8-K
Chord Energy Corp (CHRD)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 25, 2021
OASIS PETROLEUM INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-34776 | 80-0554627 |
|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) |
| 1001 Fannin Street, Suite 1500<br> <br>Houston, Texas | 77002 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (281) 404-9500
Not Applicable
(Former Name or Former Address, If Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☒ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br> <br>Symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common Stock | OAS | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On October 26, 2021, Oasis Petroleum Inc., a Delaware corporation (the “Company”), issued a press release announcing the entry by Oasis Midstream Partners LP, a Delaware limited partnership (“OMP”), into a definitive merger agreement (the “merger agreement”) on October 25, 2021 with Crestwood Equity Partners LP, a Delaware limited partnership (“Crestwood”), containing preliminary financial results for the quarter ended September 30, 2021, and declaring a quarterly cash dividend for the quarter ended September 30, 2021 of $0.50 per share of the Company’s common stock, par value $0.01 per share, payable on November 29, 2021 to shareholders of record as of November 15, 2021. In addition, on October 26, 2021, the Company released an investor presentation regarding the transactions contemplated by the merger agreement and containing preliminary financial results for the quarter ended September 30, 2021 and updated guidance for the quarter ended December 31, 2021.
The full text of the press release and the investor presentation are included as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K and are incorporated into this Item 2.02 by reference.
In accordance with General Instruction B.2 of Form 8-K, the information furnished pursuant to Item 2.02 and the press release and the investor presentation attached hereto as Exhibits 99.1 and 99.2, respectively, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| Item 7.01 | Regulation FD Disclosure. |
|---|
On October 26, 2021, the Company issued a press release and released an investor presentation announcing the entry by OMP into the merger agreement on October 25, 2021 with Crestwood, pursuant to which Crestwood will acquire OMP (the “merger”). Under the terms of the merger agreement, (i) 6,520,944 common units representing limited partner interests in OMP (“OMP Common Units”) issued and outstanding immediately prior to the effective time of the merger (the “effective time”) and owned by OMS Holdings LLC, a Delaware limited liability company and subsidiary of the Company (such OMP Common Units, the “Sponsor Cash Units”), will be converted into and will thereafter represent the right to receive $150,000,000 in cash in the aggregate, and each other OMP Common Unit issued and outstanding immediately prior to the effective time and owned by Oasis Petroleum or its subsidiaries (other than OMP) (together with the Sponsor Cash Units, the “Sponsor Units”) will be converted into and will thereafter represent the right to receive 0.7680 common units representing limited partner interests in Crestwood (“Crestwood Common Units”); (ii) each OMP Common Unit issued and outstanding immediately prior to the effective time (other than the Sponsor Units) will be converted into and will thereafter represent the right to receive 0.8700 Crestwood Common Units and (iii) all of the limited liability company interests of the OMP GP LLC, a Delaware limited liability company and the general partner of OMP, issued and outstanding immediately prior to the effective time will be converted into and will thereafter represent the right to receive $10,000,000 in cash.
The full text of the press release and the investor presentation are included as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K and are incorporated into this Item 7.01 by reference.
In accordance with General Instruction B.2 of Form 8-K, the information furnished pursuant to Item 7.01 and the press release and the investor presentation attached hereto as Exhibits 99.1 and 99.2, respectively, shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this Current Report on Form 8-K that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this Current Report on Form 8-K specifically include the expectations of plans, strategies, objectives and
anticipated financial and operating results of the Company, including the Company’s drilling program, production, derivative instruments, capital expenditure levels and other guidance included in this Current Report on Form 8-K, as well as the impact of the novel coronavirus 2019 (“COVID-19”) pandemic on the Company’s operations. These statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include, but are not limited to, risks that the proposed transaction may not be consummated or the benefits contemplated therefrom may not be realized, the ability to obtain requisite regulatory and unitholder approval and the satisfaction of the other conditions to the consummation of the proposed transaction, the ability of Crestwood to successfully integrate OMP’s operations and employees and realize anticipated synergies and cost savings, the potential impact of the announcement or consummation of the proposed transaction on relationships, including with employees, suppliers, customers, competitors and credit rating agencies, changes in crude oil and natural gas prices, developments in the global economy, particularly the public health crisis related to the COVID-19 pandemic and the adverse impact thereof on demand for crude oil and natural gas, the outcome of government policies and actions, including actions taken to address the COVID-19 pandemic and to maintain the functioning of national and global economies and markets, the impact of Company actions to protect the health and safety of employees, vendors, customers, and communities, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, the ability to realize the anticipated benefits from the Williston Basin acquisition and Permian Basin divestitures, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as the Company’s ability to access them, the proximity to and capacity of transportation facilities, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the Company’s business and other important factors that could cause actual results to differ materially from those projected as described in the Company’s reports filed with the U.S. Securities and Exchange Commission (the “SEC”). Additionally, the unprecedented nature of the COVID-19 pandemic and the related decline of the oil and gas exploration and production industry may make it particularly difficult to identify risks or predict the degree to which identified risks will impact the Company’s business and financial condition. Because considerable uncertainty exists with respect to the future pace and extent of a global economic recovery from the effects of the COVID-19 pandemic, the Company cannot predict whether or when crude oil production and economic activities will return to normalized levels. Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
No Offer or Solicitation
This communication relates to the proposed transaction between OMP and Crestwood. This communication is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, in any jurisdiction, pursuant to the proposed transaction or otherwise, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this document in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Additional Information and Where You Can Find It
In connection with the proposed transaction, Crestwood will file a registration statement on Form S-4, including a preliminary consent statement/prospectus for the unitholders of OMP with the SEC. INVESTORS AND UNITHOLDERS OF CRESTWOOD AND OMP, AS WELL AS INVESTORS AND STOCKHOLDERS OF THE COMPANY, ARE ADVISED TO CAREFULLY READ THE REGISTRATION STATEMENT AND THE PRELIMINARY CONSENT STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION, THE PARTIES TO THE PROPOSED TRANSACTION AND THE RISKS ASSOCIATED WITH THE PROPOSED TRANSACTION. The definitive consent statement/prospectus, when available, will be sent to unitholders of OMP in connection with the solicitation of consents of OMP unitholders relating to the proposed transactions. Investors and unitholders may obtain a free copy of the preliminary or definitive consent statement/prospectus (each when available) filed by Crestwood or
OMP with the SEC from the SEC’s website at www.sec.gov. Unitholders and other interested parties will also be able to obtain, without charge, a copy of the preliminary or definitive consent statement/prospectus and other relevant documents (when available) from Crestwood’s website at https://www.crestwoodlp.com/investors/ or from OMP’s website at http://oasismidstream.investorroom.com.
