Condensed Consolidating Financial Information

3 Months Ended

Mar. 31, 2019

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.

For the three months ended March 31, 2018, the Company has revised the condensed consolidating financial statements to reflect the correction of errors, which had no effect on the Company’s net income. All impacts of the revision are included in the Combined Guarantor Subsidiaries financial information. Please see Note 2 — Summary of Significant Accounting Policies for more information related to the revision.

Condensed Consolidating Balance Sheet



	March 31, 2019
	Parent/ Issuer			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands, except share data)
ASSETS
Current assets
Cash and cash equivalents	$	144		$	10,039		$	5,259		$	—		$	15,442
Accounts receivable, net	—			453,220			3,419			—			456,639
Accounts receivable - affiliates	597,551			80,273			79,659			(757,483		)	—
Inventory	—			35,997			272			—			36,269
Prepaid expenses	503			6,535			1,366			—			8,404
Derivative instruments	—			4,467			—			—			4,467
Other current assets	—			309			—			—			309
Total current assets	598,198			590,840			89,975			(757,483		)	521,530
Property, plant and equipment
Oil and gas properties (successful efforts method)	—			9,085,886			—			(12,801		)	9,073,085
Other property and equipment	—			233,131			983,632			—			1,216,763
Less: accumulated depreciation, depletion, amortization and impairment	—			(3,161,469		)	(71,637		)	—			(3,233,106		)
Total property, plant and equipment, net	—			6,157,548			911,995			(12,801		)	7,056,742
Investments in and advances to subsidiaries	4,824,586			373,669			—			(5,198,255		)	—
Derivative instruments	—			181			—			—			181
Deferred income taxes	236,242			—			—			(236,242		)	—
Long-term inventory	—			13,767			—			—			13,767
Operating right-of-use assets	—			21,639			3,102			—			24,741
Other assets	—			26,705			2,680			—			29,385
Total assets	$	5,659,026		$	7,184,349		$	1,007,752		$	(6,204,781	)	$	7,646,346
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	—		$	10,024		$	148		$	—		$	10,172
Accounts payable - affiliates	47,402			677,210			32,871			(757,483		)	—
Revenues and production taxes payable	—			249,160			409			—			249,569
Accrued liabilities	211			274,910			63,698			—			338,819
Accrued interest payable	20,758			549			624			—			21,931
Derivative instruments	—			27,663			—			—			27,663
Advances from joint interest partners	—			5,072			—			—			5,072
Current operating lease liabilities	—			10,796			2,339			—			13,135
Other current liabilities	—			2,469			16			—			2,485
Total current liabilities	68,371			1,257,853			100,105			(757,483		)	668,846
Long-term debt	1,953,333			493,000			345,000			—			2,791,333
Deferred income taxes	—			532,750			—			(236,242		)	296,508
Asset retirement obligations	—			51,871			1,533			—			53,404
Derivative instruments	—			1,271			—			—			1,271
Operating lease liabilities	—			16,825			785			—			17,610
Other liabilities	—			5,928			311			—			6,239
Total liabilities	2,021,704			2,359,498			447,734			(993,725		)	3,835,211
Stockholders’ equity
Capital contributions from affiliates	—			3,225,865			164,887			(3,390,752		)	—
Common stock, $0.01 par value: 900,000,000 shares authorized; 324,829,258 shares issued and 322,051,268 shares outstanding	3,182			—			—			—			3,182
Treasury stock, at cost: 2,777,990 shares	(33,286		)	—			—			—			(33,286		)
Additional paid-in-capital	3,087,592			8,234			—			(8,743		)	3,087,083
Retained earnings	579,834			1,404,403			82,887			(1,499,317		)	567,807
Oasis share of stockholders’ equity	3,637,322			4,638,502			247,774			(4,898,812		)	3,624,786
Non-controlling interests	—			186,349			312,244			(312,244		)	186,349
Total stockholders’ equity	3,637,322			4,824,851			560,018			(5,211,056		)	3,811,135
Total liabilities and stockholders’ equity	$	5,659,026		$	7,184,349		$	1,007,752		$	(6,204,781	)	$	7,646,346

