Condensed Consolidating Financial Information

The Notes (see Note 7 – 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, 2017
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets
Cash and cash equivalents	$	178		$	11,262		$	—		$	11,440
Accounts receivable, net	—			218,302			—			218,302
Accounts receivable - affiliates	187,496			33,709			(221,205		)	—
Inventory	—			17,942			—			17,942
Prepaid expenses	664			9,946			—			10,610
Derivative instruments	—			31,851			—			31,851
Other current assets	3			59			—			62
Total current assets	188,341			323,071			(221,205		)	290,207
Property, plant and equipment
Oil and gas properties (successful efforts method)	—			7,488,075			—			7,488,075
Other property and equipment	—			695,592			—			695,592
Less: accumulated depreciation, depletion, amortization and impairment	—			(2,252,653		)	—			(2,252,653		)
Total property, plant and equipment, net	—			5,931,014			—			5,931,014
Investments in and advances to subsidiaries	4,545,805			—			(4,545,805		)	—
Derivative instruments	—			11,834			—			11,834
Deferred income taxes	257,652			—			(257,652		)	—
Long-term inventory	—			8,762			—			8,762
Other assets	—			19,904			—			19,904
Total assets	$	4,991,798		$	6,294,585		$	(5,024,662	)	$	6,261,721
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	—		$	12,257		$	—		$	12,257
Accounts payable - affiliates	33,709			187,496			(221,205		)	—
Revenues and production taxes payable	—			143,715			—			143,715
Accrued liabilities	—			139,766			—			139,766
Accrued interest payable	38,796			332			—			39,128
Advances from joint interest partners	—			5,816			—			5,816
Total current liabilities	72,505			489,382			(221,205		)	340,682
Long-term debt	1,941,683			418,000			—			2,359,683
Deferred income taxes	—			784,833			(257,652		)	527,181
Asset retirement obligations	—			51,059			—			51,059
Other liabilities	—			5,506			—			5,506
Total liabilities	2,014,188			1,748,780			(478,857		)	3,284,111
Stockholders’ equity
Capital contributions from affiliates	—			3,395,528			(3,395,528		)	—
Common stock, $0.01 par value: 450,000,000 shares authorized; 238,642,598 shares issued and 237,410,395 shares outstanding	2,345			—			—			2,345
Treasury stock, at cost: 1,232,203 shares	(21,401		)	—			—			(21,401		)
Additional paid-in-capital	2,362,084			8,743			(8,743		)	2,362,084
Retained earnings	634,582			1,141,534			(1,141,534		)	634,582
Total stockholders’ equity	2,977,610			4,545,805			(4,545,805		)	2,977,610
Total liabilities and stockholders’ equity	$	4,991,798		$	6,294,585		$	(5,024,662	)	$	6,261,721

