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Equity-Based Compensation | 12 Months Ended
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Dec. 31, 2020
Share-based Payment Arrangement [Abstract] |
Equity-Based Compensation | Equity-Based Compensation Successor equity-based compensation Successor management incentive plan. On the Emergence Date and pursuant to the Plan, the Board of Directors adopted the 2020 LTIP, which provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, dividend equivalents, other stock-based awards, cash awards, performance awards or any combination of the foregoing. The Company has reserved 2,402,402 shares of Successor common stock for grants of awards pursuant to the 2020 LTIP, which represent 10% of the total new Successor equity at Emergence Date. In addition, the Plan required the Board of Directors to allocate 5% of the 10% total new equity reserved under the 2020 LTIP no later than 45 days after emergence. The Plan also required that the allocated equity consist solely of restricted stock units on terms, including performance metrics and vesting criteria, agreed upon between the Company’s management and the Compensation Committee of the Board of Directors (the “Compensation Committee”). On January 18, 2021, in order to satisfy this equity allocation requirement, the Compensation Committee approved the grant of certain awards under the 2020 LTIP, which consists of the following: •Restricted stock units. Restricted stock units that will vest over a four-year period to promote retention of key executives. •Performance share units. Performance share units (“PSUs”) that may be earned based on the level of achievement with respect to the applicable performance metric. The number of PSUs to be earned is subject to a market condition, which is based on a comparison of the total shareholder return (“TSR”) achieved with respect to shares of the Company’s common stock against the TSR achieved by a defined peer group at the end of the applicable performance periods. Depending on the Company’s TSR performance relative to the defined peer group, award recipients may earn between 0% and 150% of the initial granted PSUs over three-year and four-year performance periods. •Leveraged stock units. Leveraged stock units (“LSUs”) that may be earned over applicable performance periods depending upon the TSR performance of the Company’s common stock measured against specific premium return objectives. Depending on the Company’s TSR performance, award recipients may earn between 0% and 300% of the initial granted LSUs over three-year and four-year performance periods. Restricted stock awards. In addition, the Company granted restricted stock awards to directors under its 2020 LTIP, which will vest over a three-year period. The fair value of restricted stock grants is based on the closing sales price of the Company’s common stock on the date of grant, and compensation expense is recognized ratably over the requisite service period. The following table summarizes information related to restricted stock held by the Company’s directors for the periods presented:
| Successor
| Shares |  | Weighted Average Grant Date Fair Value per Share
Non-vested shares outstanding November 20, 2020 | — |  |  | $ | — |
Granted | 93,000 |  |  | 37.35 |
Vested | — |  |  | — |
Forfeited | — |  |  | — |
Non-vested shares outstanding December 31, 2020 | 93,000 |  |  | $ | 37.35 |
Unrecognized expense as of December 31, 2020 (Successor) for all outstanding restricted stock awards was $3.5 million and will be recognized over a weighted average period of three years. Predecessor equity-based compensation The Predecessor granted equity awards to its officers, employees and directors under the Amended and Restated 2010 Long Term Incentive Plan (the “2010 LTIP”). The maximum number of shares available for grant under the 2010 LTIP was 16,050,000. 