Equity-Based Compensation

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

The Company has granted equity-based compensation awards under the 2020 LTIP. In accordance with the FASB’s authoritative guidance for share-based payments, the Company accounts for awards that settle in shares of common stock as equity-classified awards and awards that settle in cash as liability-classified awards.

Equity-based compensation expense from continuing operations is recognized in general and administrative expenses on the Company’s Consolidated Statements of Operations, and equity-based compensation expense from discontinued operations is recognized in discontinued operations, net of income tax on the Company’s Consolidated Statements of Operations. The Company recognized $23.0 million, $46.1 million and $61.2 million in equity-based compensation expenses related to equity-classified awards that were attributable to continued operations during the years ended December 31, 2024, 2023 and 2022, respectively. Equity-based compensation expenses related to liability-classified awards that were attributable to continued operations were $1.0 million, $3.4 million and $4.9 million during the years ended December 31, 2024, 2023 and 2022, respectively. Stock-based compensation expense related to equity-classified awards that was attributable to discontinued operations was immaterial during the year ended December 31, 2022.

Legacy Whiting equity-based compensation. Pursuant to the Merger Agreement, at the effective time of the Merger, the Company assumed the Whiting Equity Incentive Plan and the outstanding restricted stock units (“RSUs”) and performance share units (“PSUs”) granted under the Whiting Equity Incentive Plan. Accordingly, (i) all shares remaining available for issuance under the Whiting Equity Incentive Plan as of the Merger were automatically converted into shares of the Company’s common stock, available for issuance under the Whiting Equity Incentive Plan and (ii) all Whiting RSUs and PSUs were automatically converted into RSUs and PSUs of the Company, respectively, that, to the extent earned, will be settled in shares of the Company’s common stock, subject to appropriate adjustments to the number of shares subject to each award, resulting in the following as of July 1, 2022: (x) 1,611,725 shares of the Company’s common stock remaining available for issuance to eligible participants under the Whiting Equity Incentive Plan, (y) 335,386 shares of the Company’s common stock subject to RSUs assumed under the Whiting Equity Incentive Plan and (z) 275,310 shares of the Company’s common stock subject to PSUs assumed under the Whiting Equity Incentive Plan. The number of PSUs assumed by the Company was determined based upon the change-in-control provisions contained in the original award agreement at the greater of (i) the target number of PSUs subject to such award and (ii) the actual achievement of the performance criteria measured based on the truncated performance period ending immediately prior to the effective time of the Merger. Following completion of the Merger, the Whiting RSUs and PSUs are subject to time-based vesting criteria. The fair value of the RSU and PSU awards assumed by the Company was $73.3 million, including $27.4 million that was attributable to pre-Merger services and recorded as a part of the consideration transferred and $45.9 million that is attributable to post-Merger services that will be recognized as equity-based compensation expense in the post-combination period. The Company previously granted restricted stock awards (“RSAs”) to non-employee directors. RSAs are legally issued shares which were scheduled to vest over a three-year period subject to a service condition. The Company measured the awards at fair value on the date of grant, which was based on the closing price of the Company’s common stock. Pursuant to the award agreements governing the RSAs, each outstanding RSA became fully vested upon completion of the Merger due to a “change in control” (as defined in the award agreement). As a result, 64,920 outstanding RSAs became fully vested on July 1, 2022 and the Company recognized the remaining unrecognized compensation expense immediately.

Restricted stock units. The Company has granted RSUs to employees and non-employee directors. RSUs are contingent shares with a service-based vesting condition. The RSUs granted to employees vest following a graded vesting schedule and vest ratably each year over a three-year or four-year period. The RSUs granted to non-employee directors vest over a one-year period. The fair value is based on the closing price of the Company’s common stock on the date of grant or, if applicable, the

date of modification. The Company recognizes compensation expense under the straight-line method over the requisite service period.

The following table summarizes information related to RSUs held by employees and non-employee directors of the Company:


	Shares	Weighted Average Grant Date Fair Value per Share
Non-vested shares outstanding December 31, 2023	263,059	$	98.94
Granted	169,949	161.23

Vested	(139,555)	93.23
Forfeited	(9,231)	153.10
Non-vested shares outstanding December 31, 2024	284,222	$	137.23

The fair value of awards vested was $23.2 million and $42.4 million for the years ended December 31, 2024 and 2023, respectively. The weighted average grant date fair value of RSUs was $161.23 per share and $137.43 per share for the years ended December 31, 2024 and 2023, respectively. Unrecognized expense as of December 31, 2024 for all outstanding RSUs was $24.2 million and will be recognized over a weighted average period of approximately 1.8 years.