Condensed Consolidating Balance Sheet



	December 31, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets
Cash and cash equivalents	$	166		$	11,060		$	—		$	11,226
Accounts receivable, net	—			204,335			—			204,335
Accounts receivable - affiliates	252,000			27,619			(279,619		)	—
Inventory	—			10,648			—			10,648
Prepaid expenses	275			7,348			—			7,623
Derivative instruments	—			362			—			362
Other current assets	—			4,355			—			4,355
Total current assets	252,441			265,727			(279,619		)	238,549
Property, plant and equipment
Oil and gas properties (successful efforts method)	—			7,296,568			—			7,296,568
Other property and equipment	—			618,790			—			618,790
Less: accumulated depreciation, depletion, amortization and impairment	—			(1,995,791		)	—			(1,995,791		)
Total property, plant and equipment, net	—			5,919,567			—			5,919,567
Investments in and advances to subsidiaries	4,451,192			—			(4,451,192		)	—
Derivative instruments	—			—			—			—
Deferred income taxes	220,058			—			(220,058		)	—
Other assets	—			20,516			—			20,516
Total assets	$	4,923,691		$	6,205,810		$	(4,950,869	)	$	6,178,632
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	—		$	4,645		$	—		$	4,645
Accounts payable - affiliates	27,619			252,000			(279,619		)	—
Revenues and production taxes payable	—			139,737			—			139,737
Accrued liabilities	12			119,161			—			119,173
Accrued interest payable	38,689			315			—			39,004
Derivative instruments	—			60,469			—			60,469
Advances from joint interest partners	—			7,597			—			7,597
Other current liabilities	—			10,490			—			10,490
Total current liabilities	66,320			594,414			(279,619		)	381,115
Long-term debt	1,934,214			363,000			—			2,297,214
Deferred income taxes	—			733,587			(220,058		)	513,529
Asset retirement obligations	—			48,985			—			48,985
Derivative instruments	—			11,714			—			11,714
Other liabilities	—			2,918			—			2,918
Total liabilities	2,000,534			1,754,618			(499,677		)	3,255,475
Stockholders’ equity
Capital contributions from affiliates	—			3,388,893			(3,388,893		)	—
Common stock, $0.01 par value: 450,000,000 shares authorized; 237,201,064 shares issued and 236,344,172 shares outstanding	2,331			—			—			2,331
Treasury stock, at cost: 856,892 shares	(15,950		)	—			—			(15,950		)
Additional paid-in-capital	2,345,271			8,743			(8,743		)	2,345,271
Retained earnings	591,505			1,053,556			(1,053,556		)	591,505
Total stockholders’ equity	2,923,157			4,451,192			(4,451,192		)	2,923,157
Total liabilities and stockholders’ equity	$	4,923,691		$	6,205,810		$	(4,950,869	)	$	6,178,632

Condensed Consolidating Statement of Operations



	Three Months Ended June 30, 2017
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	218,633		$	—		$	218,633
Bulk oil sales	—			8,091			—			8,091
Midstream revenues	—			15,566			—			15,566
Well services revenues	—			11,801			—			11,801
Total revenues	—			254,091			—			254,091
Operating expenses
Lease operating expenses	—			44,665			—			44,665
Midstream operating expenses	—			3,263			—			3,263
Well services operating expenses	—			8,088			—			8,088
Marketing, transportation and gathering expenses	—			12,039			—			12,039
Bulk oil purchases	—			7,980			—			7,980
Production taxes	—			18,971			—			18,971
Depreciation, depletion and amortization	—			125,291			—			125,291
Exploration expenses	—			1,667			—			1,667
Impairment	—			3,200			—			3,200
General and administrative expenses	7,534			16,014			—			23,548
Total operating expenses	7,534			241,178			—			248,712
Operating income (loss)	(7,534		)	12,913			—			5,379
Other income (expense)
Equity in earnings of subsidiaries	38,875			—			(38,875		)	—
Net gain on derivative instruments	—			50,532			—			50,532
Interest expense, net of capitalized interest	(33,006		)	(3,832		)	—			(36,838		)
Other expense	—			(166		)	—			(166		)
Total other income	5,869			46,534			(38,875		)	13,528
Income (loss) before income taxes	(1,665		)	59,447			(38,875		)	18,907
Income tax benefit (expense)	18,233			(20,572		)	—			(2,339		)
Net income	$	16,568		$	38,875		$	(38,875	)	$	16,568

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
Midstream revenues	—			6,910			—		6,910
Well services revenues	—			12,833			—		12,833
Total revenues	—			179,080			—		179,080
Operating expenses
Lease operating expenses	—			31,523			—		31,523
Midstream operating expenses	—			1,740			—		1,740
Well services operating expenses	—			7,135			—		7,135
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 expense	—			(32		)	—		(32		)
Total other 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



