Condensed Consolidating Financial Information

The Notes (see Note 7 – Long-Term Debt) are guaranteed on a senior unsecured basis by the Guarantors, which are 100% owned by the Company. These guarantees are full and unconditional and joint and several among the Guarantors. Certain of the Company’s immaterial wholly-owned subsidiaries do not guarantee the Notes (“Non-Guarantor Subsidiaries”).

The following financial information reflects consolidating financial information of the parent company, Oasis Petroleum Inc. (“Issuer”), and its Guarantors on a combined basis, prepared on the equity basis of accounting. The Non-Guarantor Subsidiaries are immaterial and, therefore, not presented separately. The information is presented in accordance with the requirements of Rule 3-10 under the SEC’s Regulation S-X. The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the Guarantors operated as independent entities. The Company has not presented separate financial and narrative information for each of the Guarantors because it believes such financial and narrative information would not provide any additional information that would be material in evaluating the sufficiency of the Guarantors.

Condensed Consolidating Balance Sheet



	March 31, 2017
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets
Cash and cash equivalents	$	177		$	13,608		$	—		$	13,785
Accounts receivable, net	—			226,427			—			226,427
Accounts receivable – affiliates	200,770			33,093			(233,863		)	—
Inventory	—			14,327			—			14,327
Prepaid expenses	334			6,842			—			7,176
Derivative instruments	—			3,026			—			3,026
Other current assets	2			4,450			—			4,452
Total current assets	201,283			301,773			(233,863		)	269,193
Property, plant and equipment
Oil and gas properties (successful efforts method)	—			7,390,299			—			7,390,299
Other property and equipment	—			632,318			—			632,318
Less: accumulated depreciation, depletion, amortization and impairment	—			(2,126,136		)	—			(2,126,136		)
Total property, plant and equipment, net	—			5,896,481			—			5,896,481
Investments in and advances to subsidiaries	4,503,650			—			(4,503,650		)	—
Derivative instruments	—			3,815			—			3,815
Deferred income taxes	239,419			—			(239,419		)	—
Other assets	—			20,139			—			20,139
Total assets	$	4,944,352		$	6,222,208		$	(4,976,932	)	$	6,189,628
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	—		$	8,837		$	—		$	8,837
Accounts payable – affiliates	33,093			200,770			(233,863		)	—
Revenues and production taxes payable	—			160,265			—			160,265
Accrued liabilities	34			128,207			—			128,241
Accrued interest payable	19,872			396			—			20,268
Derivative instruments	—			14,627			—			14,627
Advances from joint interest partners	—			6,838			—			6,838
Other current liabilities	—			13,435			—			13,435
Total current liabilities	52,999			533,375			(233,863		)	352,511
Long-term debt	1,937,879			368,000			—			2,305,879
Deferred income taxes	—			764,261			(239,419		)	524,842
Asset retirement obligations	—			50,088			—			50,088
Other liabilities	—			2,834			—			2,834
Total liabilities	1,990,878			1,718,558			(473,282		)	3,236,154
Stockholders’ equity
Capital contributions from affiliates	—			3,392,248			(3,392,248		)	—
Common stock, $0.01 par value: 450,000,000 shares authorized; 238,691,038 shares issued and 237,461,470 shares outstanding	2,344			—			—			2,344
Treasury stock, at cost: 1,229,568 shares	(21,369		)	—			—			(21,369		)
Additional paid-in-capital	2,354,485			8,743			(8,743		)	2,354,485
Retained earnings	618,014			1,102,659			(1,102,659		)	618,014
Total stockholders’ equity	2,953,474			4,503,650			(4,503,650		)	2,953,474
Total liabilities and stockholders’ equity	$	4,944,352		$	6,222,208		$	(4,976,932	)	$	6,189,628

