8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________________

FORM 8-K/A

(Amendment No. 1)

____________________________________________________________________

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 21, 2021

____________________________________________________________________

OASIS PETROLEUM INC.

(Exact name of registrant as specified in its charter)

____________________________________________________________________

Delaware	001-34776	80-0554627
(State or other jurisdiction of<br>incorporation or organization)	(Commission<br>File Number)	(I.R.S. Employer<br>Identification No.)
1001 Fannin Street, Suite 1500
---	---
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)
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☐	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))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange 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 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

EXPLANATORY NOTE

On October 22, 2021, Oasis Petroleum Inc. (the “Company”) filed a Current Report on Form 8-K (the “Initial Report”) to report the closing on October 21, 2021 of the Company’s acquisition of approximately 95,000 net acres in the Williston Basin from QEP Energy Company, a wholly-owned subsidiary of Diamondback Energy, Inc. for an aggregate purchase price of $745.0 million (the “Williston Basin Acquisition”). This Current Report on Form 8-K/A (the “Amendment”) amends and supplements the Initial Report to provide the financial statements for the properties acquired in the Williston Basin Acquisition and the pro forma financial information required by Item 9.01 of Form 8-K. No other modifications to the Initial Report are being made by this Amendment. This Amendment should be read in connection with the Initial Report, which provides a more complete description of the Williston Basin Acquisition.

Item 9.01 Financial Statements and Exhibits

(a) Financial Statements of Business Acquired

Statements of Revenues and Direct Operating Expenses of the properties acquired in the Williston Basin Acquisition for the years ended December 31, 2020 and 2019 (audited) and for the nine-month periods ended September 30, 2021 and 2020 (unaudited), together with the accompanying Independent Auditor's Report, are set forth in Exhibit 99.1.

(b) Pro Forma Financial Information

The Unaudited Pro Forma Condensed Consolidated Combined Financial Information of the Company as of September 30, 2021 and for the nine months ended September 30, 2021 and the years ended December 31, 2020, 2019 and 2018 are set forth in Exhibit 99.2.

(d) Exhibits

Exhibit No.	Description of Exhibit
99.1	Statements of Revenues and Direct Operating Expenses of the properties acquired in the Williston Basin Acquisition for the years ended December 31, 2020 and 2019 (audited) and for the nine-month periods ended September 30, 2021 and 2020 (unaudited).
99.2	Unaudited Pro Forma Condensed Consolidated Combined Financial Information of the Company as of September 30, 2021 and for the nine months ended September 30, 2021 and the years ended December 31, 2020, 2019 and 2018.
104	Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

SIGNATURE

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 thereunto duly authorized.

	OASIS PETROLEUM INC.<br><br>(Registrant)
Date: December 17, 2021	By:	/s/ Nickolas J. Lorentzatos
		Nickolas J. Lorentzatos
		Executive Vice President, General Counsel and Corporate Secretary

EXHIBIT 99.2

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated combined financial information and accompanying notes reflect the pro forma effects of:

1.On November 19, 2020 (the “Emergence Date”), Oasis Petroleum Inc. (the “Company” or “Oasis”) emerged from bankruptcy and adopted fresh start accounting in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification 852, Reorganizations, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. References to “Predecessor” relate to the period from January 1, 2018 through November 19, 2020, and references to “Successor” relate to the period from November 20, 2020 through September 30, 2021.

2.On June 9, 2021, the Company issued $400.0 million of 6.375% senior unsecured notes due June 1, 2026 (the “Oasis Senior Notes”). The Company used the proceeds from the Oasis Senior Notes to finance a portion of the consideration for the Williston Basin Acquisition (defined below).

3.On June 29, 2021, the Company completed the divestiture of its exploration and production assets in the Texas region of the Permian Basin, effective March 1, 2021, to Percussion Petroleum Operating II, LLC for cash proceeds of $347.3 million (the “Permian Basin Sale”). The Company used a portion of the proceeds from the Permian Basin Sale to finance a portion of the consideration for the Williston Basin Acquisition (defined below).

4.On October 21, 2021, the Company completed its acquisition of approximately 95,000 net acres in the Williston Basin, effective April 1, 2021, from QEP Energy Company (“QEP”), a wholly-owned subsidiary of Diamondback Energy Inc., for total cash consideration of $585.8 million (the “Williston Basin Acquisition”). The total cash consideration was comprised of a deposit of $74.5 million paid on May 3, 2021 and $511.3 million paid at closing on October 21, 2021. The Company funded the Williston Basin Acquisition with cash on hand, including proceeds from the Permian Basin Sale and proceeds from the Oasis Senior Notes. The Company expects the Williston Basin Acquisition to qualify as an asset acquisition under accounting principles generally accepted in the United States of America, as the Williston Basin Acquisition does not meet the definition of a business under the FASB Accounting Standards Codification 805, Business Combinations, since substantially all of the fair value of the assets acquired are concentrated in a single asset group.

5.On October 25, 2021, Oasis Midstream Partners LP (“OMP”) and OMP GP LLC (“OMP GP”) entered into an Agreement and Plan of Merger (the “OMP Merger”) with Crestwood Equity Partners LP (“Crestwood”). Pursuant to the terms of the OMP Merger, the Company will receive $160.0 million in cash and approximately 21 million common units of Crestwood in exchange for its approximate 70% ownership of OMP and its non-economic general partner interest in OMP GP. In connection with and prior to completion of the OMP Merger, the Company expects to contribute substantially all of its remaining midstream assets to OMP in exchange for cash consideration of approximately $6.7 million. Upon closing of the OMP Merger, the Company expects to own approximately 22% of the limited partner interests of Crestwood. As a result of this transaction, the Company will be a single basin exploration and production company. The OMP Merger represents a strategic shift for the Company and qualifies as a discontinued operation in accordance with FASB Accounting Standards Codification 205-20, Presentation of financial statements – Discontinued Operations (“ASC 205-20”). The pro forma adjustments presented herein show the effects of the OMP Merger as discontinued operations under ASC 205-20, as well as the classification of the assets and liabilities as held for sale. The Company expects the OMP Merger to be completed in the first quarter of 2022 and will file a Form 8-K under Item 2.01 upon closing. The pro forma financial information presented in such Form 8-K may contain values, adjustments and other information that differ from those contained in the pro forma financial information presented herein to, among other things, include pro forma financial information to show the pro forma effects of the OMP Merger as a significant disposition. The foregoing differences may be material individually or in the aggregate.

