Advances from joint interest partners	—			5,416			—			5,416
Other current liabilities	—			15,001			—			15,001
Total current liabilities	246,376			319,745			(200,050		)	366,071
Long-term debt	2,092,361			35,000			—			2,127,361
Deferred income taxes	—			751,297			(223,269		)	528,028
Asset retirement obligations	—			36,390			—			36,390
Derivative instruments	—			14,291			—			14,291
Other liabilities	—			3,043			—			3,043
Total liabilities	2,338,737			1,159,766			(423,319		)	3,075,184
Stockholders’ equity
Capital contributions from affiliates	—			3,380,427			(3,380,427		)	—
Common stock, $0.01 par value: 450,000,000 shares authorized; 181,200,581 shares issued and 180,399,060 shares outstanding	1,777			—			—			1,777
Treasury stock, at cost: 801,521 shares	(15,140		)	—			—			(15,140		)
Additional paid-in-capital	1,693,583			8,743			(8,743		)	1,693,583
Retained earnings	680,135			1,085,220			(1,085,220		)	680,135
Total stockholders’ equity	2,360,355			4,474,390			(4,474,390		)	2,360,355
Total liabilities and stockholders’ equity	$	4,699,092		$	5,634,156		$	(4,897,709	)	$	5,435,539

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 June 30, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations		Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	159,337		$	—	$	159,337
Well services and midstream revenues	—			19,743			—		19,743
Total revenues	—			179,080			—		179,080
Operating expenses
Lease operating expenses	—			31,523			—		31,523
Well services and midstream operating expenses	—			8,875			—		8,875
Marketing, transportation and gathering expenses	—			6,491			—		6,491
Production taxes	—			14,367			—		14,367
Depreciation, depletion and amortization	—			122,488			—		122,488
Exploration expenses	—			340			—		340
Impairment	—			23			—		23
General and administrative expenses	6,395			15,481			—		21,876
Total operating expenses	6,395			199,588			—		205,983
Loss on sale of properties	—			(1,311		)	—		(1,311		)
Operating loss	(6,395		)	(21,819		)	—		(28,214		)
Other income (expense)
Equity in loss of subsidiaries	(71,987		)	—			71,987		—
Net loss on derivative instruments	—			(90,846		)	—		(90,846		)
Interest expense, net of capitalized interest	(33,190		)	(1,789		)	—		(34,979		)
Gain on extinguishment of debt	11,642			—			—		11,642
Other income (expense)	—			(32		)	—		(32		)
Total other income (expense)	(93,535		)	(92,667		)	71,987		(114,215		)
Loss before income taxes	(99,930		)	(114,486		)	71,987		(142,429		)
Income tax benefit	9,999			42,499			—		52,498
Net loss	$	(89,931	)	$	(71,987	)	$	71,987	$	(89,931	)

Condensed Consolidating Statement of Operations



	Three Months Ended June 30, 2015
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations		Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	214,110		$	—	$	214,110
Well services and midstream revenues	—			15,936			—		15,936
Total revenues	—			230,046			—		230,046
Operating expenses
Lease operating expenses	—			37,761			—		37,761
Well services and midstream operating expenses	—			7,395			—		7,395
Marketing, transportation and gathering expenses	—			7,570			—		7,570
Production taxes	—			20,618			—		20,618
Depreciation, depletion and amortization	—			119,218			—		119,218
Exploration expenses	—			1,082			—		1,082
Rig termination	—			2,815			—		2,815
Impairment	—			19,516			—		19,516
General and administrative expenses	6,325			15,183			—		21,508
Total operating expenses	6,325			231,158			—		237,483
Operating loss	(6,325		)	(1,112		)	—		(7,437		)
Other income (expense)
Equity in loss of subsidiaries	(34,249		)	—			34,249		—
Net loss on derivative instruments	—			(39,424		)	—		(39,424		)
Interest expense, net of capitalized interest	(34,194		)	(3,211		)	—		(37,405		)
Other income	5			186			—		191
Total other income (expense)	(68,438		)	(42,449		)	34,249		(76,638		)
Loss before income taxes	(74,763		)	(43,561		)	34,249		(84,075		)
Income tax benefit	21,533			9,312			—		30,845
Net loss	$	(53,230	)	$	(34,249	)	$	34,249	$	(53,230	)

