Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-34776 | --- | --- | |------------------------------------------------------------------------------------------------------ ...

May 4, 2022 Whiting & Oasis Strategic Merger Of Equals Important Disclosures 2 No Offer or Solicitation Communications in this investor presentation do not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registr ...

Oasis Petroleum, Inc. (OAS) Q1 2022 Earnings Conference Call May 5, 2022 11:00 AM ET Company Participants Michael Lou - Chief Financial Officer and Executive Vice President Daniel Brown - Chief Executive Officer Taylor Reid - President and Chief Operating Officer Conference Call Participants Derrick Whitfield - Stifel Financial Corp Jordan Levy - Truist Securities Noel Parks - Tuohy Brothers Operator Good day and welcome to the Oasis Petroleum First Quarter Earnings Results Conference Call. All participants ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-34776 Oasis Petroleum Inc. (Exact name of registrant as specified in its charter) Delaware 80-0554627 (State or other juri ...

Financial Data and Key Metrics Changes - In Q4 2021, the company reported net income of $292 million or $7.34 per diluted share, compared to $198 million or $5 per share in the previous quarter [10] - Adjusted net income for Q4 was $168 million or $4.23 per diluted share, up from $142 million or $3.57 per share in Q3 [10] - Adjusted EBITDAX increased to $226 million from $201 million in the previous quarter, driven by better commodity prices and a slight increase in oil production [10] - Production averaged 92,800 BOE per day in Q4, slightly up from 92,100 BOE per day in Q3, with oil production averaging 52,900 barrels per day, an increase from 51,800 barrels in Q3 [10] Business Line Data and Key Metrics Changes - The company invested approximately $66 million in CapEx during Q4, bringing 16 gross, 12 net wells into production, and drilled 17 gross, 10.4 net operated wells [12] - Lease operating expenses were $62 million or $7.31 per BOE for Q4, impacted by expensed workovers [13] - Cash G&A expenses totaled $12 million for Q4, averaging around $1.16 per BOE for the year [13] Market Data and Key Metrics Changes - Natural gas prices benefited from a premium at the Ventura point compared to Henry Hub, while NGL prices averaged around 37% of WTI oil in Q4, up from less than 20% in the same quarter last year [11][13] - The company reported a significant increase in proved reserves, totaling 326 million BOE with a pretax PV10 value of $4.4 billion at year-end, compared to 260 million BOE and $1.2 billion at year-end 2020 [13][14] Company Strategy and Development Direction - The company initiated its first-ever regular dividend of $0.25 per share, marking the first step in a capital return plan [16] - Management is focused on a methodical approach to returning capital to shareholders, including potential stock buybacks and variable dividends [17][36] - The company anticipates a higher activity level in 2022, with larger working interests in wells drilled and completed in the Sanish Field due to acquisitions [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2022, expecting to generate over $900 million in EBITDA and over $500 million in adjusted free cash flow under a $70 WTI price scenario [21] - The company is cautious about the M&A environment, noting challenges due to rising commodity prices but remains open to opportunities [25] - Management emphasized the importance of maintaining a strong balance sheet while pursuing growth and returning capital to shareholders [45] Other Important Information - The company has a strong financial position entering 2022, with plans to continue pursuing acquisition opportunities while returning capital to shareholders [20] - The company is actively managing inflationary pressures and has locked in many big-ticket items for the first half of 2022 [18] Q&A Session Summary Question: What drove the strong production in Q4? - Management noted good performance from wells and new completion techniques being tested, particularly in the Sanish Field [22][23] Question: What is the outlook for M&A opportunities? - Management is monitoring the M&A environment closely, considering both small bolt-on opportunities and larger deals, but remains cautious due to high commodity prices [25] Question: How does the company view its return of capital strategy? - Management confirmed that the dividend is the first step, with more to come, including potential stock buybacks and variable dividends [32][36] Question: What is the expected production cadence for 2022? - Management indicated a slow first half of the year with significant growth expected in the second half due to drilling and completion activities [37][39] Question: How will free cash flow be utilized? - Management aims to balance returning capital to shareholders while maintaining flexibility for acquisitions, with a focus on keeping a strong balance sheet [45][46]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________ FORM 10-K _______________________________________ ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |-------------------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - The company reported a net income of $198 million or $5 per diluted share for Q3 2021, compared to a loss of $61 million or $1.57 per share in the previous quarter [9] - Adjusted net income was $142 million or $3.57 per diluted share, up from $118 million or $3.01 per share in the previous quarter [10] - Adjusted EBITDAX increased to $201 million from $176 million in the previous quarter, primarily due to better commodity prices [11] Business Line Data and Key Metrics Changes - Total production averaged 92,100 barrels of oil equivalent (BOE) in Q3 2021, slightly down from 92,600 BOE in Q2 2021 [11] - Oil production averaged 51,800 barrels in Q3 2021, down from 53,400 barrels in Q2 2021 [12] - Capital expenditures (CapEx) were $67 million, with 17 gross/9.1 net wells brought into production [15] Market Data and Key Metrics Changes - Oil differentials have narrowed due to basin production levels remaining significantly behind total takeaway capacity [13] - The company expects full-year oil differentials to land within the low end of stated guidance [14] Company Strategy and Development Direction - The company aims to maintain a reinvestment rate of approximately 35% of EBITDA in 2022, similar to 2021 [18] - Plans for 2022 include additional operational activity and infrastructure build-out, particularly in the Sanish field [22] - The company is focused on pursuing acquisitions to enhance its competitive position in the Williston Basin [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial position, expecting to exit 2021 with no debt and positive cash flow [8] - Inflationary costs are anticipated to be in the high single-digit to low double-digit percentage range, with efforts to secure contracts to mitigate these costs [21] - The company is optimistic about its ability to generate free cash flow and return capital to shareholders starting in Q1 2022 [24] Other Important Information - The company completed an acquisition of assets in North Dakota, expanding its inventory by over 60 gross locations [16] - The company is focused on improving safety, environmental controls, and governance [17] Q&A Session Summary Question: How does the company view the M&A market currently? - The company remains focused on opportunities in the Williston Basin, considering both small and large acquisitions [26] Question: What is the extent of oilfield servicing cost inflation? - Steel prices have increased significantly, and labor issues are a concern, but the company is working on securing contracts to manage costs [27][28] Question: What is the company's approach to shareholder returns? - The company is considering a balanced approach, including potential fixed dividends and share buybacks, while also investing in business growth [31] Question: Is the company looking for transformational deals or smaller acquisitions? - The company is open to both transformational and smaller bolt-on acquisitions that create value for shareholders [32] Question: Is there an update on guidance for the full year? - Management indicated that they are trending towards the high end of production measures and are satisfied with the current position [34]

