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



	September 30, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets
Cash and cash equivalents	$	90		$	13,686		$	—		$	13,776
Accounts receivable – oil and gas revenues	—			103,128			—			103,128
Accounts receivable – joint interest and other	—			77,903			—			77,903
Accounts receivable – affiliates	1,348			347,331			(348,679		)	—
Inventory	—			8,513			—			8,513
Prepaid expenses	413			5,680			—			6,093
Derivative instruments	—			9,142			—			9,142
Other current assets	—			4,290			—			4,290
Total current assets	1,851			569,673			(348,679		)	222,845
Property, plant and equipment
Oil and gas properties (successful efforts method)	—			6,438,782			—			6,438,782
Other property and equipment	—			580,171			—			580,171
Less: accumulated depreciation, depletion, amortization and impairment	—			(1,866,280		)	—			(1,866,280		)
Total property, plant and equipment, net	—			5,152,673			—			5,152,673
Investments in and advances to subsidiaries	4,478,149			—			(4,478,149		)	—
Derivative instruments	—			194			—			194
Deferred income taxes	205,200			—			(205,200		)	—
Other assets	—			22,549			—			22,549
Total assets	$	4,685,200		$	5,745,089		$	(5,032,028	)	$	5,398,261
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	—		$	7,929		$	—		$	7,929
Accounts payable – affiliates	347,331			1,348			(348,679		)	—
Revenues and production taxes payable	—			141,991			—			141,991
Accrued liabilities	27			98,899			—			98,926
Accrued interest payable	19,765			33			—			19,798
Derivative instruments	—			17,308			—			17,308
Advances from joint interest partners	—			5,191			—			5,191
Other current liabilities	—			—			—			—
Total current liabilities	367,123			272,699			(348,679		)	291,143
Long-term debt	1,930,573			195,000			—			2,125,573
Deferred income taxes	—			751,402			(205,200		)	546,202
Asset retirement obligations	—			37,092			—			37,092
Derivative instruments	—			7,755			—			7,755
Other liabilities	—			2,992			—			2,992
Total liabilities	2,297,696			1,266,940			(553,879		)	3,010,757
Stockholders’ equity
Capital contributions from affiliates	—			3,385,326			(3,385,326		)	—
Common stock, $0.01 par value: 450,000,000 shares authorized; 182,038,164 shares issued and 181,186,070 shares outstanding	1,779			—			—			1,779
Treasury stock, at cost: 852,094 shares	(15,895		)	—			—			(15,895		)
Additional paid-in-capital	1,755,427			8,743			(8,743		)	1,755,427
Retained earnings	646,193			1,084,080			(1,084,080		)	646,193
Total stockholders’ equity	2,387,504			4,478,149			(4,478,149		)	2,387,504
Total liabilities and stockholders’ equity	$	4,685,200		$	5,745,089		$	(5,032,028	)	$	5,398,261

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 September 30, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations		Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	158,183		$	—	$	158,183
Well services and midstream revenues	—			19,128			—		19,128
Total revenues	—			177,311			—		177,311
Operating expenses
Lease operating expenses	—			35,696			—		35,696
Well services and midstream operating expenses	—			8,165			—		8,165
Marketing, transportation and gathering expenses	—			8,856			—		8,856
Production taxes	—			14,638			—		14,638
Depreciation, depletion and amortization	—			111,948			—		111,948
Exploration expenses	—			489			—		489
Impairment	—			382			—		382
General and administrative expenses	5,930			16,915			—		22,845
Total operating expenses	5,930			197,089			—		203,019
Gain on sale of properties	—			6			—		6
Operating loss	(5,930		)	(19,772		)	—		(25,702		)
Other income (expense)
Equity in loss of subsidiaries	(1,140		)	—			1,140		—
Net gain on derivative instruments	—			20,847			—		20,847
Interest expense, net of capitalized interest	(29,876		)	(1,850		)	—		(31,726		)
Loss on extinguishment of debt	(13,793		)	—			—		(13,793		)
Other income (expense)	1			(260		)	—		(259		)
Total other income (expense)	(44,808		)	18,737			1,140		(24,931		)
Loss before income taxes	(50,738		)	(1,035		)	1,140		(50,633		)
Income tax benefit (expense)	16,796			(105		)	—		16,691
Net loss	$	(33,942	)	$	(1,140	)	$	1,140	$	(33,942	)