Condensed Consolidating Balance Sheet



	December 31, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets
Cash and cash equivalents	$	166		$	11,060		$	—		$	11,226
Accounts receivable, net	—			204,335			—			204,335
Accounts receivable – affiliates	252,000			27,619			(279,619		)	—
Inventory	—			10,648			—			10,648
Prepaid expenses	275			7,348			—			7,623
Derivative instruments	—			362			—			362
Other current assets	—			4,355			—			4,355
Total current assets	252,441			265,727			(279,619		)	238,549
Property, plant and equipment
Oil and gas properties (successful efforts method)	—			7,296,568			—			7,296,568
Other property and equipment	—			618,790			—			618,790
Less: accumulated depreciation, depletion, amortization and impairment	—			(1,995,791		)	—			(1,995,791		)
Total property, plant and equipment, net	—			5,919,567			—			5,919,567
Investments in and advances to subsidiaries	4,451,192			—			(4,451,192		)	—
Deferred income taxes	220,058			—			(220,058		)	—
Other assets	—			20,516			—			20,516
Total assets	$	4,923,691		$	6,205,810		$	(4,950,869	)	$	6,178,632
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	—		$	4,645		$	—		$	4,645
Accounts payable – affiliates	27,619			252,000			(279,619		)	—
Revenue and production taxes payable	—			139,737			—			139,737
Accrued liabilities	12			119,161			—			119,173
Accrued interest payable	38,689			315			—			39,004
Derivative instruments	—			60,469			—			60,469
Advances from joint interest partners	—			7,597			—			7,597
Other current liabilities	—			10,490			—			10,490
Total current liabilities	66,320			594,414			(279,619		)	381,115
Long-term debt	1,934,214			363,000			—			2,297,214
Deferred income taxes	—			733,587			(220,058		)	513,529
Asset retirement obligations	—			48,985			—			48,985
Derivative instruments	—			11,714			—			11,714
Other liabilities	—			2,918			—			2,918
Total liabilities	2,000,534			1,754,618			(499,677		)	3,255,475
Stockholders’ equity
Capital contributions from affiliates	—			3,388,893			(3,388,893		)	—
Common stock, $0.01 par value: 450,000,000 shares authorized; 237,201,064 shares issued and 236,344,172 shares outstanding	2,331			—			—			2,331
Treasury stock, at cost: 856,892 shares	(15,950		)	—			—			(15,950		)
Additional paid-in-capital	2,345,271			8,743			(8,743		)	2,345,271
Retained earnings	591,505			1,053,556			(1,053,556		)	591,505
Total stockholders’ equity	2,923,157			4,451,192			(4,451,192		)	2,923,157
Total liabilities and stockholders’ equity	$	4,923,691		$	6,205,810		$	(4,950,869	)	$	6,178,632

Condensed Consolidating Statement of Operations



	Three Months Ended March 31, 2017
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	237,252		$	—		$	237,252
Bulk oil sales	—			27,631			—			27,631
Midstream revenues	—			14,606			—			14,606
Well services revenues	—			5,627			—			5,627
Total revenues	—			285,116			—			285,116
Operating expenses
Lease operating expenses	—			43,872			—			43,872
Midstream operating expenses	—			3,327			—			3,327
Well services operating expenses	—			3,902			—			3,902
Marketing, transportation and gathering expenses	—			10,951			—			10,951
Bulk oil purchases	—			28,002			—			28,002
Production taxes	—			20,299			—			20,299
Depreciation, depletion and amortization	—			126,666			—			126,666
Exploration expenses	—			1,489			—			1,489
Impairment	—			2,682			—			2,682
General and administrative expenses	7,065			16,769			—			23,834
Total operating expenses	7,065			257,959			—			265,024
Operating income (loss)	(7,065		)	27,157			—			20,092
Other income (expense)
Equity in earnings of subsidiaries	49,103			—			(49,103		)	—
Net gain on derivative instruments	—			56,075			—			56,075
Interest expense, net of capitalized interest	(32,851		)	(3,470		)	—			(36,321		)
Other income	—			16			—			16
Total other income (expense)	16,252			52,621			(49,103		)	19,770
Income before income taxes	9,187			79,778			(49,103		)	39,862
Income tax benefit (expense)	14,638			(30,675		)	—			(16,037		)
Net income	$	23,825		$	49,103		$	(49,103	)	$	23,825

Condensed Consolidating Statement of Operations



	Three Months Ended March 31, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations		Consolidated
	(In thousands)
Revenues
Oil and gas revenues	$	—		$	117,315		$	—	$	117,315
Midstream revenues	—			6,983			—		6,983
Well services revenues	—			5,985			—		5,985
Total revenues	—			130,283			—		130,283
Operating expenses
Lease operating expenses	—			31,064			—		31,064
Midstream operating expenses	—			1,738			—		1,738
Well services operating expenses	—			2,651			—		2,651
Marketing, transportation and gathering expenses	—			8,552			—		8,552
Production taxes	—			10,753			—		10,753
Depreciation, depletion and amortization	—			122,449			—		122,449
Exploration expenses	—			363			—		363
Impairment	—			3,562			—		3,562
General and administrative expenses	7,451			16,915			—		24,366
Total operating expenses	7,451			198,047			—		205,498
Operating loss	(7,451		)	(67,764		)	—		(75,215		)
Other income (expense)
Equity in loss of subsidiaries	(37,327		)	—			37,327		—
Net gain on derivative instruments	—			14,375			—		14,375
Interest expense, net of capitalized interest	(34,832		)	(3,907		)	—		(38,739		)
Gain on extinguishment of debt	7,016			—			—		7,016
Other income	43			436			—		479
Total other income (expense)	(65,100		)	10,904			37,327		(16,869		)
Loss before income taxes	(72,551		)	(56,860		)	37,327		(92,084		)
Income tax benefit	8,096			19,533			—		27,629
Net loss	$	(64,455	)	$	(37,327	)	$	37,327	$	(64,455	)

