Long-Term Debt

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



	December 31,
	2018			2017
	(In thousands)
Oasis Credit Facility	$	468,000		$	70,000
OMP Credit Facility	318,000			78,000
Senior unsecured notes
7.25% senior unsecured notes due February 1, 2019	—			54,275
6.50% senior unsecured notes due November 1, 2021	71,835			395,501
6.875% senior unsecured notes due March 15, 2022	901,480			937,080
6.875% senior unsecured notes due January 15, 2023	366,094			366,094
6.25% senior unsecured notes due May 1, 2026	400,000			—
2.625% senior unsecured convertible notes due September 15, 2023	300,000			300,000
Total principal of senior unsecured notes	2,039,409			2,052,950
Less: unamortized deferred financing costs on senior unsecured notes	(20,865		)	(22,956		)
Less: unamortized debt discount on senior unsecured convertible notes	(69,268		)	(80,388		)
Total long-term debt	$	2,735,276		$	2,097,606

The carrying amount of the Company’s long-term debt reported in the Consolidated Balance Sheets at December 31, 2018 is $2,735.3 million, which includes $2,039.4 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 $69.3 million and $20.9 million, respectively, $468.0 million of borrowings under the Oasis Credit Facility and $318.0 million under the OMP Credit Facility. 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 $1,830.4 million at December 31, 2018.

The Company has $71.8 million, $901.5 million, $666.1 million and $400.0 million of Notes maturing in 2021, 2022, 2023 and 2026, respectively, and indebtedness under the Oasis Credit Facility and the OMP Credit Facility that become due in 2023 and 2022, respectively. The Company does not have any other debt that matures within the five years ending December 31, 2023.

Senior secured revolving line of credit. The Company has the Oasis Credit Facility with an overall senior secured line of credit of $3,000.0 million as of December 31, 2018, which has a maturity date of the earlier of (i) October 16, 2023, (ii) 90 days prior to the maturity date of the Company’s 2022 and 2023 Senior Notes, of which $1,267.6 million is outstanding, to the extent such 2022 and 2023 Senior Notes are not retired or refinanced to have a maturity date at least 90 days after October 16, 2023 and (iii) 90 days prior to the maturity date of the Company’s 2023 Senior Convertible Notes, of which $300.0 million is outstanding, to the extent such 2023 Senior Convertible Notes are not retired, converted, redeemed or refinanced to have a maturity date at least 90 days after October 16, 2023.

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 (the “Lenders”) 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.

On October 16, 2018, the Company entered into a third amended and restated credit agreement (the “Third Amended Credit Facility”). In connection with entry into the Third Amended Credit Facility, the semi-annual redetermination of the Company’s borrowing base was completed on October 16, 2018, which reaffirmed the borrowing base and the aggregate elected commitment at $1,600.0 million and $1,350.0 million, respectively, and the overall credit facility increased from $2,500.0 million to $3,000.0 million. Pursuant to the Third Amended Credit Facility, the credit facility was extended from April 2020 to October 2023, provided that the Company’s 2022 and 2023 Notes (as defined below) are retired or refinanced 90 days prior to their respective maturities. All other significant rates, terms and conditions of the Third Amended Credit Facility remained the same. The next redetermination of the Oasis Credit Facility’s borrowing base is scheduled for April 1, 2019.

Borrowings under the Oasis Credit Facility are collateralized by perfected first priority liens and security interests on substantially all of the Company’s assets, including mortgage liens on oil and natural gas properties having at least 90% (as of December 31, 2018) of the reserve value as determined by reserve reports.

Borrowings under the Oasis Credit Facility are subject to varying rates of interest based on (i) the total outstanding borrowings (including the value of all outstanding letters of credit) in relation to the borrowing base and (ii) whether the loan is a London interbank offered rate (“LIBOR”) loan or a domestic bank prime interest rate loan (defined in the Oasis Credit Facility as an Alternate Based Rate or “ABR” loan). As of December 31, 2018, any outstanding LIBOR and ABR loans would have borne their respective interest rates plus the applicable margin indicated in the following table:



Total Commitment Utilization Percentage	Applicable Margin for LIBOR Loans		Applicable Margin for ABR Loans
Less than 25%	1.50	%	0.00	%
Greater than or equal to 25% but less than 50%	1.75	%	0.25	%
Greater than or equal to 50% but less than 75%	2.00	%	0.50	%
Greater than or equal to 75% but less than 90%	2.25	%	0.75	%
Greater than or equal to 90%	2.50	%	1.00	%

A loan may be repaid at any time before the scheduled maturity of the Oasis Credit Facility upon the Company providing advance notification to the Lenders. Interest is paid quarterly on ABR loans based on the number of days an ABR loan is outstanding as of the last business day in March, June, September and December. The Company has the option to convert an ABR loan to a LIBOR-based loan upon providing advance notification to the Lenders. The minimum available loan term is one month and the maximum available loan term is six months for LIBOR-based loans (or twelve months with the consent of each leader). Interest for LIBOR loans is paid at the end of the applicable interest period for each loan or every three months for LIBOR loans that have loan terms greater than three months. At the end of a LIBOR loan term, the Oasis Credit Facility allows the Company to elect to repay the borrowing, continue a LIBOR loan with the same or differing loan term or convert the borrowing to an ABR loan.