Condensed Consolidating Balance Sheet



	December 31, 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	$	179		$	15,362		$	6,649		$	—		$	22,190
Accounts receivable, net	—			385,121			2,481			—			387,602
Accounts receivable - affiliates	643,382			76,127			80,805			(800,314		)	—
Inventory	—			33,106			22			—			33,128
Prepaid expenses	373			9,206			1,418			—			10,997
Derivative instruments	—			99,930			—			—			99,930
Intangible assets, net	—			125			—			—			125
Other current assets	—			183			—			—			183
Total current assets	643,934			619,160			91,375			(800,314		)	554,155
Property, plant and equipment
Oil and gas properties (successful efforts method)	—			8,923,291			—			(11,102		)	8,912,189
Other property and equipment	—			218,617			933,155			—			1,151,772
Less: accumulated depreciation, depletion, amortization and impairment	—			(2,974,122		)	(62,730		)	—			(3,036,852		)
Total property, plant and equipment, net	—			6,167,786			870,425			(11,102		)	7,027,109
Investments in and advances to subsidiaries	4,910,111			367,141			—			(5,277,252		)	—
Derivative instruments	—			6,945			—			—			6,945
Deferred income taxes	219,670			—			—			(219,670		)	—
Long-term inventory	—			12,260			—			—			12,260
Other assets	—			23,221			2,452			—			25,673
Total assets	$	5,773,715		$	7,196,513		$	964,252		$	(6,308,338	)	$	7,626,142
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	—		$	18,567		$	1,599		$	—		$	20,166
Accounts payable - affiliates	43,113			724,187			33,014			(800,314		)	—
Revenues and production taxes payable	—			216,114			581			—			216,695
Accrued liabilities	71			273,923			57,657			—			331,651
Accrued interest payable	37,096			502			442			—			38,040
Derivative instruments	—			84			—			—			84
Advances from joint interest partners	—			5,140			—			—			5,140
Total current liabilities	80,280			1,238,517			93,293			(800,314		)	611,776
Long-term debt	1,949,276			468,000			318,000			—			2,735,276
Deferred income taxes	—			519,725			—			(219,670		)	300,055
Asset retirement obligations	—			50,870			1,514			—			52,384
Derivative instruments	—			20			—			—			20
Other liabilities	—			7,751			—			—			7,751
Total liabilities	2,029,556			2,284,883			412,807			(1,019,984		)	3,707,262
Stockholders’ equity
Capital contributions from affiliates	—			3,226,837			177,049			(3,403,886		)	—
Common stock, $0.01 par value: 900,000,000 shares authorized; 320,469,049 shares issued and 318,377,161 shares outstanding	3,157			—			—			—			3,157
Treasury stock, at cost: 2,091,888 shares	(29,025		)	—			—			—			(29,025		)
Additional paid-in-capital	3,078,203			8,295			—			(8,743		)	3,077,755
Retained earnings	691,824			1,492,194			61,581			(1,562,910		)	682,689
Oasis share of stockholders’ equity	3,744,159			4,727,326			238,630			(4,975,539		)	3,734,576
Non-controlling interests	—			184,304			312,815			(312,815		)	184,304
Total stockholders’ equity	3,744,159			4,911,630			551,445			(5,288,354		)	3,918,880
Total liabilities and stockholders’ equity	$	5,773,715		$	7,196,513		$	964,252		$	(6,308,338	)	$	7,626,142