Participants in the Solicitation
Crestwood, OMP and their respective directors, executive officers and general partners, and the Company and its directors and executive officers, may be deemed to be participants in the solicitation of consents from the unitholders of OMP in respect of the transactions. Information about these persons is set forth in Crestwood’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on February 26, 2021, OMP’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on March 8, 2021, and the Company’s definitive proxy statement for its 2021 annual meeting filed with the SEC on April 20, 2021, respectively, and subsequent statements of changes in beneficial ownership on file for each of Crestwood, OMP and the Company with the SEC. Unitholders and investors may obtain additional information regarding the interests of such persons, which may be different than those of the respective companies’ unitholders or investors generally, by reading the preliminary or definitive consent statement/prospectus, or other relevant documents regarding the transaction (if and when available), which may be filed with the SEC.
| Item 9.01. | Financial Statements and Exhibits. |
|---|
(d) Exhibits.
| Exhibit<br>Number | Exhibit Description |
|---|---|
| 99.1 | Press Release, dated October 26, 2021. |
| 99.2 | Investor Presentation, dated October 26, 2021. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| OASIS PETROLEUM INC. | ||
|---|---|---|
| (Registrant) | ||
| Date: October 26, 2021 | ||
| By: | /s/ Nickolas J. Lorentzatos | |
| Nickolas J. Lorentzatos | ||
| Executive Vice President, General Counsel and Corporate Secretary |
EX-99.1
Exhibit 99.1
Oasis Petroleum Inc. Announces Oasis Midstream Partners to Merge with Crestwood Equity Partners
Provides Financial and Operational Update and Increases Dividend by 33%
HOUSTON, Oct. 26, 2021 /PRNewswire/ — Oasis Petroleum Inc. (NASDAQ: OAS) (“Oasis” or the “Company”) announced today that Oasis Midstream Partners (NASDAQ: OMP) (“OMP”) has entered into a definitive agreement under which it will merge with Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood”). Under the terms of the agreement, Oasis, as a unitholder of OMP, will receive $160MM in cash in addition to approximately 21.0MM common units of CEQP in aggregate in exchange for its 33.85MM OMP common units and non-economic general partner stake. Public OMP unitholders will receive 0.87 units of Crestwood common units for each unit of OMP owned. In the aggregate, the total consideration represents an at-the-market transaction based on the closing prices for OMP and Crestwood on October 25, 2021, and implies an enterprise value for the combined companies of approximately $6.9B. Upon completion of the transaction, Oasis will own approximately 21.7% of Crestwood common units.
“We are pleased to reach this agreement, which represents an outstanding outcome for Oasis shareholders and OMP unitholders. This transaction creates a combined midstream company well positioned to drive future value with enhanced scale and customer and basin diversification,” said Danny Brown, Oasis’ Chief Executive Officer. “Crestwood is a highly regarded, diversified midstream operator with a large footprint in the Williston Basin, making it the ideal midstream partner with the expertise and team to handle a large portion of Oasis’ hydrocarbons and produced water. The combination of OMP and Crestwood immediately enhances value for Oasis shareholders while increasing transparency with deconsolidated financial reporting, highlighting the Company’s E&P operations. Oasis is now well positioned to further participate in industry consolidation opportunities. Additionally, Oasis expects to benefit from its remaining ownership in the new Crestwood which, following this accretive merger, will be a larger, more diversified midstream entity with a strong balance sheet and an attractive outlook. For OMP unitholders, the transaction delivers compelling value, and the opportunity to participate in the upside potential and attractive distributions of the new Crestwood.”
