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Fresh Start Accounting (Tables) | 12 Months Ended
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Dec. 31, 2020
Reorganizations [Abstract] |
Reconciliation of Enterprise Value to Estimated Reorganization Value | The following table reconciles the Company’s enterprise value to the estimated fair value of the Successor’s stockholders’ equity at the Emergence Date:
| November 19, 2020
| (In thousands)
Enterprise value | $ | 1,300,000 |
Plus: Cash(1) | 5,615 |
Less: Fair value of Oasis Credit Facility(2) | (340,000) |
Fair value of Oasis share of Successor stockholders’ equity(3) | 965,615 |
Plus: Fair value of non-controlling interests | 92,816 |
Fair value of total Successor stockholders’ equity | $ | 1,058,431 |
__________________ (1)Cash excludes $4.5 million of cash attributable to OMP and includes $1.4 million that was initially classified as restricted cash as of November 19, 2020 but subsequently released from escrow and returned to the Successor. A total of $10.4 million of restricted cash as of November 19, 2020 was used to pay professional fees and is not included in the table above. (2)Enterprise value includes the value of the Company’s interests in OMP and OMP GP, which is net of debt under the OMP Credit Facility, and as such, only the fair value of debt under the Oasis Credit Facility is subtracted in order to determine the value of the Successor’s stockholders’ equity. (3)Reflects Successor equity issued in accordance with the Plan, including 20,000,000 shares of common stock and 1,621,622 Warrants. The following table reconciles the Company’s enterprise value to the estimated reorganization value as of the Emergence Date:
| November 19, 2020
| (In thousands)
Enterprise value | $ | 1,300,000 |
Plus: Fair value of OMP Credit Facility(1) | 455,500 |
Plus: Fair value of non-controlling interests | 92,816 |
Plus: Cash(2) | 5,615 |
Plus: Current liabilities | 305,592 |
Plus: Asset retirement obligations (non-current portion) | 45,986 |
Plus: Other non-current liabilities | 32,482 |
Reorganization value of Successor assets | $ | 2,237,991 |
_________________ (1)Enterprise value includes the value of the Company’s interests in OMP and OMP GP, which is net of debt under the OMP Credit Facility, and as such, the fair value of the OMP Credit Facility is considered in the reconciliation of enterprise value to the reorganization value of the Successor’s assets. (2)Cash excludes $4.5 million of cash attributable to OMP and includes $1.4 million that was initially classified as restricted cash as of November 19, 2020 but subsequently released from escrow and returned to the Successor. A total of $10.4 million of restricted cash as of November 19, 2020 was used to pay professional fees and is not included in the table above.
Schedule of fresh-start adjustments | The adjustments set forth in the following fresh start Condensed Consolidated Balance Sheet reflect the effect of the transactions contemplated by the Plan (“Reorganization Adjustments”) and the fair value and other required adjustments as a result of applying fresh start accounting (“Fresh Start Adjustments”). The explanatory notes provide additional information with regard to the adjustments recorded, the methods used to determine fair values as well as significant assumptions.