The unaudited pro forma condensed consolidated combined financial information has been derived from the historical consolidated financial statements of the Company and the historical Statements of Revenues and Direct Operating Expenses of properties acquired in the Williston Basin Acquisition (which were derived from information provided by QEP).

The unaudited pro forma condensed consolidated combined balance sheet at September 30, 2021 was prepared as if the Williston Basin Acquisition and OMP Merger had occurred on September 30, 2021. No pro forma adjustments were necessary to reflect the Company’s adoption of fresh start accounting, the Permian Basin Sale and the issuance of the Oasis Senior Notes, as these transactions were already included in the Company’s historical unaudited condensed consolidated balance sheet at September 30, 2021.

The unaudited pro forma condensed consolidated combined statements of operations for the nine month period ended September 30, 2021 and for the year ended December 31, 2020 were prepared as if the fresh start accounting adjustments recorded on the Emergence Date, the OMP Merger, the Williston Basin Acquisition, the Permian Basin Sale and the issuance of the Oasis Senior Notes had occurred on January 1, 2020. In addition, the unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2018 and 2019 were included in accordance with ASC 205-20 to show the effects of the OMP Merger as a discontinued operation for comparative purposes.

The unaudited pro forma condensed consolidated combined financial statements and underlying pro forma adjustments are based upon currently available information and include certain estimates and assumptions made by the Company’s management; accordingly, actual results could differ materially from the pro forma information. Management believes that the assumptions used to prepare the unaudited pro forma condensed consolidated combined financial information and accompanying notes provide a reasonable and reliably determinable basis for presenting the significant effects of the above transactions. The following unaudited pro forma condensed consolidated combined statements of operations do not purport to represent what the Company’s results of operations would have been if the Emergence Date, the Williston Basin Acquisition, the Permian Basin Sale, the issuance of the Oasis Senior Notes and the OMP Merger had occurred on January 1, 2020. The unaudited pro forma condensed consolidated combined financial information should be read together with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 and the historical Statements of Revenues and Direct Operating Expenses and notes thereto of the Williston Basin Acquisition properties filed as Exhibit 99.1 to the Current Report on Form 8-K of which this Exhibit 99.2 is a part.

Oasis Petroleum Inc.

Condensed Consolidated Combined Balance Sheet (Unaudited)

As of September 30, 2021

(In thousands, except share data)

			Transaction Accounting Adjustments
	As Reported		Discontinued Operations			Williston Basin Acquisition			Pro Forma
ASSETS
Current assets
Cash and cash equivalents	$	448,608	$	(23,032)	(a)	$	(111,296)	(b)	$	314,280
Accounts receivable, net	269,740		(5,225)		(a)	—			264,515
Inventory	28,309		(10,149)		(a)	4,954		(c)	23,114
Prepaid expenses	4,274		(1,061)		(a)	—			3,213
Other current assets	2,326		(152)		(a)	—			2,174
Current assets held for sale	—		1,035,656		(a)	—			1,035,656
Total current assets	753,257		996,037			(106,342)			1,642,952
Property, plant and equipment
Oil and gas properties (successful efforts method)	733,585		2,760		(a)	620,953		(c)	1,357,298
Other property and equipment	962,174		(914,330)		(a)	1,315		(c)	49,159
Less: accumulated depreciation, depletion and amortization	(112,915)		29,549		(a)	—			(83,366)
Total property, plant and equipment, net	1,582,844		(882,021)			622,268			1,323,091
Restricted cash – non–current	400,000		—			(400,000)		(b)	—
Derivative instruments	39,717		—			—			39,717
Long-term inventory	17,510		—			3,748		(c)	21,258
Operating right-of-use assets	5,115		(917)		(a)	—			4,198
Intangible assets	41,624		(40,958)		(a)	—			666
Goodwill	70,534		(70,534)		(a)	—			—
Other assets	88,911		(1,607)		(a)	(69,980)		(b),(c)	17,324
Total assets	$	2,999,512	$	—		$	49,694		$	3,049,206
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	5,522	$	(489)	(a)	$	—		$	5,033
Revenues and production taxes payable	232,217		(1,336)		(a)	8,997		(c)	239,878
Accrued liabilities	129,000		(34,537)		(a)	7,831		(c),(d)	102,294
Accrued interest payable	26,361		(18,412)		(a)	—			7,949
Derivative instruments	266,337		—			—			266,337
Advances from joint interest partners	1,874		—			—			1,874
Current operating lease liabilities	1,914		(973)		(a)	—			941
Other current liabilities	1,859		(564)		(a)	—			1,295
Current liabilities held for sale	—		713,944		(a)	—			713,944
Total current liabilities	665,084		657,633			16,828			1,339,545
Long-term debt	1,041,895		(650,390)		(a)	—			391,505
Deferred income taxes	984		—			—			984
Asset retirement obligations	45,974		(885)		(a)	14,850		(c)	59,939
Derivative instruments	142,516		—			—			142,516
Operating lease liabilities	1,706		—			—			1,706
---	---	---	---	---	---	---	---	---	---	---
Other liabilities	8,022		(6,358)		(a)	16,216		(c)	17,880
Total liabilities	1,906,181		—			47,894			1,954,075
Commitments and contingencies
Stockholders’ equity
Common stock, $0.01 par value: 60,000,000 shares authorized; 20,096,011 shares issued and 19,905,228 shares outstanding at September 30, 2021 and 20,093,017 shares issued and 20,093,017 shares outstanding at December 31, 2020	200		—			—			200
Treasury stock, at cost: 190,783 shares at September 30, 2021 and no shares at December 31, 2020	(14,560)		—			—			(14,560)
Additional paid-in capital	866,992		—			—			866,992
Retained earnings	51,810		—			1,800		(c)	53,610
Oasis share of stockholders’ equity	904,442		—			1,800			906,242
Non-controlling interests(1)	188,889		—			—			188,889
Total stockholders’ equity	1,093,331		—			1,800			1,095,131
Total liabilities and stockholders’ equity	$	2,999,512	$	—		$	49,694		$	3,049,206

_______________

(1) The minority interest ownership in OMP held by public unitholders will be eliminated upon completion of the OMP Merger.

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.

Oasis Petroleum Inc.

