Condensed Consolidating Financial Information

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidating Financial Information

The Notes (see Note 11 – 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, 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, 2018
	Parent/ Issuer			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands, except share data)
ASSETS
Current assets
Cash and cash equivalents	$	170		$	11,732		$	4,990		$	—		$	16,892
Accounts receivable, net	—			423,130			5,054			—			428,184
Accounts receivable - affiliates	653,255			66,153			72,896			(792,304		)	—
Inventory	—			31,409			—			—			31,409
Prepaid expenses	617			5,731			96			—			6,444
Intangible assets, net	—			375			—			—			375
Other current assets	—			192			—			—			192
Total current assets	654,042			538,722			83,036			(792,304		)	483,496
Property, plant and equipment
Oil and gas properties (successful efforts method)	—			8,679,662			—			(8,518		)	8,671,144
Other property and equipment	—			212,257			876,534			(10		)	1,088,781
Less: accumulated depreciation, depletion, amortization and impairment	—			(2,805,233		)	(54,555		)	—			(2,859,788		)
Total property, plant and equipment, net	—			6,086,686			821,979			(8,528		)	6,900,137
Investments in and advances to subsidiaries	4,653,951			515,997			—			(5,169,948		)	—
Deferred income taxes	209,919			—			—			(209,919		)	—
Long-term inventory	—			12,610			—			—			12,610
Other assets	—			18,207			1,981			—			20,188
Total assets	$	5,517,912		$	7,172,222		$	906,996		$	(6,180,699	)	$	7,416,431
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	—		$	17,182		$	24		$	—		$	17,206
Accounts payable - affiliates	41,213			726,151			24,940			(792,304		)	—
Revenues and production taxes payable	—			286,897			436			—			287,333
Accrued liabilities	56			248,097			59,373			—			307,526
Accrued interest payable	19,855			547			172			—			20,574
Derivative instruments	—			180,129			—			—			180,129
Advances from joint interest partners	—			3,878			—			—			3,878
Other current liabilities	—			40			—			—			40
Total current liabilities	61,124			1,462,921			84,945			(792,304		)	816,686
Long-term debt	1,945,009			522,000			166,000			—			2,633,009
Deferred income taxes	—			440,423			—			(209,919		)	230,504
Asset retirement obligations	—			49,860			1,497			—			51,357
Derivative instruments	—			33,017			—			—			33,017
Other liabilities	—			7,775			—			—			7,775
Total liabilities	2,006,133			2,515,996			252,442			(1,002,223		)	3,772,348
Stockholders’ equity
Capital contributions from affiliates	—			3,271,788			202,007			(3,473,795		)	—
Common stock, $0.01 par value: 900,000,000 shares authorized; 320,507,783 shares issued and 318,419,144 shares outstanding	3,157			—			—			—			3,157
Treasury stock, at cost: 2,088,639 shares	(28,985		)	—			—			—			(28,985		)
Additional paid-in-capital	3,070,642			9,141			—			(9,141		)	3,070,642
Retained earnings	466,965			1,236,740			46,413			(1,289,406		)	460,712
Oasis share of stockholders’ equity	3,511,779			4,517,669			248,420			(4,772,342		)	3,505,526
Non-controlling interests	—			138,557			406,134			(406,134		)	138,557
Total stockholders’ equity	3,511,779			4,656,226			654,554			(5,178,476		)	3,644,083
Total liabilities and stockholders’ equity	$	5,517,912		$	7,172,222		$	906,996		$	(6,180,699	)	$	7,416,431