| As of November 19, 2020
| Predecessor |  | Reorganization Adjustments |  | Fresh Start Adjustments |  | Successor
| (In thousands)
ASSETS |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |
Cash and cash equivalents | $ | 74,071 |  |  | $ | (65,317) |  | (a) | $ | — |  |  | $ | 8,754 |
Restricted cash | — |  |  | 11,800 |  | (b) | — |  |  | 11,800 |
Accounts receivable, net | 274,679 |  |  | — |  |  | — |  |  | 274,679 |
Inventory | 33,729 |  |  | — |  |  | 2,102 |  | (p) | 35,831 |
Prepaid expenses | 10,864 |  |  | (4,325) |  | (c) | — |  |  | 6,539 |
Derivative instruments | 728 |  |  | — |  |  | — |  |  | 728 |
Other current assets | 754 |  |  | — |  |  | — |  |  | 754 |
Total current assets | 394,825 |  |  | (57,842) |  |  | 2,102 |  |  | 339,085 |
Property, plant and equipment |  |  |  |  |  |  |
Oil and gas properties (successful efforts method) | 9,256,532 |  |  | — |  |  | (8,461,285) |  | (q) | 795,247 |
Other property and equipment | 1,311,240 |  |  | — |  |  | (373,068) |  | (q) | 938,172 |
Less: accumulated depreciation, depletion, amortization and impairment | (8,579,696) |  |  | — |  |  | 8,579,696 |  | (q) | — |
Total property, plant and equipment, net | 1,988,076 |  |  | — |  |  | (254,657) |  |  | 1,733,419 |
Assets held for sale, net | 1,380 |  |  | — |  |  | 4,120 |  | (r) | 5,500 |
Derivative instruments | 47 |  |  | — |  |  | — |  |  | 47 |
Long-term inventory | 14,107 |  |  | — |  |  | 413 |  | (p) | 14,520 |
Operating right-of-use assets | 13,260 |  |  | — |  |  | (797) |  | (s) | 12,463 |
Intangible assets | 667 |  |  | — |  |  | 43,000 |  | (t) | 43,667 |
Goodwill | — |  |  | — |  |  | 70,534 |  | (u) | 70,534 |
Other assets | 21,393 |  |  | 7,017 |  | (d) | (9,654) |  | (v) | 18,756 |
Total assets | $ | 2,433,755 |  |  | $ | (50,825) |  |  | $ | (144,939) |  |  | $ | 2,237,991 |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |
Accounts payable | $ | 9,206 |  |  | $ | 21,809 |  | (e) | $ | — |  |  | $ | 31,015 |
Revenues and production taxes payable | 130,487 |  |  | — |  |  | — |  |  | 130,487 |
Accrued liabilities | 72,513 |  |  | 57,470 |  | (f) | 1,885 |  | (w) | 131,868 |
Current maturities of long-term debt | 360,640 |  |  | (360,640) |  | (g) | — |  |  | — |
Accrued interest payable | 60,988 |  |  | (60,510) |  | (h) | — |  |  | 478 |
Derivative instruments | 4,902 |  |  | 49 |  | (i) | 18 |  | (x) | 4,969 |
Advances from joint interest partners | 170 |  |  | 2,555 |  | (i) | — |  |  | 2,725 |
Current operating lease liabilities | 1,050 |  |  | 924 |  | (i) | (76) |  | (s) | 1,898 |
Other current liabilities | 412 |  |  | 1,774 |  | (i) | (34) |  | (s) | 2,152 |
Total current liabilities | 640,368 |  |  | (336,569) |  |  | 1,793 |  |  | 305,592 |
Long-term debt | 455,500 |  |  | 340,000 |  | (j) | — |  |  | 795,500 |
Deferred income taxes | 1,097 |  |  | 9,746 |  | (k) | (6,412) |  | (y) | 4,431 |
Asset retirement obligations | 2,246 |  |  | 57,306 |  | (i) | (13,566) |  | (w) | 45,986 |
Derivative instruments | 5,316 |  |  | — |  |  | 41 |  | (x) | 5,357 |
Operating lease liabilities | 914 |  |  | 15,462 |  | (i) | (740) |  | (s) | 15,636 |
Other liabilities | 3,634 |  |  | 3,456 |  | (i) | (32) |  | (s) | 7,058 |
Liabilities subject to compromise | 2,051,294 |  |  | (2,051,294) |  | (l) | — |  |  | — |
Total liabilities | 3,160,369 |  |  | (1,961,893) |  |  | (18,916) |  |  | 1,179,560 |
Commitments and contingencies |  |  |  |  |  |  |
Stockholders’ equity (deficit) |  |  |  |  |  |  |
Predecessor common stock | 3,233 |  |  | (3,233) |  | (m) | — |  |  | — |
Successor common stock | — |  |  | 200 |  | (n) | — |  |  | 200 |
Predecessor treasury stock, at cost | (36,637) |  |  | 36,637 |  | (m) | — |  |  | — |
Predecessor additional paid-in capital | 3,131,446 |  |  | (3,131,446) |  | (m) | — |  |  | — |
Successor additional paid-in capital | — |  |  | 965,415 |  | (n) | — |  |  | 965,415 |
Retained earnings (accumulated deficit) | (3,995,209) |  |  | 4,034,401 |  | (o) | (39,192) |  | (z) | — |
Oasis share of stockholders’ equity (deficit) | (897,167) |  |  | 1,901,974 |  |  | (39,192) |  |  | 965,615 |
Non-controlling interests | 170,553 |  |  | 9,094 |  | (o) | (86,831) |  | (z) | 92,816 |