Condensed Consolidated Combined Statements of Operations (Unaudited)

Nine Months Ended September 30, 2021

(In thousands, except per share data)

			Transaction Accounting Adjustments					Transaction Accounting Adjustments			Other Transaction Accounting Adjustments
	As Reported		Discontinued Operations			As Adjusted		Williston Basin Acquisition			Williston Basin Acquisition			Permian Basin Sale			Oasis Senior Notes			Pro Forma
Revenues
Oil and gas revenues	$	782,324	$	(866)	(a)	$	781,458	$	328,921	(c)	$	—		$	(70,278)	(f)	$	—		$	1,040,101
Purchased oil and gas sales	183,885		92,465		(b)	276,350		—			—			(21,282)		(f)	—			255,068
Midstream revenues	183,807		(183,807)		(a)	—		—			—			—			—			—
Other services revenues	542		—			542		—			—			—			—			542
Total revenues	1,150,558		(92,208)			1,058,350		328,921			—			(91,560)			—			1,295,711
Operating expenses
Lease operating expenses	98,888		47,526		(a)	146,414		66,034		(c)	—			(11,675)		(f)	—			200,773
Midstream expenses	83,841		(83,841)		(a)	—		—			—			—			—			—
Other services expenses	47		—			47		—			—			—			—			47
Gathering, processing and transportation expenses	52,596		38,324		(a)	90,920		24,792		(c)	—			(2,542)		(f)	—			113,170
Purchased oil and gas expenses	187,745		88,044		(b)	275,789		—			—			(23,663)		(f)	—			252,126
Production taxes	50,933		—			50,933		28,635		(c)	—			(3,324)		(f)	—			76,244
Depreciation, depletion and amortization	112,581		(28,605)		(a)	83,976		—			68,645		(d)	(8,621)		(f)	—			144,000
Exploration expenses	1,936		—			1,936		—			—			(331)		(f)	—			1,605
Impairment	5		(2)		(a)	3		—			—			(3)		(f)	—			—
General and administrative expenses	60,461		1,039		(a)	61,500		—			951		(e)	(860)		(f)	—			61,591
Total operating expenses	649,033		62,485			711,518		119,461			69,596			(51,019)			—			849,556
Gain on sale of properties	228,473		—			228,473		—			—			(227,415)		(g)	—			1,058
Operating income (loss)	729,998		(154,693)			575,305		209,460			(69,596)			(267,956)			—			447,213
Other expense
Net loss on derivative instruments(1)	(550,342)		—			(550,342)		—			—			—			—			(550,342)
Interest expense, net of capitalized interest	(49,421)		26,372		(a)	(23,049)		—			—			—			(11,797)		(i)	(34,846)
Other expense	(859)		63		(a)	(796)		—			—			275		(f)	—			(521)
Total other expense	(600,622)		26,435			(574,187)		—			—			275			(11,797)			(585,709)
Income (loss) from continuing operations before income taxes	129,376		(128,258)			1,118		209,460			(69,596)			(267,681)			(11,797)			(138,496)
Income tax benefit (expense)	—		—			—		—			—			—			—			—
Net income (loss) from continuing operations including non-controlling interests	129,376		(128,258)			1,118		209,460		(69,596)		(267,681)		(11,797)		(138,496)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Net income from continuing operations attributable to non-controlling interests	27,654		(27,654)		(a)	—		—		—		—		—		—
Net income (loss) from continuing operations attributable to Oasis	$	101,722	$	(100,604)		$	1,118	$	209,460	$	(69,596)	$	(267,681)	$	(11,797)	$	(138,496)
Net earnings (loss) from continuing operations attributable to Oasis per share:
Basic	$	5.11														$	(6.96)
Diluted	4.96															(6.96)
Weighted average shares outstanding:
Basic	19,905															19,905
Diluted	20,508															19,905

_______________

(1) The Company recorded an unrealized loss on derivative instruments of $390.3 million during the nine months ended September 30, 2021.

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.

Oasis Petroleum Inc.

Condensed Consolidated Combined Statements of Operations (Unaudited)

Year Ended December 31, 2020

(In thousands, except per share data)

			Transaction Accounting Adjustments			Other Transaction Accounting Adjustments
	Successor and Predecessor Pro Forma Combined		Williston Basin Acquisition			Williston Basin Acquisition			Permian Basin Sale			Oasis Senior Notes			Pro Forma
Revenues
Oil and gas revenues	$	687,655	$	245,340	(c)	$	—		$	(99,289)	(f)	$	—		$	833,706
Purchased oil and gas sales	257,744		—			—			(25,132)		(f)	—			232,612
Other services revenues	7,051		—			—			—			—			7,051
Total revenues	952,450		245,340			—			(124,421)			—			1,073,369
Operating expenses
Lease operating expenses	182,923		74,712		(c)	—			(22,336)		(f)	—			235,299
Other services expenses	6,658		—			—			—			—			6,658
Gathering, processing and transportation expenses	131,082		30,287		(c)	—			(6,662)		(f)	—			154,707
Purchased oil and gas expenses	249,334		—			—			(25,554)		(f)	—			223,780
Production taxes	51,377		24,232		(c)	—			(4,421)		(f)	—			71,188
Depreciation, depletion and amortization	284,791		—			96,885		(d)	(39,798)		(f)	—			341,878
Exploration expenses	2,748		—			—			(209)		(f)	—			2,539
Rig termination	1,279		—			—			(1,279)		(f)	—			—
Impairment	4,825,530		—			—			(995,682)		(f)	—			3,829,848
General and administrative expenses	142,885		—			3,668		(e)	(3,461)		(f)	—			143,092
Litigation settlement	22,750		—			—			—			—			22,750
Total operating expenses	5,901,357		129,231			100,553			(1,099,402)			—			5,031,739
Gain on sale of properties	10,407		—			—			227,415		(g)	—			237,822
Operating income (loss)	(4,938,500)		116,109			(100,553)			1,202,396			—			(3,720,548)
Other income (expense)
Net gain on derivative instruments	148,950		—			—			—			—			148,950
Interest expense, net of capitalized interest	(143,856)		—			—			—			(27,156)		(i)	(171,012)
Gain on extinguishment of debt	83,867		—			—			—			—			83,867
Other income (expense)	870		—			—			(5)		(f)	—			865
Total other income (expense), net	89,831		—			—			(5)			(27,156)			62,670
Income (loss) from continuing operations before income taxes	(4,848,669)		116,109			(100,553)			1,202,391			(27,156)			(3,657,878)
Income tax benefit (expense)	269,743		—			—			(81,051)		(h)	—			188,692
Net income (loss) from continuing operations	$	(4,578,926)	$	116,109		$	(100,553)		$	1,121,340		$	(27,156)		$	(3,469,186)
Net loss from continuing operations attributable to Oasis per share:
Basic	$	(229.05)													$	(173.54)
Diluted	(229.05)														(173.54)
Weighted average shares outstanding:
Basic	19,991	19,991
---	---	---
Diluted	19,991	19,991

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.