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.

As of December 31, 2018, the Oasis Credit Facility contained covenants that included, among others:


•	a prohibition against incurring debt, subject to permitted exceptions;


•	a prohibition against making dividends, distributions and redemptions, subject to permitted exceptions;


•	a prohibition against making investments, loans and advances, subject to permitted exceptions;


•	restrictions on creating liens and leases on the assets of the Company and its subsidiaries, subject to permitted exceptions;


•	restrictions on merging and selling assets outside the ordinary course of business;


•	restrictions on use of proceeds, investments, transactions with affiliates or change of principal business;


•	a provision limiting oil and natural gas derivative financial instruments;


•	a requirement that the Company maintain a ratio of consolidated EBITDAX (as defined in the Oasis Credit Facility) to consolidated Interest Expense (as defined in the Oasis Credit Facility) of no less than 2.5 to 1.0 for the four quarters ended on the last day of each quarter;

•

a requirement that the Company maintain a Current Ratio (as defined in the Oasis Credit Facility) of consolidated current assets (including unused borrowing base committed capacity and with exclusions as described in the Oasis Credit Facility) to consolidated current liabilities (with exclusions as described in the Oasis Credit Facility) of no less than 1.0 to 1.0 as of the last day of any fiscal quarter; and

•

if the Aggregate Elected Commitment Amounts (as defined in the Oasis Credit Facility) exceed 85% of the effective borrowing base (“Trigger”), the Company is required to maintain a ratio of total debt (as defined in the Oasis Credit Facility) to consolidated EBITDAX (as defined in the Oasis Credit Facility) (the “Leverage Ratio”). The Leverage Ratio will be first tested during the quarter in which the Trigger occurs. The Leverage Ratio shall continue to be tested as long as the Aggregate Elected Commitment Amounts exceed 85% of the effective borrowing base, and shall not exceed 4.25 to 1.00 for the first two quarters and 4.00 to 1.00 for each fiscal quarter thereafter.

The Oasis Credit Facility contains customary events of default. If an event of default occurs and is continuing, the Lenders may declare all amounts outstanding under the Oasis Credit Facility to be immediately due and payable.

As of December 31, 2018, the Company had $468.0 million of borrowings and $14.0 million of outstanding letters of credit issued under the Oasis Credit Facility, resulting in an unused borrowing base committed capacity of $868.0 million. As of December 31, 2017, the Company had $70.0 million of borrowings and $10.5 million of outstanding letters of credit issued under the Oasis Credit Facility, resulting in an unused borrowing base committed capacity of $1,069.5 million. As of December 31, 2018 and 2017, the weighted average interest rate on borrowings under the Oasis Credit Facility was 4.2% and 3.1%, respectively. The Company was in compliance with the financial covenants of the Oasis Credit Facility as of December 31, 2018 and 2017.

OMP Operating LLC revolving line of credit. On September 25, 2017, OMP entered into a credit agreement (the “OMP Credit Agreement”) for the OMP Credit Facility, 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.

On August 27, 2018, OMP entered into an amendment to its revolving credit facility (the “First Amended OMP Credit Agreement”) in order to (i) increase the aggregate amount of commitments from $200.0 million to $250.0 million, (ii) provide for the ability to further increase commitments and (iii) add six new lenders to the bank group. On November 19, 2018, in connection with the OMP Dropdown (see Note 3 – Oasis Midstream Partners LP), and pursuant to the terms of the First Amended OMP Credit Agreement, the aggregate amount of commitments increased from $250.0 million to $400.0 million, and OMP was provided the ability to further increase the borrowing capacity for the OMP Credit Facility to $600.0 million, subject to certain conditions.

The OMP Credit Facility includes a letter of credit sublimit of $10.0 million and a swingline loans sublimit of $10.0 million. All obligations of OMP Operating, as the borrower under the OMP Credit Facility, are unconditionally guaranteed on a joint and several basis by OMP, OMP Operating and Bighorn DevCo.

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 is determined in accordance with the OMP Credit Agreement as follows:



Consolidated Total Leverage Ratio	Applicable Margin for Eurodollar Loans		Applicable Margin for ABR Loans		Commitment Fee Rate
Less than or equal to 3.00 to 1.00	1.75	%	0.75	%	0.375	%
Greater than 3.00 to 1.00 but less than or equal to 3.50 to 1.00	2.00	%	1.00	%	0.375	%
Greater than 3.50 to 1.00 but less than or equal to 4.00 to 1.00	2.25	%	1.25	%	0.500	%
Greater than 4.00 to 1.00 but less than or equal to 4.50 to 1.00	2.50	%	1.50	%	0.500	%
Greater than 4.50 to 1.00	2.75	%	1.75	%	0.500	%

The OMP Credit Facility includes certain financial covenants as of the end of each fiscal quarter, including a (1) consolidated total leverage ratio, (2) consolidated senior secured leverage ratio and (3) consolidated interest coverage ratio (each covenant as described in the OMP Credit Agreement).