PART I — FINANCIAL INFORMATION [Item 1. — Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20%E2%80%94%20Financial%20Statements%20(Unaudited)) This section presents Oasis Petroleum Inc.'s unaudited condensed consolidated financial statements and detailed notes for Q3 2021 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20at%20September%2030%2C%202021%20and%20December%2031%2C%202020) Balance sheets show significant increases in total assets, liabilities, cash, and derivative liabilities from December 2020 to September 2021 Condensed Consolidated Balance Sheets (In thousands) | Metric | September 30, 2021 (In thousands) | December 31, 2020 (In thousands) | | :----- | :-------------------------------- | :------------------------------- | | Total Assets | $2,999,512 | $2,159,037 | | Total Liabilities | $1,906,181 | $1,146,298 | | Total Stockholders' Equity | $1,093,331 | $1,012,739 | | Cash and cash equivalents | $448,608 | $15,856 | | Restricted cash (current & non-current) | $400,000 | $4,370 | | Derivative instruments (current & non-current liabilities) | $408,853 | $94,558 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Nine%20Months%20Ended%20September%2030%2C%202021%20(Successor)%20and%202020%20(Predecessor)) Net income improved significantly in 2021 (Successor) from net losses in 2020 (Predecessor), driven by higher revenues and reduced impairment Condensed Consolidated Statements of Operations (In thousands) | Metric (In thousands) | Three Months Ended Sep 30, 2021 (Successor) | Three Months Ended Sep 30, 2020 (Predecessor) | Nine Months Ended Sep 30, 2021 (Successor) | Nine Months Ended Sep 30, 2020 (Predecessor) | | :-------------------- | :------------------------------------------ | :-------------------------------------------- | :----------------------------------------- | :------------------------------------------- | | Total Revenues | $402,039 | $271,059 | $1,150,558 | $825,209 | | Operating Income (Loss) | $203,590 | $38,524 | $729,998 | $(4,835,228) | | Net Gain (Loss) on Derivative Instruments | $(101,790) | $(5,071) | $(550,342) | $243,064 | | Net Income (Loss) Attributable to Oasis | $71,950 | $(55,699) | $101,722 | $(4,459,503) | | Basic EPS | $3.63 | $(0.17) | $5.11 | $(14.05) | | Diluted EPS | $3.46 | $(0.17) | $4.96 | $(14.05) | [Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20(Deficit)) Total stockholders' equity increased in the Successor period (2021) due to net income and non-controlling interests, despite share repurchases and dividends Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (In thousands) | Metric (In thousands) | Balance as of Dec 31, 2020 (Successor) | Balance as of Sep 30, 2021 (Successor) | | :-------------------- | :------------------------------------- | :------------------------------------- | | Total Stockholders' Equity | $1,012,739 | $1,093,331 | | Net Income (Loss) Attributable to Oasis | N/A | $101,722 (9M 2021) | | Dividends to shareholders | N/A | $(102,123) (9M 2021) | | Repurchase of common stock | N/A | $(14,560) (9M 2021) | | Metric (In thousands) | Balance as of Dec 31, 2019 (Predecessor) | Balance as of Sep 30, 2020 (Predecessor) | | :-------------------- | :--------------------------------------- | :--------------------------------------- | | Total Stockholders' Equity (Deficit) | $3,837,081 | $(638,151) | | Net Loss Attributable to Oasis | N/A | $(4,459,503) (9M 2020) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Nine%20Months%20Ended%20September%2030%2C%202021%20(Successor)%20and%202020%20(Predecessor)) Cash flows from operating and financing activities significantly increased in 2021 (Successor), leading to a substantial rise in cash and restricted cash Condensed Consolidated Statements of Cash Flows (In thousands) | Metric (In thousands) | Nine Months Ended Sep 30, 2021 (Successor) | Nine Months Ended Sep 30, 2020 (Predecessor) | | :-------------------- | :----------------------------------------- | :------------------------------------------- | | Net cash provided by operating activities | $644,746 | $154,905 | | Net cash used in investing activities | $(89,031) | $(52,365) | | Net cash provided by (used in) financing activities | $272,667 | $(38,294) | | Increase in cash, cash equivalents and restricted cash | $828,382 | $64,246 | | End of period cash, cash equivalents and restricted cash | $848,608 | $84,265 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering critical accounting policies and significant transactions [1. Organization and Operations of the Company](index=12&type=section&id=1.%20Organization%20and%20Operations%20of%20the%20Company) Oasis is an independent E&P company in the Williston Basin, operating a midstream segment through OMP and divesting Permian assets - Oasis Petroleum Inc. is an independent E&P company focused on onshore, unconventional crude oil and natural gas resources in the **Williston Basin** (North Dakota and Montana)[24](index=24&type=chunk) - The company operates a midstream business segment through **Oasis Midstream Partners LP (OMP)**, a gathering and processing master limited partnership, and owns approximately **70% of OMP**[24](index=24&type=chunk)[25](index=25&type=chunk) - During the second quarter of 2021, the Company sold its **E&P assets in the Texas region of the Permian Basin**[24](index=24&type=chunk) [2. Summary of Significant Accounting Policies](index=12&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the basis of presentation, fresh start accounting impact, OMP consolidation, Midstream Simplification, and commodity price risk exposure - The company adopted **fresh start accounting** on November 19, 2020 (Emergence Date) following bankruptcy, making financial statements post-Emergence Date ('Successor') not comparable to prior periods ('Predecessor')[27](index=27&type=chunk) - The company completed the **Midstream Simplification** on March 30, 2021, contributing remaining interests in Bobcat DevCo and Beartooth DevCo to OMP and cancelling OMP's incentive distribution rights for **$512.5 million** (cash and OMP common units)[25](index=25&type=chunk) - The company's revenue, profitability, and future growth are substantially dependent on **volatile crude oil and natural gas prices**, which are subject to economic, political, and regulatory factors beyond its control[28](index=28&type=chunk) [3. Revenue Recognition](index=14&type=section&id=3.