Oasis Petroleum Inc.

Condensed Consolidated Combined Statements of Operations (Unaudited)

Year Ended December 31, 2020

(In thousands, except per share data)

	Predecessor															Successor
			Transaction Accounting Adjustments								Transaction Accounting Adjustments							Transaction Accounting Adjustments
	Historical Predecessor		Discontinued Operations			Fresh Start Accounting–Discontinued Operations			As Adjusted		Fresh Start Accounting–Continuing Operations			As Further Adjusted(1)		Historical Successor		Discontinued Operations			As Adjusted		Successor and Predecessor Pro Forma Combined(2)
Revenues
Oil and gas revenues	$	603,585	$	(2,075)	(a)	$	—		$	601,510	$	—		$	601,510	$	86,442	$	(297)	(a)	$	86,145	$	687,655
Purchased oil and gas sales	186,367		50,744		(b)	—			237,111		—			237,111		7,227		13,406		(b)	20,633		257,744
Midstream revenues	166,631		(166,631)		(a)	—			—		—			—		26,031		(26,031)		(a)	—		—
Other services revenues	6,836		—			—			6,836		—			6,836		215		—			215		7,051
Total revenues	963,419		(117,962)			—			845,457		—			845,457		119,915		(12,922)			106,993		952,450
Operating expenses
Lease operating expenses	118,372		42,034		(a)	—			160,406		—			160,406		17,841		4,676		(a)	22,517		182,923
Midstream expenses	42,987		(42,987)		(a)	—			—		—			—		10,572		(10,572)		(a)	—		—
Other services expenses	6,658		—			—			6,658		—			6,658		—		—			—		6,658
Gathering, processing and transportation expenses	85,896		31,988		(a)	—			117,884		—			117,884		9,124		4,074		(a)	13,198		131,082
Purchased oil and gas expenses	185,893		43,163		(b)	—			229,056		—			229,056		7,357		12,921		(b)	20,278		249,334
Production taxes	45,439		—			—			45,439		—			45,439		5,938		—			5,938		51,377
Depreciation, depletion and amortization	291,115		(20,113)		(a)	—			271,002		—			271,002		16,094		(2,305)		(a)	13,789		284,791
Exploration expenses	2,748		—			—			2,748		—			2,748		—		—			—		2,748
Rig termination	1,279		—			—			1,279		—			1,279		—		—			—		1,279
Impairment	4,937,143		(111,613)		(a)	—			4,825,530		—			4,825,530		—		—			—		4,825,530
General and administrative expenses	145,294		310		(a)	(904)		(j)	144,700		(16,618)		(m)	128,082		14,224		579		(a)	14,803		142,885
Litigation settlement	22,750		—			—			22,750		—			22,750		—		—			—		22,750
Total operating expenses	5,885,574		(57,218)			(904)			5,827,452		(16,618)			5,810,834		81,150		9,373			90,523		5,901,357
Gain on sale of properties	10,396		—			—			10,396		—			10,396		11		—			11		10,407
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Operating income (loss)	(4,911,759)		(60,744)			904			(4,971,599)		16,618			(4,954,981)		38,776		(22,295)			16,481		(4,938,500)
Other income (expense)
Net gain (loss) on derivative instruments	233,565		—			—			233,565		—			233,565		(84,615)		—			(84,615)		148,950
Interest expense, net of capitalized interest	(181,484)		39,648		(a)	—			(141,836)		—			(141,836)		(3,168)		1,148		(a)	(2,020)		(143,856)
Gain on extinguishment of debt	83,867		—			—			83,867		—			83,867		—		—			—		83,867
Reorganization items, net	786,831		—			(120,915)		(k)	665,916		(665,916)		(n)	—		—		—			—		—
Other income (expense)	1,407		(136)		(a)	—			1,271		—			1,271		(402)		1		(a)	(401)		870
Total other income (expense), net	924,186		39,512			(120,915)			842,783		(665,916)			176,867		(88,185)		1,149			(87,036)		89,831
Loss from continuing operations before income taxes	(3,987,573)		(21,232)			(120,011)			(4,128,816)		(649,298)			(4,778,114)		(49,409)		(21,146)			(70,555)		(4,848,669)
Income tax benefit	262,962		—			—			262,962		3,334		(o)	266,296		3,447		—			3,447		269,743
Net loss from continuing operations including non-controlling interests	(3,724,611)		(21,232)			(120,011)			(3,865,854)		(645,964)			(4,511,818)		(45,962)		(21,146)			(67,108)		(4,578,926)
Net income (loss) from continuing operations attributable to non-controlling interests	(84,283)		6,546		(a)	77,737		(l)	—		—			—		3,950		(3,950)		(a)	—		—
Net loss from continuing operations attributable to Oasis	$	(3,640,328)	$	(27,778)		$	(197,748)		$	(3,865,854)	$	(645,964)		$	(4,511,818)	$	(49,912)	$	(17,196)		$	(67,108)	$	(4,578,926)
Net loss from continuing operations attributable to Oasis per share:
Basic	$	(11.46)														$	(2.50)						$	(229.05)
Diluted	(11.46)															(2.50)							(229.05)
Weighted average shares outstanding:
Basic	317,644															19,991							19,991
Diluted	317,644	19,991	19,991
---	---	---	---

_______________

(1) Represents the Company’s results of operations after giving effect to the OMP Merger and fresh start accounting adjustments.

(2) Represents the combined results of operations of the Predecessor and Successor after giving effect to the OMP Merger and fresh start accounting adjustments.

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.

Oasis Petroleum Inc.