Strategic and Financial Benefits for Oasis
| • | Accelerates Value for Oasis Shareholders: In exchange for Oasis’ approximately 33.85MM OMP<br>common units and non-economic GP interest, Oasis will receive $160MM in cash and 21.0MM common units in Crestwood, representing an attractive valuation of ~8x 2021E OMP EBITDA. The transaction is expected to<br>address the sum of the parts disconnect imbedded in Oasis’ current valuation; |
|---|---|
| • | Aligns Oasis Financial Reporting with E&P Operations: After the transaction close, Oasis will no<br>longer report financial results consolidated with OMP post close. Reporting will be more aligned with Oasis’ underlying E&P operations; |
| --- | --- |
| • | Maintains Ownership Position in Leading Midstream Company: At closing, Oasis will hold a significant<br>ownership position with upside in the new Crestwood, which will be a leading midstream operator positioned for future success. Enhanced trading liquidity is expected due to the larger size and scale of the combined companies; |
| --- | --- |
| • | Advances Commitment to ESG and Sustainability: The transaction is aligned with Oasis’ ESG objectives,<br>creating an entity with an extensive infrastructure network that will help limit methane flaring as well as the trucking of oil and water. Crestwood is expected to continue to progress its three-year sustainability strategy focused on diversity and<br>inclusion, emissions reductions, biodiversity, supply chain and ESG disclosure; |
| --- | --- |
| • | Strengthens Balance Sheet: Further strengthens Oasis’ balance sheet, resulting in no leverage pro<br>forma for the transaction with pro forma liquidity of $918MM; |
| --- | --- |
1
| • | Utilizes Net Operating Loss (NOL) Carryforwards: Upon close of the transaction, Oasis expects to utilize a<br>significant portion of its NOL balance. This could allow Oasis to subsequently eliminate the tax plan announced in August 2021 that was put in place to protect the NOLs. This action would once again permit shareholders to own more than 5% of<br>Oasis’ shares outstanding. |
|---|
Strategic and Financial Benefits of Combined Crestwood and OMP
| • | Premier Multi-Basin Exposure Improves Scale and Diversity: The transaction brings together two premier<br>midstream operators with strong pipeline networks across various commodities and diversified customer bases, enhancing both company’s competitive positioning. The two midstream companies have complementary operations and together, will operate<br>in key basins including the Williston, Delaware, and Powder River; |
|---|---|
| • | Immediately Accretive to Distributable Cash Flow: Pro forma for the transaction, Crestwood intends to<br>increase its distribution to $2.62/unit or approximately 5%; |
| --- | --- |
| • | Substantial Synergies: The combined entity expects to realize approximately $25MM of annual synergies. Its<br>leaner, more efficient cost structure will support free cash generation. |
| --- | --- |
| • | Strong Management Team to Operate Assets: Crestwood has an outstanding team and track record to lead the<br>go forward midstream company. |
| --- | --- |
In connection with the transaction, Oasis will receive the right to appoint two representatives to the Crestwood Board of Directors, subject to on-going ownership thresholds. Oasis fully supports this transaction and has executed a Support Agreement with respect to the transaction. This transaction has been unanimously approved by the Board of Directors of both Crestwood and Oasis and has also been unanimously approved by the Board of Directors and Conflicts Committee of the general partner OMP. The transaction is expected to close in the first quarter of 2022 and is subject to the satisfaction of customary closing conditions, including regulatory approvals.
3Q21 Operational Update and Outlook
Oasis is providing select preliminary unaudited financial results for 3Q21^1^:
| • | Produced 51.8 MBoepd in 3Q21 with oil volumes of 31.9 Mbopd; |
|---|---|
| • | E&P CapEx was between $40MM and $44MM in 3Q21, greater than 20% below guidance. Oasis reduced its FY21 CapEx<br>guidance by 9% which follows the 7% reduction in August; |
| --- | --- |
| • | Generated significant free cash flow during 3Q21. As of 9/30/21, pro forma for the Williston Basin Acquisition,<br>Oasis had approximately $308MM of cash, $400MM of long-term debt and no amounts drawn on its $900MM borrowing base ($450MM of elected commitments); |
| --- | --- |
| • | Best-in-class balance sheet with<br>pro forma net debt after Williston Basin acquisition of $92MM; |
| --- | --- |
| • | Oasis increased its fixed dividend 33% to $0.50/share ($2.00/share annualized); |
| --- | --- |
| • | Continued focus on ESG and Sustainability with Oasis publishing its inaugural sustainability report in 3Q21 as<br>well as an ESG-focused investor presentation. Both can be found on the Company’s website at www.oasispetroleum.com; |
| --- | --- |
| • | OMP announced a $0.56/unit 3Q21 distribution. |
| --- | --- |
| ^1^ | Oasis has prepared the preliminary financial data presented below based on the most current information<br>available to management. The Company’s normal financial reporting processes with respect to the preliminary financial data have not been fully completed and PricewaterhouseCoopers LLP has not audited, reviewed, compiled or<br>performed any procedures with respect to the accompanying preliminary financial data. Accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto. As a result, the<br>Company’s actual financial results could be different from this preliminary financial data, and any differences could be material. The following disclosures concerning 3Q21 are the Company’s preliminary estimates.<br> |
| --- | --- |
2
Mr. Brown continued, “The preliminary results we provided were made possible by our strong operational execution in the quarter across our business. Our increased fixed dividend reflects our significant cash flow generation, confidence in the business and our commitment to returning capital to Oasis shareholders.”
The Company closed its previously announced acquisition of assets in the Williston Basin (the “Williston Basin Acquisition”) on October 21, 2021, and production from that asset in 3Q21 was approximately 26 MBoepd (63% oil). Production from the acquired asset will be reported as Oasis’ volumes beginning on the date of close.
Oasis ran one rig for the entire third quarter and brought on a second rig on September 25, 2021. The Company did not complete any operated wells in the Williston Basin in the 3Q21, although Oasis began completions operations on 12 Indian Hills wells in August with five of the wells completed and cleaned-out as of today with the remainder being completed during the fourth quarter. Oasis is reducing its 2021 E&P CapEx guidance by another 9% to $184MM to $194MM to account for efficiency gains and lower than planned working interest due to higher participation by non-operators in Oasis operated wells. The impact of lower working interest in operated wells is also included in production numbers, which have been offset by higher gas production and gas capture from the Oasis legacy assets. The follow table provides select 3Q21 preliminary estimates and updated 4Q21 guidance, which incorporates updated working interest in operated wells and acquisition timing.