Condensed Consolidating Statement of Operations



	Six Months Ended June 30, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations		Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	276,652		$	—	$	276,652
Well services and midstream revenues	—			32,711			—		32,711
Total revenues	—			309,363			—		309,363
Operating expenses
Lease operating expenses	—			62,587			—		62,587
Well services and midstream operating expenses	—			13,264			—		13,264
Marketing, transportation and gathering expenses	—			15,043			—		15,043
Production taxes	—			25,120			—		25,120
Depreciation, depletion and amortization	—			244,937			—		244,937
Exploration expenses	—			703			—		703
Rig termination	—			—			—		—
Impairment	—			3,585			—		3,585
General and administrative expenses	13,846			32,396			—		46,242
Total operating expenses	13,846			397,635			—		411,481
Loss on sale of properties	—			(1,311		)	—		(1,311		)
Operating loss	(13,846		)	(89,583		)	—		(103,429		)
Other income (expense)
Equity in loss of subsidiaries	(109,314		)	—			109,314		—
Net loss on derivative instruments	—			(76,471		)	—		(76,471		)
Interest expense, net of capitalized interest	(68,022		)	(5,696		)	—		(73,718		)
Gain on extinguishment of debt	18,658			—			—		18,658
Other income	43			404			—		447
Total other income (expense)	(158,635		)	(81,763		)	109,314		(131,084		)
Loss before income taxes	(172,481		)	(171,346		)	109,314		(234,513		)
Income tax benefit	18,095			62,032			—		80,127
Net loss	$	(154,386	)	$	(109,314	)	$	109,314	$	(154,386	)

Condensed Consolidating Statement of Operations



	Six Months Ended June 30, 2015
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations		Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	387,969		$	—	$	387,969
Well services and midstream revenues	—			22,464			—		22,464
Total revenues	—			410,433			—		410,433
Operating expenses
Lease operating expenses	—			76,886			—		76,886
Well services and midstream operating expenses	—			9,347			—		9,347
Marketing, transportation and gathering expenses	—			14,848			—		14,848
Production taxes	—			37,239			—		37,239
Depreciation, depletion and amortization	—			237,696			—		237,696
Exploration expenses	—			1,925			—		1,925
Rig termination	—			3,895			—		3,895
Impairment	—			24,837			—		24,837
General and administrative expenses	14,944			29,888			—		44,832
Total operating expenses	14,944			436,561			—		451,505
Operating loss	(14,944		)	(26,128		)	—		(41,072		)
Other income (expense)
Equity in loss of subsidiaries	(21,630		)	—			21,630		—
Net gain on derivative instruments	—			7,648			—		7,648
Interest expense, net of capitalized interest	(69,415		)	(6,774		)	—		(76,189		)
Other income	4			117			—		121
Total other income (expense)	(91,041		)	991			21,630		(68,420		)
Loss before income taxes	(105,985		)	(25,137		)	21,630		(109,492		)
Income tax benefit	34,714			3,507			—		38,221
Net loss	$	(71,271	)	$	(21,630	)	$	21,630	$	(71,271	)

