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]

PART I — FINANCIAL INFORMATION Presents the company's unaudited condensed consolidated financial statements and related disclosures for the reporting period [Item 1. — Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20%E2%80%94%20Financial%20Statements%20%28Unaudited%29) Presents unaudited condensed consolidated financial statements, including balance sheets, operations, equity, cash flows, and comprehensive notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20at%20June%2030%2C%202021%20and%20December%2031%2C%202020) Provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :----------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $2,936,716 | $2,159,037 | | Total Liabilities | $1,914,943 | $1,146,298 | | Cash and cash equivalents | $388,915 | $15,856 | | Long-term debt | $1,044,474 | $710,000 | | Total Stockholders' Equity | $1,021,773 | $1,012,739 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202021%20%28Successor%29%20and%202020%20%28Predecessor%29) Reports the company's financial performance over specific periods, including revenues, expenses, and net income or loss Three Months Ended June 30 | Metric | 2021 (Successor) (in thousands) | 2020 (Predecessor) (in thousands) | | :-------------------------------------- | :------------------------------ | :-------------------------------- | | Total Revenues | $393,060 | $166,352 | | Operating Income (Loss) | $375,573 | $(11,224) | | Net Income (Loss) Attributable to Oasis | $73,364 | $(92,943) | | Basic EPS | $3.69 | $(0.29) | Six Months Ended June 30 | Metric | 2021 (Successor) (in thousands) | 2020 (Predecessor) (in thousands) | | :-------------------------------------- | :------------------------------ | :-------------------------------- | | Total Revenues | $748,519 | $554,150 | | Operating Income (Loss) | $526,408 | $(4,873,752) | | Net Income (Loss) Attributable to Oasis | $29,772 | $(4,403,804) | | Basic EPS | $1.49 | $(13.90) | [Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20%28Deficit%29) Details the changes in the company's equity accounts over a period, reflecting net income, dividends, and stock transactions | Metric | June 30, 2021 (Successor) (in thousands) | December 31, 2020 (Successor) (in thousands) | | :---------------------------------------- | :--------------------------------------- | :------------------------------------------- | | Total Stockholders' Equity | $1,021,773 | $1,012,739 | | Net income (loss) attributable to Oasis (Q2 2021) | $73,364 | N/A | | Special dividend declared (Q2 2021) | $(82,958) | N/A | | Repurchase of common stock (Q2 2021) | $(14,560) | N/A | | Issuance of OMP common units, net of offering costs (Q2 2021) | $86,657 | N/A | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202021%20%28Successor%29%20and%202020%20%28Predecessor%29) Summarizes the cash inflows and outflows from operating, investing, and financing activities over a specific period | Metric | Six Months Ended June 30, 2021 (Successor) (in thousands) | Six Months Ended June 30, 2020 (Predecessor) (in thousands) | | :--------------------------------------------------- | :-------------------------------------------------------- | :-------------------------------------------------------- | | Net cash provided by operating activities | $350,363 | $59,895 | | Net cash provided by (used in) investing activities | $46,750 | $(112,434) | | Net cash provided by financing activities | $371,576 | $109,928 | | Increase in cash, cash equivalents and restricted cash | $768,689 | $57,389 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and supplementary information for the figures presented in the primary financial statements [1. Organization and Operations of the Company](index=11&type=section&id=1.%20Organization%20and%20Operations%20of%20the%20Company) Describes the company's business, operational focus, and significant structural changes during the reporting period - Oasis Petroleum Inc. is an independent exploration and production (E&P) company focused on onshore, unconventional crude oil and natural gas resources in the Williston Basin (North Dakota and Montana)[21](index=21&type=chunk) - The company operates a midstream business segment through Oasis Midstream Partners LP (OMP), owning approximately **70% of OMP** as of June 30, 2021[21](index=21&type=chunk)[22](index=22&type=chunk) - During the second quarter of 2021, the company sold its E&P assets in the Texas region of the Permian Basin[21](index=21&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the key accounting principles and methods applied in preparing the financial statements, including fresh start accounting - The company adopted fresh start accounting on November 19, 2020 (Emergence Date) following bankruptcy, making financial statements after this date (Successor) not comparable to prior periods (Predecessor)[24](index=24&type=chunk) - Oasis consolidates OMP, recognizing a non-controlling interest for public unitholders, as Oasis has authority to direct OMP's economic performance[22](index=22&type=chunk) - A Midstream Simplification was completed on March 30, 2021, involving the contribution of remaining Bobcat DevCo and Beartooth DevCo interests to OMP for approximately **$512.5 million** (cash and OMP common units) and the cancellation of OMP's incentive distribution rights[22](index=22&type=chunk) [3. Revenue Recognition](index=13&type=section&id=3.%20Revenue%20Recognition) Details the company's policies and breakdown of revenue streams from E&P and midstream operations, including performance obligations Total E&P Revenues | Period | 2021 (Successor) (in thousands) | 2020 (Predecessor) (in thousands) | | :------------------------- | :------------------------------ | :-------------------------------- | | Three Months Ended June 30 | $328,987 | $121,826 | | Six Months Ended June 30 | $611,685 | $453,213 | Total Midstream Revenues | Period | 2021 (Successor) (in thousands) | 2020 (Predecessor) (in thousands) | | :------------------------- | :------------------------------ | :-------------------------------- | | Three Months Ended June 30 | $64,073 | $44,526 | | Six Months Ended June 30 | $136,834 | $100,937 | Remaining Performance Obligations (as of June 30, 2021) | Year | Amount (in thousands) | | :--- | :-------------------- | | 2021 | $8,376 | | 2022 | $17,175 | | 2023 | $10,896 | | 2024 | $11,089 | | 2025 | $2,768 | | **Total** | **$50,304** | [4. Inventory](index=14&type=section&id=4.%20Inventory) Presents the composition and valuation of the company's current and long-term inventory, including equipment and crude oil Total Inventory (Current & Long-term) | Category | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :------------------------------ | :--------------------------- | :------------------------------- | | Equipment and materials | $21,827 | $25,103 | | Crude oil inventory | $11,006 | $8,826 | | Linefill in third party pipelines (long-term) | $8,683 | $14,522 | | **Total** | **$41,516** | **$48,451** | [5. Additional Balance Sheet Information](index=15&type=section&id=5.%20Additional%20Balance%20Sheet%20Information) Provides further detail on specific balance sheet accounts such as accounts receivable and accrued liabilities Accounts Receivable, net | Category | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------- | :--------------------------- | :------------------------------- | | Trade accounts | $228,518 | $161,519 | | Joint interest accounts | $41,422 | $31,920 | | Other accounts | $32,953 | $13,206 | | Less: allowance for credit losses | $(387) | $(106) | | **Total accounts receivable, net** | **$302,506** | **$206,539** | Accrued Liabilities | Category | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :------------------------------------ | :--------------------------- | :------------------------------- | | Accrued capital costs | $49,914 | $39,380 | | Accrued dividends payable | $83,543 | — | | **Total accrued liabilities** | **$223,119** | **$126,284** | [6. Fair Value Measurements](index=15&type=section&id=6.%20Fair%20Value%20Measurements) Explains the methodologies and inputs used to determine the fair value of financial assets and liabilities, particularly derivatives Fair Value of Financial Assets and Liabilities (June 30, 2021) | Category | Level 2 (in thousands) | Total (in thousands) | | :------------------------------------------ | :--------------------- | :------------------- | | Permian Basin Sale Contingent Consideration (Assets) | $32,860 | $32,860 | | Commodity derivative instruments (Liabilities) | $381,649 | $381,649 | Fair Value of Financial Assets and Liabilities (December 31, 2020) | Category | Level 2 (in thousands) | Total (in thousands) | | :------------------------------------------ | :--------------------- | :------------------- | | Commodity derivative instruments (Assets) | $467 | $467 | | Commodity derivative instruments (Liabilities) | $94,558 | $94,558 | - Commodity derivative instruments are valued using mark-to-market reports and readily available market prices, incorporating credit adjustments for non-performance risk[45](index=45&type=chunk)[47](index=47&type=chunk) - Permian Basin Sale Contingent Consideration was valued at **$32.9 million** using a Monte Carlo simulation model with Level 2 inputs[48](index=48&type=chunk) [7. Derivative Instruments](index=17&type=section&id=7.