| E&P Metric | Preliminary 3Q21 | 4Q21 Guidance |
|---|---|---|
| Production (MBoe/d) | 51.8 | 68.5-71.5 |
| Production (Mbbl/d) | 31.9 | 44.0-46.0 |
| Differential to NYMEX WTI ($ per Bbl) | $0.38-$0.48 | $0.50-$1.00 |
| Natural gas realization ($ over NYMEX) | $1.43-$1.53 | $1.00-$1.25 |
| E&P LOE ($ per Boe) | $9.37-$9.47 | $9.25-$9.75 |
| E&P GPT ($ per Boe)^(1)^ | $3.90-$4.00 | $3.75-$4.25 |
| E&P Cash G&A ($MM)^(2)^ | $10.4-$10.6 | $9.2-$9.8 |
| Production taxes (as a % of oil and gas revenues) | 6.8%-6.85% | 7.3%-7.8% |
| E&P & Other CapEx ($MM)<br>^(3)^ | $40-$44 | $60-$70 |
| Cash Interest ($MM) | $6.8-$7.0 | $7.0-$7.5 |
| Cash taxes ($MM) | $0 | $0 |
| (1) | Excludes effect of non-cash valuation charges on pipeline imbalances<br>and benefits from midstream segment for crude oil gathering and transportation services. | |
| --- | --- | |
| (2) | Preliminary 3Q21 excludes non-recurring items related to the Williston<br>Basin Acquisition, the Crestwood transaction, and restructuring consulting expenses. Adjusting for these items, E&P Cash G&A would have been $8.1MM to 8.3MM. 4Q21 Guidance excludes expenses related to the Crestwood transaction. E&P Cash<br>G&A also excludes certain non-cash items, including non-cash equity-based compensation expenses included in the E&P segment. | |
| --- | --- | |
| (3) | Includes well services and administrative capital and excludes capitalized interest. | |
| --- | --- |
NYMEX West Texas Intermediate crude oil index price (“NYMEX WTI”) averaged $70.54 per barrel and NYMEX Henry Hub natural gas index price (“NYMEX HH”) averaged $4.36 per Mcf. During 3Q21, Oasis had a realized hedge loss of $81.4MM. Oasis did not add any new hedges since the August update. The September 2021 crude oil derivative contracts settled at a net payable of $26.4MM, which was paid in October 2021 and will be included in the Company’s 4Q21 derivative settlements.
3
Dividend Declaration
The board of directors of Oasis has declared a dividend of $0.50 per share ($2.00/share annualized) for 3Q21 for shareholders of record as of November 15, 2021, payable on November 29, 2021.
Painted Wood Dedication
Oasis has approved a dedication to OMP for the Painted Woods project areas which includes crude oil, natural gas, and produced water services.
Advisors to the Transaction
Morgan Stanley & Co. LLC and Tudor, Pickering, Holt & Co. are serving as financial advisors to Oasis and its affiliate companies and Vinson & Elkins L.L.P. is serving as counsel to Oasis and its affiliate companies. Jefferies is serving as financial advisor and Richards, Layton & Finger, P.A. is serving as counsel to OMP’s Conflicts Committee.
Combined Transaction and Earnings Call
Oasis will host a live webcast and conference call on today at 9:00 a.m. Central Time to discuss the transaction and preliminary 3Q21 financial and operational results.
Investors, analysts and other interested parties are invited to listen to the webcast:
| Date: | Tuesday, October 26, 2021 |
|---|---|
| Time: | 9:00 a.m. Central Time |
| Live Webcast: | https://www.webcaster4.com/Webcast/Page/1052/43321 |
Sell-side analysts with questions may use the following dial-in:
| Dial-in: | 888-317-6003 |
|---|---|
| Intl. Dial-in: | 412-317-6061 |
| Conference ID: | 0484731 |
| Website: | www.oasispetroleum.com |
Oasis expects to file its third quarter 2021 Form 10-Q by November 9, 2021. The Company expects to update its Investor Presentation with actual financial numbers when it files the 10-Q. As a result of today’s transaction and earnings call, Oasis has cancelled its third quarter results conference call originally scheduled for 11:30 am Central Time on November 4, 2021.
About Oasis
Oasis is an independent exploration and production company with quality and sustainable long-lived assets in the Williston Basin. The Company is uniquely positioned with a best-in-class balance sheet and is focused on rigorous capital discipline and generating free cash flow by operating efficiently, safely and responsibly to develop its unconventional onshore oil-rich resources in the continental United States. For more information, please visit the Company’s website at www.oasispetroleum.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including the Company’s drilling program, production, derivative instruments, capital expenditure levels
4
and other guidance included in this press release, as well as the impact of the novel coronavirus 2019 (“COVID-19”) pandemic on the Company’s operations. These statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include, but are not limited to, risks that the proposed transaction may not be consummated or the benefits contemplated therefrom may not be realized, the ability to obtain requisite regulatory and unitholder approval and the satisfaction of the other conditions to the consummation of the proposed transaction, the ability of Crestwood to successfully integrate OMP’s operations and employees and realize anticipated synergies and cost savings, the potential impact of the announcement or consummation of the proposed transaction on relationships, including with employees, suppliers, customers, competitors and credit rating agencies, changes in crude oil and natural gas prices, developments in the global economy, particularly the public health crisis related to the COVID-19 pandemic and the adverse impact thereof on demand for crude oil and natural gas, the outcome of government policies and actions, including actions taken to address the COVID-19 pandemic and to maintain the functioning of national and global economies and markets, the impact of Company actions to protect the health and safety of employees, vendors, customers, and communities, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, the ability to realize the anticipated benefits from the Williston Basin acquisition and Permian Basin divestitures, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as the Company’s ability to access them, the proximity to and capacity of transportation facilities, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the Company’s business and other important factors that could cause actual results to differ materially from those projected as described in the Company’s reports filed with the U.S. Securities and Exchange Commission. Additionally, the unprecedented nature of the COVID-19 pandemic and the related decline of the oil and gas exploration and production industry may make it particularly difficult to identify risks or predict the degree to which identified risks will impact the Company’s business and financial condition. Because considerable uncertainty exists with respect to the future pace and extent of a global economic recovery from the effects of the COVID-19 pandemic, the Company cannot predict whether or when crude oil production and economic activities will return to normalized levels.
Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
No Offer or Solicitation
This communication relates to the proposed transaction between OMP and Crestwood. This communication is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, in any jurisdiction, pursuant to the proposed transaction or otherwise, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this document in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Additional Information and Where You Can Find It
In connection with the proposed transaction, Crestwood will file a registration statement on Form S-4, including a preliminary consent statement/prospectus for the unitholders of OMP with the U.S. Securities and Exchange Commission (“SEC”). INVESTORS AND UNITHOLDERS OF CRESTWOOD AND OMP, AS WELL AS INVESTORS AND STOCKHOLDERS OF THE COMPANY, ARE ADVISED TO CAREFULLY READ THE REGISTRATION STATEMENT AND THE PRELIMINARY CONSENT STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
5
PROPOSED TRANSACTION, THE PARTIES TO THE PROPOSED TRANSACTION AND THE RISKS ASSOCIATED WITH THE PROPOSED TRANSACTION. The definitive consent statement/prospectus, when available, will be sent to unitholders of OMP in connection with the solicitation of consents of OMP unitholders relating to the proposed transactions. Investors and unitholders may obtain a free copy of the preliminary or definitive consent statement/prospectus (each when available) filed by Crestwood or OMP with the SEC from the SEC’s website at www.sec.gov. Unitholders and other interested parties will also be able to obtain, without charge, a copy of the preliminary or definitive consent statement/prospectus and other relevant documents (when available) from Crestwood’s website at https://www.crestwoodlp.com/investors/ or from OMP’s website at http://oasismidstream.investorroom.com.
Participants in the Solicitation
Crestwood, OMP and their respective directors, executive officers and general partners, and Oasis and its directors and executive officers, may be deemed to be participants in the solicitation of consents from the unitholders of OMP in respect of the transactions. Information about these persons is set forth in Crestwood’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on February 26, 2021, OMP’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on March 8, 2021, and Oasis’ definitive proxy statement for its 2021 annual meeting filed with the SEC on April 20, 2021, respectively, and subsequent statements of changes in beneficial ownership on file for each of Crestwood, OMP and Oasis with the SEC. Unitholders and investors may obtain additional information regarding the interests of such persons, which may be different than those of the respective companies’ unitholders generally, by reading the preliminary or definitive consent statement/prospectus, or other relevant documents regarding the transaction (if and when available), which may be filed with the SEC.
Contact:
Oasis Petroleum Inc.
Danny Brown, Chief Executive Officer
Michael H. Lou, Chief Financial Officer and Executive Vice President
Bob Bakanauskas, Director, Investor Relations
(281) 404-9600
ir@oasispetroleum.com
6
EX-99.2
A New Tomorrow, Today October 2021 Building a Stronger, More Sustainable Oasis: Transformational Actions to Enhance Shareholder Value Exhibit 99.2
Forward-Looking / Cautionary Statements Non-GAAP Financial Measures 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, E&P Adjusted EBITDA, E&P Free Cash Flow, Adjusted Net Income (Loss) Attributable to Oasis, Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share and Recycle Ratio are supplemental financial measures that are not presented in accordance with generally accepted accounting principles in the United States (“GAAP”). These non-GAAP measures should not be considered in isolation or as a substitute for natural gas and NGL revenues, gathering, processing and transportation expenses, general and administrative expenses, interest expenses, net income (loss), operating income (loss), net cash provided by (used in) operating activities, earnings (loss) per share or any other measures prepared under GAAP. Because these non-GAAP measures exclude some but not all items that affect net income (loss) and may vary among companies, the amounts presented may not be comparable to similar metrics of other companies. Reconciliations of these non-GAAP financial measures to their most comparable GAAP measure can be found in the annual report on Form 10-K, quarterly reports on Form 10-Q and the Company’s website at www.oasispetroleum.com. Amounts excluded from these non-GAAP measure in future periods could be significant. Cautionary Statement Regarding Oil and Gas Quantities The Securities Exchange Commission (the “SEC”) requires oil and gas companies, in their filings with the SEC, to disclose proved reserves, which are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions (using unweighted average 12-month first day of the month prices), operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities of the exploration and development companies may justify revisions of estimates that were made previously. If significant, such revisions could impact the Company’s strategy and future prospects. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered. The SEC also permits the disclosure of separate estimates of probable or possible reserves that meet SEC definitions for such reserves; however, we currently do not disclose probable or possible reserves in our SEC filings. Our production forecasts and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price declines or drilling cost increases. 