Condensed Consolidating Financial Information

The Notes (see Note 9 – 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 operating units, including OMP (see Note 3 – Oasis Midstream Partners LP), which is accounted for on a consolidated basis, do not guarantee the Notes (“Non-Guarantor Subsidiaries”).

The following financial information reflects consolidating financial information of the parent company, Oasis Petroleum Inc. (“Issuer”), its Guarantors on a combined basis and the Non-Guarantor Subsidiaries on a combined basis, prepared on the equity basis of accounting. 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, 2017
	Parent/ Issuer			Combined Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets
Cash and cash equivalents	$	178		$	8,310		$	—		$	—		$	8,488
Accounts receivable, net	—			285,325			58			—			285,383
Accounts receivable - affiliates	136,004			34,226			5,611			(175,841		)	—
Inventory	—			17,169			—			—			17,169
Prepaid expenses	465			10,153			29			—			10,647
Derivative instruments	—			692			—			—			692
Other current assets	—			65			—			—			65
Total current assets	136,647			355,940			5,698			(175,841		)	322,444
Property, plant and equipment
Oil and gas properties (successful efforts method)	—			7,640,785			—			—			7,640,785
Other property and equipment	—			261,444			522,098			—			783,542
Less: accumulated depreciation, depletion, amortization and impairment	—			(2,358,848		)	(29,861		)	—			(2,388,709		)
Total property, plant and equipment, net	—			5,543,381			492,237			—			6,035,618
Investments in and advances to subsidiaries	4,535,693			376,528			—			(4,912,221		)	—
Derivative instruments	—			703			—			—			703
Deferred income taxes	269,704			—			—			(269,704		)	—
Long-term inventory	—			10,885			—			—			10,885
Other assets	—			19,614			1,948			—			21,562
Total assets	$	4,942,044		$	6,307,051		$	499,883		$	(5,357,766	)	$	6,391,212
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	—		$	16,348		$	—		$	—		$	16,348
Accounts payable - affiliates	33,885			141,615			341			(175,841		)	—
Revenues and production taxes payable	—			169,361			—			—			169,361
Accrued liabilities	(8		)	188,375			5,790			—			194,157
Accrued interest payable	19,872			449			4			—			20,325
Derivative instruments	—			16,412			—			—			16,412
Advances from joint interest partners	—			5,095			—			—			5,095
Total current liabilities	53,749			537,655			6,135			(175,841		)	421,698
Long-term debt	1,945,613			395,000			—			—			2,340,613
Deferred income taxes	—			778,039			—			(269,704		)	508,335
Asset retirement obligations	—			51,156			1,257			—			52,413
Derivative instruments	—			3,703			—			—			3,703
Other liabilities	—			5,805			—			—			5,805
Total liabilities	1,999,362			1,771,358			7,392			(445,545		)	3,332,567
Stockholders’ equity
Capital contributions from affiliates	—			3,282,946			261,312			(3,544,258		)	—
Common stock, $0.01 par value: 450,000,000 shares authorized; 238,639,488 shares issued and 237,312,881 shares outstanding	2,348			—			—			—			2,348
Treasury stock, at cost: 1,326,607 shares	(22,132		)	—			—			—			(22,132		)
Additional paid-in-capital	2,369,098			8,849			—			(8,849		)	2,369,098
Retained earnings	593,368			1,127,935			—			(1,127,935		)	593,368
Oasis share of stockholders’ equity	2,942,682			4,419,730			261,312			(4,681,042		)	2,942,682
Non-controlling interests	—			115,963			231,179			(231,179		)	115,963



Total stockholders’ equity	2,942,682		4,535,693		492,491		(4,912,221		)	3,058,645
Total liabilities and stockholders’ equity	$	4,942,044	$	6,307,051	$	499,883	$	(5,357,766	)	$	6,391,212