At December 31, 2018, the Company had $318.0 million of borrowings outstanding under the OMP Credit Facility, resulting in an unused borrowing capacity of $82.0 million. As of December 31, 2018 and 2017, the weighted average interest rate on borrowings under the OMP Credit Facility was 4.2% and 3.2%, respectively. OMP Operating was in compliance with the financial covenants of the OMP Credit Facility as of December 31, 2018.

Senior unsecured notes. At December 31, 2018, the Company had $1,739.4 million principal amount of senior unsecured notes outstanding with maturities ranging from November 2021 to May 2026 and coupons ranging from 6.25% to 6.875% (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.

On May 14, 2018, the Company completed its offering of $400.0 million in aggregate principal amount of its 6.25% senior unsecured notes due 2026 (the “2026 Notes”). The Company used the net proceeds of $394.4 million from the 2026 Notes to fund the repurchase of certain outstanding senior notes (the “Tender Offers”), as described below.

On May 25, 2018, the Company completed the Tender Offers and, as a result of the Tender Offers, the Company repurchased an aggregate principal amount of $390.6 million of its outstanding Senior Notes, consisting of $31.3 million principal amount of its 7.25% senior unsecured notes due 2019 (the “2019 Notes”), $323.7 million principal amount of its 6.50% senior unsecured notes due 2021 and $35.6 million principal amount of its 6.875% senior unsecured notes due 2022, for an aggregate cost of $402.0 million, including accrued interest and fees.

On May 29, 2018, the Company paid $23.0 million to redeem all of the remaining outstanding 2019 Notes, which payment consisted of the 100% redemption price plus all accrued and unpaid interest on the 2019 Notes. The Company financed the redemption with borrowings under the Oasis Credit Facility. As a result of the Tender Offers and the redemption, the Company recognized a pre-tax loss of $13.8 million, which was net of unamortized deferred financing costs write-offs of $4.0 million, and is reflected in loss on extinguishment of debt in the Company’s Consolidated Statements of Operations for the year ended December 31, 2018. As of December 31, 2018, no 2019 Notes remained outstanding.

The indentures governing the Senior Notes restrict the Company’s ability and the ability of certain of the Company’s subsidiaries to: (i) incur additional debt or enter into sale and leaseback transactions; (ii) pay distributions on, redeem or repurchase equity interests; (iii) make certain investments; (iv) incur liens; (v) enter into transactions with affiliates; (vi) merge or consolidate with another company; and (vii) transfer and sell assets. These covenants are subject to a number of important exceptions and qualifications. If at any time when the Company’s Senior Notes are rated investment grade by both Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services and no default (as defined in the indentures) has occurred and is continuing, many of such covenants will terminate and the Company will cease to be subject to such covenants. The Company was in compliance with the terms of the indentures for the Senior Notes as of December 31, 2018.

Senior unsecured convertible notes. At December 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 commencing after the calendar quarter ending on September 30, 2016 (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 December 31, 2018, none of the contingent conditions allowing holders of the Senior Convertible Notes to convert these notes had been met. In addition, the Company was in compliance with the terms of the indentures for the Senior Convertible Notes as of December 31, 2018.

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.

Deferred financing costs. As of December 31, 2018, the Company had $31.2 million of deferred financing costs related to the Notes and the Revolving Credit Facilities. Deferred financing costs of $20.9 million related to the Notes are included in long-term debt on the Company’s Consolidated Balance Sheets as of December 31, 2018, and are being amortized over the respective terms of the Notes. Deferred financing costs of $7.9 million and $2.4 million related to the Oasis Credit Facility and OMP Credit Facility, respectively, are included in other assets on the Company’s Consolidated Balance Sheets at December 31, 2018, and are being amortized over the term of the Oasis Credit Facility and the OMP Credit Facility. Amortization of deferred financing costs recorded for the year ended December 31, 2018, 2017 and 2016 was $7.6 million, $7.0 million and $9.8 million, respectively. These costs are included in interest expense on the Company’s Consolidated Statements of Operations. For the year ended December 31, 2018, the Company’s interest expense also included $0.3 million for unamortized deferred financing costs related to the Oasis Credit Facility, which were written off in proportion to the two lenders leaving the bank group. For the year ended December 31, 2016, the Company’s interest expense also included $1.8 million for unamortized deferred financing costs related to the Oasis Credit Facility, which were written off in proportion to the decrease in the borrowing base. No deferred financing costs related to the Revolving Credit Facilities were written off during the year ended December 31, 2017. Aforementioned, the gain (loss) on extinguishment of debt in the Company’s Consolidated Statements of Operations included unamortized deferred financing costs write-offs of $4.0 million and $6.4 million related to the repurchased Notes for the years ended December 31, 2018 and 2016, respectively. No deferred financing costs related to the Notes were written off during the year ended December 31, 2017.