%20Revenue%20Recognition) Revenue recognition policies for E&P and midstream segments are detailed, with E&P revenues from oil/gas sales and midstream from fee-based services Revenue by Type (In thousands) | Revenue Type (In thousands) | Three Months Ended Sep 30, 2021 (Successor) | Nine Months Ended Sep 30, 2021 (Successor) | | :-------------------------- | :------------------------------------------ | :----------------------------------------- | | Crude oil revenues | $205,731 | $598,278 | | Natural gas revenues | $75,905 | $184,046 | | Total E&P revenues | $335,327 | $947,013 | | Total midstream revenues | $66,712 | $203,545 | - Contract liabilities increased from **$3.966 million** at December 31, 2020, to **$6.921 million** at September 30, 2021, primarily due to cash received for aid in construction payments[38](index=38&type=chunk) Remaining Performance Obligations (In thousands) | Year | Remaining Performance Obligations (In thousands) | | :--- | :--------------------------------------------- | | 2021 (excluding 9M) | $3,709 | | 2022 | $17,175 | | 2023 | $10,896 | | 2024 | $11,089 | | 2025 | $2,768 | | Total | $45,637 | [4. Inventory](index=15&type=section&id=4.%20Inventory) Total inventory decreased slightly from $48.451 million at December 31, 2020, to $45.819 million at September 30, 2021, with no material write-downs in Q3 2021 Inventory (In thousands) | Inventory Type (In thousands) | September 30, 2021 (Successor) | December 31, 2020 (Successor) | | :---------------------------- | :----------------------------- | :---------------------------- | | Equipment and materials | $19,563 | $25,103 | | Crude oil inventory | $8,746 | $8,826 | | Total inventory (current) | $28,309 | $33,929 | | Long-term inventory (linefill) | $17,510 | $14,522 | | Total | $45,819 | $48,451 | - No material write-downs of inventory or long-term inventory were recorded during the three or nine months ended September 30, 2021[43](index=43&type=chunk) - During the nine months ended September 30, 2020 (Predecessor), the Company recorded impairment losses of **$7.2 million** for crude oil inventory and **$1.3 million** for long-term linefill due to lower commodity prices[43](index=43&type=chunk) [5. Additional Balance Sheet Information](index=16&type=section&id=5.%20Additional%20Balance%20Sheet%20Information) Accounts receivable, net, increased to $269.7 million, and accrued liabilities increased to $129.0 million at September 30, 2021 Accounts Receivable and Accrued Liabilities (In thousands) | Metric (In thousands) | September 30, 2021 (Successor) | December 31, 2020 (Successor) | | :-------------------- | :----------------------------- | :---------------------------- | | Total accounts receivable, net | $269,740 | $206,539 | | Trade accounts | $200,301 | $161,519 | | Joint interest accounts | $39,291 | $31,920 | | Other accounts | $31,560 | $13,206 | | Less: allowance for credit losses | $(1,412) | $(106) | | Total accrued liabilities | $129,000 | $126,284 | | Accrued capital costs | $51,086 | $39,380 | | Accrued midstream operating expenses | $21,933 | $15,051 | [6. Fair Value Measurements](index=16&type=section&id=6.%20Fair%20Value%20Measurements) The company measures financial assets and liabilities at fair value, primarily using Level 2 inputs for commodity derivatives and contingent consideration - The company's financial assets and liabilities are measured at fair value on a recurring basis, primarily using **Level 2 inputs** for commodity derivative instruments and the Permian Basin Sale Contingent Consideration[47](index=47&type=chunk)[48](index=48&type=chunk)[51](index=51&type=chunk) Fair Value Measurements (In thousands) | Metric (In thousands) | September 30, 2021 (Successor) | | :-------------------- | :----------------------------- | | Total Assets (Fair Value) | $39,717 | | Permian Basin Sale Contingent Consideration | $39,717 | | Total Liabilities (Fair Value) | $408,853 | | Commodity derivative instruments | $408,853 | - The fair value of commodity derivative instruments is based on third-party calculations using mark-to-market valuation reports, incorporating credit adjustments for non-performance risk[50](index=50&type=chunk) [7. Derivative Instruments](index=18&type=section&id=7.%20Derivative%20Instruments) Oasis uses derivative instruments to manage commodity price risks, recording them at fair value, and modified certain hedge contracts in May 2021 - The company uses derivative financial instruments (fixed price swaps and collars) to manage crude oil and natural gas price risks, not for speculative trading, with all derivatives recorded at fair value[53](index=53&type=chunk) - In May 2021, the company paid **$82.4 million** to modify certain commodity hedge contracts, adjusting swap prices for 2022-2024 crude oil volumes to **$50.00 per barrel**[55](index=55&type=chunk) Derivative Instruments (In thousands) | Derivative Instrument | Balance Sheet Location | Gross Amount (In thousands) | Net Amount (In thousands) | | :-------------------- | :--------------------- | :-------------------------- | :------------------------ | | Contingent consideration | Derivative instruments — non-current assets | $39,717 | $39,717 | | Commodity contracts | Derivative instruments — current liabilities | $271,077 | $266,337 | | Commodity contracts | Derivative instruments — non-current liabilities | $164,614 | $142,516 | | Total derivatives liabilities | | $435,691 | $408,853 | [8. Property, Plant and Equipment](index=20&type=section&id=8.%20Property%2C%20Plant%20and%20Equipment) Net property, plant and equipment decreased to $1,582.844 million at September 30, 2021, primarily due to a reduction in net proved oil and gas properties Property, Plant and Equipment (In thousands) | Metric (In thousands) | September 30, 2021 (Successor) | December 31, 2020 (Successor) | | :-------------------- | :----------------------------- | :---------------------------- | | Proved oil and gas properties, net | $660,949 | $757,714 | | Unproved oil and gas properties | $2,293 | $40,211 | | Other property and equipment, net | $919,602 | $930,862 | | Total property, plant and equipment, net | $1,582,844 | $1,728,787 | [9. Acquisitions](index=21&type=section&id=9.%20Acquisitions) Oasis completed the Williston Basin Acquisition on October 21, 2021, acquiring 95,000 net acres for $585.8 million, funded by cash and senior notes - On October 21, 2021, the company completed the **Williston Basin Acquisition**, acquiring approximately **95,000 net acres** from QEP Energy Company for an adjusted purchase price of **$585.8 million**[62](index=62&type=chunk) - The acquisition was funded with cash on hand, including proceeds from the Permian Basin Sale and the issuance of **$400.0 million in Oasis Senior Notes**[62](index=62&type=chunk) [10. Divestitures](index=21&type=section&id=10.%20Divestitures) Oasis completed the Permian Basin Sale on June 29, 2021, divesting assets for $450.0 million, including cash and earn-out payments - On June 29, 2021, the company completed the **Primary Permian Basin Sale**, divesting its remaining upstream assets in the Texas region of the Permian Basin for an aggregate purchase price of **$450.0 million**[64](index=64&type=chunk) - The purchase price included **$375.0 million cash at closing** and up to three **$25.0 million earn-out payments** for 2023, 2024, and 2025, contingent on NYMEX WTI crude oil prices exceeding **$60 per barrel**[64](index=64&type=chunk) - The company also sold certain well services equipment and inventory for **$5.5 million**, consisting of cash proceeds of **$2.6 million** and a **$2.9 million promissory note**[66](index=66&type=chunk) [11. Long-Term Debt](index=22&type=section&id=11.