Condensed Consolidating Statement of Operations



	Three Months Ended September 30, 2015
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	175,270		$	—		$	175,270
Well services and midstream revenues	—			21,965			—			21,965
Total revenues	—			197,235			—			197,235
Operating expenses
Lease operating expenses	—			35,670			—			35,670
Well services and midstream operating expenses	—			10,023			—			10,023
Marketing, transportation and gathering expenses	—			8,465			—			8,465
Production taxes	—			16,676			—			16,676
Depreciation, depletion and amortization	—			123,734			—			123,734
Exploration expenses	—			327			—			327
Impairment	—			80			—			80
General and administrative expenses	5,903			16,455			—			22,358
Total operating expenses	5,903			211,430			—			217,333
Gain on sale of properties	—			172			—			172
Operating loss	(5,903		)	(14,023		)	—			(19,926		)
Other income (expense)
Equity in earnings of subsidiaries	49,899			—			(49,899		)	—
Net gain on derivative instruments	—			103,637			—			103,637
Interest expense, net of capitalized interest	(34,020		)	(2,493		)	—			(36,513		)
Other income	1			248			—			249
Total other income (expense)	15,880			101,392			(49,899		)	67,373
Income before income taxes	9,977			87,369			(49,899		)	47,447
Income tax benefit (expense)	17,078			(37,470		)	—			(20,392		)
Net income	$	27,055		$	49,899		$	(49,899	)	$	27,055

Condensed Consolidating Statement of Operations



	Nine Months Ended September 30, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations		Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	434,835		$	—	$	434,835
Well services and midstream revenues	—			51,839			—		51,839
Total revenues	—			486,674			—		486,674
Operating expenses
Lease operating expenses	—			98,283			—		98,283
Well services and midstream operating expenses	—			21,429			—		21,429
Marketing, transportation and gathering expenses	—			23,899			—		23,899
Production taxes	—			39,758			—		39,758
Depreciation, depletion and amortization	—			356,885			—		356,885
Exploration expenses	—			1,192			—		1,192
Impairment	—			3,967			—		3,967
General and administrative expenses	19,776			49,311			—		69,087
Total operating expenses	19,776			594,724			—		614,500
Loss on sale of properties	—			(1,305		)	—		(1,305		)
Operating loss	(19,776		)	(109,355		)	—		(129,131		)
Other income (expense)
Equity in loss of subsidiaries	(110,454		)	—			110,454		—
Net loss on derivative instruments	—			(55,624		)	—		(55,624		)
Interest expense, net of capitalized interest	(97,898		)	(7,546		)	—		(105,444		)
Gain on extinguishment of debt	4,865			—			—		4,865
Other income	44			144			—		188
Total other income (expense)	(203,443		)	(63,026		)	110,454		(156,015		)
Loss before income taxes	(223,219		)	(172,381		)	110,454		(285,146		)
Income tax benefit	34,891			61,927			—		96,818
Net loss	$	(188,328	)	$	(110,454	)	$	110,454	$	(188,328	)

Condensed Consolidating Statement of Operations



	Nine Months Ended September 30, 2015
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	563,239		$	—		$	563,239
Well services and midstream revenues	—			44,429			—			44,429
Total revenues	—			607,668			—			607,668
Operating expenses
Lease operating expenses	—			112,556			—			112,556
Well services and midstream operating expenses	—			19,370			—			19,370
Marketing, transportation and gathering expenses	—			23,313			—			23,313
Production taxes	—			53,915			—			53,915
Depreciation, depletion and amortization	—			361,430			—			361,430
Exploration expenses	—			2,252			—			2,252
Rig termination	—			3,895			—			3,895
Impairment	—			24,917			—			24,917
General and administrative expenses	20,847			46,343			—			67,190
Total operating expenses	20,847			647,991			—			668,838
Gain on sale of properties	—			172			—			172
Operating loss	(20,847		)	(40,151		)	—			(60,998		)
Other income (expense)
Equity in earnings of subsidiaries	28,269			—			(28,269		)	—
Net gain on derivative instruments	—			111,285			—			111,285
Interest expense, net of capitalized interest	(103,435		)	(9,267		)	—			(112,702		)
Other income	5			365			—			370
Total other income (expense)	(75,161		)	102,383			(28,269		)	(1,047		)
Income (loss) before income taxes	(96,008		)	62,232			(28,269		)	(62,045		)
Income tax benefit (expense)	51,792			(33,963		)	—			17,829
Net income (loss)	$	(44,216	)	$	28,269		$	(28,269	)	$	(44,216	)