%20Derivative%20Instruments) Discusses the company's use of derivative instruments to manage commodity price risk and their financial impact - The company uses 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[50](index=50&type=chunk) - In May 2021, the company paid **$82.4 million** to modify certain crude oil swap contracts, adjusting prices to **$50.00/Bbl** for 2022-2024 volumes[51](index=51&type=chunk) Net Gain (Loss) on Derivative Instruments | Period | 2021 (Successor) (in thousands) | 2020 (Predecessor) (in thousands) | | :------------------------- | :------------------------------ | :-------------------------------- | | Three Months Ended June 30 | $(267,037) | $(37,187) | | Six Months Ended June 30 | $(448,552) | $248,135 | Outstanding Commodity Derivative Instruments (June 30, 2021) | Commodity | Settlement Period | Instrument | Volumes | Weighted Average Price | Fair Value (Liabilities) (in thousands) | | :---------- | :---------------- | :--------- | :------ | :--------------------- | :-------------------------------------- | | Crude oil | 2021 | Fixed price swaps | 5,307,000 Bbl | $42.09 | $(154,623) | | Crude oil | 2022 | Fixed price swaps | 7,245,000 Bbl | $49.02 | $(120,533) | | Crude oil | 2023 | Fixed price swaps | 5,265,000 Bbl | $50.00 | $(53,619) | | Natural gas | 2021 | Fixed price swaps | 7,360,000 MMBtu | $2.84 | $(5,889) | [8. Property, Plant and Equipment](index=19&type=section&id=8.%20Property%2C%20Plant%20and%20Equipment) Details the carrying values of the company's proved oil and gas properties and other property, plant, and equipment Total Property, Plant and Equipment, net | Category | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :------------------------------------ | :--------------------------- | :------------------------------- | | Proved oil and gas properties, net | $610,174 | $757,714 | | Other property and equipment, net | $915,902 | $930,862 | | **Total** | **$1,554,685** | **$1,728,787** | [9. Acquisitions](index=20&type=section&id=9.%20Acquisitions) Describes significant acquisition activities, including the Williston Basin Acquisition, and their financial implications - On May 3, 2021, Oasis Petroleum North America LLC agreed to acquire approximately **95,000 net acres** in the Williston Basin for **$745.0 million** in cash[58](index=58&type=chunk) - A deposit of **$74.5 million** was paid, and the Williston Basin Acquisition is expected to close late in the third quarter of 2021[58](index=58&type=chunk) [10. Divestitures](index=20&type=section&id=10.%20Divestitures) Outlines significant divestiture activities, including the Permian Basin Sale, and the resulting gains and cash proceeds - The company completed the Primary Permian Basin Sale on June 29, 2021, for up to **$450.0 million**, consisting of **$375.0 million cash** and up to three **$25.0 million** earn-out payments contingent on NYMEX WTI crude oil prices exceeding **$60/Bbl** for 2023-2025[59](index=59&type=chunk) - Cash proceeds received from the Primary Permian Basin Sale were **$347.3 million**, and an additional **$19.4 million** was received from the Additional Permian Basin Sale[59](index=59&type=chunk) - A total gain of **$222.5 million** from the Permian Basin Sale was recognized for the three and six months ended June 30, 2021[59](index=59&type=chunk) - The company also sold certain well services equipment and inventory for **$5.5 million** on March 22, 2021[60](index=60&type=chunk) [11. Long-Term Debt](index=21&type=section&id=11.%20Long-Term%20Debt) Provides details on the company's long-term debt structure, including credit facilities and senior notes, and their terms Total Long-Term Debt, net | Category | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--------------------------- | :--------------------------- | :------------------------------- | | Oasis Credit Facility | — | $260,000 | | Oasis Senior Notes | $391,087 | — | | OMP Credit Facility | $213,000 | $450,000 | | OMP Senior Notes | $440,387 | — | | **Total long-term debt, net** | **$1,044,474** | **$710,000** | - The Oasis Credit Facility had a borrowing base of **$400.0 million** and an unused capacity of **$398.7 million** at June 30, 2021, with the borrowing base expected to increase to **$650.0 million** upon the Williston Basin Acquisition closing[63](index=63&type=chunk) - Oasis issued **$400.0 million** of **6.375% senior unsecured notes** due June 1, 2026, with proceeds restricted for funding a portion of the Williston Basin Acquisition[67](index=67&type=chunk) - OMP issued **$450.0 million** of **8.00% senior unsecured notes** due April 1, 2029, using proceeds for a **$231.5 million** distribution to Oasis and repayment of **$204.0 million** on the OMP Credit Facility[71](index=71&type=chunk) [12. Asset Retirement Obligations](index=24&type=section&id=12.%20Asset%20Retirement%20Obligations) Presents the balance and changes in the company's asset retirement obligations, reflecting environmental liabilities Asset Retirement Obligations (ARO) Balance | Metric | June 30, 2021 (Successor) (in thousands) | December 31, 2020 (Successor) (in thousands) | | :--------------------------------- | :--------------------------------------- | :------------------------------------------- | | Balance | $46,064 | $48,594 | | Liabilities settled through divestitures | $(4,845) | N/A | | Accretion expense during period | $2,043 | N/A | [13. Income Taxes](index=24&type=section&id=13.%20Income%20Taxes) Discusses the company's effective tax rates, deferred tax assets, and the utilization of net operating loss carryforwards Effective Tax Rates (Successor) | Period | Effective Tax Rate | | :------------------------- | :----------------- | | Three Months Ended June 30 | 4.3% | | Six Months Ended June 30 | (0.2)% | - The effective tax rates were lower than the statutory federal rate of **21%** primarily due to a valuation allowance against net deferred tax assets[74](index=74&type=chunk) - The company expects to qualify for and utilize the exception under Section 382(l)(5) of the Code for its net operating loss carryforwards (NOLs), anticipating no cash taxes for the 2021 tax year[74](index=74&type=chunk) [14. Equity-Based Compensation](index=24&type=section&id=14.%20Equity-Based%20Compensation) Details the types of equity awards granted under the company's incentive plan and the associated compensation expenses - The company grants Restricted Stock Units (RSUs), Performance Share Units (PSUs), Leveraged Stock Units (LSUs), and restricted stock awards under its 2020 Long Term Incentive Plan (LTIP)[75](index=75&type=chunk)[77](index=77&type=chunk) Equity-Based Compensation Expense (Successor, Q2 2021) | Award Type | Expense (in millions) | | :-------------------- | :-------------------- | | Restricted Stock Units | $1.4 | | Performance Share Units | $1.0 | | Leveraged Stock Units | $2.0 | | Restricted Stock Awards | $0.3 | - Total equity-based compensation expenses for the six months ended June 30, 2021, were **$6.9 million** (Successor), compared to **$11.7 million** (Predecessor) for the same period in 2020[16](index=16&type=chunk)[81](index=81&type=chunk) [15. Stockholders' Equity](index=26&type=section&id=15.%20Stockholders'%20Equity) Reports on changes in stockholders' equity, including dividends, share repurchases, and equity offerings by OMP - The company declared two regular dividends of **$0.375 per share** (**$7.5 million** each) and a special dividend of **$4.00 per share** (**$83.0 million** payable) in Q2 2021[82](index=82&type=chunk) - A share repurchase program of up to **$100.0 million** was authorized in March 2021, with **$14.6 million** (**190,783 shares**) repurchased by June 30, 2021[82](index=82&type=chunk) - OMP completed an equity offering of **3,623,188 common units** for **$86.7 million**, which was used to redeem an equal number of common units held by Oasis for **$87.0 million**, resulting in Oasis owning approximately **70%** of OMP's outstanding common units[84](index=84&type=chunk) - Subsequent to June 30, 2021, the Board adopted a Tax Benefits Preservation Plan to protect the availability of the company's Net Operating Losses (NOLs) and other tax attributes[84](index=84&type=chunk) [16. Earnings (Loss) Per Share](index=27&type=section&id=16.