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 Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this presentation that address activities, events or developments that Oasis Petroleum Inc. (the “Company” or “Oasis”) expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this presentation specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including the Company’s drilling program, production, derivative instruments, capital expenditure levels and other guidance included in this presentation, as well as the impact of the novel coronavirus 2019 (“COVID-19”) pandemic on the Company’s operations. These statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include, but are not limited to, risks that the proposed transaction between Crestwood Equity Partners LP (“Crestwood”) and Oasis Midstream Partners LP’s (“OMP”) may not be consummated or the benefits contemplated therefrom may not be realized, the ability to obtain requisite regulatory and unitholder approval and the satisfaction of the other conditions to the consummation of the proposed transaction, the ability of Crestwood to successfully integrate OMP operations and employees and realize anticipated synergies and cost savings, the potential impact of the announcement or consummation of the proposed transaction on relationships, including with employees, suppliers, customers, competitors and credit rating agencies, changes in crude oil and natural gas prices, developments in the global economy, particularly the public health crisis related to the COVID-19 pandemic and the adverse impact thereof on demand for crude oil and natural gas, the outcome of government policies and actions, including actions taken to address the COVID-19 pandemic and to maintain the functioning of national and global economies and markets, the impact of Company actions to protect the health and safety of employees, vendors, customers, and communities, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, the ability to realize the anticipated benefits from the Williston Basin acquisition and Permian Basin divestitures, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as the Company’s ability to access them, the proximity to and capacity of transportation facilities, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the Company’s business and other important factors that could cause actual results to differ materially from those projected as described in the Company’s reports filed with the U.S. Securities and Exchange Commission (the “SEC”). Additionally, the unprecedented nature of the COVID-19 pandemic and the related decline of the oil and gas exploration and production industry may make it particularly difficult to identify risks or predict the degree to which identified risks will impact the Company’s business and financial condition. Because considerable uncertainty exists with respect to the future pace and extent of a global economic recovery from the effects of the COVID-19 pandemic, the Company cannot predict whether or when crude oil production and economic activities will return to normalized levels. Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
Strategic Merger of OMP and Crestwood Equity Partners (CEQP) Transaction OMP merging with CEQP with Oasis receiving a combination of cash and stock for its interest in OMP 33.85MM common OMP LP units for $150MM in cash and ~21.0MM CEQP common LP units Non-economic OMP GP stake for $10MM in cash Attractive valuation at ~8x 2021E OMP EBITDA No outside financing needed by Crestwood Ownership Structure Oasis will own 21.7% of pro forma Crestwood Oasis will have the right to appoint two representatives to the Crestwood Board of Directors (assuming minimum ownership levels) Accretion Accretive to OMP and CEQP unit holders on distributable cash flow Pro forma Crestwood to increase distribution by approximately 5% to $2.62/unit in 2022 Expected annual distributions from CEQP to Oasis: $55MM Approvals and Closing Transaction unanimously approved by Oasis and OMP Boards Oasis fully supports the transaction Subject to Hart-Scott-Rodino regulatory approvals and other customary approvals Expected to close in the first quarter 2022
Combination Creates Premier, Diversified Midstream Franchise Robust Nationwide Platform Diversified Midstream Position Across 5 Basins Pro Forma Highlights OMP PF YE 2022E leverage: <3.5x PF float ~$2.1Bn Significant pro forma FCF generation High Quality Customer Base $1.8 Enterprise Value ($Bn) ~$6.9 $218-224 >$820 2021E EBITDA ($MM) OMP now a part of a large, diverse midstream entity with value upside for Oasis Note: Key statistics include CEQP and JV assets as of July 9, 2021, plus assets from the pending Oasis Midstream acquisition. *Due to the pending acquisition of Oasis Midstream, Crestwood anticipates that it will re-evaluate its segments for reporting purposes in the near-future. OMP Status Quo Pro Forma Pipeline Miles 615 2,571 Capacity Processing 0.28 Bcf/d 1.5 Bcf/d Gas Gathering 0.25 Bcf/d 3.1 Bcf/d Crude Gathering 170MBbls/d 320MBbls/s Produced Water Gathering 343MBbls/d 523MBbls/d CEQP’s Storage & Logistics Business* 1.0 Bcf/d gas transportation 35 Bcf gas storage facilities 180 MBbls/d crude oil rail terminalling 1.8 MMBbls crude oil storage (PF) 10.0 MMBbls NGL storage 1.6 MMBbls/d NGL pipeline and transportation capacity
Transforming Oasis into Premier Operator Strategic Rationale for Oasis Oasis receives significant value for its interest in OMP, addressing sum of the parts disconnect Oasis deconsolidates financials post close highlighting E&P operations Oasis maintains ownership position with upside in leading midstream company positioned for success Enhanced trading liquidity in combined OMP / Crestwood $25MM of annual cost synergies from transaction Allows for utilization of NOL carryforwards Utilizes a significant portion of NOLs balance Plans to eliminate tax plan at close, permitting shareholders to own more than 5% of Oasis shares Pro forma, Oasis will be unlevered with a net cash position $468MM cash on balance sheet Undrawn revolver ($450MM elected commitments/$900MM borrowing base) $400MM unsecured notes Oasis has a great partner in Crestwood, a midstream provider with outstanding operational capabilities and scale 1 2 3 4 5
The Financial Impact to Oasis Oasis E&P Valuation ($MM) Consolidated (before OMP Merger)4 Pro Forma (after OMP Merger with CEQP)5 OMP $631 Net Debt Mkt. Cap. EV Midstream Units E&P EV $2,381 $3,103 $2,282 $723 OAS $92 $2,381 OAS $92 $160 $2,313 $636 $1,677 Mkt. Cap. EV Midstream Units E&P EV $821 Net Debt Cash Received Oasis 3Q21 and Oasis Pro Forma include impact of $511MM payment for Williston Basin acquisition. EBITDA defined as estimated annualized 3Q21 consolidated EBITDA at Oasis for first column and estimated annualized 3Q21 E&P EBITDA + pro forma distribution from CEQP for second column. Both estimates are pro forma for Williston Basin acquisition that closed 10/21/21. Oasis Liquidity defined as availability under Oasis Revolving Credit Facility plus Unrestricted Cash Pricing as of 10/25/21. Oasis and OMP balance sheet data as of 9/30/21 adjusted for QEP final payment. Midstream units reflect value of OMP units held as of 9/30/21 using market prices as of 10/25/21 Pricing as of 10/25/21. Oasis balance sheet data as of 9/30/21 adjusted for QEP final payment. Midstream units reflect pro forma value of CEQP units using market prices as of 10/25/21