Condensed Consolidating Balance Sheet



	December 31, 2017
	Parent/ Issuer			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands, except share data)
ASSETS
Current assets
Cash and cash equivalents	$	178		$	15,659		$	883		$	—		$	16,720
Accounts receivable, net	—			362,746			834			—			363,580
Accounts receivable - affiliates	425,668			46,020			85,818			(557,506		)	—
Inventory	—			19,367			—			—			19,367
Prepaid expenses	267			6,586			778			—			7,631
Derivative instruments	—			344			—			—			344
Other current assets	—			193			—			—			193
Total current assets	426,113			450,915			88,313			(557,506		)	407,835
Property, plant and equipment
Oil and gas properties (successful efforts method)	—			7,840,921			—			(1,966		)	7,838,955
Other property and equipment	—			214,818			653,928			—			868,746
Less: accumulated depreciation, depletion, amortization and impairment	—			(2,499,867		)	(34,348		)	—			(2,534,215		)
Total property, plant and equipment, net	—			5,555,872			619,580			(1,966		)	6,173,486
Investments in and advances to subsidiaries	4,790,976			422,132			—			(5,213,108		)	—
Derivative instruments	—			9			—			—			9
Deferred income taxes	183,568			—			—			(183,568		)	—
Long-term inventory	—			12,200			—			—			12,200
Other assets	—			19,587			2,013			—			21,600
Total assets	$	5,400,657		$	6,460,715		$	709,906		$	(5,956,148	)	$	6,615,130
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	—		$	13,370		$	—		$	—		$	13,370
Accounts payable - affiliates	34,382			511,486			11,638			(557,506		)	—
Revenues and production taxes payable	—			213,995			—			—			213,995
Accrued liabilities	216			177,446			58,818			—			236,480
Accrued interest payable	38,796			53			114			—			38,963
Derivative instruments	—			115,716			—			—			115,716
Advances from joint interest partners	—			4,916			—			—			4,916
Other current liabilities	—			40			—			—			40
Total current liabilities	73,394			1,037,022			70,570			(557,506		)	623,480
Long-term debt	1,949,606			70,000			78,000			—			2,097,606
Deferred income taxes	—			489,489			—			(183,568		)	305,921
Asset retirement obligations	—			47,195			1,316			—			48,511
Derivative instruments	—			19,851			—			—			19,851
Other liabilities	—			6,182			—			—			6,182
Total liabilities	2,023,000			1,669,739			149,886			(741,074		)	3,101,551
Stockholders’ equity
Capital contributions from affiliates	—			3,264,691			234,935			(3,499,626		)	—
Common stock, $0.01 par value: 450,000,000 shares authorized; 270,627,014 shares issued and 269,295,466 shares outstanding	2,668			—			—			—			2,668
Treasury stock, at cost: 1,331,548 shares	(22,179		)	—			—			—			(22,179		)
Additional paid-in-capital	2,677,217			8,922			—			(8,922		)	2,677,217
Retained earnings	719,951			1,379,475			11,639			(1,393,080		)	717,985
Oasis share of stockholders’ equity	3,377,657			4,653,088			246,574			(4,901,628		)	3,375,691
Non-controlling interests	—			137,888			313,446			(313,446		)	137,888
Total stockholders’ equity	3,377,657			4,790,976			560,020			(5,215,074		)	3,513,579
Total liabilities and stockholders’ equity	$	5,400,657		$	6,460,715		$	709,906		$	(5,956,148	)	$	6,615,130