%20Earnings%20%28Loss%29%20Per%20Share) Presents the basic and diluted earnings per share calculations and the factors affecting share count Earnings (Loss) Per Share | Metric | Q2 2021 (Successor) | YTD Q2 2021 (Successor) | Q2 2020 (Predecessor) | YTD Q2 2020 (Predecessor) | | :---------- | :------------------ | :---------------------- | :-------------------- | :------------------------ | | Basic EPS | $3.69 | $1.49 | $(0.29) | $(13.90) | | Diluted EPS | $3.52 | $1.46 | $(0.29) | $(13.90) | - Weighted average basic shares outstanding for Q2 2021 were **19,904 thousand**, and diluted shares were **20,822 thousand**[85](index=85&type=chunk) - Potentially dilutive shares were excluded from diluted EPS calculations when their effect was anti-dilutive, particularly during net loss periods[85](index=85&type=chunk) [17. Business Segment Information](index=27&type=section&id=17.%20Business%20Segment%20Information) Provides financial data broken down by the company's E&P and Midstream operating segments - The company operates two reportable segments: E&P (acquisition and development of oil and gas properties) and Midstream (natural gas gathering, compression, processing, water services)[86](index=86&type=chunk) Segment Financial Information (Successor, Three Months Ended June 30, 2021) | Segment | Revenues from non-affiliates (in thousands) | Operating income (loss) (in thousands) | | :-------- | :------------------------------------------ | :------------------------------------- | | E&P | $328,987 | $337,188 | | Midstream | $64,073 | $39,990 | Segment Financial Information (Successor, Six Months Ended June 30, 2021) | Segment | Revenues from non-affiliates (in thousands) | Operating income (loss) (in thousands) | | :-------- | :------------------------------------------ | :------------------------------------- | | E&P | $611,685 | $440,368 | | Midstream | $136,834 | $88,657 | [18. Commitments and Contingencies](index=29&type=section&id=18.%20Commitments%20and%20Contingencies) Discloses the company's outstanding letters of credit, surety bonds, volume commitments, and legal proceedings - As of June 30, 2021, the company had **$6.8 million** in outstanding letters of credit and **$7.5 million** in net surety bond exposure[90](index=90&type=chunk) - Volume commitment agreements related to the divested Permian Basin properties were assigned to Percussion, eliminating the company's future obligations[90](index=90&type=chunk) - A **$2.4 million** deficiency fee was recorded for a volume shortfall under certain commitment agreements[90](index=90&type=chunk) - Subsequent to June 30, 2021, a new estimable future commitment of **$149.6 million** for crude oil transport became effective with a remaining term of approximately **7 years**[90](index=90&type=chunk) - The Mirada litigation settlement was fully paid by May 2021, with no remaining settlement payments outstanding[92](index=92&type=chunk) [Item 2. — Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20%E2%80%94%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operational results, recent developments, market conditions, liquidity, capital resources, and non-GAAP measures [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=31&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) Warns readers about the inherent uncertainties and risks associated with forward-looking statements contained within the report - This report contains forward-looking statements subject to risks and uncertainties, including those related to the COVID-19 pandemic, commodity prices, and economic conditions[96](index=96&type=chunk) - Key factors that could cause actual results to vary include changes in crude oil and natural gas prices, weather, capital expenditures, acquisitions, reserves, operational factors, capital markets, transportation, environmental regulations, and litigation[99](index=99&type=chunk) [Overview](index=33&type=section&id=Overview) Provides a high-level description of the company's core business, operational focus, and recent strategic divestitures - Oasis Petroleum Inc. is an independent E&P company focused on unconventional crude oil and natural gas resources in the Williston Basin[101](index=101&type=chunk) - The company operates a midstream business through Oasis Midstream Partners LP (OMP), owning OMP's general partner and approximately **70% of OMP**[101](index=101&type=chunk) - Oasis sold its E&P assets in the Texas region of the Permian Basin during the second quarter of 2021[101](index=101&type=chunk) [Recent Developments](index=33&type=section&id=Recent%20Developments) Highlights key corporate events, including acquisitions, divestitures, leadership changes, and market condition impacts - The company entered into an agreement on May 3, 2021, for the Williston Basin Acquisition, acquiring approximately **95,000 net acres** for **$745.0 million**, expected to close late in Q3 2021[102](index=102&type=chunk) - The Permian Basin Sale closed on June 29, 2021, for up to **$450.0 million**, including **$347.3 million** in cash proceeds (Primary Sale) and **$19.4 million** (Additional Sale)[103](index=103&type=chunk)[104](index=104&type=chunk) - Daniel E. Brown was appointed Chief Executive Officer on April 13, 2021[105](index=105&type=chunk) - The Midstream Simplification was completed on March 30, 2021, involving the contribution of DevCo interests to OMP and elimination of incentive distribution rights for approximately **$512.5 million**[108](index=108&type=chunk) - OMP completed an equity offering and unit redemption on June 29, 2021, resulting in Oasis owning approximately **70%** of OMP's outstanding common units[109](index=109&type=chunk) - Market conditions have improved but remain uncertain due to COVID-19, leading to workforce reductions and enhanced safety protocols[110](index=110&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance, detailing changes in revenues, expenses, and other income/loss items - Financial statements for the Successor period (post-November 19, 2020) are not comparable to the Predecessor period due to fresh start accounting[114](index=114&type=chunk) Revenues (Q2 2021 vs. Q1 2021) | Revenue Type | Q2 2021 (in thousands) | Q1 2021 (in thousands) | Change (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :-------------------- | | Crude oil and natural gas | $255,227 | $245,461 | +$9,766 | | Purchased oil and gas sales | $81,855 | $48,460 | +$33,395 | | Midstream revenues | $55,783 | $61,312 | $(5,529) | | Total Revenues | $393,060 | $355,459 | +$37,601 | Revenues (YTD Q2 2021 vs. YTD Q2 2020) | Revenue Type | YTD Q2 2021 (in thousands) | YTD Q2 2020 (in thousands) | Change (in thousands) | | :-------------------------- | :------------------------- | :------------------------- | :-------------------- | | Crude oil and natural gas | $500,688 | $332,958 | +$167,730 | | Midstream revenues | $117,095 | $91,185 | +$25,910 | | Total Revenues | $748,519 | $554,150 | +$194,369 | - Average daily production decreased by **2,934 Boepd** to **54,271 Boepd** quarter-over-quarter, primarily due to natural decline in crude oil production[119](index=119&type=chunk) - Impairment expense decreased by **$4.8 billion** for the six months ended June 30, 2021, compared to the same period in 2020, with no material asset impairment charges in 2021[130](index=130&type=chunk) - A **$223.0 million** net gain on sale of properties was recognized for the three months ended June 30, 2021, primarily from the Permian Basin Sale[122](index=122&type=chunk)[131](index=131&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet its short-term and long-term financial obligations, including cash, borrowing capacity, and capital expenditures - As of June 30, 2021, the company had **$1,419.1 million** in total liquidity, comprising **$388.9 million** in cash and cash equivalents and **$630.2 million** in aggregate unused borrowing capacity[135](index=135&type=chunk) - The company has **$400.0 million** of restricted cash held to fund a portion of the Williston Basin Acquisition[135](index=135&type=chunk) - Net cash provided by operating activities increased significantly to **$350.4 million** for the six months ended June 30, 2021, driven by higher revenues and lower expenses[140](index=140&type=chunk)[141](index=141&type=chunk) Capital Expenditures (Six Months Ended June 30, 2021) | Category | Amount (in thousands) | | :--------------------------- | :-------------------- | | E&P and other capital expenditures | $82,024 | | Midstream capital expenditures | $13,651 | | **Total capital expenditures** | **$95,675** | - The company declared a special dividend of **$4.00 per share**, payable on July 21, 2021, and repurchased **$14.6 million** of common stock in Q2 2021 as part of a **$100.0 million** program[147](index=147&type=chunk)[148](index=148&type=chunk) [Non-GAAP Financial Measures](index=45&type=section&id=Non-GAAP%20Financial%20Measures) Explains and reconciles non-GAAP financial metrics used by