2020 Incentive Compensation Program. In order to effectively incentivize employees in the then-current environment, the Board of Directors approved a revised 2020 incentive compensation program applicable to all employees effective June 12, 2020 (the “2020 Incentive Compensation Program”). Under the 2020 Incentive Compensation Program, all 2020 equity-based awards, including restricted stock awards, performance share units (“PSUs”) and the OMP phantom unit awards (the “OMP Phantom Units”), previously granted under the 2010 LTIP, were forfeited and concurrently replaced with cash retention incentives, which were accounted for as modifications of such 2020 awards. In addition, all employees waived participation in the Company’s 2020 annual cash incentive plan and instead became eligible to earn cash performance incentives based on the achievement of certain specified incentive metrics measured on a quarterly basis from July 1, 2020 to June 30, 2021. The 2020 Incentive Compensation Program resulted in $15.6 million being paid in June 2020 with the remainder of the target amount under such program payable over the following 12 months. For the Company’s officers and certain other senior employees, the prepaid cash incentives paid in June 2020 could be clawed back if (i) certain specified incentive metrics measured on a quarterly basis were not achieved from July 1, 2020 to December 31, 2020 and (ii) such individuals do not remain employed for a period of up to 12 months, unless such individuals are terminated without cause or resign for good reason. The after-tax value of the cash incentives paid to the Company’s officers and certain other senior employees of $8.8 million was capitalized to prepaid expenses and is being amortized over the relevant service periods. The Company immediately expensed the difference between the cash and after-tax value of the prepaid cash incentives of $4.1 million, which is not subject to the clawback provisions of the 2020 Incentive Compensation Program, and recognized additional compensation expenses of $0.4 million to adjust for the grant date fair value of certain original 2020 equity-based awards that exceeded the replacement cash retention incentives less amounts previously recognized for the original 2020 equity-based awards. On the Emergence Date and pursuant to the Plan, the remaining unamortized amount of prepaid cash incentives of $4.3 million was vested and included in general and administrative expenses on the Company’s Consolidated Statements of Operations. For all other employees, the June 2020 incentive payment of $2.7 million was not subject to any clawback provisions, and $2.1 million, which represents the excess of the cash retention payment over amounts previously recognized for the original 2020 equity-based awards the cash incentives replaced, was immediately expensed. The expenses related to the 2020 Incentive Compensation Program are included in general and administrative expenses on the Company’s Consolidated Statements of Operations. Restricted stock awards. The Company granted restricted stock awards to its employees and directors under the 2010 LTIP, the majority of which vest over a three-year period. The fair value of restricted stock grants is based on the closing sales price of the Company’s common stock on the date of grant or, if applicable, the date of modification. Compensation expense is recognized ratably over the requisite service period. The following table summarizes information related to restricted stock held by the Company’s employees and directors for the periods presented:
| Shares |  | Weighted Average Grant Date Fair Value per Share
Non-vested shares outstanding December 31, 2019 (Predecessor) | 5,736,167 |  |  | $ | 8.77 |
Granted | 3,516,579 |  |  | 3.06 |
Vested | (6,054,387) |  |  | 7.92 |
Forfeited(1) | (3,198,359) |  |  | 3.20 |
Non-vested shares outstanding November 19, 2020 (Predecessor) | — |  |  | $ | — |
___________________ (1)On June 12, 2020, all restricted stock awards issued to employees and non-employee directors in 2020 were forfeited and concurrently replaced with cash incentives under the 2020 Incentive Compensation Program. Refer to “2020 Incentive Compensation Program” above for more information. Equity-based compensation expense recorded for restricted stock awards was $19.0 million for the period from January 1, 2020 through November 19, 2020, and $24.0 million and $20.1 million for the years ended December 31, 2019 and 2018, respectively, and is included in general and administrative expenses on the Company’s Consolidated Statements of Operations. The fair value of awards vested was $47.3 million for the period from January 1, 2020 through November 19, 2020, and $14.6 million and $17.3 million for the years ended December 31, 2019 and 2018, respectively. The weighted average grant date fair value of restricted stock awards granted was $3.06 per share for the period from January 1, 2020 through November 19, 2020, and $6.61 per share and $10.20 per share for the years ended December 31, 2019 and 2018, respectively. On the Emergence Date and pursuant to the Plan, all outstanding unvested restricted