Total stockholders’ equity (deficit) | (726,614) |  |  | 1,911,068 |  |  | (126,023) |  |  | 1,058,431 |
Total liabilities and stockholders’ equity (deficit) | $ | 2,433,755 |  |  | $ | (50,825) |  |  | $ | (144,939) |  |  | $ | 2,237,991 |
Reorganization Adjustments (a)The table below reflects the uses of cash on the Emergence Date from the implementation of the Plan:
| (In thousands)
Payment of Oasis Credit Facility principal(1) | $ | 20,640 |
Payment pursuant to the Mirada Settlement Agreement | 20,000 |
Funding of the professional fees escrow account | 11,800 |
Payment of Oasis Credit Facility fees | 6,900 |
Payment of professional fees | 3,766 |
Payment of DIP Credit Facility accrued interest and fees | 1,375 |
Payment of Predecessor Credit Facility accrued interest and fees | 836 |
Total uses of cash | $ | 65,317 |
_________________ (1)On the Emergence Date, the principal amounts under the DIP Credit Facility and the Predecessor Credit Facility of $300.0 million and $60.6 million, respectively, were converted to principal amounts of revolving loans under the Oasis Credit Facility in accordance with the Plan. (b)Reflects the funding of an escrow account for professional fees associated with the Chapter 11 Cases, as required by the Plan. (c)Reflects the remaining unamortized amount of prepaid cash incentives under the 2020 Incentive Compensation Program (as defined in Note 18—Equity-Based Compensation), which vested on the Emergence Date as a result of implementing the Plan, and was recorded in general and administrative expenses. (d)Represents $7.3 million of fees related to the Oasis Credit Facility paid or accrued on the Emergence Date, which were capitalized as deferred financing costs and will be amortized to interest expense through the maturity date of May 19, 2024, offset by approximately $0.2 million of deferred financing costs related to the Predecessor Credit Facility, which were eliminated with a corresponding charge to reorganization items, net. (e)Represents the reinstatement of $19.9 million of accounts payable included in liabilities subject to compromise to be satisfied in the ordinary course of business, coupled with a $1.9 million reclassification from accrued liabilities to accounts payable related to certain equity-based compensation awards classified as liabilities that vested on the Emergence Date. (f)Changes in accrued liabilities include the following:
| (In thousands)
Reinstatement of accrued expenses from liabilities subject to compromise | $ | 73,778 |
Accrual for professional fees incurred upon Emergence Date | 4,603 |
Vesting of equity-based compensation awards classified as liabilities | 1,142 |
Payment pursuant to Mirada Settlement Agreement | (20,000) |
Reclassification of payable for vested liability awards to accounts payable | (1,913) |
Payment of certain professional fees accrued prior to Emergence Date | (140) |
Net impact to accrued liabilities | $ | 57,470 |
(g)Reflects the refinancing of the borrowings outstanding under the DIP Credit Facility and Predecessor Credit Facility of $300.0 million and $60.6 million, respectively, through the Oasis Credit Facility on the Emergence Date. (h)Reflects the write-off of Specified Default Interest and OMP Specified Default Interest of $30.3 million and $28.0 million, respectively, which was waived on the Emergence Date, and the payment of accrued interest for the DIP Credit Facility and Predecessor Credit Facility of $1.4 million and $0.8 million, respectively, on the Emergence Date. (i)Reflects the reinstatement of obligations that were classified as liabilities subject to compromise. (j)Reflects borrowings drawn under the Oasis Credit Facility on the Emergence Date, consisting of principal amounts that were converted from principal amounts under the DIP Credit Facility and the Predecessor Credit Facility of $300.0 million and $60.6 million, respectively, in accordance with the Plan, partially offset by a principal repayment amount of $20.6 million. Refer to Note 15—Long-Term Debt for more information on the Oasis Credit Facility. (k)Reflects an increase in the deferred tax liability recorded as a result of an ownership change under Section 382 (as defined in Note 17—Income Taxes), which limits the use of tax attributes and other deductions in future tax years. (l)On the Emergence Date, liabilities subject to compromise were settled in accordance with the Plan as follows:
| (In thousands)
Notes | $ | 1,825,757 |
Accrued interest on Notes | 50,337 |
Asset retirement obligations | 57,306 |
Accounts payable and accrued liabilities | 93,674 |
Other liabilities | 24,220 |
Total liabilities subject to compromise of the Predecessor | 2,051,294 |
Reinstatement of liabilities for general unsecured claims | (175,200) |
Issuance of common stock to Notes holders | (941,810) |
Gain on settlement of liabilities subject to compromise | $ | 934,284 |
(m)Reflects the cancellation of the Predecessor’s accumulated deficit, common stock and treasury stock and changes in the Predecessor’s additional paid-in capital as follows:
| (In thousands)
Cancellation of accumulated deficit | $ | (3,086,292) |
Cancellation of common stock | 3,233 |
Cancellation of treasury stock | (36,637) |
Equity-based compensation for vesting of awards classified as equity | 12,055 |
Issuance of Warrants to Predecessor common stockholders | (23,805) |
Net impact to Predecessor additional paid-in capital | $ | (3,131,446) |
(n)Reflects the distribution of Successor equity instruments in accordance with the Plan, including the issuance of 20,000,000 shares of common stock at a par value of $0.01 per share and 1,621,622 Warrants. The fair value of the Warrants was estimated at $14.68 per Warrant using a Black-Scholes model. See Note 19—Stockholders’ Equity for additional information.
| (In thousands)
Common stock to Notes holders | $ | 941,810 |
Warrants to Predecessor common stockholders | 23,805 |
Total fair value of Successor equity | $ | 965,615 |
(o)The table below reflects the cumulative impact of the reorganization adjustments discussed above:
| (In thousands)
Gain on settlement of liabilities subject to compromise | $ | 934,284 |
Write-off of Specified Default Interest | 30,285 |
Write-off of OMP Specified Default Interest | 28,014 |
Gain on debt discharge | 992,583 |
Professional fees incurred on the Emergence Date | (7,869) |
Write-off of Predecessor Credit Facility deferred financing costs | (243) |
Total reorganization items from reorganization adjustments | 984,471 |
Equity-based compensation expense for vesting of awards on Emergence Date | (13,197) |
Vesting of prepaid cash incentive compensation | (4,325) |
Income from reorganization adjustments before income taxes | 966,949 |
Income tax expense | (9,746) |
Net income from reorganization adjustments including non-controlling interests | 957,203 |
Less: Net income from reorganization adjustments attributable to non-controlling interests | (9,094) |
Net income from reorganization adjustments attributable to Oasis | 948,109 |
Cancellation of accumulated deficit | 3,086,292 |
Net impact to Predecessor retained earnings (accumulated deficit) | $ | 4,034,401 |
Fresh Start Adjustments (p)Reflects fair value adjustments to the Company’s crude oil inventory, equipment inventory, and long-term linefill inventory of $1.6 million, $0.5 million and $0.4 million, respectively, based on market prices as of the Emergence Date. Crude oil prices were estimated using NYMEX West Texas Intermediate crude oil index prices (“NYMEX WTI”) based on the estimated timing of liquidation and adjusted for quality and location differentials. (q)Reflects adjustments to present the Company's proved oil and gas properties, unproved acreage and other property and equipment at their estimated fair values based on the valuation methodology discussed above as well as the elimination of accumulated depreciation, depletion, amortization and impairment. The following table summarizes the components of property, plant and equipment as of the Emergence Date:
| Fair Value |  |  | Historical Book Value
| (In thousands)
Proved oil and gas properties | $ | 755,247 |  |  |  | $ | 9,081,974 |
Less: Accumulated depreciation, depletion, amortization and impairment | — |  |  |  | (8,259,334) |
Proved oil and gas properties, net | 755,247 |  |  |  | 822,640 |
Unproved oil and gas properties | 40,000 |  |  |  | 174,558 |
Other property and equipment | 938,172 |  |  |  | 1,311,240 |
Less: Accumulated depreciation and impairment | — |  |  |  | (320,362) |