Condensed Consolidating Statement of Cash Flows



	Nine Months Ended September 30, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities:
Net loss	$	(188,328	)	$	(110,454	)	$	110,454		$	(188,328	)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Equity in loss of subsidiaries	110,454			—			(110,454		)	—
Depreciation, depletion and amortization	—			356,885			—			356,885
Gain on extinguishment of debt	(4,865		)	—			—			(4,865		)
Loss on sale of properties	—			1,305			—			1,305
Impairment	—			3,967			—			3,967
Deferred income taxes	(34,891		)	(61,927		)	—			(96,818		)
Derivative instruments	—			55,624			—			55,624
Stock-based compensation expenses	18,195			566			—			18,761
Deferred financing costs amortization and other	5,371			4,803			—			10,174
Working capital and other changes:
Change in accounts receivable	(85		)	(88,509		)	99,943			11,349
Change in inventory	—			2,559			—			2,559
Change in prepaid expenses	(135		)	1,303			—			1,168
Change in other current assets	—			(240		)	—			(240		)
Change in other assets	100			(248		)	—			(148		)
Change in accounts payable, interest payable and accrued liabilities	70,285			(12,333		)	(99,943		)	(41,991		)
Change in other current liabilities	—			(6,000		)	—			(6,000		)
Change in other liabilities	—			17			—			17
Net cash provided by (used in) operating activities	(23,899		)	147,318			—			123,419
Cash flows from investing activities:
Capital expenditures	—			(340,314		)	—			(340,314		)
Proceeds from sale of properties	—			12,333			—			12,333
Costs related to sale of properties	—			(310		)	—			(310		)
Derivative settlements	—			115,576			—			115,576
Advances from joint interest partners	—			544			—			544
Net cash used in investing activities	—			(212,171		)	—			(212,171		)
Cash flows from financing activities:
Repurchase of senior unsecured notes	(435,907		)	—			—			(435,907		)
Proceeds from issuance of senior unsecured convertible notes	300,000			—			—			300,000
Proceeds from revolving credit facility	—			835,000			—			835,000
Principal payments on revolving credit facility	—			(778,000		)	—			(778,000		)
Deferred financing costs	(7,880		)	(931		)	—			(8,811		)
Proceeds from sale of common stock	182,791			—			—			182,791
Purchases of treasury stock	(2,275		)	—			—			(2,275		)
Investment in / capital contributions from subsidiaries	(13,517		)	13,517			—			—
Net cash provided by financing activities	23,212			69,586			—			92,798
Increase (decrease) in cash and cash equivalents	(687		)	4,733			—			4,046
Cash and cash equivalents at beginning of period	777			8,953			—			9,730
Cash and cash equivalents at end of period	$	90		$	13,686		$	—		$	13,776

Condensed Consolidating Statement of Cash Flows



	Nine Months Ended September 30, 2015
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	(44,216	)	$	28,269		$	(28,269	)	$	(44,216	)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Equity in earnings of subsidiaries	(28,269		)	—			28,269			—
Depreciation, depletion and amortization	—			361,430			—			361,430
Gain on sale of properties	—			(172		)	—			(172		)
Impairment	—			24,917			—			24,917
Deferred income taxes	(51,792		)	33,963			—			(17,829		)
Derivative instruments	—			(111,285		)	—			(111,285		)
Stock-based compensation expenses	19,276			353			—			19,629
Deferred financing costs amortization and other	3,401			4,067			—			7,468
Working capital and other changes:
Change in accounts receivable	(493		)	(22,000		)	130,802			108,309
Change in inventory	—			8,425			—			8,425
Change in prepaid expenses	(120		)	758			—			638
Change in other current assets	—			5,529			—			5,529
Change in accounts payable, interest payable and accrued liabilities	105,536			(58,867		)	(130,802		)	(84,133		)
Change in other current liabilities	—			1,655			—			1,655
Change in other liabilities	—			(28		)	—			(28		)
Net cash provided by operating activities	3,323			277,014			—			280,337
Cash flows from investing activities:
Capital expenditures	—			(740,633		)	—			(740,633		)
Proceeds from sale of properties	—			78			—			78
Derivative settlements	—			291,436			—			291,436
Advances from joint interest partners	—			(1,239		)	—			(1,239		)
Net cash used in investing activities	—			(450,358		)	—			(450,358		)
Cash flows from financing activities:
Proceeds from revolving credit facility	—			618,000			—			618,000
Principal payments on revolving credit facility	—			(938,000		)	—			(938,000		)
Deferred financing costs	—			(3,587		)	—			(3,587		)
Proceeds from sale of common stock	462,833			—			—			462,833
Purchases of treasury stock	(2,771		)	—			—			(2,771		)
Investment in / capital contributions from subsidiaries	(463,404		)	463,404			—			—
Net cash provided by (used in) financing activities	(3,342		)	139,817			—			136,475
Decrease in cash and cash equivalents	(19		)	(33,527		)	—			(33,546		)
Cash and cash equivalents at beginning of period	776			45,035			—			45,811
Cash and cash equivalents at end of period	$	757		$	11,508		$	—		$	12,265