Legacy Oasis performance share units. The Company granted PSUs to certain employees. These PSUs were contingent shares that may be earned over three-year and four-year performance periods subject to market-based and service-based vesting conditions. The number of PSUs to be earned was initially subject to a market condition that was based on a comparison of the total stockholder 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, with 50% of the PSU awards eligible to be earned based on performance relative to a certain group of the Company’s oil and gas peers and 50% of the PSU awards eligible to be earned based on performance relative to the broad-based Russell 2000 index. Depending on the Company’s TSR performance relative to the defined peer group, award recipients could earn between 0% and 150% of target. Pursuant to the PSU award agreements, the number of PSUs earned was certified at the greater of (i) target performance and (ii) actual achievement of the performance criteria measured based on the truncated performance period ending immediately prior to the effective time of a “change in control.” The completion of the Merger on July 1, 2022 represented a “change in control” such that 250,016 PSUs were earned by legacy Oasis award recipients subject to a service-based vesting condition, including 183,915 PSUs that were outstanding at December 31, 2021 and an incremental 66,101 PSUs that were earned based upon the achievement of the performance criteria described above.

The following table summarizes information related to PSUs held by employees of the Company:


	Shares	Weighted Average Grant Date Fair Value per Share
Non-vested shares outstanding December 31, 2023	78,943	$	69.67
Granted	—	—

Vested	(78,943)	69.67
Forfeited	—	—
Non-vested shares outstanding December 31, 2024	—	$	—

The fair value of awards vested was $9.0 million and $46.3 million for the years ended December 31, 2024 and 2023, respectively. No PSUs under this award agreement were granted during the years ended December 31, 2024 and 2023.

2024 Performance share units. During the year ended December 31, 2024, the Company granted PSUs that include (i) total stockholder return (“TSR”) PSUs (“Absolute TSR PSUs”) and (ii) relative TSR PSUs (“Relative TSR PSUs” and collectively with the Absolute TSR PSUs, the “2024 PSUs”), which are eligible to vest and become earned at the end of the applicable performance period on December 31, 2026, subject to the level of achievement with respect to certain performance goals.

The Absolute TSR PSUs are subject to time-based service requirements and market conditions based on the TSR achieved by the Company during the performance period. Depending on the Company’s TSR, award recipients may earn between 0% and 300% of the target number of Absolute TSR PSUs originally granted.

The Relative TSR PSUs are subject to time-based service requirements and market conditions based on a comparison of the TSR achieved by the Company against the TSR achieved by the members of a defined peer group at the end of the performance period. Depending on the Company’s TSR performance relative to the TSR performance of the members of the defined peer group, award recipients may earn between 0% and 200% of the target number of Relative TSR PSUs originally granted.

Any earned 2024 PSUs will be settled in shares of the Company’s common stock for up to 100% of the target number of PSUs subject to each applicable award, with any remaining earned PSUs that exceed the target number of PSUs subject to the award being settled in cash based on the fair market value of a share of the Company’s common stock on the applicable payment date. The 2024 PSUs are bifurcated and classified as equity-based and liability-based awards based on the probability of achieving various target performance thresholds.

The following table summarizes information related to the Absolute TSR PSUs held by employees of the Company:


	Shares	Weighted Average Grant Date Fair Value per Share
Non-vested shares outstanding December 31, 2023	—	$	—
Granted	15,808	233.01

Vested	(364)	233.35
Forfeited	—	—
Non-vested shares outstanding December 31, 2024	15,444	$	233.00

The fair value of awards vested was $0.1 million for the year ended December 31, 2024. Unrecognized expense as of December 31, 2024 for all outstanding Absolute TSR PSUs was $1.1 million and will be recognized over a weighted average period of 2.0 years.