Condensed Consolidating Statement of Operations



	Three Months Ended March 31, 2019
	Parent/ Issuer			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	368,782		$	—		$	—		$	368,782
Purchased oil and gas sales	—			148,471			—			—			148,471
Midstream revenues	—			3,070			91,651			(46,700		)	48,021
Well services revenues	—			10,458			—			—			10,458
Total revenues	—			530,781			91,651			(46,700		)	575,732
Operating expenses
Lease operating expenses	—			71,785			—			(13,341		)	58,444
Midstream expenses	—			1,848			26,915			(12,034		)	16,729
Well services expenses	—			6,970			—			—			6,970
Marketing, transportation and gathering expenses	—			45,237			—			(10,287		)	34,950
Purchased oil and gas expenses	—			149,904			—			—			149,904
Production taxes	—			29,618			—			—			29,618
Depreciation, depletion and amortization	—			186,069			8,929			(5,165		)	189,833
Exploration expenses	—			830			—			—			830
Impairment	—			629			—			—			629
General and administrative expenses	9,087			20,825			8,720			(4,173		)	34,459
Total operating expenses	9,087			513,715			44,564			(45,000		)	522,366
Loss on sale of properties	—			(2,922		)	—			—			(2,922		)
Operating income (loss)	(9,087		)	14,144			47,087			(1,700		)	50,444
Other income (expense)
Equity in earnings (loss) of subsidiaries	(89,492		)	43,339			—			46,153			—
Net loss on derivative instruments	—			(117,611		)	—			—			(117,611		)
Interest expense, net of capitalized interest	(32,876		)	(7,844		)	(3,748		)	—			(44,468		)
Other expense	—			(46		)	—			—			(46		)
Total other expense	(122,368		)	(82,162		)	(3,748		)	46,153			(162,125		)
Income (loss) before income taxes	(131,455		)	(68,018		)	43,339			44,453			(111,681		)
Income tax benefit (expense)	16,573			(12,870		)	—			—			3,703
Net income (loss) including non-controlling interests	(114,882		)	(80,888		)	43,339			44,453			(107,978		)
Less: Net income attributable to non-controlling interests	—			6,904			21,796			(21,796		)	6,904
Net income (loss) attributable to Oasis	$	(114,882	)	$	(87,792	)	$	21,543		$	66,249		$	(114,882	)

Condensed Consolidating Statement of Operations



	Three Months Ended March 31, 2018
	Parent/ Issuer			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	366,595		$	—		$	—		$	366,595
Purchased oil and gas sales	—			67,709			—			—			67,709
Midstream revenues	—			1,150			61,421			(34,649		)	27,922
Well services revenues	—			11,586			—			—			11,586
Total revenues	—			447,040			61,421			(34,649		)	473,812
Operating expenses
Lease operating expenses	—			55,699			—			(10,918		)	44,781
Midstream expenses	—			746			17,116			(9,877		)	7,985
Well services expenses	—			7,387			—			—			7,387
Marketing, transportation and gathering expenses	—			26,672			—			(5,659		)	21,013
Purchased oil and gas expenses	—			70,594			—			—			70,594
Production taxes	—			31,000			—			—			31,000
Depreciation, depletion and amortization	—			146,227			6,364			(3,326		)	149,265
Exploration expenses	—			769			—			—			769
Impairment	—			93			—			—			93
General and administrative expenses	7,232			17,678			6,150			(3,120		)	27,940
Total operating expenses	7,232			356,865			29,630			(32,900		)	360,827
Operating income (loss)	(7,232		)	90,175			31,791			(1,749		)	112,985
Other income (expense)
Equity in earnings of subsidiaries	32,164			31,529			—			(63,693		)	—
Net loss on derivative instruments	—			(71,116		)	—			—			(71,116		)
Interest expense, net of capitalized interest	(32,446		)	(4,438		)	(262		)	—			(37,146		)
Other expense	—			(183		)	—			—			(183		)
Total other expense	(282		)	(44,208		)	(262		)	(63,693		)	(108,445		)
Income (loss) before income taxes	(7,514		)	45,967			31,529			(65,442		)	4,540
Income tax benefit (expense)	8,104			(8,932		)	—			—			(828		)
Net income including non-controlling interests	590			37,035			31,529			(65,442		)	3,712
Less: Net income attributable to non-controlling interests	—			3,122			21,574			(21,574		)	3,122
Net income attributable to Oasis	$	590		$	33,913		$	9,955		$	(43,868	)	$	590

