Long-Term Debt

3 Months Ended

Mar. 31, 2021

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


	Successor
	March 31, 2021		December 31, 2020

	(In thousands)
Oasis Credit Facility	$	—	$	260,000

OMP Credit Facility	234,000		450,000
OMP Senior Notes	450,000		—
Less: unamortized deferred financing costs on OMP Senior Notes	(9,762)		—
Total OMP long-term debt	674,238		450,000

Total long-term debt	$	674,238	$	710,000

Oasis Credit Facility

The Company has a senior secured revolving credit facility (the “Oasis Credit Facility”) among Oasis Petroleum Inc., as parent, OPNA, as borrower, and Wells Fargo Bank, N.A. (“Wells Fargo”), as administrative agent and the lenders party thereto, which has a maturity date of May 19, 2024. On March 22, 2021, the Company entered into the Second Amendment to the Oasis Credit Facility to, among other things, (i) provide for the occurrence of the transactions pursuant to the Midstream Simplification, (ii) decrease the borrowing base from $575.0 million to $500.0 million, (iii) decrease the aggregate lender commitments from $575.0 million to $450.0 million, (iv) provide the ability to initiate certain share-repurchases, (v) reduce the rolling hedging requirement and add incremental flexibility to allow for restructuring of existing hedge positions and (vi) decrease the LIBOR floor from 1.00% to 0.25%.

The applicable margin for borrowings under the Oasis Credit Facility is based on the total outstanding borrowings (including the amount of all outstanding letters of credit) in relation to the borrowing base and varies from (a) in the case of LIBOR loans (“Eurodollar Loans”), 3.00% to 4.00%, and (b) in the case of domestic bank prime rate interest loans (“ABR Loans”) or

swingline loans, 2.00% to 3.00%. The unused portion of the Oasis Credit Facility is subject to a commitment fee of 0.50%.

At March 31, 2021, the Company had no borrowings outstanding and $1.3 million of outstanding letters of credit under the Oasis Credit Facility, resulting in an unused borrowing capacity of $448.7 million. For the three months ended March 31, 2021, the weighted average interest rate incurred on borrowings under the Oasis Credit Facility was 4.3%. The fair value of the Oasis Credit Facility approximates its carrying value since borrowings under the Oasis Credit Facility bear interest at variable rates, which are tied to current market rates.

The Oasis Credit Facility contains customary events of default, as well as cross-default provisions with other indebtedness of OPNA and the restricted subsidiaries under the Oasis Credit Facility. 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. There are no cross-default provisions between the Oasis Credit Facility and the indebtedness of OMP and its restricted subsidiaries, other than to the extent that any “DevCo” (as defined in the Oasis Credit Facility) then exists that is owned in part by OMP and in part by the Company, in which case the Oasis Credit Facility contains a cross-default in the event that any material debt of such DevCo is accelerated prior to its scheduled maturity. The Company was in compliance with the financial covenants under the Oasis Credit Facility at March 31, 2021.

OMP Debt

OMP Credit Facility. OMP has a senior secured revolving credit facility (the “OMP Credit Facility”) among OMP, as parent, OMP Operating LLC, as borrower, Wells Fargo, as administrative agent and the lenders party thereto. On March 22, 2021, OMP entered into the Fourth Amendment to the OMP Credit Facility to, among other things, (i) provide for the occurrence of the transactions pursuant to the Midstream Simplification, (ii) amend the consolidated total leverage ratio financial covenant to no greater than 5.00 to 1.00, (iii) amend the consolidated senior secured leverage ratio to no greater than 3.00 to 1.00, (iv) amend the consolidated interest coverage ratio to no less than 2.50 to 1.00, (v) provide for the issuance of the OMP Senior Notes (defined below), (vi) decrease the aggregate lender commitments from $575.0 million to $450.0 million, (vii) increase pricing for credit under the OMP Credit Facility and (viii) extend the maturity date from September 25, 2022 until at least September 30, 2024.