Other property and equipment, net | 938,172 |  |  |  | 990,878 |
Total property, plant and equipment, net | $ | 1,733,419 |  |  |  | $ | 1,988,076 |
(r)Reflects fair value adjustments to the Company’s assets held for sale based on the sales price agreed upon with the buyer, less estimated costs to sell. (s)Reflects adjustments required to present at fair value operating lease right-of-use assets and operating and finance lease liabilities. The Company's remaining lease obligations were remeasured using incremental borrowing rates applicable to the Company as of the Emergence Date and commensurate with the Successor's capital structure. The incremental borrowing rates ranged from 3.06% to 6.58% based on the tenor of the leases. Finance lease liabilities are included in other current liabilities and other liabilities on the Company’s Consolidated Balance Sheet. (t)Reflects adjustments to present identified intangible assets at their estimated fair values based on the valuation methodology discussed above. The following table summarizes the components of property, plant and equipment as of the Emergence Date:
| Fair Value |  |  | Historical Book Value
| (In thousands)
Interest in OMP GP | $ | 28,000 |  |  |  | $ | — |
Customer contracts | 15,000 |  |  |  | — |
Seismic data | 667 |  |  |  | 667 |
Total intangible assets | $ | 43,667 |  |  |  | $ | 667 |
(u)Adjustment to record the excess of the reorganization value over the fair value of identified tangible and intangible assets as goodwill. (v)Reflects adjustments to eliminate certain deferred costs determined to have no fair value, including electrical infrastructure costs of $8.1 million and deferred financing costs related to the OMP Credit Facility of $1.5 million, and a $0.1 million adjustment to present finance lease right-of-use assets at fair value. (w)Adjustment to present at fair value the Company's asset retirement obligations (“ARO”) using assumptions as of the Emergence Date, including an inflation factor of 2% and an estimated 30-year credit-adjusted risk-free rate of 8.5%. (x)Reflects fair value adjustment to the Company’s derivative instruments using the Company’s estimated credit-adjusted risk-free rate as of the Emergence Date of 5.12%. (y)Reflects the adjustment to deferred income taxes to reflect the change in the financial reporting basis of assets as a result of the adoption of fresh start accounting. (z)The table below reflects the cumulative impact of the fresh start adjustments discussed above:
| (In thousands)
Loss on revaluation adjustments | $ | (132,435) |
Income tax benefit | 6,412 |
Net loss from fresh start adjustments including non-controlling interests | (126,023) |
Less: Net loss from fresh start adjustments attributable to non-controlling interests | 86,831 |
Net loss from fresh start adjustments attributable to Oasis | $ | (39,192) |
Reorganization Items, Net Any expenses, gains and losses that were realized or incurred between the Petition Date and the Emergence Date and as a direct result of the Chapter 11 Cases and the implementation of the Plan are recorded in reorganization items, net in the Company’s Consolidated Statements of Operations. The following table summarizes the components of reorganization items, net:
| (In thousands)
Gain on debt discharge | $ | 992,583 |
Loss on revaluation adjustments | (132,435) |
Write-off of unamortized debt discount | (38,373) |
Professional fees | (16,352) |
Write-off of unamortized deferred financing costs | (12,739) |
DIP Credit Facility fees | (5,853) |
Total reorganization items, net | $ | 786,831 |

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- Definition Tabular disclosure of description and amounts of adjustments to historical balance sheet to arrive at fresh-start amounts following bankruptcy and reorganization with a different owner. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 852 -SubTopic 10 -Section 50 -Paragraph 7 -Subparagraph (a)-(b) -URI http://asc.fasb.org/extlink&oid=120604989&loc=SL2890621-112765 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 852 -SubTopic 10 -Section 55 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=84165509&loc=d3e56426-112766 + Details
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