management to evaluate operational performance and financial health - The company uses supplemental non-GAAP financial measures, such as E&P Adjusted Gas Revenue, Cash GPT, E&P GPT, E&P Cash G&A, Cash Interest, E&P Cash Interest, Adjusted EBITDA, Adjusted EBITDA attributable to Oasis, and E&P Free Cash Flow, to provide additional insights into its operations and financial performance[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[158](index=158&type=chunk)[161](index=161&type=chunk) Key Non-GAAP Financial Measures (Six Months Ended June 30, 2021, Successor) | Metric | Amount (in thousands) | | :---------------------------------- | :-------------------- | | E&P Adjusted Gas Revenue | $87,045 | | Cash GPT | $37,305 | | E&P Cash G&A | $25,008 | | Adjusted EBITDA attributable to Oasis | $233,051 | | E&P Free Cash Flow | $148,332 | [Item 3. — Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20%E2%80%94%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details the company's exposure to commodity price, interest rate, and credit risks, and how these are managed through derivatives - The company is exposed to commodity price risk (crude oil, natural gas, NGLs), interest rate risk, and counterparty and customer credit risk, which are managed through risk management programs including derivative instruments[166](index=166&type=chunk)[168](index=168&type=chunk) - At June 30, 2021, the company had a net derivative liability position of **$381.6 million**. A **10% increase** in crude oil prices would decrease its fair value by approximately **$169.4 million**, while a **10% decrease** would increase it by approximately **$163.5 million**[170](index=170&type=chunk) - Earn-out payments from the Permian Basin Sale are contingent on NYMEX WTI crude oil prices exceeding **$60 per barrel** for 2023, 2024, and 2025[169](index=169&type=chunk) - Interest rate risk is present with fixed-rate Oasis Senior Notes (**6.375%**) and OMP Senior Notes (**8.00%**), and variable rates on the Oasis and OMP Credit Facilities[171](index=171&type=chunk) - Counterparty credit risk for derivative arrangements is mitigated by contracting with high credit-quality financial institutions and spreading exposure across several institutions[173](index=173&type=chunk) [Item 4. — Controls and Procedures](index=50&type=section&id=Item%204.%20%E2%80%94%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and procedures with no material changes in internal control over financial reporting - The company's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2021[174](index=174&type=chunk) - There were no material changes in the company's internal control over financial reporting during the quarter ended June 30, 2021[175](index=175&type=chunk) PART II — OTHER INFORMATION Contains additional information not covered in the financial statements, including legal proceedings, risk factors, and equity sales [Item 1. — Legal Proceedings](index=51&type=section&id=Item%201.%20%E2%80%94%20Legal%20Proceedings) This section refers to Note 18 — Commitments and Contingencies for a discussion of material legal proceedings the company is involved in during the ordinary course of business - Material legal proceedings are discussed in Note 18 — Commitments and Contingencies[178](index=178&type=chunk) [Item 1A. — Risk Factors](index=51&type=section&id=Item%201A.%20%E2%80%94%20Risk%20Factors) Highlights business risks, particularly the potential inability to utilize Net Operating Losses (NOLs) and other tax attributes - A key risk is the potential inability to utilize Net Operating Losses (NOLs) and other tax attributes to offset future taxable income for U.S. federal or state tax purposes, which could adversely affect financial position, results of operations, and cash flows[180](index=180&type=chunk) - The company believes it qualifies for the Section 382(l)(5) exception, which allows for no limitations on Tax Benefits going forward, but future ownership changes could still limit their use[180](index=180&type=chunk) - A Tax Benefits Preservation Plan has been adopted to protect the availability of these Tax Benefits, but there is no assurance against future ownership changes[180](index=180&type=chunk) [Item 2. — Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20%E2%80%94%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no unregistered equity sales and details share repurchase activities, including 190,783 shares bought for $14.6 million - No unregistered sales of equity securities occurred during the period[182](index=182&type=chunk) Issuer Purchases of Equity Securities (Three Months Ended June 30, 2021) | Period | Total Number of Shares Purchased | | :----------------------- | :----------------------------- | | May 1 – May 31, 2021 | 190,783 | | **Total** | **190,783** | - The repurchases were part of a **$100.0 million** share-repurchase program authorized in March 2021, expiring on December 31, 2022[182](index=182&type=chunk) [Item 6. — Exhibits](index=52&type=section&id=Item%206.%20%E2%80%94%20Exhibits) Lists all exhibits filed with the Form 10-Q, including various agreements related to acquisitions, divestitures, and debt facilities, as well as employment agreements, Sarbanes-Oxley certifications, and XBRL interactive data files - Exhibits include Purchase and Sale Agreements for the Williston Basin Acquisition and Permian Basin Sale[183](index=183&type=chunk) - Amendments to the Oasis Credit Agreement and OMP Credit Facility, along with commitment letters and purchase agreements for senior notes, are filed[183](index=183&type=chunk) - Employment agreements, Sarbanes-Oxley certifications (Sections 302 and 906), and XBRL interactive data files are also included[183](index=183&type=chunk)[185](index=185&type=chunk) SIGNATURES Confirms the official signing and certification of the report by the company's authorized executive officers - The report was signed on August 5, 2021, by Daniel E. Brown, Chief Executive Officer, and Michael H. Lou, Executive Vice President and Chief Financial Officer[192](index=192&type=chunk)

Strategic Transformation & Financial Performance - Oasis is transforming into a dominant Williston Basin pure play, increasing asset size and scale[6] - The company exited the Permian Basin and is focused on the Williston Basin[8, 17] - Oasis has a best-in-class balance sheet with pro forma leverage of approximately 0.5x as of June 30, 2021[4, 11, 16] - The company is focused on generating free cash flow (FCF) and delivering competitive shareholder returns[6, 7] - Oasis estimates 2021 FCF of approximately $330 million and anticipates a reinvestment rate below 50%[13, 28] Capital Allocation & Shareholder Returns - A $400 per share special dividend was declared and paid in July[11, 15] - The company plans to increase the fixed dividend by 33% to $050 per share ($200 annualized) post-acquisition[11, 15, 28] - A $100 million share repurchase plan was instituted, with $146 million completed (191k shares)[11, 15] Operational Efficiency & Sustainability - The company is optimizing costs and efficiency, with over $30 million of estimated E&P savings compared to the original estimate of $20 to $25 million[17] - Oasis is committed to environmental, social, and governance (ESG) initiatives, including reducing flaring by over 50% less than peer average in North Dakota[6, 17, 25] Williston Basin Acquisition - The Williston acquisition adds scale at a compelling valuation of approximately $28k/Boepd (2 stream) or ~$26k/Boepd (3 stream)[11] - The acquisition is expected to generate over $550 million through 2024 at strip prices[19] - The company added 40+ Williston locations with an average IRR of approximately 100%[19] Midstream Strategy - Midstream simplification and OMP unit sell-down delivered $319 million of cash to Oasis[11] - Oasis owns approximately 696% of OMP LP Units[66]

| --- | --- | |-----------------------|----------------------------------------------------------------| | | | | | Building a Stronger, | | | Sustainable Oasis: Transforming into Dominant Williston Basin | | | June 2021 Pure Play | | A New Tomorrow, Today | A New Tomorrow, Today | Forward-Looking / Cautionary Statements Forward-Looking Statements This presentation, including the oral statements made in connection herewith, contains forward-looking statements within the meaning of Section 27A of the Securiti ...

Whiting Petroleum Corporation (WLL) Q1 2021 Earnings Conference Call May 6, 2021 11:00 AM ET Company Participants Brandon Day – Investors Relations Manager Lynn Peterson – President and Chief Executive Officer Jimmy Henderson – Executive Vice President-Finance and Chief Financial Officer Chip Rimer – Executive Vice President-Operations and Chief Operating Officer Jo Ann Stockton – Vice President-Commercial Conference Call Participants David Deckelbaum – Cowen Neal Dingmann – Truist Noel Parks – Tuohy Brothe ...