The following table summarizes information related to the Relative TSR PSUs held by employees of the Company:


	Shares	Weighted Average Grant Date Fair Value per Share
Non-vested shares outstanding December 31, 2023	—	$	—
Granted	47,428	197.10

Vested	(1,091)	200.54
Forfeited	—	—
Non-vested shares outstanding December 31, 2024	46,337	$	197.02

The fair value of awards vested was $0.2 million for the year ended December 31, 2024. Unrecognized expense as of December 31, 2024 for all outstanding Relative TSR PSUs was $4.5 million and will be recognized over a weighted average period of 2.0 years.

Legacy Oasis leveraged stock units. The Company granted leveraged stock units (“LSUs”) to certain employees. LSUs are contingent shares that may be earned over a three-year or four-year performance period subject to market-based and service-based vesting conditions. The number of LSUs to be earned was initially subject to a market condition that was based on the TSR performance of the Company’s common stock measured against specific premium return objectives. Depending on the Company’s TSR performance, award recipients could earn between 0% and 300% of target; however, the number of shares delivered in respect to these awards during the grant cycle could not exceed ten times the fair value of the award on the grant date. Pursuant to LSU award agreements, the number of LSUs earned was certified at the greater of (i) target performance and (ii) actual achievement of the performance criteria measured based on the truncated performance period ending immediately prior to the effective time of a “change in control.” The completion of the Merger on July 1, 2022 represented a “change in control” such that 787,218 LSUs were earned by award recipients subject to a service-based vesting condition.

The following table summarizes information related to LSUs held by employees of the Company:


	Shares	Weighted Average Grant Date Fair Value per Share
Non-vested shares outstanding December 31, 2023	497,037	$	84.59
Granted	—	—

Vested	(248,520)	84.59
Forfeited	—	—
Non-vested shares outstanding December 31, 2024	248,517	$	84.59

The fair value of awards vested was $42.3 million for the year ended December 31, 2024. No awards vested for the year ended December 31, 2023. No LSUs were granted during the years ended December 31, 2024 and 2023. Unrecognized expense as of December 31, 2024 for all outstanding LSUs was $0.3 million and will be recognized over a weighted average period of approximately 0.3 years.

Fair value assumptions. The aggregate grant date fair value of the 2024 PSUs, legacy Oasis PSUs, and LSUs was determined by a third-party valuation specialist using a Monte Carlo simulation model. The key valuation inputs were: (i) the forecast period, (ii) risk-free interest rate, (iii) implied equity volatility and (iv) stock price on the date of grant. The risk-free interest rates are the U.S. Treasury bond rates on the date of grant that correspond to each performance period. Implied equity volatility is derived by solving for an asset volatility and equity volatility based on the leverage of the Company and each of its peers.

The following table summarizes the assumptions used in the Monte Carlo simulation model to determine the grant date fair value and associated equity-based compensation expenses by grant date:


	2021 PSUs and LSUs			2024 Absolute and Relative TSR PSUs
	Year Ended December 31, 2021			Year Ended December 31, 2024

Forecast period (years)	3	—	4	3
Risk-free interest rates	0.2%	—	0.6%	3.8%	—	4.7%
Implied equity volatility	45%	—	60%	35%

Range of stock price on date of grant	$44.41	—	$68.07	$141.41	—	$169.66

Phantom unit awards. The Company has granted phantom unit awards to certain employees. Phantom unit awards represent the right to receive, upon vesting of the award, a cash payment equal to the fair market value of one share of common stock. The phantom unit awards are subject to a service-based vesting condition and generally vest in equal installments each year over a three-year period from the date of grant. Compensation expense is recognized over the requisite service period.

The following table summarizes information related to phantom unit awards held by employees of the Company:


	Phantom Unit Awards	Weighted Average Grant Date Fair Value per Share
Non-vested phantom unit awards outstanding December 31, 2023	10,043	$	165.87
Granted	12,613	158.68
Vested	(3,557)	136.67
Forfeited	(1,012)	151.09
Non-vested phantom unit awards outstanding December 31, 2024	18,087	$	151.71

The fair value of vested phantom unit awards was $0.6 million and $1.1 million for the years ended December 31, 2024 and 2023, respectively. Unrecognized expense as of December 31, 2024 for all outstanding phantom unit awards was $1.4 million and will be recognized over a weighted average period of approximately 1.9 years