Condensed Consolidated Statements of Operations (Unaudited)

Year Ended December 31, 2019

(In thousands, except per share data)

			Transaction Accounting Adjustments
	As Reported		Discontinued Operations			Pro Forma
Revenues
Oil and gas revenues	$	1,408,771	$	(962)	(a)	$	1,407,809
Purchased oil and gas sales	408,791		72,223		(b)	481,014
Midstream revenues	212,208		(212,208)		(a)	—
Other services revenues	41,974		—			41,974
Total revenues	2,071,744		(140,947)			1,930,797
Operating expenses
Lease operating expenses	223,384		65,306		(a)	288,690
Midstream expenses	62,146		(62,146)		(a)	—
Other services expenses	28,761		—			28,761
Gathering, processing and transportation expenses	128,806		45,220		(a)	174,026
Purchased oil and gas expenses	409,180		65,734		(b)	474,914
Production taxes	112,592		—			112,592
Depreciation, depletion and amortization	787,192		(15,552)		(a)	771,640
Exploration expenses	6,658		—			6,658
Rig termination	384		—			384
Impairment	10,257		—			10,257
General and administrative expenses	143,506		5,089		(a)	148,595
Total operating expenses	1,912,866		103,651			2,016,517
Loss on sale of properties	(4,455)		—			(4,455)
Operating income (loss)	154,423		(244,598)			(90,175)
Other income (expense)
Net loss on derivative instruments	(106,314)		—			(106,314)
Interest expense, net of capitalized interest	(176,223)		16,936		(a)	(159,287)
Gain on extinguishment of debt	4,312		—			4,312
Other income	440		129		(a)	569
Total other income (expense), net	(277,785)		17,065			(260,720)
Loss from continuing operations before income taxes	(123,362)		(227,533)			(350,895)
Income tax benefit	32,715		—			32,715
Net loss from continuing operations including non-controlling interests	(90,647)		(227,533)			(318,180)
Net income from continuing operations attributable to non-controlling interests	37,596		(37,596)		(a)	—
Net loss from continuing operations attributable to Oasis	$	(128,243)	$	(189,937)		$	(318,180)
Net loss attributable to Oasis from continuing operations per share:
Basic	$	(0.41)				$	(1.01)
Diluted	(0.41)					(1.01)
Weighted average shares outstanding:
Basic	315,002					315,002
Diluted	315,002					315,002

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.

Oasis Petroleum Inc.

Condensed Consolidated Statements of Operations (Unaudited)

Year Ended December 31, 2018

(In thousands, except per share data)

			Transaction Accounting Adjustments
	As Reported		Discontinued Operations			Pro Forma
Revenues
Oil and gas revenues	$	1,590,024	$	—		$	1,590,024
Purchased oil and gas sales	550,344		1,464		(b)	551,808
Midstream revenues	120,504		(120,504)		(a)	—
Other services revenues	61,075		—			61,075
Total revenues	2,321,947		(119,040)			2,202,907
Operating expenses
Lease operating expenses	193,912		53,611		(a)	247,523
Midstream expenses	32,758		(32,758)		(a)	—
Other services expenses	41,200		—			41,200
Gathering, processing and transportation expenses	107,193		24,770		(a)	131,963
Purchased oil and gas expenses	553,461		1,445		(b)	554,906
Production taxes	133,696		—			133,696
Depreciation, depletion and amortization	636,296		(12,285)		(a)	624,011
Exploration expenses	27,432		—			27,432
Impairment	384,228		—			384,228
General and administrative expenses	121,346		6,403		(a)	127,749
Total operating expenses	2,231,522		41,186			2,272,708
Gain on sale of properties	28,587		—			28,587
Operating income (loss)	119,012		(160,226)			(41,214)
Other income (expense)
Net gain on derivative instruments	28,457		—			28,457
Interest expense, net of capitalized interest	(159,085)		2,343		(a)	(156,742)
Loss on extinguishment of debt	(13,848)		—			(13,848)
Total other income (expense), net	(144,355)		2,343			(142,012)
Loss from continuing operations before income taxes	(25,343)		(157,883)			(183,226)
Income tax benefit	5,843		—			5,843
Net loss from continuing operations including non-controlling interests	(19,500)		(157,883)			(177,383)
Net income from continuing operations attributable to non-controlling interests	15,796		(15,796)		(a)	—
Net loss from continuing operations attributable to Oasis	$	(35,296)	$	(142,087)		$	(177,383)
Net loss attributable to Oasis from continuing operations per share:
Basic	$	(0.11)				$	(0.58)
Diluted	(0.11)					(0.58)
Weighted average shares outstanding:
Basic	307,480					307,480
Diluted	307,480					307,480

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.

Notes to Unaudited Pro Forma Condensed Consolidated Combined Financial Information

1. Basis of Presentation

On October 21, 2021, the Company completed its previously announced acquisition of approximately 95,000 net acres in the Williston Basin, effective April 1, 2021, from QEP Energy Company (“QEP”), a wholly-owned subsidiary of Diamondback Energy Inc., for total cash consideration of $585.8 million (the “Williston Basin Acquisition”). The total cash consideration was comprised of a deposit of $74.5 million paid on May 3, 2021 and $511.3 million paid at closing on October 21, 2021. The Company funded the Williston Basin Acquisition with cash on hand, including proceeds from the divestiture of its exploration and production assets in the Texas region of the Permian Basin on June 29, 2021 (the “Permian Basin Sale”) and proceeds from the issuance of $400.0 million 6.375% senior unsecured notes due June 1, 2026 (the “Oasis Senior Notes”) on June 9, 2021. The Company expects the Williston Basin Acquisition to qualify as an asset acquisition under accounting principles generally accepted in the United States of America as the Williston Basin Acquisition does not meet the definition of a business under the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations, since substantially all of the fair value of the assets acquired are concentrated in a single asset group. The Company has applied the cost accumulation model under FASB ASC 805-50, Business Combinations - Acquisitions of Assets Rather than a Business (“ASC 805-50”), and as such, recognized the Williston Basin Acquisition at cost, which includes transaction costs. The Company does not expect any material deferred income taxes from the Williston Basin Acquisition, as the tax basis of the assets acquired and liabilities assumed was equal to the book basis at closing.