Condensed Consolidating Statement of Cash Flows



	Six Months Ended June 30, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities:
Net loss	$	(154,386	)	$	(109,314	)	$	109,314		$	(154,386	)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Equity in loss of subsidiaries	109,314			—			(109,314		)	—
Depreciation, depletion and amortization	—			244,937			—			244,937
Gain on extinguishment of debt	(18,658		)	—			—			(18,658		)
Loss on sale of properties	—			1,311			—			1,311
Impairment	—			3,585			—			3,585
Deferred income taxes	(18,095		)	(62,032		)	—			(80,127		)
Derivative instruments	—			76,471			—			76,471
Stock-based compensation expenses	12,624			355			—			12,979
Deferred financing costs amortization and other	3,360			3,192			—			6,552
Working capital and other changes:
Change in accounts receivable	(85		)	53,068			(48,686		)	4,297
Change in inventory	—			2,054			—			2,054
Change in prepaid expenses	278			1,145			—			1,423
Change in other current assets	—			(114		)	—			(114		)
Change in other assets	100			—			—			100
Change in accounts payable, interest payable and accrued liabilities	(50,462		)	(16,258		)	48,686			(18,034		)
Change in other current liabilities	—			9,001			—			9,001
Change in other liabilities	—			10			—			10
Net cash provided by (used in) operating activities	(116,010		)	207,411			—			91,401
Cash flows from investing activities:
Capital expenditures	—			(231,341		)	—			(231,341		)
Proceeds from sale of properties	—			11,679			—			11,679
Costs related to sale of properties	—			(310		)	—			(310		)
Derivative settlements	—			103,790			—			103,790
Advances from joint interest partners	—			769			—			769
Net cash used in investing activities	—			(115,413		)	—			(115,413		)
Cash flows from financing activities:
Repurchase of senior unsecured notes	(56,925		)	—			—			(56,925		)
Proceeds from revolving credit facility	—			359,000			—			359,000
Principal payments on revolving credit facility	—			(462,000		)	—			(462,000		)
Deferred financing costs	—			(751		)	—			(751		)
Proceeds from sale of common stock	182,953			—			—			182,953
Purchases of treasury stock	(1,520		)	—			—			(1,520		)
Investment in / capital contributions from subsidiaries	(9,190		)	9,190			—			—
Net cash provided by (used in) financing activities	115,318			(94,561		)	—			20,757
Decrease in cash and cash equivalents	(692		)	(2,563		)	—			(3,255		)
Cash and cash equivalents at beginning of period	777			8,953			—			9,730
Cash and cash equivalents at end of period	$	85		$	6,390		$	—		$	6,475

Condensed Consolidating Statement of Cash Flows



	Six Months Ended June 30, 2015
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities:
Net loss	$	(71,271	)	$	(21,630	)	$	21,630		$	(71,271	)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Equity in loss of subsidiaries	21,630			—			(21,630		)	—
Depreciation, depletion and amortization	—			237,696			—			237,696
Impairment	—			24,837			—			24,837
Deferred income taxes	(34,714		)	(3,507		)	—			(38,221		)
Derivative instruments	—			(7,648		)	—			(7,648		)
Stock-based compensation expenses	13,515			148			—			13,663
Deferred financing costs amortization and other	2,255			2,804			—			5,059
Working capital and other changes:
Change in accounts receivable	(256		)	9,890			66,165			75,799
Change in inventory	—			3,685			—			3,685
Change in prepaid expenses	297			3,097			—			3,394
Change in other current assets	—			5,538			—			5,538
Change in accounts payable, interest payable and accrued liabilities	65,933			(22,392		)	(66,165		)	(22,624		)
Change in other liabilities	—			(21		)	—			(21		)
Net cash provided by (used in) operating activities	(2,611		)	232,497			—			229,886
Cash flows from investing activities:
Capital expenditures	—			(587,430		)	—			(587,430		)
Derivative settlements	—			213,336			—			213,336
Advances from joint interest partners	—			(406		)	—			(406		)
Net cash used in investing activities	—			(374,500		)	—			(374,500		)
Cash flows from financing activities:
Proceeds from revolving credit facility	—			320,000			—			320,000
Principal payments on revolving credit facility	—			(665,000		)	—			(665,000		)
Deferred financing costs	—			(3,591		)	—			(3,591		)
Proceeds from sale of common stock	463,010			—			—			463,010
Purchases of treasury stock	(1,932		)	—			—			(1,932		)
Investment in / capital contributions from subsidiaries	(458,465		)	458,465			—			—
Net cash provided by financing activities	2,613			109,874			—			112,487
Increase (decrease) in cash and cash equivalents	2			(32,129		)	—			(32,127		)
Cash and cash equivalents at beginning of period	776			45,035			—			45,811
Cash and cash equivalents at end of period	$	778		$	12,906		$	—		$	13,684