	Six Months Ended June 30, 2017
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	455,885		$	—		$	455,885
Bulk oil sales	—			35,722			—			35,722
Midstream revenues	—			30,172			—			30,172
Well services revenues	—			17,428			—			17,428
Total revenues	—			539,207			—			539,207
Operating expenses
Lease operating expenses	—			88,537			—			88,537
Midstream operating expenses	—			6,590			—			6,590
Well services operating expenses	—			11,990			—			11,990
Marketing, transportation and gathering expenses	—			22,990			—			22,990
Bulk oil purchases	—			35,982			—			35,982
Production taxes	—			39,270			—			39,270
Depreciation, depletion and amortization	—			251,957			—			251,957
Exploration expenses	—			3,156			—			3,156
Impairment	—			5,882			—			5,882
General and administrative expenses	14,599			32,783			—			47,382
Total operating expenses	14,599			499,137			—			513,736
Operating income (loss)	(14,599		)	40,070			—			25,471
Other income (expense)
Equity in earnings of subsidiaries	87,978			—			(87,978		)	—
Net gain on derivative instruments	—			106,607			—			106,607
Interest expense, net of capitalized interest	(65,857		)	(7,302		)	—			(73,159		)
Other expense	—			(150		)	—			(150		)
Total other income	22,121			99,155			(87,978		)	33,298
Income before income taxes	7,522			139,225			(87,978		)	58,769
Income tax benefit (expense)	32,871			(51,247		)	—			(18,376		)
Net income	$	40,393		$	87,978		$	(87,978	)	$	40,393

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
Midstream revenues	—			13,893			—		13,893
Well services revenues	—			18,818			—		18,818
Total revenues	—			309,363			—		309,363
Operating expenses
Lease operating expenses	—			62,587			—		62,587
Midstream operating expenses	—			3,478			—		3,478
Well services operating expenses	—			9,786			—		9,786
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
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 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 Cash Flows



	Six Months Ended June 30, 2017
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities:
Net income	$	40,393		$	87,978		$	(87,978	)	$	40,393
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiaries	(87,978		)	—			87,978			—
Depreciation, depletion and amortization	—			251,957			—			251,957
Impairment	—			5,882			—			5,882
Deferred income taxes	(32,871		)	51,247			—			18,376
Derivative instruments	—			(106,607		)	—			(106,607		)
Stock-based compensation expenses	13,395			428			—			13,823
Deferred financing costs amortization and other	7,470			1,401			—			8,871
Working capital and other changes:
Change in accounts receivable	64,504			(19,833		)	(58,414		)	(13,743		)
Change in inventory	—			(1,007		)	—			(1,007		)
Change in prepaid expenses	(389		)	125			—			(264		)
Change in other current assets	(3		)	283			—			280
Change in long-term inventory and other assets	—			(8,768		)	—			(8,768		)
Change in accounts payable, interest payable and accrued liabilities	6,185			(53,441		)	58,414			11,158
Change in other current liabilities	—			(10,490		)	—			(10,490		)
Net cash provided by operating activities	10,706			199,155			—			209,861
Cash flows from investing activities:
Capital expenditures	—			(252,461		)	—			(252,461		)
Proceeds from sale of properties	—			4,000			—			4,000
Derivative settlements	—			(8,899		)	—			(8,899		)
Advances from joint interest partners	—			(1,781		)	—			(1,781		)
Net cash used in investing activities	—			(259,141		)	—			(259,141		)
Cash flows from financing activities:
Proceeds from revolving credit facility	—			484,000			—			484,000
Principal payments on revolving credit facility	—			(429,000		)	—			(429,000		)
Purchases of treasury stock	(5,451		)	—			—			(5,451		)
Investment in / capital contributions from subsidiaries	(5,188		)	5,188			—			—
Other	(55		)	—			—			(55		)
Net cash provided by (used in) financing activities	(10,694		)	60,188			—			49,494
Increase in cash and cash equivalents	12			202			—			214
Cash and cash equivalents at beginning of period	166			11,060			—			11,226
Cash and cash equivalents at end of period	$	178		$	11,262		$	—		$	11,440

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 net 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 long-term inventory and 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:
Proceeds from revolving credit facility	—			359,000			—			359,000
Principal payments on revolving credit facility	—			(462,000		)	—			(462,000		)
Repurchase of senior unsecured notes	(56,925		)	—			—			(56,925		)
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