On October 25, 2021, Oasis Midstream Partners LP (“OMP”) and OMP GP LLC (“OMP GP”) entered into an Agreement and Plan of Merger (the “OMP Merger”) with Crestwood Equity Partners LP (“Crestwood”). Pursuant to the terms of the OMP Merger, the Company will receive $160.0 million in cash and approximately 21 million common units of Crestwood in exchange for its approximate 70% ownership of OMP and its non-economic general partner interest in OMP GP. In connection with and prior to completion of the OMP Merger, the Company expects to contribute substantially all of its remaining midstream assets to OMP in exchange for cash consideration of approximately $6.7 million. Upon closing of the OMP Merger, the Company expects to own approximately 22% of the limited partner interests of Crestwood. As a result of this transaction, the Company will be a single basin exploration and production company. The OMP Merger represents a strategic shift for the Company and qualifies as discontinued operations in accordance with FASB ASC 205-20, Presentation of financial statements – Discontinued Operations (“ASC 205-20”). The pro forma adjustments presented herein show the effects of the OMP Merger as discontinued operations under ASC 205-20, as well as the classification of the assets and liabilities as held for sale. The Company expects the OMP Merger to be completed in the first quarter of 2022 and will file a Form 8-K under Item 2.01 upon closing. The pro forma financial information presented in such Form 8-K may contain values, adjustments and other information that differ from those contained in the pro forma financial information presented herein to, among other things, include pro forma financial information to show the pro forma effects of the OMP Merger as a significant disposition. The foregoing differences may be material individually or in the aggregate.

On November 19, 2020 (the “Emergence Date”) the Company emerged from bankruptcy and adopted fresh start accounting in accordance with the FASB ASC 852, Reorganizations, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. References to “Predecessor” relate to the period from January 1, 2018 through November 19, 2020, and references to “Successor” relate to the period from November 20, 2020 through September 30, 2021.

The unaudited pro forma condensed consolidated combined financial information has been derived from the historical consolidated financial statements of the Company and the historical Statements of Revenues and Direct Operating Expenses of properties acquired in the Williston Basin Acquisition (which were derived from information provided by QEP). The unaudited pro forma condensed consolidated combined balance sheet at September 30, 2021 was prepared as if the Williston Basin Acquisition and OMP Merger had occurred on September 30, 2021. No pro forma adjustments were necessary to reflect the Company’s adoption of fresh start accounting, the Permian Basin Sale and the issuance of the Oasis Senior Notes as these transactions were already included in the Company’s historical unaudited condensed consolidated balance sheet at September 30, 2021. The unaudited pro forma condensed consolidated combined statements of operations for the nine month period ended September 30, 2021 and for the year ended December 31, 2020 were prepared as if the fresh start accounting adjustments recorded on Emergence Date, the OMP Merger, the Williston Basin Acquisition, the Permian Basin Sale and the issuance of the Oasis Senior Notes had occurred on January 1, 2020. In addition, the unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2018 and 2019 were included in accordance with FASB ASC 205-20 to show the effects of the OMP Merger for comparative purposes.

The unaudited pro forma condensed consolidated combined financial statements and underlying pro forma adjustments are based upon currently available information and include certain estimates and assumptions made by management; accordingly, actual results could differ materially from the pro forma information. Management believes the assumptions provide a reasonable and reliably determinable basis for presenting the significant effects of the transactions described above. These unaudited pro forma condensed consolidated combined financial statements are provided for illustrative purposes only and may or may not provide an indication of results in the future.

2. Pro Forma Adjustments and Assumptions

Balance Sheet

The unaudited pro forma condensed consolidated combined balance sheet at September 30, 2021 reflects the following adjustments:

(a) Represents the assets and liabilities classified as held for sale in connection with the OMP Merger. The Company expects the OMP Merger to be completed within one year, and as such, has classified the assets and liabilities held for sale as current.

(b) Represents the cash paid to QEP of $74.5 million on May 3, 2021 and $511.3 million on October 21, 2021 for the Williston Basin Acquisition, as follows:

	(In thousands)
Cash and cash equivalents	$	111,296
Restricted cash – non–current	400,000
Other assets	74,506
Total cash paid	$	585,802

(c) Represents the allocation of the total cost of the Williston Basin Acquisition to the assets acquired and liabilities assumed, as follows:

	(In thousands)
Total Cost
Cash Consideration:
Cash paid at closing on October 21, 2021	$	511,296
Cash deposit paid on May 3, 2021	74,506
Total cash paid	585,802
Liabilities Assumed:
Asset retirement obligations	14,850
Suspended funds	8,997
Unfavorable contracts(1)	21,724
Total liabilities assumed	45,571
Transaction costs(2)	4,123
Total cost of Williston Basin Acquisition	$	635,496
Allocation of Total Cost
Assets
Inventory	$	4,954
Oil and gas properties(3)	620,953
Other property and equipment	1,315
Long-term inventory	3,748
Other assets	4,526
---	---	---
Total assets	$	635,496
Liabilities
Revenues and production taxes payable	$	(8,997)
Accrued liabilities	(5,508)
Asset retirement obligations	(14,850)
Other liabilities	(16,216)
Total liabilities	$	(45,571)

(1) Represents an estimated aggregate minimum volume commitment (“MVC”) of $21.7 million related to unfavorable contracts acquired in the Williston Basin Acquisition that the Company has determined to be probable and reasonably estimable at the close of the transaction.

(2) Prior to the closing of the Williston Basin Acquisition, the Company expensed $1.8 million of transaction costs as incurred under general and administrative expenses during the nine months ended September 30, 2021. At closing, the Company reduced general and administrative expenses by $1.8 million and recorded these costs as part of the total cost of the Williston Basin Acquisition in accordance with FASB ASC 805-50. In addition, the Company estimates it will accrue an additional $2.3 million of transaction costs that will be recorded as part of the total cost of the Williston Basin Acquisition.

(3) Includes $583.5 million recorded to proved developed oil and gas properties and $22.6 million recorded to proved undeveloped oil and gas properties.

(d) Represents (i) the estimated additional transaction costs from the Williston Basin Acquisition of approximately $2.3 million, and (ii) the current portion of an estimated MVC of $5.5 million assumed in the Williston Basin Acquisition. See footnote (c)

above for additional details.

