Long-Term Debt

The Company’s long-term debt consists of the following:



	March 31, 2018			December 31, 2017
	(In thousands)
Oasis Credit Facility	$	626,000		$	70,000
OMP Credit Facility	117,000			78,000
Senior unsecured notes
7.25% senior unsecured notes due February 1, 2019	54,275			54,275
6.5% senior unsecured notes due November 1, 2021	395,501			395,501
6.875% senior unsecured notes due March 15, 2022	937,080			937,080
6.875% senior unsecured notes due January 15, 2023	366,094			366,094
2.625% senior unsecured convertible notes due September 15, 2023	300,000			300,000
Total principal of senior unsecured notes	2,052,950			2,052,950
Less: unamortized deferred financing costs on senior unsecured notes	(21,646		)	(22,956		)
Less: unamortized debt discount on senior unsecured convertible notes	(77,771		)	(80,388		)
Total long-term debt	$	2,696,533		$	2,097,606

The carrying amount of the Company’s long-term debt reported in the Condensed Consolidated Balance Sheet at March 31, 2018 was $2,696.5 million, which included $2,053.0 million of senior unsecured notes, reductions for the unamortized debt discount related to the equity component of the senior unsecured convertible notes and the unamortized deferred financing costs on the senior unsecured notes of $77.8 million and $21.6 million, respectively, $626.0 million of borrowings under the Oasis Credit Facility and $117.0 million of borrowings under a $200.0 million senior secured revolving credit facility among OMP, as parent, OMP Operating LLC, a subsidiary of OMP, as borrower, Wells Fargo Bank, N.A., as administrative agent and the lenders party thereto (the “OMP Credit Facility,” and, together with the Oasis Credit Facility, the “Revolving Credit Facilities”). The Revolving Credit Facilities are recorded at values that approximate fair value since their variable interest rates are tied to current market rates. The fair value of the Company’s senior unsecured notes, which are publicly traded and therefore categorized as Level 1 liabilities, was $2,086.8 million at March 31, 2018.

On April 30, 2018, the Company launched and priced a private placement offering of $400.0 million in aggregate principal amount of 6.25% senior unsecured notes due 2026. The offering is expected to close on May 14, 2018, and the Company intends to use the net proceeds from the offering to fund tender offers (the “Tender Offers”) to purchase for cash, subject to certain conditions, up to $400.0 million in aggregate purchase price, excluding accrued and unpaid interest, of its outstanding 7.25% senior notes due 2019, 6.5% senior notes due 2021, 6.875% senior notes due 2022 and 6.875% senior notes due 2023 (collectively, the “Tender Notes”). The Tender Offers are being made pursuant to an Offer to Purchase and Consent Solicitation Statement dated April 30, 2018. To the extent that the Tender Offers are not completed or the net proceeds from the offering exceed the amount needed to fund the Tender Offers, the Company will use the remaining net proceeds from the offering for general corporate purposes, which may include redemptions or repurchases of the Tender Notes, reducing borrowings under the Oasis Credit Facility, repaying other indebtedness, working capital or funding capital expenditures and acquisitions. The Company’s 7.25% senior notes due February 1, 2019 are excluded from current liabilities in its Condensed Consolidated Balance Sheet at March 31, 2018 because the Company has the intent and ability to refinance this obligation on a long-term basis as demonstrated by the private placement offering and Tender Offers.

Senior secured revolving line of credit. The Company has the Oasis Credit Facility with an overall senior secured line of credit of $2,500.0 million as of March 31, 2018, which has a maturity date of the earlier of (i) April 13, 2020, and (ii) 90 days prior to the maturity date of the 7.25% senior unsecured notes due February 1, 2019 (the “2019 Notes”), of which $54.3 million is outstanding, to the extent such 2019 Notes are not retired or refinanced to have a maturity date at least 90 days after April 13, 2020. The Oasis Credit Facility is restricted to a borrowing base, which is reserve-based and subject to semi-annual redeterminations on April 1 and October 1 of each year. On February 26, 2018, the Company entered into an amendment to the Oasis Credit Facility, resulting in the aggregate elected commitment being increased from $1,150.0 million to $1,350.0 million and two new lenders being added to the bank group. On April 19, 2018, the lenders under the Oasis Credit Facility completed their regular semi-annual redetermination of the borrowing base scheduled for April 1, 2018, resulting in the Company entering into the Twelfth Amendment to the Second Amended and Restated Credit Agreement to the Oasis Credit Facility, which (i) reaffirmed the borrowing base and the aggregate elected commitment at $1,600.0 million and $1,350.0 million, respectively, (ii) removed the legacy anti-cash hoarding provisions, (iii) reduced the coverage threshold with respect to mortgaged properties and (iv) amended the asset sale covenant to give the Company additional flexibility to trade oil and gas properties. In addition, in connection with such amendment, OP Permian became a guarantor under the Oasis Credit Facility. The next redetermination of the Oasis Credit Facility’s borrowing base is scheduled for October 1, 2018.

At March 31, 2018, the Company had $626.0 million of London Interbank Offered Rate (“LIBOR”) loans at a weighted average interest rate of 3.6% and $14.0 million of outstanding letters of credit issued under the Oasis Credit Facility, resulting in an unused borrowing base committed capacity of $710.0 million. On a quarterly basis, the Company also pays a commitment fee that can range from 0.375% to 0.500% on the average amount of borrowing base capacity not utilized during the quarter and fees calculated on the average amount of letter of credit balances outstanding during the quarter. The Company was in compliance with the financial covenants of the Oasis Credit Facility as of March 31, 2018.