The applicable margin for borrowings under the OMP Credit Facility is based on the OMP’s most recently tested consolidated total leverage ratio and varies from (a) in the case of Eurodollar Loans, 2.25% to 3.25%, and (b) in the case of ABR Loans or swingline loans, 1.25% to 2.25%. The unused portion of the OMP Credit Facility is subject to a commitment fee ranging from 0.375% to 0.500%.

At March 31, 2021, the aggregate commitments under the OMP Credit Facility were $450.0 million, and the Company had $234.0 million of borrowings outstanding and $5.5 million of outstanding letters of credit, resulting in an unused borrowing capacity of $210.5 million. For the three months ended March 31, 2021, the weighted average interest rate incurred on borrowings under the OMP Credit Facility was 2.1%. The fair value of the OMP Credit Facility approximates its carrying value since borrowings under the OMP Credit Facility bear interest at variable rates, which are tied to current market rates.

The OMP Credit Facility contains customary events of default, as well as cross-default provisions with other indebtedness of OMP and the restricted subsidiaries under the OMP Credit Facility. If an event of default occurs and is continuing, the lenders may declare all amounts outstanding under the OMP Credit Facility to be immediately due and payable. There are no cross-default provisions between OMP Credit Facility and the Oasis Credit Facility. OMP was in compliance with the financial covenants under the OMP Credit Facility at March 31, 2021.

OMP Senior Notes. On March 30, 2021, OMP and OMP Finance Corp. (“OMP Finance” and together with OMP, the “OMP Issuers”) issued in a private placement $450.0 million of 8.00% senior unsecured notes due April 1, 2029 (the “OMP Senior Notes”). The OMP Senior Notes were issued at par and resulted in net proceeds, after deducting the underwriters’ gross spread, of $442.1 million. OMP used the net proceeds from the OMP Senior Notes to: (i) make a distribution to OMS Holdings of $231.5 million in connection with the Midstream Simplification, (ii) repay $204.0 million of outstanding principal borrowings and $0.5 million of accrued interest under the OMP Credit Facility and (iii) pay approximately $6.1 million in fees and other expenses. In connection with the issuance of the OMP Senior Notes, OMP recorded deferred financing costs of $9.8 million which are being amortized over the term of the OMP Senior Notes.

Interest on the OMP Senior Notes is payable semi-annually on April 1 and October 1 of each year, commencing on October 1, 2021. The fair value of the OMP Senior Notes, which are publicly traded among qualified institutional investors and represent a Level 1 fair value measurement, was $460.1 million at March 31, 2021.

The OMP Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by the OMP Issuers, along with OMP’s wholly-owned subsidiaries (the “Guarantors”). The OMP Senior Notes guarantees are joint and several obligations of the Guarantors. The OMP Issuers and the Guarantors do not have any significant restrictions on the ability to obtain funds from its subsidiaries by dividend or loan. In addition, there are no restrictions on the subsidiaries to transfer funds, and as such, there are no restricted net assets to disclose.

The indenture governing the OMP Senior Notes contains certain covenants that, subject to certain exceptions and qualifications, among other things, limit OMP’s ability and the ability of its restricted subsidiaries, including OMP Finance, to incur or guarantee additional indebtedness or issue certain redeemable or preferred equity, make certain investments, declare or pay dividends or make distributions on equity interests or redeem, repurchase or retire equity interests or subordinated indebtedness, transfer or sell assets including equity of restricted subsidiaries, agree to payment restrictions affecting OMP’s restricted subsidiaries, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets, enter into transactions with affiliates, incur liens and designate certain of OMP’s subsidiaries as unrestricted subsidiaries. In addition, the indenture governing the OMP Senior Notes contains cross-default provisions with other indebtedness of OMP and its restricted subsidiaries. There are no cross-default provisions between the OMP Senior Notes and the Oasis Credit Facility.