PART I — FINANCIAL INFORMATION [Item 1. — Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20%E2%80%94%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements and accompanying notes detail the company's financial position and performance [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets reflect an increase in total assets driven by cash and a rise in total liabilities from derivative instruments | Metric | March 31, 2021 (thousands) | December 31, 2020 (thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $113,054 | $15,856 | | Total current assets | $422,523 | $271,617 | | Total assets | $2,297,178 | $2,159,037 | | Derivative instruments (current liabilities) | $156,450 | $56,944 | | Total liabilities | $1,335,175 | $1,146,298 | | Total stockholders' equity | $962,003 | $1,012,739 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Operating income improved and net loss was reduced in Q1 2021 compared to Q1 2020, driven by lower impairment charges | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Total revenues | $355,459 | $387,798 | | Operating income (loss) | $150,835 | $(4,862,528) | | Impairment | $3 | $4,823,678 | | Net loss attributable to Oasis | $(43,592) | $(4,310,861) | | Basic (Loss) Per Share | $(2.18) | $(13.61) | | Diluted (Loss) Per Share | $(2.18) | $(13.61) | [Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Deficit)) Total equity decreased for the Successor period due to net loss and dividends, contrasting with a large deficit in the Predecessor period | Metric | As of December 31, 2020 (Successor, thousands) | As of March 31, 2021 (Successor, thousands) | | :--- | :--- | :--- | | Total Stockholders' Equity | $1,012,739 | $962,003 | | Net income (loss) | N/A | $(35,265) | | Dividends to shareholders | N/A | $(7,535) | | Metric | As of December 31, 2019 (Predecessor, thousands) | As of March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Total Stockholders' Equity | $3,837,081 | $(499,172) | | Net loss | N/A | $(4,334,275) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased significantly while cash used in investing activities decreased in Q1 2021 | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $190,413 | $107,775 | | Net cash used in investing activities | $(41,868) | $(130,768) | | Net cash provided by (used in) financing activities | $(55,717) | $136,976 | | Increase in cash and cash equivalents | $92,828 | $113,983 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's business, accounting policies, revenue, debt, equity, and the Williston Acquisition [1. Organization and Operations of the Company](index=10&type=section&id=1.%20Organization%20and%20Operations%20of%20the%20Company) Oasis Petroleum is an E&P company focused on unconventional oil and gas in the Williston and Permian Basins - Oasis Petroleum Inc. is an independent E&P company focused on onshore, unconventional crude oil and natural gas resources in the United States, specifically in the Williston Basin and Permian Basin[23](index=23&type=chunk) - The Company also operates a midstream business segment through **Oasis Midstream Partners LP (OMP)**, a consolidated subsidiary[23](index=23&type=chunk) [2. Summary of Significant Accounting Policies](index=10&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Fresh start accounting post-bankruptcy emergence affects comparability, and the Midstream Simplification was completed in March 2021 - The unaudited condensed consolidated financial statements are **not comparable** to prior periods due to the adoption of fresh start accounting on November 19, 2020[24](index=24&type=chunk)[26](index=26&type=chunk) - On March 30, 2021, the Company completed the **Midstream Simplification**, contributing its remaining interests in Bobcat DevCo and Beartooth DevCo to OMP[24](index=24&type=chunk) - As a result of the Midstream Simplification, the Company now owns approximately **77% limited partner interest in OMP**[24](index=24&type=chunk) [Risks and Uncertainties](index=11&type=section&id=Risks%20and%20Uncertainties) Financial performance is highly dependent on volatile crude oil and natural gas prices influenced by external factors - The Company's revenue, profitability, and future growth are substantially dependent upon **volatile crude oil and natural gas prices**[27](index=27&type=chunk) [Cash Equivalents and Restricted Cash](index=11&type=section&id=Cash%20Equivalents%20and%20Restricted%20Cash) Cash and cash equivalents increased significantly to $113.1 million, while restricted cash was reduced to zero | Metric | March 31, 2021 (thousands) | December 31, 2020 (thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $113,054 | $15,856 | | Restricted cash | $— | $4,370 | [Significant Accounting Policies](index=11&type=section&id=Significant%20Accounting%20Policies_No_Material_Changes) No material changes were made to critical accounting policies and estimates from the 2020 Annual Report - **No material changes** to the Company's critical accounting policies and estimates from those disclosed in the 2020 Annual Report[29](index=29&type=chunk) [Recent Accounting Pronouncements](index=11&type=section&id=Recent%20Accounting%20Pronouncements) The company is evaluating the impact of ASU 2020-04, Reference Rate Reform, related to the discontinuation of LIBOR - The Company is evaluating ASU 2020-04, Reference Rate Reform, for its impact on financial statements and disclosures related to the **discontinuation of LIBOR**[30](index=30&type=chunk) [3. Revenue Recognition](index=12&type=section&id=3.%20Revenue%20Recognition) This note details revenue recognition for E&P and midstream segments, including contract liabilities and performance obligations E&P Revenues | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Crude oil revenues | $185,818 | $212,793 | | Natural gas and NGL revenues | $59,643 | $26,335 | | Total E&P revenues | $282,698 | $331,387 | Midstream Revenues | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Total midstream service revenues | $29,635 | $38,172 | | Total midstream product revenues | $43,126 | $18,239 | | Total midstream revenues | $72,761 | $56,411 | Contract Liabilities | Metric | As of December 31, 2020 (Successor, thousands) | As of March 31, 2021 (Successor, thousands) | | :--- | :--- | :--- | | Balance | $3,966 | $3,884 | - Remaining performance obligations for fixed pricing and fixed volume contracts totaled **$54.8 million** as of March 31, 2021[38](index=38&type=chunk) [4. Inventory](index=13&type=section&id=4.%20Inventory) Total inventory, valued at the lower of cost and net realizable value, decreased slightly from year-end 2020 | Metric | March 31, 2021 (thousands) | December 31, 2020 (thousands) | | :--- | :--- | :--- | | Equipment and materials | $23,713 | $25,103 | | Crude oil inventory | $5,710 | $8,826 | | Total inventory | $29,423 | $33,929 | | Linefill in third party pipelines | $15,805 | $14,522 | | Total | $45,228 | $48,451 | [5. Accounts Receivable](index=14&type=section&id=5.%20Accounts%20Receivable) Total net accounts receivable increased to $268.8 million, primarily driven by an increase in trade accounts | Metric | March 31, 2021 (thousands) | December 31, 2020 (thousands) | | :--- | :--- | :--- | | Trade accounts | $221,594 | $161,519 | | Joint interest accounts | $33,665 | $31,920 | | Other accounts | $13,684 | $13,206 | | Total accounts receivable | $268,943 | $206,645 | | Less: allowance for credit losses | $(125) | $(106) | | Total accounts receivable, net | $268,818 | $206,539 | [6. Fair Value Measurements](index=14&type=section&id=6.%20Fair%20Value%20Measurements) The company measures financial assets and liabilities at fair value, primarily classifying commodity derivatives as Level 2 Commodity Derivative Instruments (Liabilities) | Metric | March 31, 2021 (thousands) | December 31, 2020 (thousands) | | :--- | :--- | :--- | | Total liabilities | $253,010 | $94,558 | - The fair values of commodity derivative instruments are primarily classified as **Level 2 measurements**, based on third-party valuations using observable market data[46](index=46&type=chunk) - A credit adjustment was applied to reduce the fair value of net derivative liability by **$10.2 million** at March 31, 2021, and **$4.3 million** at December 31, 2020[46](index=46&type=chunk) [7. Derivative Instruments](index=16&type=section&id=7.%20Derivative%20Instruments) The company uses swaps and collars to manage commodity price risks, recognizing a significant net loss on derivatives in Q1 2021 - The Company utilizes **fixed price swaps and collars** to manage risks related to changes in crude oil and natural gas prices, with all derivative instruments recorded at fair value[49](index=49&type=chunk) Net Gain (Loss) on Derivative Instruments | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Net gain (loss) on derivative instruments | $(181,515) | $285,322 | Outstanding Commodity Derivative Instruments (March 31, 2021) | Commodity | Settlement Period | Derivative Instrument | Volumes | | :--- | :--- | :--- | :--- | | Crude oil | 2021 | Fixed price swaps | 7,975,000 Bbl | | Crude oil | 2021 | Two-way collar | 459,000 Bbl | | Crude oil | 2022 | Fixed price swaps | 7,245,000 Bbl | | Crude oil | 2022 | Two-way collar | 636,000 Bbl | | Crude oil | 2023 | Fixed price swaps | 5,265,000 Bbl | | Crude oil | 2024 | Fixed price swaps | 434,000 Bbl | | Natural gas | 2021 | Fixed price swaps | 11,000,000 MMBtu | | Natural gas | 2022 | Fixed price swaps | 5,430,000 MMBtu | [8. Property, Plant and Equipment](index=18&type=section&id=8.