The Oasis Value Proposition vs. Peers Peer EV and EBITDA estimates and prices from Factset as of 10/25/21. Peer balance sheet data as of last reported period (6/30/21) adjusted for announced A&D, Peer Group: CDEV, CLR, CPE, ERF, LPI, MTDR, NOG, PDCE, RRC, SM, WLL. Net Debt for OAS as of 9/30/21 pro forma for $511MM paid to QEP for Williston acquisition on 10/21/21 and $160MM of cash from sale of OMP position to CEQP. OAS EV removes market value of CEQP units owned as of 10/25/21. OAS E&P EBITDA reflects FactSet consensus for estimates conforming to E&P-only cost structure (does not include midstream distributions). Estimated FCF / current EV pro forma for announced A&D. FactSet consensus for peers as of 10/25//21. Peer FCF defined as consolidated/estimated cash from operations minus CapEx. OAS FCF uses sell side cash flow estimates for those analysts conforming to E&P-only cost structure and removes estimated midstream distributions from FCF. Peer Group: CDEV, CLR, CPE, ERF, LPI, MTDR, NOG, PDCE, RRC, SM, WLL. E&P Adjusted EBITDA reflects FactSet consensus for estimates conforming to E&P-only cost structure (does not include midstream distributions). 2022E FCF to EV Yield2 EV / 2022E EBITDA1 EV / 2022E EBITDA($MM)3 = Merger Accelerates and Illuminates Value to Oasis x x
Key Accomplishments Transforming Oasis 2021 Strategic Accomplishments Strategic Focus / Simplified Story Exited the Permian, while building scale in Williston Basin Executed multiple transactions delivering significant value from OMP to Oasis shareholders Cash to Oasis via simplification in March OMP unit sale in June funded $4/share special dividend to Oasis shareholders Merger of OMP and CEQP will create midstream leader and deliver compelling cash and equity consideration to Oasis Aggressively reduced operating, capital and administrative costs to enhance margins Capital Allocation / Return of Cash to Shareholders Established Capital Allocation Committee Initiated meaningful fixed dividend (increased 33% to $0.50/share) Initiated and committed to aggressive share repurchase program No leverage and $918MM of pro forma liquidity – target leverage unchanged at < 1x ESG Foundation Implemented peer-leading compensation program aligned with shareholder returns Published inaugural sustainability report with ESG best practice commitments and initiatives
Significant Cash Generation and Return of Capital in 2021 January February March April May June July August October November December June 29 Oasis announces monetization of 3.6MM common units in OMP at a price of $24 / unit Cash Generation Return of Capital Organic E&P FCF $320-340MM (Estimate through 3Q21)1 Cash Monetizations2 $956MM Total $1,276-1,296MM Annualized Dividend3 $40MM Special Dividend $80MM Share Repurchases Authorized $100MM Total $220MM May 20 Oasis announces strategic sale of its Permian assets for total upfront consideration of $481MM September Pro forma – includes estimate for Williston Basin acquisition as if Oasis owned it since 1/1/21 and excludes Delaware asset as if Oasis had sold it on 1/1/21. 3Q21 for Oasis includes preliminary estimate announced on 10/26/21. Includes $229MM from Simplification, $481MM from Delaware Exit, OMP public unit sale, and sale to CEQP for cash Annualized dividend reflective of announced fixed annualized dividend of $2.00 / share June 29 Oasis declares $4.00 / share special dividend August 3 Oasis announces 2Q21 quarterly dividend of $0.375 / share ($1.50 / share annualized March 22 Oasis announces authorization of new $100MM share-repurchase program August 3 Oasis announces $14.6MM of share repurchases from Q1’21 to Q2’21 March 22 Oasis announces sale of remaining DevCo interests to Oasis Midstream Partners and IDR elimination in exchange for $229MM cash and 14.8MM common units in OMP October 26 Oasis announces merger of Oasis Midstream with Crestwood Equity Partners LP ($160MM cash to OAS) May 3 Oasis announces 1Q21 quarterly dividend of $0.375 / share ($1.50 / share annualized October 26 Oasis announces Q3’21 quarterly dividend of $0.50 / share ($2.00 / share annualized Feb 24 Oasis announces 4Q20 quarterly dividend of $0.375 / share ($1.50 / share annualized
Oasis Next Steps Transitions to Building on Accomplishments and Driving Future Value Maintain Capital Discipline Enhance returns (corporate and shareholder) and increase free cash flow without accelerating activity on current assets Realize operational and financial synergies from recent transaction Participate in Industry Consolidation Prudently and opportunistically evaluating opportunities Pursue value-enhancing opportunities to enhance size and scale Focus on Strengths Premier Williston Basin position with top tier assets E&P structure and focus Financial position / balance sheet Management team and board fully committed to value enhancing transactions
Oasis is the Premier E&P Investment Opportunity Wild Basin South Nesson Indian Hills Painted Woods North Alger Red Bank Cottonwood Montana South Antelope Fort Berthold 497k Net Acres 87% Operated 76% Working Interest Legacy Acquired 77.7 Mboepd1 Returns-Focused Business Model Focused on delivering competitive shareholder returns with low-cost assets $2.00/share annualized dividend; aggressively pursing $100MM share repurchase program High Quality Assets Generating Significant Free Cash Flow Leading Williston position YTD estimated pro forma E&P FCF of ~$320-340MM2 <50% reinvestment rate Driving Operational Excellence Continue to drive down LOE, capital, G&A per unit Reduced FY21 CapEx guidance reflects strong execution Biased Towards Strategic Actions Building on strategic steps taken in 2021 to further enhance shareholder value Best-in-Class Balance Sheet PF – No leverage, well below 1x long-term target ESG Leadership Best-in-Class Gas Capture 50% Y/Y reduction in total emissions per BOE (CO2e) in 2020 Great assets operated by strong team focused on growing free cash flow and delivering superior returns for investors PF production in 3Q21 from Oasis Legacy of 51.8Mboepd (31.9Mbopd) and Williston Basin acquisition of ~25.9Mboepd (16.2Mbopd) Pro forma – includes estimate for Williston Basin acquisition as if Oasis owned it since 1/1/21 and excludes Delaware asset as if Oasis had sold it on 1/1/21. 3Q21 for Oasis includes preliminary estimate announced on 10/26/21.