stock awards were vested and the Company accelerated $6.7 million of expense during the period from January 1, 2020 through November 19, 2020. Performance share units. The Company granted PSUs to its officers under the 2010 LTIP. The PSUs are awards of restricted stock units that may be earned based on the level of achievement with respect to the applicable performance metric, and each PSU that is earned represents the right to receive one share of the Company’s common stock. The Company accounted for the PSUs as equity awards pursuant to the FASB’s authoritative guidance for share-based payments. The number of PSUs to be earned is subject to a market condition, which is based on a comparison of the TSR achieved with respect to shares of the Company’s common stock against the TSR achieved by a defined peer group at the end of the performance periods. Depending on the Company’s TSR performance relative to the defined peer group, award recipients will earn between 0% and 240% of the initial PSUs granted. All compensation expense related to the PSUs will be recognized if the requisite performance period is fulfilled, even if the market condition is not achieved. The following table summarizes information related to PSUs held by the Company’s officers for the periods presented:
| Units |  | Weighted Average Grant Date Fair Value per Unit
Non-vested PSUs at December 31, 2019 (Predecessor) | 3,027,224 |  |  | $ | 9.12 |
Granted | 2,429,747 |  |  | 2.56 |
Vested | (913,346) |  |  | 8.29 |
Forfeited(1) | (2,396,524) |  |  | 3.13 |
Cancelled | (2,147,101) |  |  | 8.31 |
Non-vested PSUs November 19, 2020 (Predecessor) | — |  |  | $ | — |
___________________ (1)On June 12, 2020, all PSUs issued to the Company’s officers in 2020 were forfeited and concurrently replaced with cash incentives under the 2020 Incentive Compensation Program. Refer to “2020 Incentive Compensation Program” above for more information. Equity-based compensation expense recorded for PSUs was $11.2 million for the period from January 1, 2020 through November 19, 2020, and $9.0 million and $8.5 million for the years ended December 31, 2019 and 2018, respectively, and is included in general and administrative expenses on the Company’s Consolidated Statements of Operations. The fair value of PSUs vested was $7.6 million for the period from January 1, 2020 through November 19, 2020, and $2.6 million and $5.3 million for the years ended December 31, 2019 and 2018, respectively. The weighted average grant date fair value of PSUs granted was $2.56 per share for the period from January 1, 2020 through November 19, 2020, $6.80 per share and $12.71 per share for the years ended December 31, 2019 and 2018, respectively. On the Emergence Date and pursuant to the Plan, all outstanding PSUs were cancelled and the Company accelerated $4.7 million of expense during the period from January 1, 2020 through November 19, 2020. The aggregate grant date fair value of the market-based awards was determined using a Monte Carlo simulation model. The Monte Carlo simulation model uses assumptions regarding random projections and must be repeated numerous times to achieve a probabilistic assessment. The key valuation assumptions for the Monte Carlo model are the forecast period, risk-free interest rates, stock price volatility, initial value, stock price on the date of grant and correlation coefficients. The risk-free interest rates are the U.S. Treasury bond rates on the date of grant that corresponds to each performance period. The initial value is the average of the volume weighted average prices for the 30 trading days prior to the start of the performance cycle for the Company and each of its peers. Volatility is the standard deviation of the average percentage change in stock price over a historical period for the Company and each of its peers. The correlation coefficients are measures of the strength of the linear relationship between and amongst the Company and its peers estimated based on historical stock price data. The following assumptions were used for the Monte Carlo model to determine the grant date fair value and associated equity-based compensation expense of the PSUs granted during the periods presented:
| 2020 |  | 2019 |  | 2018
Forecast period (years) | 2 - 4 |  | 2 - 4 |  | 2 - 4
Risk-free interest rates | 1.53% - 1.55% |  | 2.55% - 2.56% |  | 2.08% - 2.31%
Oasis stock price volatility | 68.56 | % |  | 71.17 | % |  | 72.88 | %
Oasis initial value | $ | 3.19 |  |  | $ | 5.85 |  |  | $ | 8.82 |