Condensed Consolidating Statement of Cash Flows



	Three Months Ended March 31, 2017
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities:
Net income	$	23,825		$	49,103		$	(49,103	)	$	23,825
Adjustments to reconcile net income to cash provided by operating activities:
Equity in loss of subsidiaries	(49,103		)	—			49,103			—
Depreciation, depletion and amortization	—			126,666			—			126,666
Impairment	—			2,682			—			2,682
Deferred income taxes	(14,638		)	30,675			—			16,037
Derivative instruments	—			(56,075		)	—			(56,075		)
Stock-based compensation expenses	6,498			210			—			6,708
Deferred financing costs amortization and other	3,665			1,275			—			4,940
Working capital and other changes:
Change in accounts receivable	51,230			(27,952		)	(45,756		)	(22,478		)
Change in inventory	—			(3,679		)	—			(3,679		)
Change in prepaid expenses	(59		)	341			—			282
Change in other current assets	(2		)	(108		)	—			(110		)
Change in other assets	—			(4		)	—			(4		)
Change in accounts payable, interest payable and accrued liabilities	(13,321		)	(26,375		)	45,756			6,060
Change in other current liabilities	—			2,945			—			2,945
Net cash provided by operating activities	8,095			99,704			—			107,799
Cash flows from investing activities:
Capital expenditures	—			(96,047		)	—			(96,047		)
Derivative settlements	—			(7,960		)	—			(7,960		)
Advances from joint interest partners	—			(759		)	—			(759		)
Net cash used in investing activities	—			(104,766		)	—			(104,766		)
Cash flows from financing activities:
Proceeds from revolving credit facility	—			246,000			—			246,000
Principal payments on revolving credit facility	—			(241,000		)	—			(241,000		)
Purchases of treasury stock	(5,419		)	—			—			(5,419		)
Investment in / capital contributions from subsidiaries	(2,610		)	2,610			—			—
Other	(55		)	—			—			(55		)
Net cash provided by (used in) financing activities	(8,084		)	7,610			—			(474		)
Increase in cash and cash equivalents	11			2,548			—			2,559
Cash and cash equivalents at beginning of period	166			11,060			—			11,226
Cash and cash equivalents at end of period	$	177		$	13,608		$	—		$	13,785

Condensed Consolidating Statement of Cash Flows



	Three Months Ended March 31, 2016
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities:
Net loss	$	(64,455	)	$	(37,327	)	$	37,327		$	(64,455	)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Equity in earnings of subsidiaries	37,327			—			(37,327		)	—
Depreciation, depletion and amortization	—			122,449			—			122,449
Gain on extinguishment of debt	(7,016		)	—			—			(7,016		)
Impairment	—			3,562			—			3,562
Deferred income taxes	(8,096		)	(19,533		)	—			(27,629		)
Derivative instruments	—			(14,375		)	—			(14,375		)
Stock-based compensation expenses	6,547			183			—			6,730
Deferred financing costs amortization and other	1,701			3,365			—			5,066
Working capital and other changes:
Change in accounts receivable	(85		)	96,353			(97,263		)	(995		)
Change in inventory	—			349			—			349
Change in prepaid expenses	139			102			—			241
Change in other current assets	—			4			—			4
Change in other assets	77			—			—			77
Change in accounts payable, interest payable and accrued liabilities	(122,242		)	(39,077		)	97,263			(64,056		)
Change in other current liabilities	—			(6,000		)	—			(6,000		)
Change in other liabilities	—			(3		)	—			(3		)
Net cash provided by (used in) operating activities	(156,103		)	110,052			—			(46,051		)
Cash flows from investing activities:
Capital expenditures	—			(103,411		)	—			(103,411		)
Derivative settlements	—			73,313			—			73,313
Advances from joint interest partners	—			(257		)	—			(257		)
Net cash used in investing activities	—			(30,355		)	—			(30,355		)
Cash flows from financing activities:
Proceeds from revolving credit facility	—			214,000			—			214,000
Principal payments on revolving credit facility	—			(287,000		)	—			(287,000		)
Repurchase of senior unsecured notes	(22,308		)	—			—			(22,308		)
Deferred financing costs	—			(751		)	—			(751		)
Proceeds from sale of common stock	183,164			—			—			183,164
Purchases of treasury stock	(1,032		)	—			—			(1,032		)
Investment in / capital contributions from subsidiaries	(4,408		)	4,408			—			—
Net cash provided by (used in) financing activities	155,416			(69,343		)	—			86,073
Increase (decrease) in cash and cash equivalents	(687		)	10,354			—			9,667
Cash and cash equivalents at beginning of period	777			8,953			—			9,730
Cash and cash equivalents at end of period	$	90		$	19,307		$	—		$	19,397