%20Property,%20Plant%20and%20Equipment) Net property, plant and equipment remained stable at $1.72 billion, with proved oil and gas properties as a major component | Metric | March 31, 2021 (thousands) | December 31, 2020 (thousands) | | :--- | :--- | :--- | | Proved oil and gas properties, net | $760,538 | $757,714 | | Other property and equipment, net | $918,751 | $930,862 | | Total property, plant and equipment, net | $1,719,549 | $1,728,787 | [9. Divestitures](index=18&type=section&id=9.%20Divestitures) The sale of well services equipment in March 2021 resulted in a net loss of $0.1 million - On March 22, 2021, the Company completed the sale of certain well services equipment and inventory for cash proceeds of **$2.6 million** and a **$2.9 million** promissory note[55](index=55&type=chunk) - A **net loss on sale of properties of $0.1 million** was recognized for the three months ended March 31, 2021 (Successor)[55](index=55&type=chunk) - For the three months ended March 31, 2020 (Predecessor), a **net gain on sale of properties of $11.5 million** was recognized[55](index=55&type=chunk) [10. Long-Term Debt](index=18&type=section&id=10.%20Long-Term%20Debt) Total long-term debt decreased to $674.2 million, with changes to credit facilities and the issuance of OMP Senior Notes | Metric | March 31, 2021 (thousands) | December 31, 2020 (thousands) | | :--- | :--- | :--- | | Oasis Credit Facility | $— | $260,000 | | OMP Credit Facility | $234,000 | $450,000 | | OMP Senior Notes | $450,000 | $— | | Total long-term debt | $674,238 | $710,000 | - The Oasis Credit Facility's borrowing base decreased from **$575.0 million to $500.0 million**, and aggregate lender commitments decreased from **$575.0 million to $450.0 million**[57](index=57&type=chunk) - OMP issued **$450.0 million of 8.00% senior unsecured notes** due April 1, 2029, on March 30, 2021[62](index=62&type=chunk) [11. Asset Retirement Obligations](index=20&type=section&id=11.%20Asset%20Retirement%20Obligations) Asset Retirement Obligations increased slightly to $49.6 million due to accretion expense | Metric | As of December 31, 2020 (Successor, thousands) | As of March 31, 2021 (Successor, thousands) | | :--- | :--- | :--- | | Balance | $48,594 | $49,630 | | Accretion expense | N/A | $1,032 | [12. Income Taxes](index=20&type=section&id=12.%20Income%20Taxes) The effective tax rate for Q1 2021 was 9.4%, impacted by a valuation allowance against deferred tax assets | Metric | Three Months Ended March 31, 2021 (Successor) | Three Months Ended March 31, 2020 (Predecessor) | | :--- | :--- | :--- | | Effective tax rate | 9.4% | 5.6% | - The valuation allowance increased by **$4.9 million**, from $565.4 million at December 31, 2020, to **$570.3 million** at March 31, 2021[67](index=67&type=chunk) [13. Equity-Based Compensation](index=20&type=section&id=13.%20Equity-Based%20Compensation) The company granted various equity-based awards under its 2020 LTIP and converted OMP GP Class B Units - During Q1 2021, the Company granted **399,861 RSUs, 139,935 PSUs, and 187,822 LSUs** under its 2020 Long Term Incentive Plan[68](index=68&type=chunk)[70](index=70&type=chunk) - Equity-based compensation expense for Q1 2021 included **$0.6 million for RSUs**, **$0.3 million for PSUs**, **$0.4 million for LSUs**, and **$0.3 million for restricted stock awards**[68](index=68&type=chunk)[70](index=70&type=chunk) - On March 30, 2021, Class B Units in OMP GP were converted into restricted common units in OMP, with **34% vesting immediately** and the remainder vesting over two years[71](index=71&type=chunk) [14. Stockholders' Equity](index=22&type=section&id=14.%20Stockholders'%20Equity) The company declared a dividend and authorized a $100.0 million share-repurchase program in Q1 2021 - A dividend of **$0.375 per share ($7.5 million)** was declared on February 24, 2021, and paid on March 22, 2021[75](index=75&type=chunk) - The Board of Directors authorized a **$100.0 million share-repurchase program** in March 2021; no shares were purchased under this program during Q1 2021[75](index=75&type=chunk) - As of March 31, 2021, there were **1,621,538 warrants outstanding**, exercisable at $94.57 per warrant until November 19, 2024[75](index=75&type=chunk) [15. Earnings (Loss) Per Share](index=22&type=section&id=15.%20Earnings%20(Loss)%20Per%20Share) Basic and diluted weighted average shares were 20.0 million for Q1 2021, with a corrected loss per share of $(2.18) | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Basic and diluted weighted average common shares outstanding | 20,000 | 316,828 | | Anti-dilutive weighted average common shares | 2,265 | 11,166 | - Basic and diluted loss per share for the three months ended March 31, 2021 (Successor) was corrected to **$(2.18)** from a previously reported $(2.20)[79](index=79&type=chunk) [16. Business Segment Information](index=23&type=section&id=16.%20Business%20Segment%20Information) The E&P segment generated $103.2 million in operating income, while the midstream segment generated $48.7 million Successor (Three Months Ended March 31, 2021) | Metric | E&P (thousands) | Midstream (thousands) | | :--- | :--- | :--- | | Revenues from non-affiliates | $282,698 | $72,761 | | Operating income | $103,180 | $48,667 | Predecessor (Three Months Ended March 31, 2020) | Metric | E&P (thousands) | Midstream (thousands) | | :--- | :--- | :--- | | Revenues from non-affiliates | $331,387 | $56,411 | | Operating loss | $(4,817,255) | $(42,226) | [17. Commitments and Contingencies](index=24&type=section&id=17.%20Commitments%20and%20Contingencies) Material off-balance sheet arrangements include letters of credit and surety bonds, with an accrued litigation settlement - Material off-balance sheet arrangements include **$6.8 million** in outstanding letters of credit and **$7.2 million** in net surety bond exposure[83](index=83&type=chunk) - An accrual of **$22.8 million** remains for the Mirada litigation settlement as of March 31, 2021, following an initial $20.0 million payment[83](index=83&type=chunk) [18. Subsequent Events](index=24&type=section&id=18.%20Subsequent%20Events) The company agreed to acquire 95,000 net acres in the Williston Basin for $745.0 million after the quarter ended - On May 3, 2021, the Company entered into an agreement to acquire approximately **95,000 net acres** in the Williston Basin for **$745.0 million cash**[84](index=84&type=chunk) - The acquisition is expected to be financed through cash on hand, borrowings under the Oasis Credit Facility, and a **$500.0 million fully-committed underwritten Bridge Facility**[84](index=84&type=chunk) - The Oasis Credit Facility was amended on May 3, 2021, to allow for bridge loans, second liens, and remove certain restrictions to facilitate acquisitions[86](index=86&type=chunk) [Item 2. — Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20%E2%80%94%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, liquidity, capital resources, and recent developments for Q1 2021 [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=26&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section warns that forward-looking statements are subject to risks like commodity price volatility and COVID-19 impacts - The report contains forward-looking statements subject to numerous risks and uncertainties, including **commodity prices, global economic conditions, and the COVID-19 pandemic**[90](index=90&type=chunk) - The Company disclaims any obligation to update or revise these statements unless required by securities law[92](index=92&type=chunk) [Overview](index=28&type=section&id=Overview) Oasis Petroleum is an independent E&P company operating in the Williston and Permian Basins with a midstream business - Oasis Petroleum Inc. is an independent E&P company focused on onshore, unconventional crude oil and natural gas resources in the **Williston and Permian Basins**[94](index=94&type=chunk) - The Company operates a midstream business through Oasis Midstream Partners LP (OMP), owning approximately **77% of OMP**, and derives significant cash flows from this segment[94](index=94&type=chunk) [Recent Developments](index=28&type=section&id=Recent%20Developments) Key developments include the Williston Acquisition agreement, a CEO change, and the completed Midstream Simplification - On May 3, 2021, Oasis agreed to acquire approximately **95,000 net acres** in the Williston Basin for **$745.0 million cash**, with closing expected in July 2021[95](index=95&type=chunk) - **Daniel E. Brown** was appointed Chief Executive Officer on April 14, 2021[96](index=96&type=chunk) - The **Midstream Simplification** was