Statements of Operations

The unaudited pro forma condensed consolidated combined statements of operations for the nine month period ended September 30, 2021 and the year ended December 31, 2020, as well as the unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2018 and 2019 reflect the following adjustments:

(a) Represents the classification of revenues and expenses from the OMP Merger as discontinued operations. The Company will have continuing cash outflows to Crestwood following the completion of the OMP Merger for gathering, processing, transportation and water handling costs pursuant to the existing contractual arrangements between the Company and OMP that will be assigned to Crestwood at closing. Historically, these transactions were eliminated within lease operating expenses and gathering, processing and transportation expenses for operated properties and within oil and gas revenues for non-operated properties.

(b) Represents the purchase of residue gas and natural gas liquids (“NGLs”), which were subsequently sold to third parties. The Company has historically eliminated the intercompany purchase of residue gas and NGLs from OMP in its consolidated financial statements within midstream expenses. In addition, the subsequent sale of residue gas and NGLs to third parties that was purchased from OMP has historically been reported within midstream revenues. The Company has reclassified these transactions to purchased oil and gas expenses and purchased oil and gas sales, respectively, to reflect the expected continuing impact.

The unaudited pro forma condensed consolidated combined statements of operations for the nine month period ended September 30, 2021 and the year ended December 31, 2020 reflect the following adjustments:

(c) Represents the revenues and direct operating expenses from the oil and gas properties acquired in the Williston Basin Acquisition.

(d) Represents the incremental depreciation, depletion and amortization and accretion expense related to the assets acquired in the Williston Basin Acquisition. Depletion was calculated using the unit-of-production method under the successful efforts method of accounting and was adjusted for (i) the increase in depletion reflecting the acquisition cost and production volumes attributable to the oil and gas properties and (ii) the revision to the depletion rate reflecting the reserve volumes attributable to the oil and gas properties. The pro forma depletion rate attributable to the Williston Basin Acquisition was $8.47 per barrel of oil equivalent. This adjustment also includes the depreciation expense attributable to other property, plant and equipment and

accretion expense attributable to asset retirement obligations of $0.3 million and $0.6 million for the nine months ended September 30, 2021, respectively, and $0.3 million and $0.8 million for the year ended December 31, 2020, respectively.

(e) Represents the estimated impact from additional employees hired by the Company in connection with the Williston Basin Acquisition of $2.8 million for the nine months ended September 30, 2021 and $3.7 million for the year ended December 31, 2020. In addition, general and administrative expenses for the nine months ended September 30, 2021 was offset by $1.8 million of transaction costs previously expensed as incurred prior to closing of the Williston Basin Acquisition that were subsequently capitalized and recorded as part of the total cost of the Williston Basin Acquisition at closing in accordance with FASB ASC 805-50.

(f) Represents the elimination of the revenues and expenses associated with the assets divested in the Permian Basin Sale.

(g) The Company recorded a gain on sale of properties of $227.4 million from the Permian Basin Sale in its historical unaudited condensed consolidated financial statements for the nine months ended September 30, 2021. This pro forma adjustment records this gain on sale of properties in the results of operations for the year ended December 31, 2020 and removes it from the results of operations for the nine months ended September 30, 2021.

(h) Represents the estimated income tax impact from the Permian Basin Sale at the applicable state and federal statutory tax rate.

(i) Represents interest expense associated with the Oasis Senior Notes of $11.1 million and amortization of deferred financing costs of $0.7 million during the nine months ended September 30, 2021 and interest expense of $25.5 million and amortization of deferred financing costs of $1.6 million during the year ended December 31, 2020. The Company issued the Oasis Senior Notes on June 9, 2021 and used the proceeds to finance a portion of the Williston Basin Acquisition. The Company’s historical unaudited condensed consolidated financial statements already includes interest expense from the Oasis Senior Notes from June 9, 2021 until September 30, 2021.

(j) Represents the unrecognized compensation cost that was immediately expensed on the Emergence Date primarily for Class B units in OMP GP.

(k) Represents reorganization items recognized on the Emergence Date that are attributable to discontinued operations, as follows:

	(In thousands)
Gain on debt discharge(1)	$	28,014
Gain on revaluation adjustments	92,901
Total reorganization items, net	$	120,915

(1) Represents the write-off of a specified default interest charge incurred during 2020 by OMP that was waived on the Emergence Date.

(l) Represents the impacts to non-controlling interests from the application of fresh start accounting attributable to discontinued operations as follows: (i) net loss from fresh start adjustments attributable to non-controlling interests of $86.8 million; offset by (ii) net income from reorganization adjustments attributable to non-controlling interests of $9.1 million.

(m) Represents the immediate vesting on the Emergence Date of Predecessor restricted stock awards of $6.7 million, Predecessor performance share units of $4.7 million, Predecessor phantom unit awards of $1.0 million and unamortized prepaid cash incentives of $4.2 million that were each attributable to continuing operations.

(n) Represents reorganization items recognized on the Emergence Date that are attributable to continuing operations, as follows:

	(In thousands)
Gain on debt discharge	$	964,569
Loss on revaluation adjustments	(225,336)
Write-off of unamortized debt discount	(38,373)
Professional fees	(16,352)
Write-off of unamortized deferred financing costs	(12,739)
Debtor-in-possession credit facility fees	(5,853)
Total reorganization items, net	$	665,916

(o) Represents income tax expense of $9.7 million from reorganization adjustments attributable to continuing operations, offset by the income tax benefit from fresh start adjustments of $6.4 million attributable to continuing operations.

3. Supplemental Oil and Gas Reserve Information

Estimated Quantities of Proved Oil and Natural Gas Reserves

The table below summarizes the Company’s estimated net proved reserves at December 31, 2020 based on reports prepared by DeGolyer and MacNaughton, the Company’s independent reserve engineers. In preparing its reports, DeGolyer and MacNaughton evaluated 100% of the reserves and discounted values at December 31, 2020 in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to companies involved in oil and natural gas producing activities.

In addition, the following table also sets forth information as of December 31, 2020 about the estimated net proved reserves attributable to the Permian Basin Sale and Williston Basin Acquisition, and the pro forma estimated net proved reserves of the Company as if the Permian Basin Sale and Williston Basin Acquisition had occurred on December 31, 2020. The reserve estimates attributable to the Permian Basin Sale at December 31, 2020 presented in the table below were derived from the reports prepared by DeGolyer and MacNaughton. The reserve estimates attributable to the Williston Basin Acquisition at December 31, 2020 presented in the table below were prepared based upon information provided by QEP and was prepared in accordance with the authoritative guidance of the FASB and the SEC on oil and natural gas reserve estimation and disclosures.