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		)	—
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 September 30, 2017
	Parent/ Issuer			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	248,648		$	—		$	—		$	248,648
Bulk oil sales	—			21,195			—			—			21,195
Midstream revenues	—			15,828			2,939			—			18,767
Well services revenues	—			16,138			—			—			16,138
Total revenues	—			301,809			2,939			—			304,748
Operating expenses
Lease operating expenses	—			45,334			—			—			45,334
Midstream operating expenses	—			3,621			680			—			4,301
Well services operating expenses	—			9,125			—			—			9,125
Marketing, transportation and gathering expenses	—			15,028			—			—			15,028
Bulk oil purchases	—			21,701			—			—			21,701
Production taxes	—			21,052			—			—			21,052
Depreciation, depletion and amortization	—			132,035			254			—			132,289
Exploration expenses	—			854			—			—			854
Impairment	—			139			—			—			139
General and administrative expenses	6,775			15,375			381			—			22,531
Total operating expenses	6,775			264,264			1,315			—			272,354
Operating income (loss)	(6,775		)	37,545			1,624			—			32,394
Other income (expense)
Equity in earnings (loss) of subsidiaries	(13,599		)	1,605			—			11,994			—
Net loss on derivative instruments	—			(54,310		)	—			—			(54,310		)
Interest expense, net of capitalized interest	(32,894		)	(4,476		)	(19		)	—			(37,389		)
Other income (expense)	2			(607		)	—			—			(605		)
Total other expense	(46,491		)	(57,788		)	(19		)	11,994			(92,304		)
Income (loss) before income taxes	(53,266		)	(20,243		)	1,605			11,994			(59,910		)
Income tax benefit	12,052			6,794			—			—			18,846
Net income (loss) including non-controlling interests	(41,214		)	(13,449		)	1,605			11,994			(41,064		)
Less: Net income attributable to non-controlling interests	—			150			1,112			(1,112		)	150
Net income (loss) attributable to Oasis	$	(41,214	)	$	(13,599	)	$	493		$	13,106		$	(41,214	)

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	$	—		$	156,316		$	—	$	156,316
Bulk oil sales	—			1,867			—		1,867
Midstream revenues	—			8,487			—		8,487
Well services revenues	—			10,641			—		10,641
Total revenues	—			177,311			—		177,311
Operating expenses
Lease operating expenses	—			35,696			—		35,696
Midstream operating expenses	—			2,617			—		2,617
Well services operating expenses	—			5,548			—		5,548
Marketing, transportation and gathering expenses	—			7,003			—		7,003
Bulk oil purchases	—			1,853			—		1,853
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



	Nine Months Ended September 30, 2017
	Parent/ Issuer			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	704,533		$	—		$	—		$	704,533
Bulk oil sales	—			56,917			—			—			56,917
Midstream revenues	—			46,000			2,939			—			48,939
Well services revenues	—			33,566			—			—			33,566
Total revenues	—			841,016			2,939			—			843,955
Operating expenses
Lease operating expenses	—			133,871			—			—			133,871
Midstream operating expenses	—			10,211			680			—			10,891
Well services operating expenses	—			21,115			—			—			21,115
Marketing, transportation and gathering expenses	—			38,018			—			—			38,018
Bulk oil purchases	—			57,683			—			—			57,683
Production taxes	—			60,322			—			—			60,322
Depreciation, depletion and amortization	—			383,992			254			—			384,246
Exploration expenses	—			4,010			—			—			4,010
Impairment	—			6,021			—			—			6,021
General and administrative expenses	21,374			48,158			381			—			69,913
Total operating expenses	21,374			763,401			1,315			—			786,090
Operating income (loss)	(21,374		)	77,615			1,624			—			57,865
Other income (expense)
Equity in earnings of subsidiaries	74,379			1,605			—			(75,984		)	—
Net gain on derivative instruments	—			52,297			—			—			52,297
Interest expense, net of capitalized interest	(98,751		)	(11,778		)	(19		)	—			(110,548		)
Other income (expense)	2			(757		)	—			—			(755		)
Total other income (expense)	(24,370		)	41,367			(19		)	(75,984		)	(59,006		)
Income (loss) before income taxes	(45,744		)	118,982			1,605			(75,984		)	(1,141		)
Income tax benefit (expense)	44,923			(44,453		)	—			—			470
Net income (loss) including non-controlling interests	(821		)	74,529			1,605			(75,984		)	(671		)
Less: Net income attributable to non-controlling interests	—			150			1,112			(1,112		)	150
Net income (loss) attributable to Oasis	$	(821	)	$	74,379		$	493		$	(74,872	)	$	(821	)