Condensed Consolidating Statement of Operations



	Three Months Ended September 30, 2018
	Parent/ Issuer			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	452,643		$	—		$	—		$	452,643
Purchased oil and gas sales	—			46,356			—			—			46,356
Midstream revenues	—			765			71,467			(41,045		)	31,187
Well services revenues	—			16,262			—			—			16,262
Total revenues	—			516,026			71,467			(41,045		)	546,448
Operating expenses
Lease operating expenses	—			63,099			—			(14,565		)	48,534
Midstream operating expenses	—			528			19,816			(11,692		)	8,652
Well services operating expenses	—			11,405			—			—			11,405
Marketing, transportation and gathering expenses	—			36,839			—			(6,126		)	30,713
Purchased oil and gas expenses	—			46,148			—			(60		)	46,088
Production taxes	—			38,722			—			—			38,722
Depreciation, depletion and amortization	—			159,843			7,189			(4,048		)	162,984
Exploration expenses	—			22,315			—			—			22,315
General and administrative expenses	7,486			24,627			5,449			(2,703		)	34,859
Total operating expenses	7,486			403,526			32,454			(39,194		)	404,272
Gain on sale of properties	—			36,869			—			—			36,869
Operating income (loss)	(7,486		)	149,369			39,013			(1,851		)	179,045
Other income (expense)
Equity in earnings of subsidiaries	96,555			38,835			—			(135,390		)	—
Net loss on derivative instruments	—			(48,544		)	—			—			(48,544		)
Interest expense, net of capitalized interest	(32,836		)	(6,561		)	(163		)	—			(39,560		)
Loss on extinguishment of debt	(47		)	—			—			—			(47		)
Other income (expense)	—			126			(15		)	—			111
Total other income (expense)	63,672			(16,144		)	(178		)	(135,390		)	(88,040		)
Income before income taxes	56,186			133,225			38,835			(137,241		)	91,005
Income tax benefit (expense)	6,155			(30,937		)	—			—			(24,782		)
Net income including non-controlling interests	62,341			102,288			38,835			(137,241		)	66,223
Less: Net income attributable to non-controlling interests	—			3,882			26,459			(26,459		)	3,882
Net income attributable to Oasis	$	62,341		$	98,406		$	12,376		$	(110,782	)	$	62,341

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
Purchased oil and gas 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	—			10,288			—			—			10,288
Marketing, transportation and gathering expenses	—			15,028			—			—			15,028
Purchased oil and gas expenses	—			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			14,212			381			—			21,368
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



	Nine Months Ended September 30, 2018
	Parent/ Issuer			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	1,212,235		$	—		$	—		$	1,212,235
Purchased oil and gas sales	—			121,971			—			—			121,971
Midstream revenues	—			2,832			199,446			(113,827		)	88,451
Well services revenues	—			46,344			—			—			46,344
Total revenues	—			1,383,382			199,446			(113,827		)	1,469,001
Operating expenses
Lease operating expenses	—			176,413			—			(38,957		)	137,456
Midstream operating expenses	—			2,054			53,266			(30,995		)	24,325
Well services operating expenses	—			32,352			—			—			32,352
Marketing, transportation and gathering expenses	—			92,164			—			(17,605		)	74,559
Purchased oil and gas expenses	—			121,311			—			(60		)	121,251
Production taxes	—			103,748			—			—			103,748
Depreciation, depletion and amortization	—			456,624			20,212			(11,017		)	465,819
Exploration expenses	—			23,701			—			—			23,701
Impairment	—			384,228			—			—			384,228
General and administrative expenses	22,214			60,259			17,496			(8,940		)	91,029
Total operating expenses	22,214			1,452,854			90,974			(107,574		)	1,458,468
Gain on sale of properties	—			38,823			—			—			38,823
Operating income (loss)	(22,214		)	(30,649		)	108,472			(6,253		)	49,356
Other income (expense)
Equity in earnings (loss) of subsidiaries	(149,295		)	107,849			—			41,446			—
Net loss on derivative instruments	—			(239,945		)	—			—			(239,945		)
Interest expense, net of capitalized interest	(98,417		)	(18,591		)	(608		)	—			(117,616		)
Loss on extinguishment of debt	(13,698		)	—			—			—			(13,698		)
Other income (expense)	—			161			(15		)	—			146
Total other expense	(261,410		)	(150,526		)	(623		)	41,446			(371,113		)
Income (loss) before income taxes	(283,624		)	(181,175		)	107,849			35,193			(321,757		)
Income tax benefit	26,351			49,040			—			—			75,391
Net income (loss) including non-controlling interests	(257,273		)	(132,135		)	107,849			35,193			(246,366		)
Less: Net income attributable to non-controlling interests	—			10,907			73,075			(73,075		)	10,907
Net income (loss) attributable to Oasis	$	(257,273	)	$	(143,042	)	$	34,774		$	108,268		$	(257,273	)