Oasis stock price on date of grant | $ | 2.77 |  |  | $ | 6.63 |  |  | $ | 9.27 |
Associated tax benefit. For the years ended December 31, 2019 and 2018, the Company had an associated tax benefit of $7.8 million and $6.8 million, respectively, related to all equity-based compensation. The Company did not have any associated tax benefits related to equity-based compensation during the period from January 1, 2020 through November 19, 2020 (Predecessor) as a result of recording a valuation allowance on its deferred tax assets or during the period from November 20, 2020 through December 31, 2020 (Successor) as a result of the vesting of equity-based awards on the Emergence Date. OMP phantom unit awards. The Company granted OMP Phantom Units to its employees under the 2010 LTIP. Each OMP Phantom Unit represents the right to receive, upon vesting of the award, a cash payment equal to the fair market value of one OMP common unit on the day prior to the date it vests (the “Vesting Date”). Award recipients are also entitled to Distribution Equivalent Rights (“DER”) with respect to each OMP Phantom Unit received. Each DER represents the right to receive, upon vesting of the award, a cash payment equal to the value of the distributions paid on one OMP common unit between the grant date and the applicable Vesting Date. The OMP Phantom Units generally vest in equal installments each year over a three-year period from the date of grant, and compensation expense will be recognized over the requisite service period and is included in general and administrative expenses on the Company’s Consolidated Statements of Operations. The OMP Phantom Units are accounted for as liability-classified awards since the awards will settle in cash, and equity-based compensation expense is accounted for under the fair value method in accordance with GAAP. Under the fair value method for liability-classified awards, compensation expense is remeasured each reporting period at fair value based upon the closing price of a publicly traded common unit. The Company will directly pay, or will reimburse OMP, for the cash settlement amount of these awards. The following table summarizes information related to OMP Phantom Units held by certain employees of Oasis for the periods presented:
| Phantom Units |  | Weighted Average Fair Value per Unit
Non-vested units outstanding December 31, 2019 (Predecessor) | 362,002 |  |  | $ | 19.09 |
Granted | 242,500 |  |  | 8.65 |
Vested | (242,360) |  |  | 14.01 |
Forfeited(1) | (315,615) |  |  | 8.64 |
Non-vested units outstanding November 19, 2020 (Predecessor) | 46,527 |  |  | $ | 11.77 |
Granted | — |  |  | — |
Vested | (19,927) |  |  | 12.21 |
Forfeited | — |  |  | — |
Non-vested units outstanding December 31, 2020 (Successor) | 26,600 |  |  | $ | 12.55 |
___________________ (1)On June 12, 2020, all OMP Phantom Units issued to certain employees of Oasis in 2020 were forfeited and concurrently replaced with cash incentives under the 2020 Incentive Compensation Program. Refer to “2020 Incentive Compensation Program” above for more information. Equity-based compensation expense recorded for the OMP Phantom Units for the period from January 1, 2020 through November 19, 2020 and the years ended December 31, 2019 and 2018 was $1.5 million, $2.5 million and $0.5 million, respectively. The fair value of OMP Phantom Units vested was $3.4 million for the period from January 1, 2020 through November 19, 2020 and $0.8 million and $0.6 million for the years ended December 31, 2019 and 2018, respectively. For the period from January 1, 2020 through November 19, 2020 and the years ended December 31, 2019 and 2018, the weighted average grant date fair value of OMP Phantom Units granted was $8.65 per unit, $18.57 per unit and $23.91 per unit, respectively. On the Emergence Date and pursuant to the Plan, outstanding unvested OMP Phantom Units for certain employees were vested and the Company accelerated $1.1 million of expense during the period from January 1, 2020 through November 19, 2020. Equity-based compensation expense recorded for the OMP Phantom Units was $0.2 million for the Successor 2020 Period. As of December 31, 2020 (Successor), unrecognized compensation cost for all outstanding OMP Phantom Units was $0.2 million, which is expected to be recognized over a weighted average period of 1.3 years. Class B units in OMP GP. In May 2017, OMP GP granted restricted Class B units to certain employees, including OMP’s executive officers, as consideration for services to Oasis, which vest