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	$	—		$	432,968		$	—	$	432,968
Bulk oil sales	—			1,867			—		1,867
Midstream revenues	—			22,380			—		22,380
Well services revenues	—			29,459			—		29,459
Total revenues	—			486,674			—		486,674
Operating expenses
Lease operating expenses	—			98,283			—		98,283
Midstream operating expenses	—			6,095			—		6,095
Well services operating expenses	—			15,334			—		15,334
Marketing, transportation and gathering expenses	—			22,046			—		22,046
Bulk oil purchases	—			1,853			—		1,853
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 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 Cash Flows



	Nine Months Ended September 30, 2017
	Parent/ Issuer			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities:
Net income (loss) including non-controlling interests	$	(821	)	$	74,529		$	1,605		$	(75,984	)	$	(671	)
Adjustments to reconcile net income (loss) including non-controlling interests to net cash provided by (used in) operating activities:
Equity in earnings of subsidiaries	(74,379		)	(1,605		)	—			75,984			—
Depreciation, depletion and amortization	—			383,992			254			—			384,246
Impairment	—			6,021			—			—			6,021
Deferred income taxes	(44,923		)	44,453			—			—			(470		)
Derivative instruments	—			(52,297		)	—			—			(52,297		)
Equity-based compensation expenses	19,740			711			—			—			20,451
Deferred financing costs amortization and other	11,399			1,260			7			—			12,666
Working capital and other changes:
Change in accounts receivable	115,996			(87,610		)	(5,630		)	(103,778		)	(81,022		)
Change in inventory	—			(235		)	—			—			(235		)
Change in prepaid expenses	(190		)	1,013			—			—			823
Change in other current assets	—			276			—			—			276
Change in long-term inventory and other assets	—			(12,843		)	—			—			(12,843		)
Change in accounts payable, interest payable and accrued liabilities	(12,571		)	(62,542		)	3,617			103,778			32,282
Change in other current liabilities	—			(10,490		)	—			—			(10,490		)
Net cash provided by (used in) operating activities	14,251			284,633			(147		)	—			298,737
Cash flows from investing activities:
Capital expenditures	—			(443,649		)	—			—			(443,649		)
Proceeds from sale of properties	—			4,000			—			—			4,000
Derivative settlements	—			(804		)	—			—			(804		)
Advances from joint interest partners	—			(2,502		)	—			—			(2,502		)
Net cash used in investing activities	—			(442,955		)	—			—			(442,955		)
Cash flows from financing activities:
Proceeds from revolving credit facility	—			764,000			—			—			764,000
Principal payments on revolving credit facility	—			(732,000		)	—			—			(732,000		)
Deferred financing costs	—			1,858			(1,954		)	—			(96		)
Proceeds from issuance of Oasis Midstream common units, net of offering costs	—			—			115,813			—			115,813
Purchases of treasury stock	(6,182		)	—			—			—			(6,182		)
Investment in subsidiaries / capital contributions from parent	(8,002		)	121,714			(113,712		)	—			—
Other	(55		)	—			—			—			(55		)
Net cash provided by (used in) financing activities	(14,239		)	155,572			147			—			141,480
Increase (decrease) in cash and cash equivalents	12			(2,750		)	—			—			(2,738		)
Cash and cash equivalents at beginning of period	166			11,060			—			—			11,226
Cash and cash equivalents at end of period	$	178		$	8,310		$	—		$	—		$	8,488

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 net 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
Equity-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 long-term inventory and 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:
Proceeds from revolving credit facility	—			835,000			—			835,000
Principal payments on revolving credit facility	—			(778,000		)	—			(778,000		)
Repurchase of senior unsecured notes	(435,907		)	—			—			(435,907		)
Proceeds from issuance of senior unsecured convertible notes	300,000			—			—			300,000
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 subsidiaries / capital contributions from parent	(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