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Oasis Midstream Partners
12 Months Ended
Dec. 31, 2021
Related Party Transactions [Abstract]  
Oasis Midstream Partners Oasis Midstream Partners
OMP is a gathering and processing master limited partnership formed by the Company to own, develop, operate and acquire a diversified portfolio of midstream assets in North America. OMP’s assets are located in the Williston and Permian Basins. As of December 31, 2021, the Company owned approximately 70% of OMP’s outstanding limited partner units.
OMP Merger
On October 25, 2021, OMP and OMP GP entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Crestwood Equity Partners LP, a Delaware limited partnership (“Crestwood”), Project Falcon Merger Sub LLC, a Delaware limited liability company and direct wholly-owned subsidiary of Crestwood, Project Phantom Merger Sub LLC, a Delaware limited liability company and direct wholly-owned subsidiary of Crestwood, and, solely for the purposes of Section 2.1(a)(i) of the Merger Agreement, Crestwood Equity GP LLC, a Delaware limited liability company and the general partner of Crestwood (“Crestwood GP”).
Pursuant to the Merger Agreement, the Company agreed to sell to Crestwood its entire ownership of OMP common units and all of the limited liability company interests of OMP GP in exchange for $160.0 million in cash and approximately 21 million common units of Crestwood (the “OMP Merger”). The OMP Merger was unanimously approved by the Board of Directors of both Oasis and Crestwood and was also unanimously approved by the Board of Directors and Conflicts Committee of OMP GP.
In addition, the Company and Crestwood executed a director nomination agreement pursuant to which Oasis appointed two directors to the Board of Directors of Crestwood GP. In accordance with the director nomination agreement, and for so long as Oasis and its affiliates own at least 15% of Crestwood’s issued and outstanding common units, Oasis may designate two directors to the Board of Directors of Crestwood GP. Oasis may designate one director if Oasis and its affiliates hold at least 10% (but less than 15%) of Crestwood’s issued and outstanding common units.
On February 1, 2022, the OMP Merger was completed and the Company received $160.0 million in cash and approximately 21 million common units of Crestwood in exchange for the Company’s ownership of OMP common units and all of the limited liability company interests of OMP GP. The Company owns approximately 21.7% of Crestwood’s issued and outstanding common units and is Crestwood’s largest single customer. The OMP Merger represents a strategic shift for the Company and qualified for reporting as a discontinued operation. See Note 6Discontinued Operations.
Contractual arrangements
The Company had previously entered into several long-term, fee-based contractual arrangements with OMP for midstream services, including (i) natural gas gathering, compression, processing and gas lift supply services; (ii) crude oil gathering, terminaling and transportation services; (iii) produced and flowback water gathering and disposal services; and (iv) freshwater distribution services. These contracts were assigned to Crestwood upon completion of the OMP Merger, and the Company will depend on Crestwood for a large portion of its midstream services.
In addition, the Company provided substantial labor and overhead support to OMP pursuant to a services and secondment agreement. The Company had also seconded to OMP certain of its employees to operate, construct, manage and maintain its assets. The expenses of executive officers and non-executive employees were allocated to OMP based on the amount of time spent managing its business and operations. In connection with the closing of OMP Merger, certain employees of the Company were transferred to Crestwood. In addition, the Company and Crestwood entered into a transition services agreement pursuant to which Oasis will provide customary transition services to Crestwood for a limited duration in exchange for a monthly service fee.
Midstream Simplification
On March 30, 2021, the Company completed the transactions contemplated by a contribution and simplification agreement (the “Contribution and Simplification Agreement”), dated as of March 22, 2021.
Pursuant to the Contribution and Simplification Agreement, among other things, (a) the Company contributed to OMP its remaining limited liability company interests in Bobcat DevCo and Beartooth DevCo of 64.7% and 30.0%, respectively, in exchange for total consideration of approximately $512.5 million composed of (x) a cash distribution of $231.5 million and (y) 12,949,644 common units representing limited partner interests in OMP, (b) OMP’s incentive distribution rights were cancelled and converted into 1,850,356 OMP common units (the “IDR Conversion Common Units”), and (c) OMP GP distributed the
IDR Conversion Common Units on a pro rata basis to holders of its Class A units and Class B units, such that following such distribution, Oasis, through its wholly-owned subsidiary OMS Holdings LLC (“OMS Holdings”), is the sole member of OMP GP (the foregoing clauses (a), (b) and (c), the “Midstream Simplification”). The effective date of the Midstream Simplification was January 1, 2021.