over a ten-year period. The restricted Class B units represent 8% of the outstanding units of OMP GP as of December 31, 2020 (Successor). Compensation expense is recognized ratably over the requisite service period. Equity-based compensation expense recorded for the Class B units was $0.2 million and $0.9 million for the Successor period from November 20, 2020 through December 31, 2020 and Predecessor period from January 1, 2020 through November 19, 2020, respectively, and $0.2 million and $0.3 million for the years ended December 31, 2019 and 2018, respectively, and is included in general and administrative expenses on the Company’s Consolidated Statements of Operations. On the Emergence Date and pursuant to the Plan, outstanding unvested Class B units for certain employees were vested and the Company accelerated $0.7 million of expense during the period from January 1, 2020 through November 19, 2020. OMP equity-based compensation The Oasis Midstream Partners LP 2017 Long Term Incentive Plan (the “OMP LTIP”) provides for the grant, at the discretion of the board of directors of OMP GP, of equity-based awards by OMP. As of December 31, 2020 (Successor), the aggregate number of OMP common units that may be issued pursuant to any and all awards under the OMP LTIP is equal to 2,793,360 common units, subject to adjustment due to recapitalization or reorganization, or related to forfeitures or expiration of awards, as provided under the OMP LTIP. On January 1 of each calendar year following the adoption and prior to the expiration of the OMP LTIP, the total number of common units that may be issued pursuant to the OMP LTIP automatically increases by a number of common units equal to one percent of the number of common units outstanding on a fully diluted basis as of the close of business on the immediately preceding December 31 (calculated by adding to the number of common units outstanding, all outstanding securities convertible into common units on such date on an as converted basis). As a result of this adjustment, an additional 338,114 common units were reserved for issuance pursuant to awards under the OMP LTIP on January 1, 2021. OMP restricted unit awards. OMP has granted restricted unit awards to independent directors of the general partner under the OMP LTIP, which vest over a one-year period from the date of grant. These awards are accounted for as equity-classified awards since the awards will settle in common units upon vesting. The fair value of restricted unit awards is based on the closing sales price of OMP’s common units on the date of grant, and compensation expense is recognized ratably over the requisite service period. The following table summarizes information related to restricted units held by certain directors of OMP for the periods presented:
| Restricted Units |  | Weighted Average Grant Date Fair Value per Unit
Non-vested units outstanding December 31, 2019 (Predecessor) | 16,170 |  |  | $ | 18.57 |
Granted | 16,170 |  |  | 16.69 |
Vested | (16,170) |  |  | 18.57 |
Forfeited | — |  |  | — |
Non-vested units outstanding November 19, 2020 (Predecessor) | 16,170 |  |  | $ | 16.69 |
Granted | — |  |  | — |
Vested | — |  |  | — |
Forfeited | — |  |  | — |
Non-vested units outstanding December 31, 2020 (Successor) | 16,170 |  |  | $ | 16.69 |
Equity-based compensation expense recorded for OMP restricted unit awards was $0.2 million for the period from January 1, 2020 through November 19, 2020, and $0.4 million for the years ended December 31, 2019 and 2018, respectively, and is included in general and administrative expenses on the Company’s Consolidated Statements of Operations. The fair value of OMP restricted unit awards vested was $0.3 million for the period from January 1, 2020 through November 19, 2020 and the years ended December 31, 2019 and 2018, respectively. The weighted average grant date fair value of OMP restricted stock awards granted was $16.69 per unit for the period from January 1, 2020 through November 19, 2020 and $18.57 per unit and $17.55 per unit for the years ended December 31, 2020, 2019 and 2018, respectively. The Successor recorded immaterial equity-based compensation expense recorded for OMP restricted unit awards for the period from November 20, 2020 through December 31, 2020. Unrecognized expense as of December 31, 2020 (Successor) for all outstanding OMP restricted unit awards was $0.01 million, and will be recognized over a weighted average period of 0.1 years.

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