Appendix
Focused ESG Initiatives And Best Practices Note: More details on our ESG initiatives can be found on the Oasis website: www.oasispetroleum.com/sustainability/ Environmental Best in Class Gas Capture Flared gas 50%+ less than peer average in North Dakota Capture gas for other operators, reducing industry-wide emissions 50% Y/Y reduction in total emissions per BOE (CO2e) in 2020 61% per year reduction in reportable spills (2019-2020) Strong record of fluid and emission containment Environmental impact of our operations complemented by control of extensive infrastructure Social Responsibility Increased female (+18%) and minority (+39%) percent of the total professional workforce since 2017 Comprehensive benefits including health care for employees at every level in the organization and retirement plan dollar matching Oasis Academy for Success learning and development program supports job-specific training Ongoing soft skill and leadership development and training Committed to our Communities Deeply involved in the areas in which we work and are active Employees involved in broad range of charitable organizations in ND & TX Work with NextOp to attract US Military veterans for open positions at Oasis Governance Board of Directors 86% independent Diverse industry-leading experts across multiple disciplines Declassified Board Implemented peer-leading compensation practices aligned with shareholders Established Nominating, Environmental, Social & Governance Committee to oversee ESG policies and initiatives Codified an enterprise risk management system to ensure organizational reliability Directors elected by majority vote Split CEO and Board Chair roles Shareholders able to call special meetings No supermajority voting requirements
Driving Better Margins And Increased Capital Productivity E&P Costs do not include any benefit from midstream cash flows. Includes impact from Williston acquisition. 2020 Cash G&A excludes restructuring and professional fees as well as costs associated with RIFs. 4Q21 Run Rate assumes Williston Basin acquisition closed on 10/1/21 and does not include impact from OMP sale. Reflects E&P & Other Capital (including Williston Basin acquisition post close and Permian divestiture – pre close). Other capital includes administrative capital, but excludes capitalized interest. E&P CapEx excludes acquisition and divestiture purchase/sale price. Improving E&P LOE per Boe1 Performance 2021 E&P Capital Plan Reductions at time of Announcement ($MM)3 Proactive E&P Cash G&A Reductions2 ($ per Boe) 37% ~15% 10%
Updated Guidance ($MM except per unit) OMP Cash Flow Attributable to OAS in 20213 OMP Capital Structure MM 2021 Distribution per Unit 2021E PF Distribution ($MM) Public Units 14.8 OAS Units 33.8 $2.21 $78.7 Total Units 48.6 Oasis is providing select preliminary unaudited financial results for 3Q21. Oasis has prepared the preliminary financial data presented below based on the most current information available to management. The Company's normal financial reporting processes with respect to the preliminary financial data have not been fully completed and PricewaterhouseCoopers LLP has not audited, reviewed, compiled or performed any procedures with respect to the accompanying preliminary financial data. Accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto. As a result, the Company's actual financial results could be different from this preliminary financial data, and any differences could be material. Williston Basin Acquisition closed on 10/21/21 OAS ownership adjusted to reflect 3.6MM OMP unit sell-down announced 6/24/21. 2021E PF Distribution is calculated on ownership at the time of distribution with distribution held flat through YE21. Assumes merger has closed before 4Q21 distribution has been paid in 2022. 10/26/21 Preliminary1 Estimate Includes Acquisition2 CEQP Cash Flow Attributable to OAS in 20224 CEQP Capital Structure MM 2022E PF Distribution per Unit 2022E PF Distribution ($MM) Public Units 75.69 OAS Units 21.0 $2.62 $55.0 Total Units 96.75
Oasis Financial and Operational Results See subsequent slides for reconciliations Excludes restructuring and RIF related expenses in 1Q21 only Reflects cash OMP distributions to OAS during respective quarter OAS adjusted EBITDA conforms to definition of EBITDA in OAS credit facility and excludes OMP EBITDA In accordance with OAS credit facility to capture cash flows not associated with OMP Excludes capitalized interest Cash includes $400MM of restricted cash to fund a portion of Williston Basin Acquisition upon closing Footnotes
Reconciliation from Consolidated Financial Statements to E&P Business Adjusting for midstream benefits and credits Reflects cash distributions paid to OAS from OMP in respective quarter Adjustment to Gas Revenue, LOE, GP&T are related to midstream credits for consolidating purposes. G&A and EBITDA adjustments are related to RIF expenses incurred in 1Q21. $MM except per unit
Oasis and OMP Financial Highlights Borrowing base was increased to $900MM on 10/21/21 upon the closing of the Williston Basin acquisition Cash is pro forma for closing of Williston Basin acquisition, but does not include cash from OMP sale. OAS & OMP Balance Sheet on 9/30/21 ($MM) OMP Financial Highlights – 2Q21 Actuals ($MM) OAS Hedging Program (10/26/2021) WTI Oil Hedging 2H21 2022 2023 Swap volume (mbopd) 29 19 14 Weighted avg. swap price $42.09 $50.00 $50.00 2-way collar volume (mbopd) 8.0 13.5 12 Weighted avg. floor price $51.25 $49.44 $45.00 Weighted avg. ceiling price $68.24 $66.56 $64.88 HH Gas Hedging 2H21 1H22 Swap volume (MMBtu/d) 40,000 30,000 Weighted avg. swap price $2.84 $2.82
Contact Information Oasis Petroleum 1001 Fannin Street, Suite 1500 Houston, Texas, 77002 Main: (281) 404-9500 Owner Relations (Toll Free): (855) 209-8370 Investor Relations: Danny Brown (CEO) Michael Lou (CFO) Bob Bakanauskas (Director, IR) (281) 404-9600 ir@oasispetroleum.com www.OasisPetroleum.com