OMP Operating LLC revolving line of credit. Through its ownership of OMP, the Company has the OMP Credit Facility with a revolving line of credit of $200.0 million, which has a maturity date of September 25, 2022. The OMP Credit Facility is available to fund working capital and to finance acquisitions and other capital expenditures of OMP. The OMP Credit Facility includes a letter of credit sublimit of $10.0 million and a swingline loans sublimit of $10.0 million. The borrowing capacity on the OMP Credit Facility may be increased up to $400.0 million, subject to certain conditions.

Borrowings under the OMP Credit Facility bear interest at a rate per annum equal to the applicable margin (as described below) plus (i) with respect to Eurodollar Loans, the Adjusted LIBO Rate (as defined in the OMP Credit Agreement) or (ii) with respect to ABR Loans, the greatest of (A) the Prime Rate in effect on such day, (B) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1.00% or (C) the Adjusted LIBO Rate for a one-month interest period on such day plus 1.00% (each as defined in the OMP Credit Agreement). The applicable margin for borrowings under the OMP Credit Facility varies from (a) in the case of Eurodollar Loans, 1.75% to 2.75%, and (b) in the case of ABR Loans or swingline loans, 0.75% to 1.75%. The unused portion of the OMP Credit Facility is subject to a commitment fee ranging from 0.375% to 0.500%.

The OMP Credit Facility includes certain financial covenants as of the end of each fiscal quarter, including a (1) consolidated leverage ratio, (2) consolidated secured leverage ratio and (3) consolidated interest coverage ratio (each covenant as described in the OMP Credit Facility). OMP Operating LLC was in compliance with the financial covenants of the OMP Credit Facility as of March 31, 2018. All obligations of OMP Operating LLC, as the borrower under the OMP Credit Facility, are unconditionally guaranteed on a joint and several basis by OMP, OMP Operating LLC and Bighorn DevCo LLC.

At March 31, 2018, the Company had $117.0 million of borrowings outstanding under the OMP Credit Facility. As of March 31, 2018, the weighted average interest rate on borrowings under the OMP Credit Facility was 3.6%.

Senior unsecured notes. At March 31, 2018, the Company had $1,753.0 million principal amount of senior unsecured notes outstanding with maturities ranging from February 2019 to January 2023 and coupons ranging from 6.50% to 7.25% (the “Senior Notes”). Prior to certain dates, the Company has the option to redeem some or all of the Senior Notes for cash at certain redemption prices equal to a certain percentage of their principal amount plus an applicable make-whole premium and accrued and unpaid interest to the redemption date. The 2019 Notes are currently redeemable for cash at a redemption price equal to par plus accrued and unpaid interest to the redemption date.

Senior unsecured convertible notes. At March 31, 2018, the Company had $300.0 million of 2.625% senior unsecured convertible notes due September 2023 (the “Senior Convertible Notes”). The Company has the option to settle conversions of these notes with cash, shares of common stock or a combination of cash and common stock at its election. The Company’s intent is to settle the principal amount of the Senior Convertible Notes in cash upon conversion. Prior to March 15, 2023, the Senior Convertible Notes will be convertible only under the following circumstances: (i) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period (the “Measurement Period”) in which the trading price per $1,000 principal amount of the Senior Convertible Notes for each trading day of the Measurement Period is less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (iii) upon the occurrence of specified corporate events, including certain distributions or a fundamental change. On or after March 15, 2023, the Senior Convertible Notes will be convertible at any time until the second scheduled trading day immediately preceding their September 15, 2023 maturity date. The Senior Convertible Notes will be convertible at an initial conversion rate of 76.3650 shares of the Company’s common stock per $1,000 principal amount of the Senior Convertible Notes, which is equivalent to an initial conversion price of approximately $13.10. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its Senior Convertible Notes in connection with such corporate event or redemption in certain circumstances. As of March 31, 2018, none of the contingent conditions allowing holders of the Senior Convertible Notes to convert these notes had been met.

Upon issuance, the Company separately accounted for the liability and equity components of the Senior Convertible Notes in accordance with Accounting Standards Codification 470-20. The liability component was recorded at the estimated fair value of a similar debt instrument without the conversion feature. The difference between the principal amount of the Senior Convertible Notes and the estimated fair value of the liability component was recorded as a debt discount and will be amortized to interest expense over the term of the notes using the effective interest method, with an effective interest rate of 8.97% per annum. The fair value of the Senior Convertible Notes as of the issuance date was estimated at $206.8 million, resulting in a debt discount at inception of $93.2 million. The equity component, representing the value of the conversion option, was computed by deducting the fair value of the liability component from the initial proceeds of the Senior Convertible Notes issuance. This equity component was recorded, net of deferred taxes and issuance costs, in additional paid-in capital and will not be remeasured as long as it continues to meet the conditions for equity classification.

Interest on the Senior Notes and the Senior Convertible Notes (collectively, the “Notes”) is payable semi-annually in arrears. The Notes are guaranteed on a senior unsecured basis by the Company, along with its material subsidiaries (the “Guarantors”), which are 100% owned by the Company. These guarantees are full and unconditional and joint and several among the Guarantors, subject to certain customary release provisions. The indentures governing the Notes contain customary events of default as well as covenants that place restrictions on the Company and certain of its subsidiaries.