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Acquisition | 6 Months Ended
--- | ---
Jun. 30, 2018
Business Combinations [Abstract] |
Acquisition | Acquisition Permian Basin Acquisition. On February 14, 2018, the Company acquired from Forge Energy, LLC (“Forge Energy”) approximately 22,000 net acres in the Delaware Basin (the “Permian Basin Acquisition”) for aggregate consideration consisting of approximately $549.8 million in cash and 46,000,000 shares of the Company’s common stock, subject to customary post-closing adjustments (collectively, the “Purchase Price”). In connection with the closing of the Permian Basin Acquisition, the Company and Forge Energy entered into a Registration Rights Agreement that granted the equity holders of Forge Energy certain customary registration rights for the stock portion of the Purchase Price. The Company funded the cash portion of the Purchase Price with borrowings under a senior secured revolving line of credit among OPNA, as Borrower, Wells Fargo Bank, N.A., as administrative agent and the lenders party thereto (the “Oasis Credit Facility”), and proceeds from the Company’s December 2017 issuance of its common stock. The Permian Basin Acquisition represents the Company’s initial entry into the Delaware Basin. The assets underlying the Permian Basin Acquisition are primarily located in the Bone Spring and Wolfcamp formations of the Delaware sub-basin, across Ward, Winkler, Loving and Reeves Counties, Texas. The Permian Basin Acquisition qualified as a business combination. As such, the Company estimated the fair value of the assets acquired and liabilities assumed as of the February 14, 2018 acquisition date. The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Fair value measurements also utilize assumptions of market participants. The Company used a discounted cash flow model and made market assumptions as to future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of future development and operating costs, projections of future rates of production, expected recovery rates and risk adjusted discount rates. These assumptions represent Level 3 inputs, as further discussed under Note 6 — Fair Value Measurements. The Company recorded the assets acquired and liabilities assumed in the Permian Basin Acquisition at their estimated fair value of $921.0 million, which the Company considers to be representative of the price paid by a typical market participant. This measurement resulted in no goodwill or bargain purchase being recognized. The Permian Basin Acquisition is considered a taxable transaction; therefore, no deferred tax amounts were recognized at the acquisition date as the tax basis of the assets acquired and liabilities assumed were also recorded at fair value. The following table summarizes the consideration paid for the Company’s acquisition and the fair value of the assets acquired and liabilities assumed as of the acquisition date. The purchase price allocation is preliminary and subject to adjustment, as the final closing statement was finalized in July 2018, subsequent to the second quarter of 2018.
| At February 14, 2018
| (In thousands)
Consideration paid to Forge Energy: |
Cash | $ | 549,770 |
Common stock: 46,000,000 shares issued | 371,220 |
| $ | 920,990 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |
Proved developed properties | $ | 110,735 |
Proved undeveloped properties | 167,170 |
Unproved lease acquisition costs | 644,040 |
Inventory | 293 |
Intangible assets | 1,000 |
Asset retirement obligations | (2,248 | )
| $ | 920,990 |
The results of operations for the Permian Basin Acquisition have been included in the Company’s condensed consolidated financial statements since the February 14, 2018 closing date, including $20.0 million and $31.6 million of total revenue and $6.8 million and $10.2 million of operating income for the three and six months ended June 30, 2018, respectively. The Company also recorded a $1.0 million finite-lived intangible asset on the Company’s Condensed Consolidated Balance Sheets for a non-compete agreement with a one-year life. Intangible assets are amortized on a straight-line basis over the useful life, and the Company includes the amortization in depreciation, depletion and amortization expenses on the Company’s Condensed Consolidated Statements of Operations. For the three and six months ended June 30, 2018, amortization expense recognized for this non-compete agreement was approximately $0.3 million and $0.4 million, respectively. Summarized below are the consolidated results of operations for the three and six months ended June 30, 2018, on an unaudited pro forma basis, as if the acquisition and related financing had occurred on January 1, 2017. The unaudited pro forma financial information was derived from the historical consolidated statements of operations of the Company and the statement of revenues and direct operating expenses for the Permian Basin Acquisition properties, which were derived from the historical accounting records of Forge Energy. The unaudited pro forma financial information does not purport to be indicative of results of operations that would have occurred had the acquisition and related financing occurred on the basis assumed above, nor is such information indicative of the Company’s expected future results of operations.
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (In thousands) |  | (In thousands)
| Unaudited |  | Unaudited
Revenues | $ | 501,337 |  |  | $ | 262,991 |  |  | $ | 928,082 |  |  | $ | 553,073 |
Net income attributable to Oasis | (320,204 | ) |  | 23,877 |  |  | (315,073 | ) |  | 51,785 |
Net income attributable to Oasis per share: |  |  |  |  |  |  |
Basic | $ | (1.02 | ) |  | $ | 0.09 |  |  | $ | (1.01 | ) |  | $ | 0.19 |
Diluted | (1.02 | ) |  | 0.08 |  |  | (1.00 | ) |  | 0.18 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- References No definition available. + Details
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