%20Long-Term%20Debt) Total long-term debt increased to $1,041.895 million at September 30, 2021, due to new Oasis and OMP Senior Notes issuances Long-Term Debt (In thousands) | Debt Type (In thousands) | September 30, 2021 (Successor) | December 31, 2020 (Successor) | | :----------------------- | :----------------------------- | :---------------------------- | | Oasis Senior Notes | $391,505 | — | | OMP Credit Facility | $210,000 | $450,000 | | OMP Senior Notes | $440,390 | — | | Total long-term debt, net | $1,041,895 | $710,000 | - The Oasis Credit Facility's borrowing base increased to **$900.0 million** on October 21, 2021, and the company had no borrowings outstanding at September 30, 2021[69](index=69&type=chunk)[71](index=71&type=chunk) - OMP issued **$450.0 million** of 8.00% senior unsecured notes due April 1, 2029, using proceeds for a distribution to Oasis and to repay OMP Credit Facility borrowings[76](index=76&type=chunk) [12. Asset Retirement Obligations](index=25&type=section&id=12.%20Asset%20Retirement%20Obligations) Asset Retirement Obligations (ARO) decreased slightly to $47.047 million at September 30, 2021, reflecting new liabilities, accretion, revisions, and settlements Asset Retirement Obligations (In thousands) | Metric (In thousands) | Amount | | :-------------------- | :----- | | Balance at December 31, 2020 (Successor) | $48,594 | | Liabilities incurred during period | $409 | | Liabilities settled during period | $(322) | | Accretion expense during period | $3,016 | | Revisions to estimates | $194 | | Liabilities settled through divestitures | $(4,844) | | Balance at September 30, 2021 (Successor) | $47,047 | [13. Income Taxes](index=25&type=section&id=13.%20Income%20Taxes) The company's effective tax rate was 0.0% for Q3 and 9M 2021 due to a valuation allowance, expecting no cash taxes for FY 2021 - The company's effective tax rate for the three and nine months ended September 30, 2021, was **0.0%**, primarily due to a valuation allowance against deferred tax assets[79](index=79&type=chunk) - The estimated valuation allowance decreased by **$35.6 million** to **$529.8 million** at September 30, 2021, from **$565.4 million** at December 31, 2020[79](index=79&type=chunk) - The company expects to owe **no cash taxes** for the 2021 tax year after qualifying for the Section 382(l)(5) exception, and anticipates a **$20.0 million refund** from an estimated income tax payment[79](index=79&type=chunk) [14. Equity-Based Compensation](index=25&type=section&id=14.%20Equity-Based%20Compensation) Oasis granted various equity-classified awards under its 2020 LTIP, with total equity-based compensation expense of $11.187 million for 9M 2021 - The company granted **443,836 RSUs**, **183,915 PSUs**, and **262,406 LSUs** during the nine months ended September 30, 2021, under its 2020 LTIP[82](index=82&type=chunk) - Equity-based compensation expense for the nine months ended September 30, 2021, totaled **$3.5 million for RSUs**, **$2.2 million for PSUs**, **$4.0 million for LSUs**, and **$0.9 million for restricted stock awards**[82](index=82&type=chunk) - All outstanding unvested restricted stock awards and PSUs granted under the Predecessor 2010 LTIP vested upon the company's emergence from bankruptcy on November 19, 2020[86](index=86&type=chunk) [15. Stockholders' Equity](index=27&type=section&id=15.%20Stockholders%27%20Equity) Oasis declared significant dividends and repurchased shares in 2021, while adopting a Tax Benefits Preservation Plan to protect NOLs - The company declared quarterly dividends of **$0.375 per share** and a special dividend of **$4.00 per share** in 2021, totaling **$102.5 million**[87](index=87&type=chunk) - Under a **$100.0 million share-repurchase program**, the company repurchased **190,783 shares for $14.6 million** during the nine months ended September 30, 2021[87](index=87&type=chunk) - A **Tax Benefits Preservation Plan** was adopted on August 3, 2021, to protect the availability of the company's net operating loss carryforwards and other tax attributes[89](index=89&type=chunk) [16. Earnings (Loss) Per Share](index=29&type=section&id=16.%20Earnings%20(Loss)%20Per%20Share) Basic EPS for Oasis was $3.63 for Q3 2021 and $5.11 for 9M 2021, a significant improvement from losses in the Predecessor period Earnings (Loss) Per Share (In thousands, except per share data) | Metric (In thousands) | Three Months Ended Sep 30, 2021 (Successor) | Nine Months Ended Sep 30, 2021 (Successor) | | :-------------------- | :------------------------------------------ | :----------------------------------------- | | Basic EPS | $3.63 | $5.11 | | Diluted EPS | $3.46 | $4.96 | | Basic Weighted Average Shares Outstanding | 19,812 | 19,905 | | Diluted Weighted Average Shares Outstanding | 20,786 | 20,508 | | Metric (In thousands) | Three Months Ended Sep 30, 2020 (Predecessor) | Nine Months Ended Sep 30, 2020 (Predecessor) | | :-------------------- | :-------------------------------------------- | :------------------------------------------- | | Basic EPS | $(0.17) | $(14.05) | | Diluted EPS | $(0.17) | $(14.05) | | Basic Weighted Average Shares Outstanding | 318,287 | 317,365 | | Diluted Weighted Average Shares Outstanding | 318,287 | 317,365 | - For the Successor period, potentially dilutive shares include unvested restricted stock awards, warrants, and contingently issuable shares related to RSUs, PSUs, and LSUs[90](index=90&type=chunk) - For the Predecessor period, all potentially dilutive shares were excluded from the diluted loss per share calculation due to the net loss incurred, making them anti-dilutive[90](index=90&type=chunk) [17. Business Segment Information](index=29&type=section&id=17.%20Business%20Segment%20Information) Oasis operates two reportable segments, E&P and midstream, with E&P generating $947.0 million in revenues and $593.5 million in operating income for 9M 2021 - The company has two reportable segments: **E&P** (acquisition and development of oil and gas properties) and **midstream** (gathering, compression, processing, and transportation services)[91](index=91&type=chunk)[94](index=94&type=chunk) Business Segment Performance (9M 2021, In thousands) | Metric (In thousands) | E&P (9M 2021) | Midstream (9M 2021) | Consolidated (9M 2021) | | :-------------------- | :------------ | :------------------ | :--------------------- | | Revenues from non-affiliates | $947,013 | $203,545 | $1,150,558 | | Operating income (loss) | $593,493 | $139,946 | $729,998 | | Property, plant and equipment, net | $692,271 | $893,333 | $1,582,844 | | Total assets | $1,939,695 | $1,062,577 | $2,999,512 | - Intercompany revenues and expenses between segments are eliminated in consolidation, with only non-affiliated and third-party revenues/expenses included in the consolidated statements[94](index=94&type=chunk) [18. Commitments and Contingencies](index=31&type=section&id=18.%20Commitments%20and%20Contingencies) Oasis had $6.7 million in outstanding letters of credit and $10.2 million in net surety bond exposure, with a new $258.6 million crude oil transportation commitment - As of September 30, 2021, the company had **$6.7 million in outstanding letters of credit** and **$10.2 million in net surety bond exposure**[97](index=97&type=chunk) - Volume commitment agreements related to properties divested in the Primary Permian Basin Sale were assigned to Percussion, eliminating the company's future obligations[98](index=98&type=chunk) - A new estimable future commitment of **$258.6 million** for crude oil transportation in the Williston Basin became effective in August 2021, with a remaining term of approximately **7 years**[100](index=100&type=chunk) - The company paid **$22.8 million** in May 2021 to settle the Mirada litigation, with no remaining settlement payments outstanding[101](index=101&type=chunk) [19. Subsequent Events](index=32&type=section&id=19.