completed on March 30, 2021, for **$512.5 million consideration**[98](index=98&type=chunk) - In response to COVID-19 impacts, the Company **reduced its workforce by 15%** during Q1 2021[99](index=99&type=chunk) [Highlights](index=30&type=section&id=Highlights) Q1 2021 highlights include midstream simplification, a dividend declaration, a share-repurchase program, and strong operating cash flow - Completed simplification of midstream business and declared a Q1 2021 dividend of **$0.375 per share**[102](index=102&type=chunk) - Authorized a **$100.0 million share-repurchase program**[102](index=102&type=chunk) Q1 2021 Operational & Financial Highlights | Metric | Value | | :--- | :--- | | Production volumes (Boepd) | 57,205 (64% oil) | | E&P and other capital expenditures | $28.6 million | | E&P lease operating expense (LOE) | $9.92 per Boe | | Crude oil differentials | $1.58 discount to NYMEX WTI | | Net cash provided by operating activities | $190.4 million | | Adjusted EBITDA attributable to Oasis | $126.0 million | [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section analyzes financial performance for Q1 2021, highlighting the impact of fresh start accounting and commodity prices [Comparability](index=31&type=section&id=Comparability) Financial statements after November 19, 2020, are not comparable to prior periods due to fresh start accounting - Financial statements on or after November 19, 2020 are **not comparable** to prior periods due to the adoption of fresh start accounting[104](index=104&type=chunk) [Revenues](index=31&type=section&id=Revenues) Total revenues were $355.5 million, with higher commodity prices offsetting lower production volumes compared to prior periods Total Revenues | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Total revenues | $355,459 | $387,798 | Average Daily Production & Sales Prices | Metric | Three Months Ended March 31, 2021 (Successor) | Three Months Ended March 31, 2020 (Predecessor) | | :--- | :--- | :--- | | Total average daily production (Boepd) | 57,205 | 80,066 | | Average crude oil sales price (per Bbl) | $56.09 | $43.22 | | Average natural gas sales price (per Mcf) | $5.41 | $1.86 | - Crude oil and natural gas revenues **increased $68.0 million quarter-over-quarter** (Q1 2021 vs Q4 2020), primarily due to higher sales prices[109](index=109&type=chunk) - Compared to Q1 2020, crude oil and natural gas revenues **increased $6.4 million**, driven by higher sales prices offsetting lower production volumes[112](index=112&type=chunk) [Expenses and other income (expenses)](index=34&type=section&id=Expenses%20and%20other%20income%20(expenses)) Total operating expenses were significantly lower than Q1 2020 due to reduced impairment, G&A, and DD&A expenses Operating Expenses and Other Income (Expenses) | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Total operating expenses | $204,712 | $5,261,552 | | Operating income (loss) | $150,835 | $(4,862,528) | | Net gain (loss) on derivative instruments | $(181,515) | $285,322 | | Impairment | $3 | $4,823,678 | | General and administrative expenses | $20,737 | $31,174 | | Interest expense, net | $(8,697) | $(95,757) | - General and administrative (G&A) expenses **decreased $20.9 million quarter-over-quarter** (Q1 2021 vs Q4 2020) due to reduced compensation and a 15% decrease in headcount[119](index=119&type=chunk) - Compared to Q1 2020, G&A expenses **decreased $10.4 million** due to a 30% decrease in employee headcount[125](index=125&type=chunk) - Depreciation, depletion and amortization (DD&A) expenses **decreased $163.8 million** to $40.0 million compared to Q1 2020, due to a lower DD&A rate resulting from asset write-downs[123](index=123&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is driven by operating cash flows and debt issuance, with $772.3 million available as of March 31, 2021 - Primary sources of liquidity are **cash flows from operations** and the issuance of OMP Senior Notes[129](index=129&type=chunk) - As of March 31, 2021, the Company had **$772.3 million of liquidity available**, including $113.1 million in cash and $659.3 million of unused borrowing capacity[132](index=132&type=chunk) - The Oasis Credit Facility had **$448.7 million** in unused borrowing capacity, and the OMP Credit Facility had **$210.5 million** in unused borrowing capacity[132](index=132&type=chunk)[133](index=133&type=chunk) - OMP issued **$450.0 million of 8.00% senior unsecured notes** due April 1, 2029, on March 30, 2021[133](index=133&type=chunk) [Cash flows](index=39&type=section&id=Cash%20flows) Net cash from operating activities increased to $190.4 million, while financing activities used $55.7 million for debt repayments Cash Flow Summary | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $190,413 | $107,775 | | Net cash used in investing activities | $(41,868) | $(130,768) | | Net cash provided by (used in) financing activities | $(55,717) | $136,976 | | Increase in cash and cash equivalents | $92,828 | $113,983 | - Net cash provided by operating activities increased primarily due to **lower interest, operating, and administrative expenses**[136](index=136&type=chunk) - Net cash used in financing activities was **$55.7 million**, driven by net principal repayments on credit facilities, partially offset by the issuance of OMP Senior Notes[138](index=138&type=chunk) [Capital expenditures](index=39&type=section&id=Capital%20expenditures) Total capital expenditures for Q1 2021 were $29.3 million, with the majority allocated to E&P activities Capital Expenditures (Three Months Ended March 31, 2021) | Category | Amount (thousands) | | :--- | :--- | | E&P | $28,595 | | Other capital expenditures | $414 | | Midstream | $259 | | Total capital expenditures | $29,268 | [Dividends](index=40&type=section&id=Dividends) The company paid a $0.375 per share dividend in March 2021 and declared another for payment in May 2021 - A dividend of **$0.375 per share ($7.5 million)** was paid on March 22, 2021[142](index=142&type=chunk) - Another dividend of **$0.375 per share** was declared on May 3, 2021, payable on May 31, 2021[142](index=142&type=chunk) [Non-GAAP Financial Measures](index=40&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP measures used by management to assess performance, such as Adjusted EBITDA and Free Cash Flow [E&P Adjusted Gas Revenue](index=40&type=section&id=E&P%20Adjusted%20Gas%20Revenue) E&P Adjusted Gas Revenue adjusts total natural gas revenues for benefits from the midstream segment | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Natural gas and NGL revenues | $59,643 | $26,335 | | Intercompany impacts from midstream segment | $(10,585) | $(11,239) | | E&P Adjusted Gas Revenue | $49,058 | $15,096 | [Cash GPT and E&P GPT](index=40&type=section&id=Cash%20GPT%20and%20E&P%20GPT) Cash GPT and E&P GPT are non-GAAP measures used to assess the cash costs of marketing and transporting commodities | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | GPT | $15,711 | $29,464 | | Pipeline imbalances | $1,847 | $(245) | | Cash GPT | $17,558 | $29,219 | | Intercompany impacts from midstream segment | $1,810 | $2,012 | | E&P GPT | $19,368 | $31,231 | [E&P Cash G&A](index=41&type=section&id=E&P%20Cash%20G&A) E&P Cash G&A excludes non-cash and non-E&P G&A to provide a comparable view of operating costs | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | General and administrative expenses | $20,737 | $31,174 | | Equity-based compensation expenses | $(1,688) | $(6,621) | | G&A expenses attributable to midstream and other services | $(5,062) | $(7,888) | | E&P Cash G&A | $13,987 | $16,665 | [Cash Interest and E&P Cash Interest](index=41&type=section&id=Cash%20Interest%20and%20E&P%20Cash%20Interest) Cash Interest and E&P Cash Interest adjust GAAP interest expense for non-cash items | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Interest expense | $8,697 | $95,757 | | Capitalized interest | $418 | $2,287 | | Amortization of deferred financing costs | $(3,471) | $(1,699) | | Amortization of debt discount | $— | $(2,839) | | Cash Interest | $5,644 | $93,506 | | Cash Interest attributable to OMP | $(2,728) | $(30,232) | | E&P Cash Interest | $2,916 | $63,274 | [Adjusted EBITDA and Adjusted EBITDA attributable to Oasis](index=42&type=section&id=Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20attributable%20to%20Oasis) Adjusted EBITDA was $169.2 million, and Adjusted EBITDA attributable to Oasis was $126.0 million in Q1 2021 | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Adjusted EBITDA | $169,200 | $166,982 | | Adjusted EBITDA attributable to Oasis | $126,007 | $133,826 | [E&P Adjusted EBITDA and E&P Free Cash Flow](index=43&type=section&id=E&P%20Adjusted%20EBITDA%20and%20E&P%20Free%20Cash%20Flow) E&P Adjusted EBITDA was $111.8 million, and E&P Free Cash Flow was $93.5 million in Q1 2021 | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | E&P Adjusted EBITDA | $111,790 | $98,885 | | E&P Free Cash Flow | $93,549 | $(83,400) | [Adjusted Net Income (Loss) Attributable to Oasis and Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share](index=44&type=section&id=Adjusted%20Net%20Income%20(Loss)%20Attributable%20to%20Oasis%20and%20Adjusted%20Diluted%20Earnings%20(Loss)%20Attributable%20to%20Oasis%20Per%20Share) Adjusted Net Income was $86.2 million, and Adjusted Diluted Earnings Per Share was $4.31 in Q1 2021 | Metric | Three Months Ended March 31, 2021 (Successor, thousands) | Three Months Ended March 31, 2020 (Predecessor, thousands) | | :--- | :--- | :--- | | Adjusted Net Income (Loss) Attributable to Oasis | $86,219 | $(62,804) | | Metric | Three Months Ended March 31, 2021 (Successor) | Three Months Ended March 31, 2020 (Predecessor) | | :--- | :--- | :--- | | Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share | $4.31 | $(0.20) | - Adjusted Diluted Earnings per Share for Q1 2021 (Successor) was corrected to **$4.31** from a previously reported $4.34[161](index=161&type=chunk) [Fair Value of Financial Instruments](index=45&type=section&id=Fair%20Value%20of%20Financial%20Instruments) This section refers to Note 6 for a detailed discussion of derivative instruments and their fair value measurements - Refer to **Note 6 — Fair Value Measurements** for a discussion of derivative instruments and their related fair value measurements[162](index=162&type=chunk) [Critical Accounting Policies and Estimates](index=45&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) No material changes were made to critical accounting policies and estimates from those in the 2020 Annual Report - **No material changes** in critical accounting policies and estimates from those disclosed in the 2020 Annual Report[163](index=163&type=chunk) [Item 3. — Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20%E2%80%94%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to commodity price, interest rate, and counterparty credit risks, managed via derivatives and other policies - The Company is exposed to **commodity price risk**, **interest rate risk**, and **counterparty and customer credit risk**[163](index=163&type=chunk) - Commodity price risk is managed through derivative instruments, which resulted in a **net derivative liability position of $253.0 million** at March 31, 2021[165](index=165&type=chunk) - A **10% increase in crude oil prices** would decrease the fair value of the derivative position by approximately **$117.8 million**[165](index=165&type=chunk) - Counterparty credit risk for derivative arrangements is mitigated by contracting only with **high credit-quality financial institutions**[168](index=168&type=chunk) [Item 4. — Controls and Procedures](index=47&type=section&id=Item%204.%20%E2%80%94%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes in internal controls [Evaluation of disclosure controls and procedures](index=47&type=section&id=Evaluation%20of%20disclosure%20controls%20and%20procedures) The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2021 - The CEO and CFO concluded that the Company's disclosure controls and procedures were **effective** as of March 31, 2021[169](index=169&type=chunk) [Changes in internal control over financial reporting](index=47&type=section&id=Changes%20in%20internal%20control%20over%20financial%20reporting) No material changes occurred in the company's internal control over financial reporting during Q1 2021 - **No material changes** in internal control over financial reporting occurred during the quarter ended March 31, 2021[170](index=170&type=chunk) PART II — OTHER INFORMATION [Item 1. — Legal Proceedings](index=48&type=section&id=Item%201.%20%E2%80%94%20Legal%20Proceedings) This section refers to Note 17 of the financial statements for a discussion of material legal proceedings - Refer to **Note 17 — Commitments and Contingencies** in Part I, Item 1 for a discussion of material legal proceedings[173](index=173&type=chunk) [Item 1A. — Risk Factors](index=48&type=section&id=Item%201A.%20%E2%80%94%20Risk%20Factors) No material changes were made to the company's risk factors from those described in its 2020 Annual Report - **No material changes** in risk factors from those described in the 2020 Annual Report[174](index=174&type=chunk) [Item 2. — Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20%E2%80%94%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or share repurchases occurred during the three months ended March 31, 2021 - **No sales of unregistered equity securities** occurred during the period covered by this report[176](index=176&type=chunk) - **No common stock was purchased** under the share-repurchase program during the three months ended March 31, 2021[176](index=176&type=chunk) [Item 5.— Other Information](index=49&type=section&id=Item%205.%E2%80%94%20Other%20Information) This section discloses details on the Williston Acquisition agreement, credit facility amendments, and related bridge financing [Purchase and Sale Agreement](index=49&type=section&id=Purchase%20and%20Sale%20Agreement) The company agreed to acquire 95,000 net acres in the Williston Basin for $745.0 million cash - On May 3, 2021, Oasis Petroleum North America LLC entered into a Purchase and Sale Agreement to acquire approximately **95,000 net acres** in the Williston Basin for a cash purchase price of **$745.0 million**[178](index=178&type=chunk) - The effective date for the Acquisition is April 1, 2021, and **closing is expected in July 2021**[178](index=178&type=chunk) - The Purchase Price is expected to be financed through cash on hand, borrowings under the Oasis Credit Facility, and a **$500.0 million Bridge Facility**[178](index=178&type=chunk) [Amendment to Credit Facility](index=49&type=section&id=Amendment%20to%20Credit%20Facility) The credit agreement was amended to allow for bridge loans and remove certain restrictions to facilitate acquisitions - The Third Amendment to the Credit Agreement, dated May 3, 2021, provides the ability to incur loans pursuant to a **customary bridge loan facility** and adds terms for second liens[183](index=183&type=chunk) - It also **eliminates restrictions** on making cash deposits for acquisitions and removes limitations on capital expenditures[183](index=183&type=chunk) [Bridge Facility](index=50&type=section&id=Bridge%20Facility) A $500.0 million bridge facility was committed to finance the Williston Acquisition, expected to be replaced by high-yield debt - A **$500.0 million senior secured second lien Bridge Facility** was committed by J.P. Morgan Chase Bank, N.A., Wells Fargo Bank, N.A., and Wells Fargo Securities, LLC on May 3, 2021[184](index=184&type=chunk) - The Bridge Facility is intended to finance the Williston Acquisition and is expected to be replaced by an **issuance of high-yield debt financing**[184](index=184&type=chunk) [Item 6. — Exhibits](index=50&type=section&id=Item%206.%20%E2%80%94%20Exhibits) This section lists all exhibits filed with the report, including various agreements, contracts, and certifications - The exhibits include the Contribution and Simplification Agreement, Purchase and Sale Agreement, Employment Agreements, Notices of Grant for equity awards, Credit Agreement Amendments, Commitment Letter, and Sarbanes-Oxley certifications[185](index=185&type=chunk)[187](index=187&type=chunk) SIGNATURES [Signatures](index=52&type=section&id=Signatures_Details) The report was duly signed by the Chief Executive Officer and Chief Financial Officer on May 6, 2021 - The report was signed on May 6, 2021, by **Daniel E. Brown, Chief Executive Officer**, and **Michael H. Lou, Executive Vice President and Chief Financial Officer**[192](index=192&type=chunk)

Acquisition Highlights - Oasis is acquiring top-tier assets in the Williston Basin, adding to the size and scale of its Cornerstone Asset at a compelling valuation[6] - The acquisition price is attractive at approximately $28,000 per Boepd[6] - The purchase price for the acquisition is $745 million, funded through a combination of cash on hand ($105.9 million at 3/31/21) and revolver borrowings[7] - The transaction is expected to increase the dividend by approximately 33% post-closing, to $0.50 per share ($2.00 annualized)[7] Pro Forma Overview - Pro forma net Williston acres will be 497,000, with 98% held by production[8] - Pro forma Williston production is expected to be 77.0 Mboe/d[8] - Annualized adjusted EBITDA is projected to be between $790.8 million and $810.8 million[8] - Pro forma leverage is estimated to be approximately 0.8x[8] Financial Strategy - The company is focused on generating free cash flow, with a forecast of over $200 million in 2021[26] - A $100 million share repurchase program has been announced[28] - The company is targeting long-term leverage below 1x[29] Operational Efficiency - The company is aiming to reduce E&P LOE per Boe by 5% from September 2020 estimates to current 2021 guidance[39] - E&P cash G&A reductions are projected to be between 40% and 60% from the 2020 run rate to the 4Q21 run rate[39]

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, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | --- | --- | --- | --- | |-------------------------------------------------------------- ...