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
Purchased oil and gas 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	—			23,858			—			—			23,858
Marketing, transportation and gathering expenses	—			38,018			—			—			38,018
Purchased oil and gas expenses	—			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			45,415			381			—			67,170
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 Cash Flows



	Nine Months Ended September 30, 2018
	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	$	(257,273	)	$	(132,135	)	$	107,849		$	35,193		$	(246,366	)
Adjustments to reconcile net income (loss) including non-controlling interests to net cash provided by (used in) operating activities:
Equity in earnings (loss) of subsidiaries	149,295			(107,849		)	—			(41,446		)	—
Depreciation, depletion and amortization	—			456,624			20,212			(11,017		)	465,819
Loss on extinguishment of debt	13,698			—			—			—			13,698
Gain on sale of properties	—			(38,823		)	—			—			(38,823		)
Impairment	—			384,228			—			—			384,228
Deferred income taxes	(26,351		)	(49,067		)	—			—			(75,418		)
Derivative instruments	—			239,945			—			—			239,945
Equity-based compensation expenses	20,292			1,014			280			—			21,586
Deferred financing costs amortization and other	11,955			7,884			235			—			20,074
Working capital and other changes:
Change in accounts receivable	(227,589		)	(77,231		)	8,747			234,798			(61,275		)
Change in inventory	—			(12,076		)	—			—			(12,076		)
Change in prepaid expenses	(350		)	864			682			—			1,196
Change in other current assets	—			1			—			—			1
Change in long-term inventory and other assets	—			(490		)	—			—			(490		)
Change in accounts payable, interest payable and accrued liabilities	(12,270		)	278,481			18,895			(234,798		)	50,308
Change in other liabilities	—			(406		)	—			—			(406		)
Net cash provided by (used in) operating activities	(328,593		)	950,964			156,900			(17,270		)	762,001
Cash flows from investing activities:
Capital expenditures	—			(621,269		)	(219,819		)	—			(841,088		)
Acquisitions	—			(579,886		)	—			—			(579,886		)
Proceeds from sale of properties	—			333,029			—			—			333,029
Costs related to sale of properties	—			(2,707		)	—			—			(2,707		)
Derivative settlements	—			(162,013		)	—			—			(162,013		)
Advances from joint interest partners	—			(1,038		)	—			—			(1,038		)
Net cash used in investing activities	—			(1,033,884		)	(219,819		)	—			(1,253,703		)
Cash flows from financing activities:
Proceeds from Revolving Credit Facilities	—			2,376,000			123,000			—			2,499,000
Principal payments on Revolving Credit Facilities	—			(1,924,000		)	(35,000		)	—			(1,959,000		)
Repurchase of senior unsecured notes	(423,190		)	—			—			—			(423,190		)
Proceeds from issuance of senior unsecured convertible notes	400,000			—			—			—			400,000
Deferred financing costs	(7,058		)	(261		)	(331		)	—			(7,650		)
Purchases of treasury stock	(6,806		)	—			—			—			(6,806		)
Distributions to non-controlling interests	—			92,672			(103,065		)	—			(10,393		)
Investment in subsidiaries / capital contributions from parent	365,601			(465,293		)	82,422			17,270			—
Other	38			(125		)	—			—			(87		)
Net cash provided by financing activities	328,585			78,993			67,026			17,270			491,874
Increase (decrease) in cash and cash equivalents	(8		)	(3,927		)	4,107			—			172
Cash and cash equivalents at beginning of period	178			15,659			883			—			16,720
Cash and cash equivalents at end of period	$	170		$	11,732		$	4,990		$	—		$	16,892

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 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 Oasis Credit Facility	—			764,000			—			—			764,000
Principal payments on Oasis 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