%20Subsequent%20Events) OMP entered a Merger Agreement with Crestwood Equity Partners LP, where Oasis will receive $160.0 million cash and 21.0 million Crestwood common units - On October 25, 2021, OMP and OMP GP entered into a **Merger Agreement with Crestwood Equity Partners LP**[102](index=102&type=chunk) - Oasis, as an OMP unitholder, will receive **$160.0 million in cash** and approximately **21.0 million Crestwood common units** in exchange for its OMP ownership[102](index=102&type=chunk)[104](index=104&type=chunk) - Upon completion of the mergers, Oasis is expected to own approximately **22% of the Crestwood Common Units**[102](index=102&type=chunk) - The mergers were unanimously approved by the Boards of Directors of Oasis and Crestwood, and OMP GP, and are expected to close in the **first quarter of 2022**[102](index=102&type=chunk) [Item 2. — Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20%E2%80%94%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Oasis Petroleum Inc.'s financial condition and results of operations, highlighting the impact of fresh start accounting and market conditions [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=34&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section advises that the report contains forward-looking statements subject to various risks and uncertainties, and actual results may differ materially - The report contains forward-looking statements regarding strategic tactics, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, and objectives[108](index=108&type=chunk) - Key risks include crude oil, natural gas, and NGL realized prices, global economic developments, the COVID-19 pandemic (including new strains and vaccine administration), actions of foreign oil producers, and the timing/pace of economic recovery[108](index=108&type=chunk) - The company disclaims any obligation to update or revise these statements unless required by securities law, and actual results may vary due to factors like commodity price changes, weather, capital expenditures, and regulatory developments[112](index=112&type=chunk) [Overview](index=37&type=section&id=Overview) Oasis Petroleum Inc. is an independent E&P company focused on unconventional crude oil and natural gas in the Williston Basin, operating a midstream business through OMP - Oasis Petroleum Inc. is an independent E&P company focused on onshore, unconventional crude oil and natural gas resources in the **Williston Basin**[114](index=114&type=chunk) - The company operates a midstream business through **OMP**, owning approximately **70% of OMP**, and derives significant cash flows from OMP distributions[114](index=114&type=chunk) - During the second quarter of 2021, the company sold its **E&P assets in the Texas region of the Permian Basin**[114](index=114&type=chunk) [Recent Developments](index=37&type=section&id=Recent%20Developments) Recent developments include the Williston Basin Acquisition, Permian Basin Sale, CEO change, DAPL review, Midstream Simplification, and the OMP Merger with Crestwood - Completed the **Williston Basin Acquisition** on October 21, 2021, for an adjusted purchase price of **$585.8 million**[115](index=115&type=chunk) - Completed the **Permian Basin Sale** on June 29, 2021, for an aggregate purchase price of **$450.0 million**, including cash and earn-out payments contingent on crude oil prices[116](index=116&type=chunk) - Announced the **OMP Merger with Crestwood Equity Partners LP** on October 25, 2021, where Oasis will receive **$160.0 million in cash** and approximately **21.0 million Crestwood common units**, expecting to own about **22% of Crestwood**[123](index=123&type=chunk)[124](index=124&type=chunk) [Market Conditions and COVID-19](index=39&type=section&id=Market%20Conditions%20and%20COVID-19) The COVID-19 pandemic continues to pose unpredictable impacts despite improved global economic activity and higher energy demand, necessitating ongoing monitoring and safety protocols - COVID-19 and its variants continue to create considerable uncertainty, despite improvements in global economic activity and higher energy demand[126](index=126&type=chunk) - The company reduced its workforce in Q1 2021 and deployed additional safety protocols in response to the pandemic[126](index=126&type=chunk) - Commodity prices have improved from historic lows in 2020, but further negative impacts from COVID-19 may necessitate business plan adjustments[126](index=126&type=chunk) [Commodity Prices](index=39&type=section&id=Commodity%20Prices) Oasis's revenue and profitability are highly dependent on volatile crude oil, natural gas, and NGL prices, managed through in-house marketing and derivative instruments - Revenue and profitability are substantially dependent on **volatile crude oil, natural gas, and NGL prices**, which are influenced by economic, political, and regulatory factors[127](index=127&type=chunk) - The company manages commodity price risk through in-house marketing, derivative financial instruments, and physical delivery contracts[127](index=127&type=chunk) - In Q3 2021, crude oil price differentials averaged a **$0.43 per barrel discount to NYMEX WTI**, and **93% of gross operated crude oil production** and substantially all natural gas production were connected to gathering systems[127](index=127&type=chunk) [Recent Highlights](index=40&type=section&id=Recent%20Highlights) Key highlights for Q3 2021 include a $0.50 per share dividend, average production of 51,804 Boepd, and net cash from operating activities of $294.4 million - Declared a dividend for Q3 2021 of **$0.50 per share** of common stock[129](index=129&type=chunk) Recent Highlights (Q3 2021) | Metric | Q3 2021 | | :----- | :------ | | Production volumes | 51,804 Boepd (62% oil) | | E&P capital expenditures | $41.9 million | | E&P lease operating expense (LOE) | $9.42 per Boe | | Crude oil differentials | $0.43 to NYMEX WTI (discount) | | Net cash provided by operating activities | $294.4 million | | Adjusted EBITDA attributable to Oasis | $116.2 million | [Results of Operations](index=40&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, noting the impact of fresh start accounting, increased commodity prices, and significant derivative losses [Comparability](index=40&type=section&id=Comparability) Due to fresh start accounting adoption on November 19, 2020, financial statements for 'Successor' periods are not comparable to 'Predecessor' periods - The company adopted **fresh start accounting** on November 19, 2020 (Emergence Date), making 'Successor' financial statements not comparable to 'Predecessor' statements[130](index=130&type=chunk) - Assets and liabilities were recorded at their estimated fair values as of the Emergence Date, primarily impacting comparability in oil and gas and other properties[130](index=130&type=chunk) [Revenues](index=40&type=section&id=Revenues) Total revenues increased significantly for Q3 and 9M 2021 (Successor) due to higher crude oil and natural gas prices, despite lower production volumes Revenues (In thousands) | Revenue Type (In thousands) | Q3 2021 (Successor) | Q3 2020 (Predecessor) | 9M 2021 (Successor) | 9M 2020 (Predecessor) | | :-------------------------- | :------------------ | :-------------------- | :------------------ | :-------------------- | | Crude oil revenues | $205,731 | N/A | $598,278 | $448,904 | | Natural gas revenues | $75,905 | N/A | $184,046 | $63,631 | | Midstream revenues | $66,712 | N/A | $183,807 | $138,164 | | Total revenues | $402,039 | $271,059 | $1,150,558 | $825,209 | | Average daily production (Boepd) | 51,804 | 66,581 | 54,407 | 66,581 | | Average crude oil sales price (per Bbl) | $70.12 | $36.61 | $63.63 | $36.61 | | Average natural gas sales price (per Mcf) | $6.91 | $1.77 | $5.63 | $1.77 | - Crude oil and natural gas revenues increased by **$26.4 million** quarter-over-quarter (Q3 2021 vs. Q2 2021) due to higher realized prices, despite lower production volumes from the Permian Basin Sale[135](index=135&type=chunk) - Midstream revenues increased by **$10.9 million** quarter-over-quarter (Q3 2021 vs. Q2 2021), driven by increased natural gas sales and produced/flowback water revenues[135](index=135&type=chunk) [Expenses and other income (expenses)](index=43&type=section&id=Expenses%20and%20other%20income%20(expenses)) Total operating expenses decreased significantly for 9M 2021 (Successor) due to the absence of large impairment charges, despite substantial net losses on derivative instruments Expenses and Other Income (Expenses) (In thousands) | Expense Type (In thousands) | Q3 2021 (Successor) | Q3 2020 (Predecessor) | 9M 2021 (Successor) | 9M 2020 (Predecessor) | | :-------------------------- | :------------------ | :-------------------- | :------------------ | :-------------------- | | Total operating expenses | $203,854 | $234,008 | $649,033 | $5,672,089 | | Lease operating expenses | $29,307 | $29,353 | $98,888 | $108,730 | | Midstream expenses | $32,396 | $11,110 | $83,841 | $32,355 | | Gathering, processing and transportation expenses | $16,400 | $20,328 | $52,596 | $73,557 | | Depreciation, depletion and amortization | $33,623 | $36,000 | $112,581 | $272,885 | | Impairment | — | $2,578 | $5 | $4,828,575 | | Net gain (loss) on Derivative Instruments | $(101,790) | $(5,071) | $(550,342) | $243,064 | | Interest expense, net | $(18,153) | $(37,389) | $(49,421) | $(177,534) | - LOE decreased by **$5.0 million** quarter-over-quarter (Q3 2021 vs. Q2 2021) primarily due to the Permian Basin Sale, while midstream expenses increased by **$8.9 million** due to higher natural gas purchases[140](index=140&type=chunk) - Impairment expense decreased by **$4.8 billion** for 9M 2021 compared to 9M 2020, which included significant charges on proved and unproved oil and gas properties, midstream assets, and inventory due to commodity price declines[150](index=150&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) Oasis's liquidity is primarily driven by cash flows from operations, Permian Basin Sale proceeds, and the issuance of Oasis and OMP Senior Notes - Primary liquidity sources include cash flows from operations, Permian Basin Sale proceeds, and the issuance of **Oasis Senior Notes** and **OMP Senior Notes**[155](index=155&type=chunk) - As of September 30, 2021, the company had **$1,481.8 million of liquidity**, comprising **$448.6 million in cash and cash equivalents** and **$633.2 million in aggregate unused borrowing capacity**[159](index=159&type=chunk) - The Oasis Credit Facility's borrowing base increased to **$900.0 million** on October 21, 2021, and the company had no outstanding borrowings at September 30, 2021[160](index=160&type=chunk)[161](index=161&type=chunk) - The company has a **$100.0 million share-repurchase program** authorized until December 31, 2022, and adopted a **Tax Benefits Preservation Plan** to protect its net operating loss carryforwards[172](index=172&type=chunk)[173](index=173&type=chunk) [Cash flows](index=48&type=section&id=Cash%20flows) Net cash provided by operating activities significantly increased to $644.7 million for 9M 2021 (Successor), leading to a substantial increase in overall cash Cash Flows (In thousands) | Cash Flow Type (In thousands) | 9M 2021 (Successor) | 9M 2020 (Predecessor) | | :---------------------------- | :------------------ | :-------------------- | | Net cash provided by operating activities | $644,746 | $154,905 | | Net cash used in investing activities | $(89,031) | $(52,365) | | Net cash provided by (used in) financing activities | $272,667 | $(38,294) | | Increase in cash, cash equivalents and restricted cash | $828,382 | $64,246 | - The increase in operating cash flows was primarily due to higher crude oil and natural gas revenues and lower interest, G&A, GPT, and LOE expenses[166](index=166&type=chunk) - Working capital shifted from a deficit of **$69.6 million** at December 31, 2020, to a surplus of **$88.2 million** at September 30, 2021, due to higher cash and accounts receivable, offset by increased derivative liabilities and payables[166](index=166&type=chunk) [Capital expenditures](index=49&type=section&id=Capital%20expenditures) Total capital expenditures for the nine months ended September 30, 2021, were $154.4 million, with E&P and other capital expenditures totaling $124.6 million Capital Expenditures (In thousands) | Capital Expenditure Type (In thousands) | 9M 2021 (Successor) | | :------------------------------------ | :------------------ | | E&P | $122,895 | | Other capital expenditures | $1,680 | | Total E&P and other capital expenditures | $124,575 | | Midstream | $29,786 | | Total capital expenditures | $154,361 | | Capitalized interest | $1,539 | [Dividends](index=49&type=section&id=Dividends) Oasis paid quarterly cash dividends totaling $22.5 million and a special dividend of $80.0 million in 2021, with future dividends subject to board discretion - The company paid quarterly cash dividends totaling **$22.5 million** and a special dividend of **$80.0 million** during 2021[171](index=171&type=chunk) - A dividend of **$0.50 per share** of common stock was declared on October 26, 2021, payable on November 29, 2021[171](index=171&type=chunk) - Future dividend payments depend on the company's earnings, financial condition, capital requirements, indebtedness, and statutory/contractual restrictions[171](index=171&type=chunk) [Share Repurchase Program](index=49&type=section&id=Share%20Repurchase%20Program) The Board authorized a $100.0 million share-repurchase program, under which 190,783 shares were repurchased for $14.6 million by September 30, 2021 - A **$100.0 million share-repurchase program** was authorized in March 2021, expiring on December 31, 2022[172](index=172&type=chunk) - During the nine months ended September 30, 2021, **190,783 shares were repurchased for $14.6 million** at a weighted average price of **$76.30 per share**[172](index=172&type=chunk) - An additional **156,519 shares were repurchased for $19.0 million** between October 28 and November 2, 2021, at a weighted average price of **$121.22 per share**[172](index=172&type=chunk) [Tax Benefits Preservation Plan](index=49&type=section&id=Tax%20Benefits%20Preservation%20Plan) Oasis adopted a Tax Benefits Preservation Plan to protect its net operating loss carryforwards, expecting zero cash taxes for FY 2021 - The company qualifies for a **Section 382(l)(5) exception**, allowing utilization of NOLs and other tax attributes, resulting in zero cash taxes for 9M 2021 and expected for FY 2021[173](index=173&type=chunk) - A **Tax Benefits Preservation Plan** was adopted to protect these Tax Benefits from potential limitations due to future 'ownership changes' as defined by Section 382 of the Code[173](index=173&type=chunk) - The plan includes a dividend of one preferred share purchase right per common share, exercisable if a person or group acquires **4.95% or more of the company's outstanding common stock**[175](index=175&type=chunk) [Non-GAAP Financial Measures](index=50&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles several non-GAAP financial measures used to evaluate the company's performance, providing insights into operational costs and cash generation [E&P Adjusted Gas Revenue](index=50&type=section&id=E%26P%20Adjusted%20Gas%20Revenue) E&P Adjusted Gas Revenue is a non-GAAP measure representing total natural gas revenues less benefits from the midstream segment for gathering and processing services - E&P Adjusted Gas Revenue is a non-GAAP measure representing total natural gas revenues less midstream benefits for gathering and processing services[177](index=177&type=chunk) E&P Adjusted Gas Revenue (In thousands) | Metric (In thousands) | Q3 2021 (Successor) | 9M 2021 (Successor) | | :-------------------- | :------------------ | :------------------ | | Natural gas revenues | $75,905 | $184,046 | | Intercompany impacts from midstream segment | $(11,773) | $(32,869) | | E&P Adjusted Gas Revenue | $64,132 | $151,177 | [Cash GPT and E&P GPT](index=50&type=section&id=Cash%20GPT%20and%20E%26P%20GPT) Cash GPT is total GPT expenses less non-cash valuation charges, while E&P GPT further subtracts midstream benefits for crude oil gathering and transportation services - Cash GPT is total GPT expenses less non-cash valuation charges on pipeline imbalances, while E&P GPT further excludes midstream benefits for crude oil gathering and transportation services[178](index=178&type=chunk) Cash GPT and E&P GPT (In thousands) | Metric (In thousands) | Q3 2021 (Successor) | 9M 2021 (Successor) | | :-------------------- | :------------------ | :------------------ | | GPT expenses | $16,400 | $52,596 | | Pipeline imbalances | $547 | $1,656 | | Cash GPT | $16,947 | $54,252 | | Intercompany impacts from midstream segment | $1,856 | $5,455 | | E&P GPT | $18,803 | $59,707 | [E&P Cash G&A](index=51&type=section&id=E%26P%20Cash%20G%26A) E&P Cash G&A is a non-GAAP measure representing total G&A expenses less non-cash equity-based compensation, other non-cash charges, and midstream-attributable G&A - E&P Cash G&A is total G&A expenses less non-cash equity-based compensation, other non-cash charges, and G&A expenses attributable to the midstream segment[181](index=181&type=chunk) E&P Cash G&A (In thousands) | Metric (In thousands) | Q3 2021 (Successor) | 9M 2021 (Successor) | | :-------------------- | :------------------ | :------------------ | | General and administrative expenses | $19,514 | $60,461 | | Equity-based compensation expenses | $(4,287) | $(11,187) | | G&A expenses attributable to midstream segment | $(3,670) | $(12,709) | | Other non-cash adjustments | $(1,025) | $(675) | | E&P Cash G&A | $10,532 | $35,890 | [Cash Interest and E&P Cash Interest](index=51&type=section&id=Cash%20Interest%20and%20E%26P%20Cash%20Interest) Cash Interest is interest expense adjusted for capitalized interest and non-cash amortization, while E&P Cash Interest further deducts OMP-attributable cash interest - Cash Interest is interest expense plus capitalized interest, less amortization and write-offs of deferred financing costs and debt discounts[182](index=182&type=chunk) - E&P Cash Interest is total Cash Interest less Cash Interest attributable to OMP, providing insight into E&P financing costs[182](index=182&type=chunk) Cash Interest and E&P Cash Interest (In thousands) | Metric (In thousands) | Q3 2021 (Successor) | 9M 2021 (Successor) | | :-------------------- | :------------------ | :------------------ | | Interest expense | $18,153 | $49,421 | | Capitalized interest | $578 | $1,539 | | Amortization of deferred financing costs | $(1,216) | $(14,677) | | Cash Interest | $17,515 | $36,283 | | Cash Interest attributable to OMP | $(10,606) | $(24,091) | | E&P Cash Interest | $6,909 | $12,192 | [Adjusted EBITDA and Adjusted EBITDA attributable to Oasis](index=52&type=section&id=Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20attributable%20to%20Oasis) Adjusted EBITDA represents earnings before interest, taxes, DD&A, and other non-cash charges, with Adjusted EBITDA attributable to Oasis further adjusting for OMP's EBITDA and distributions - Adjusted EBITDA is earnings (loss) before interest expense, income taxes, DD&A, exploration expenses, and other similar non-cash or non-recurring charges[185](index=185&type=chunk) - Adjusted EBITDA attributable to Oasis adjusts for OMP's Adjusted EBITDA and includes distributions from OMP, providing insight into the company's ability to maintain debt covenant compliance[185](index=185&type=chunk) Adjusted EBITDA and Adjusted EBITDA attributable to Oasis (In thousands) | Metric (In thousands) | Q3 2021 (Successor) | 9M 2021 (Successor) | | :-------------------- | :------------------ | :------------------ | | Net income (loss) including non-controlling interests | $83,332 | $129,376 | | Adjusted EBITDA | $155,416 | $466,521 | | Adjusted EBITDA attributable to OMP | $(58,178) | $(170,456) | | Cash distributions from OMP to Oasis | $18,954 | $52,828 | | Adjusted EBITDA attributable to Oasis | $116,192 | $348,893 | [E&P Adjusted EBITDA and E&P Free Cash Flow](index=54&type=section&id=E%26P%20Adjusted%20EBITDA%20and%20E%26P%20Free%20Cash%20Flow) E&P Adjusted EBITDA is derived from the E&P segment's income before taxes, adjusted for non-cash items, while E&P Free Cash Flow further subtracts cash interest and capital expenditures - E&P Adjusted EBITDA is derived from the E&P segment's income (loss) before income taxes, adjusted for items like gain/loss on sale of properties, derivative instruments, interest expense, DD&A, and impairment[189](index=189&type=chunk) - E&P Free Cash Flow is E&P Adjusted EBITDA plus distributions from OMP, less E&P Cash Interest and E&P/other capital expenditures[189](index=189&type=chunk) E&P Adjusted EBITDA and E&P Free Cash Flow (In thousands) | Metric (In thousands) | Q3 2021 (Successor) | 9M 2021 (Successor) | | :-------------------- | :------------------ | :------------------ | | Income (loss) before income taxes including non-controlling interests (E&P segment) | $44,040 | $18,910 | | E&P Adjusted EBITDA | $95,341 | $295,795 | | Distributions to Oasis from OMP and DevCo Interests | $18,954 | $52,828 | | E&P Cash Interest | $(6,909) | $(12,192) | | E&P and other capital expenditures | $(42,551) | $(124,575) | | E&P Free Cash Flow | $65,413 | $213,395 | [Fair Value of Financial Instruments](index=55&type=section&id=Fair%20Value%20of%20Financial%20Instruments) This section refers to Note 6 for details on fair value measurements of derivative instruments and other financial instruments, and Note 7 for additional derivative information - Refer to Note 6 for discussion of derivative instruments and their fair value measurements[191](index=191&type=chunk) - Refer to Note 7 for additional information regarding derivative instruments[195](index=195&type=chunk) [Critical Accounting Policies and Estimates](index=55&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) There have been no material changes to the company's critical accounting policies and estimates from those disclosed in its 2020 Annual Report - No material changes to critical accounting policies and estimates from the 2020 Annual Report[192](index=192&type=chunk) [Item 3. — Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20%E2%80%94%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Oasis is exposed to market risks from commodity price fluctuations, interest rate changes, and counterparty credit risk, mitigated by derivatives and high credit-quality institutions - The company is exposed to market risks including commodity price risk, interest rate risk, and counterparty and customer credit risk[193](index=193&type=chunk) - To reduce commodity price risk, the company uses derivative contracts, with a net derivative liability position of **$408.9 million** at September 30, 2021[193](index=193&type=chunk)[195](index=195&type=chunk) - Interest rate risk is managed through fixed-rate Oasis Senior Notes (**$400.0 million at 6.375%**) and OMP Senior Notes (**$450.0 million at 8.00%**), and variable-rate Oasis and OMP Credit Facilities[196](index=196&type=chunk) - Counterparty credit risk for derivative arrangements is mitigated by engaging high credit-quality financial institutions and utilizing netting provisions[198](index=198&type=chunk) [Item 4. — Controls and Procedures](index=56&type=section&id=Item%204.