Condensed Consolidating Statement of Cash Flows



	Three Months Ended March 31, 2019
	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	$	(114,882	)	$	(80,888	)	$	43,339		$	44,453		$	(107,978	)
Adjustments to reconcile net income (loss) including non-controlling interests to net cash provided by operating activities:
Equity in earnings (loss) of subsidiaries	89,492			(43,339		)	—			(46,153		)	—
Depreciation, depletion and amortization	—			186,069			8,929			(5,165		)	189,833
Loss on sale of properties	—			2,922			—			—			2,922
Impairment	—			629			—			—			629
Deferred income taxes	(16,573		)	13,026			—			—			(3,547		)
Derivative instruments	—			117,611			—			—			117,611
Equity-based compensation expenses	8,339			555			119			—			9,013
Deferred financing costs amortization and other	4,058			2,681			191			—			6,930
Working capital and other changes:
Change in accounts receivable, net	45,831			(74,291		)	208			(42,831		)	(71,083		)
Change in inventory	—			(3,184		)	—			—			(3,184		)
Change in prepaid expenses	(130		)	1,583			52			—			1,505
Change in accounts payable, interest payable and accrued liabilities	(11,909		)	2,306			3,438			42,831			36,666
Change in other assets and liabilities, net	—			(4,165		)	(226		)	—			(4,391		)
Net cash provided by operating activities	4,226			121,515			56,050			(6,865		)	174,926
Cash flows from investing activities:
Capital expenditures	—			(187,990		)	(49,458		)	—			(237,448		)
Derivative settlements	—			13,446			—			—			13,446
Net cash used in investing activities	—			(174,544		)	(49,458		)	—			(224,002		)
Cash flows from financing activities:
Proceeds from Revolving Credit Facilities	—			388,000			32,000			—			420,000
Principal payments on Revolving Credit Facilities	—			(363,000		)	(5,000		)	—			(368,000		)
Deferred financing costs	—			—			(43		)	—			(43		)
Purchases of treasury stock	(4,261		)	—			—			—			(4,261		)
Distributions to non-controlling interests	—			16,985			(21,922		)	—			(4,937		)
Investment in subsidiaries / capital contributions from parent	—			5,923			(12,788		)	6,865			—
Other	—			(202		)	(229		)	—			(431		)
Net cash provided by (used in) financing activities	(4,261		)	47,706			(7,982		)	6,865			42,328
Decrease in cash and cash equivalents	(35		)	(5,323		)	(1,390		)	—			(6,748		)
Cash and cash equivalents at beginning of period	179			15,362			6,649			—			22,190
Cash and cash equivalents at end of period	$	144		$	10,039		$	5,259		$	—		$	15,442

Condensed Consolidating Statement of Cash Flows



	Three Months Ended March 31, 2018
	Parent/ Issuer			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities:
Net income including non-controlling interests	$	590		$	37,035		$	31,529		$	(65,442	)	$	3,712
Adjustments to reconcile net income including non-controlling interests to net cash provided by operating activities:
Equity in earnings of subsidiaries	(32,164		)	(31,529		)	—			63,693			—
Depreciation, depletion and amortization	—			146,227			6,364			(3,326		)	149,265
Impairment	—			93			—			—			93
Deferred income taxes	(8,104		)	8,932			—			—			828
Derivative instruments	—			71,116			—			—			71,116
Equity-based compensation expenses	6,418			273			63			—			6,754
Deferred financing costs amortization and other	3,929			1,432			114			—			5,475
Working capital and other changes:
Change in accounts receivable, net	51,714			(23,888		)	36,992			(70,526		)	(5,708		)
Change in inventory	—			(3,672		)	—			—			(3,672		)
Change in prepaid expenses	(180		)	641			31			—			492
Change in accounts payable, interest payable and accrued liabilities	(12,832		)	(66,000		)	8,062			70,526			(244		)
Change in other assets and liabilities, net	—			248			—			—			248
Net cash provided by operating activities	9,371			140,908			83,155			(5,075		)	228,359
Cash flows from investing activities:
Capital expenditures	—			(169,994		)	(84,844		)	—			(254,838		)
Acquisitions	—			(520,728		)	—			—			(520,728		)
Derivative settlements	—			(36,974		)	—			—			(36,974		)
Other	—			(28		)	—			—			(28		)
Net cash used in investing activities	—			(727,724		)	(84,844		)	—			(812,568		)
Cash flows from financing activities:
Proceeds from Revolving Credit Facilities	—			1,413,000			57,000			—			1,470,000
Principal payments on Revolving Credit Facilities	—			(857,000		)	(18,000		)	—			(875,000		)
Deferred financing costs	—			(215		)	—			—			(215		)
Purchases of treasury stock	(6,021		)	—			—			—			(6,021		)
Distributions to non-controlling interests	—			34,866			(38,316		)	—			(3,450		)
Investment in subsidiaries / capital contributions from parent	(3,259		)	(5,986		)	4,170			5,075			—
Other	(90		)	—			—			—			(90		)
Net cash provided by (used in) financing activities	(9,370		)	584,665			4,854			5,075			585,224
Increase (decrease) in cash and cash equivalents	1			(2,151		)	3,165			—			1,015
Cash and cash equivalents at beginning of period	178			15,659			883			—			16,720
Cash and cash equivalents at end of period	$	179		$	13,508		$	4,048		$	—		$	17,735