Discontinued Operations and Disposal Groups

12 Months Ended

Dec. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

The OMP Merger represents a strategic shift for the Company and qualifies as a discontinued operation in accordance with ASC 205-20.

As of October 25, 2021, the operating results of OMP were classified as discontinued operations on the Company’s Consolidated Statements of Operations. The Company will have continuing involvement with Crestwood following the completion of the OMP Merger for midstream services pursuant to contractual arrangements between the Company and OMP that were assigned to Crestwood at closing. Intercompany transactions between Oasis and OMP have historically been eliminated in consolidation within lease operating expenses and gathering, processing and transportation expenses for operated properties and within oil and gas revenues for non-operated properties. In addition, the intercompany purchase and sale of residue gas and NGLs between the Company and OMP has historically been eliminated in consolidation within midstream revenues and midstream expenses. The Company has reclassified these transactions to purchased oil and gas expenses and purchased oil and gas sales, respectively, to reflect their continuing impact.

Consolidated Statements of Operations

The results of operations reported as discontinued operations in connection with the OMP Merger are as follows for the periods presented (in thousands):


	Successor				Predecessor
	Year Ended December 31, 2021		November 20, 2020 through December 31, 2020		January 1, 2020 through November 19, 2020		Year Ended December 31, 2019

Revenues
Oil and gas revenues	$	1,013	$	297	$	2,075	$	962
Purchased oil and gas sales (1)	(131,369)		(13,406)		(50,744)		(72,223)
Midstream revenues	254,228		26,031		166,631		212,208
Total revenues	123,872		12,922		117,962		140,947
Operating expenses
Lease operating expenses (1)	(62,142)		(4,676)		(42,034)		(65,306)
Midstream expenses	122,040		10,572		42,987		62,146
Gathering, processing and transportation expenses (1)	(49,795)		(4,074)		(31,988)		(45,220)
Purchased oil and gas expenses (1)	(125,709)		(12,921)		(43,163)		(65,734)
Depreciation, depletion and amortization	31,868		2,305		20,113		15,552
Impairment	2		—		111,613		—
General and administrative expenses (1)	4,193		(579)		594		(5,089)
Total operating expenses	(79,543)		(9,373)		58,122		(103,651)
Operating income	203,415		22,295		59,840		244,598
Other income (expense)
Interest expense, net of capitalized interest	(36,945)		(1,148)		(39,648)		(16,936)
Reorganization items	—		—		120,915		—
Other income (expense)	(115)		(1)		136		(129)
Total other income (expense), net	(37,060)		(1,149)		81,403		(17,065)
Income from discontinued operations before income taxes	166,355		21,146		141,243		227,533
Income tax expense	(17)		—		—		—
Income from discontinued operations, net of income tax	166,338		21,146		141,243		227,533
Net income (loss) attributable to non-controlling interests	35,696		3,950		(84,283)		37,596
Income from discontinued operations attributable to Oasis, net of income tax	$	130,642	$	17,196	$	225,526	$	189,937

__________________

(1)Includes discontinued intercompany eliminations.

Consolidated Balance Sheets

The carrying amounts of the major classes of assets and liabilities related to the OMP Merger are as follows for the periods presented (in thousands):


	December 31,
	2021		2020

ASSETS
Current assets
Cash and cash equivalents	$	2,669	$	5,147

Accounts receivable, net	6,509		4,299
Inventory	8,541		12,305
Prepaid expenses	456		3,914

Other current assets	—		649
Total current assets of discontinued operations	18,175		26,314
Property, plant and equipment
Oil and gas properties (successful efforts method)(1)	(3,207)		(276)
Other property and equipment	933,667		884,445
Less: accumulated depreciation, depletion and amortization	(32,102)		(3,207)
Total property, plant and equipment, net	898,358		880,962



Operating right-of-use assets	671		1,643
Intangible assets	40,277		43,000
Goodwill	70,534		70,534

Other assets	1,303		665
Total non-current assets of discontinued operations	1,011,143		996,804
Total assets of discontinued operations	$	1,029,318	$	1,023,118

LIABILITIES
Current liabilities
Accounts payable	$	43	$	680
Revenues and production taxes payable	1,635		1,632
Accrued liabilities	36,183		18,142
Accrued interest payable	9,296		360


Current operating lease liabilities	733		945
Other current liabilities	564		350
Total current liabilities of discontinued operations	48,454		22,109
Long-term debt	644,078		450,000

Asset retirement obligations	904		831

Operating lease liabilities	—		733
Other liabilities	6,217		4,187
Total non-current liabilities of discontinued operations	651,199		455,751
Total liabilities of discontinued operations	$	699,653	$	477,860

___________________________

(1) Includes discontinued intercompany eliminations.

Consolidated Statements of Cash Flows

Depreciation, depletion and amortization contained in “Cash flows from operating activities” from discontinued operations was $31.9 million for the year ended December 31, 2021 (Successor), $2.3 million for the period from November 20, 2020 through

December 31, 2020 (Successor), $20.1 million for the period from January 1, 2020 through November 19, 2020 (Predecessor) and $15.6 million for the year ended December 31, 2019 (Predecessor). Capital expenditures contained in “Cash flows used in investing activities” that were attributable to discontinued operations were $38.5 million for the year ended December 31, 2021 (Successor), $2.5 million for the period from November 20, 2020 through December 31, 2020 (Successor), $54.8 million for the period from January 1, 2020 through November 19, 2020 (Predecessor) and $222.2 million for the year ended December 31, 2019 (Predecessor). There were no significant non-cash activities from discontinued operations for the periods presented.