%20%E2%80%94%20Controls%20and%20Procedures) The company's disclosure controls and procedures were effective as of September 30, 2021, with no material changes in internal control over financial reporting - The company's disclosure controls and procedures were effective as of September 30, 2021, as evaluated by management, including the CEO and CFO[199](index=199&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2021[200](index=200&type=chunk) PART II — OTHER INFORMATION [Item 1. — Legal Proceedings](index=57&type=section&id=Item%201.%20%E2%80%94%20Legal%20Proceedings) This section refers to Note 18 of the financial statements for a discussion of material legal proceedings, including the MHA Nation Title Dispute and Mirada litigation settlement - Material legal proceedings are discussed in **Note 18 — Commitments and Contingencies**[203](index=203&type=chunk) [Item 1A. — Risk Factors](index=57&type=section&id=Item%201A.%20%E2%80%94%20Risk%20Factors) The company's business faces various risks, and there have been no material changes to the risk factors previously described in its 2020 Annual Report - No material changes in risk factors from those described in the 2020 Annual Report and subsequent SEC filings[204](index=204&type=chunk) [Item 2. — Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20%E2%80%94%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period, and no shares were repurchased under the program in Q3 2021, though it remains active - No sales of unregistered equity securities occurred during the period[206](index=206&type=chunk) - No shares were purchased under the publicly announced share-repurchase program during the three months ended September 30, 2021[206](index=206&type=chunk) - The share-repurchase program, authorized for up to **$100.0 million**, expires on December 31, 2022, with **85,443,582 shares** remaining available for repurchase[206](index=206&type=chunk) [Item 6. — Exhibits](index=59&type=section&id=Item%206.%20%E2%80%94%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the OMP Merger Agreement, Tax Benefits Preservation Plan, and Sarbanes-Oxley certifications - Key exhibits include the **Merger Agreement with Crestwood Equity Partners LP**, Certificate of Designations of Series A Junior Participating Preferred Stock, **Tax Benefits Preservation Plan**, and Support Agreement[208](index=208&type=chunk) - Sarbanes-Oxley Section 302 and 906 certifications from the Principal Executive Officer and Principal Financial Officer are furnished[208](index=208&type=chunk) - XBRL Instance, Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, Presentation Linkbase, and Cover Page Interactive Data Files are filed[208](index=208&type=chunk) SIGNATURES The report is duly signed on November 4, 2021, by Daniel E. Brown, Chief Executive Officer, and Michael H. Lou, Executive Vice President and Chief Financial Officer - The report was signed on **November 4, 2021**, by **Daniel E. Brown, Chief Executive Officer**, and **Michael H. Lou, Executive Vice President and Chief Financial Officer**[213](index=213&type=chunk)

Financial Data and Key Metrics Changes - The company reported a net loss of $62 million or $1.57 per share for Q2 2021, compared to a loss of $1 million or $0.02 per share in the previous quarter [9] - Adjusted net income was $118 million or $3.01 per share, up from $108 million or $2.79 per share in the previous quarter [9] - EBITDAX for Q2 2021 was $176 million, slightly higher than $170 million in the previous quarter, attributed to higher production and commodity prices [9] Business Line Data and Key Metrics Changes - Average production for the quarter was 92,600 barrels of oil equivalent (BOE), with 58% being crude oil, compared to 89,900 BOE in the first quarter [10] - Oil production remained flat at approximately 53,000 barrels per day, with an increase in ethane recoveries contributing to higher BOE production [10] - The company adjusted its oil production forecast to 50,000 to 53,000 barrels per day and total production to 88,000 to 92,000 BOE per day for the year [10] Market Data and Key Metrics Changes - Oil differentials in Q2 were narrower than the lower end of guidance, benefiting from the stabilization of transportation interruptions and improved basin production levels [16] - Pipeline utilization has trended downward, with increased rail movements reflecting alternative marketing arrangements [17] Company Strategy and Development Direction - The company is focused on optimizing its asset base and taking advantage of favorable commodity prices, with expectations to generate approximately $700 million in EBITDAX and over $425 million in free cash flow for 2021 [8] - Recent business development activities include divesting Redtail assets and acquiring assets in Mountrail County, North Dakota, aimed at creating a more focused asset portfolio [19] - The company plans to maintain a balance between returning capital to shareholders and expanding its inventory, deferring decisions on capital returns until economic conditions stabilize [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position due to solid assets and a strong balance sheet, while acknowledging the volatility in oil prices [7] - The company is committed to reducing emissions and improving transparency in its operations, working with third parties to measure and document emissions [22] Other Important Information - Capital expenditures (CapEx) for Q2 were $58 million, with guidance for full-year CapEx tightened to $240 million to $252 million [11][13] - Lease operating expenses were $64 million or $7.61 per BOE, with guidance for LOE adjusted to $235 million to $245 million [14] Q&A Session Summary Question: Timeline for returning capital to shareholders - Management indicated that updates on capital returns could be expected by the end of the year or early next year, emphasizing the need for sustainable decisions [26] Question: Share buybacks versus cash payments - Management acknowledged discussions around share buybacks, considering the current share price and dividend balance [27] Question: Operational activity in the Sanish Field - Management confirmed plans for increased activity in the Sanish Field in 2022, including drilling 3-mile laterals [28][30] Question: Appetite for additional M&A - Management expressed a cautious approach to M&A, balancing shareholder returns with long-term sustainability [35] Question: Update on ultra-long lateral development - Management confirmed plans for 3-mile laterals in 2022, which are expected to significantly increase returns [36][37]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | |---------------------------------------------------------------------------------------------| | | | For the transition period from to | | Commission file number: 1-34776 | | ...