Reserve estimates are inherently imprecise and are generally based upon extrapolation of historical production trends, analogy to similar properties and volumetric calculations. Accordingly, reserve estimates are expected to change, and such changes could be material and occur in the near term as future information becomes available.

	December 31, 2020
	OAS Historical	Permian Basin Sale	Williston Basin Acquisition	Pro Forma
Proved Reserves(1)
Developed:
Oil (MMBbls)	85.4	(13.2)	41.1	113.3
Natural gas (Bcf)	262.7	(20.8)	75.0	316.9
NGL (MMBbls)(2)	—	—	12.8	12.8
Total estimated proved developed reserves (MMBoe)	129.2	(16.7)	66.4	178.9
Undeveloped:
Oil (MMBbls)	34.3	(11.0)	10.7	34.0
Natural gas (Bcf)	113.5	(16.3)	9.3	106.5
NGL (MMBbls)(2)	—	—	1.6	1.6
Total estimated proved undeveloped reserves (MMBoe)	53.3	(13.7)	13.8	53.4

_______________

(1) The reserve estimates were prepared using SEC pricing, calculated as the unweighted arithmetic average first-day-of-the-month prices for the prior twelve months. For the Company’s historical reserves, including the reserves attributable to the Permian Basin Sale, SEC pricing was $39.54 per Bbl for crude oil and $2.03 per MMBtu for natural gas for the year ended

December 31, 2020. For the reserves data provided by QEP attributable to the Williston Basin Acquisition, SEC pricing was $39.57 per Bbl for crude oil and $1.99 per MMBtu for natural gas for the year ended December 31, 2020. These prices were adjusted by location and quality differentials.

(2) The reserves attributable to the Williston Basin Acquisition were historically reported by QEP on a three-stream basis, while the Company has historically reported reserves on a two-stream basis.

Changes in commodity prices may significantly impact the Company’s estimates of oil and natural gas reserves. Sustained lower commodity prices can reduce the quantity of the Company’s reserves by causing the economic limit of the proved developed and proved undeveloped wells (the point at which the costs to operate exceed the value of estimated future production, assuming constant prices and costs under SEC rules) to occur earlier in their productive lives than would be the case with higher prices. The undeveloped reserves may also be reduced by the elimination of wells because they would not meet the investment criteria to be economically producible at such prices and costs. The proved undeveloped reserves may also be eliminated by the deferral of drilling of otherwise economic wells beyond the five year proved reserve development horizon as a result of revisions to the Company’s development plan adopted in response to lower prices or otherwise.

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves

The following table presents the Standardized Measure of Discounted Future Net Cash Flows relating to the proved oil and natural gas reserves of the Company, adjusted for the properties sold in the Permian Basin Sale and the properties acquired in the Williston Basin Acquisition on a pro forma combined basis as of December 31, 2020. The Standardized Measure shown below represents estimates only and should not be construed as the current market value of the Company’s estimated oil and natural gas reserves or those estimated oil and natural gas reserves attributable to the properties sold in the Permian Basin Sale and the properties acquired in the Williston Basin Acquisition.

	December 31, 2020
	OAS Historical		Permian Basin Sale		Williston Basin Acquisition		Pro Forma
	(In thousands)
Future cash inflows	$	5,197,220	$	(1,010,896)	$	2,062,726	$	6,249,050
Future production costs	(2,792,921)		404,546		$	(1,350,604)	(3,738,979)
Future development costs	(610,658)		177,445		$	(157,014)	(590,227)
Future outflows for income tax	(232,849)		64,673		(10,945)		(179,121)
Future net cash flows	1,560,792		(364,232)		544,163		1,740,723
10% annual discount for estimated timing of cash flows	(611,915)		203,962		(192,758)		(600,711)
Standardized measure of discounted future net cash flows	$	948,877	$	(160,270)	$	351,405	$	1,140,012

19

Document

EXHIBIT 99.1

Williston Basin Properties

Table of Contents

	Page
Independent Auditor's Report	2
Statements of Revenues and Direct Operating Expenses	3
Notes Accompanying the Statements of Revenues and Direct Operating Expenses	4
Supplemental Oil and Gas Reserves Information (Unaudited)	8

INDEPENDENT AUDITOR'S REPORT

To Management of

QEP Energy Company

We have audited the accompanying Statements of Revenues and Direct Operating Expenses of certain oil and natural gas properties (the Properties) of QEP Energy Company, which are subject to the Purchase and Sale Agreement dated May 3, 2021, for the years ended December 31, 2020 and 2019, and the related notes to the Statements of Revenues and Direct Operating Expenses.

Management’s Responsibility for the Statements of Revenues and Direct Operating Expenses

Management is responsible for the preparation and fair presentation of the Statements of Revenues and Direct Operating Expenses in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Statements of Revenues and Direct Operating Expenses that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Statements of Revenues and Direct Operating Expenses based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Statements of Revenues and Direct Operating Expenses are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Statements of Revenues and Direct Operating Expenses. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Statements of Revenues and Direct Operating Expenses, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the Statements of Revenues and Direct Operating Expenses in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Statements of Revenues and Direct Operating Expenses.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion the accompanying Statements of Revenues and Direct Operating Expenses referred to above presents fairly, in all material respects, the revenues and direct operating expenses of the Properties for each of the years ended December 31, 2020 and 2019, in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Note 1 to the Statements of Revenues and Direct Operating Expenses, the accompanying Statements of Revenues and Direct Operating Expenses were prepared for the purpose of presenting the revenues and direct operating expenses of the Properties and are not intended to be a complete presentation of the financial position, results of operations or cash flows of the Properties. Our opinion is not modified with respect to this matter.

WEAVER AND TIDWELL, L.L.P.

Houston, TX

November 18, 2021

STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES

	Year Ended December 31,				Nine Months Ended September 30,
	2020		2019		2021		2020
					(Unaudited)
	(in thousands)
REVENUES
Oil and condensate, gas and NGL sales	$	245,340	$	438,899	$	328,921		$	165,251
DIRECT OPERATING EXPENSES
Lease operating expense	74,712		99,777		66,034		54,969
Transportation and processing costs	30,287		30,376		24,792		20,550
Production and property taxes	24,232		41,241		28,635		16,902
Total Direct Operating Expenses	129,231		171,394		119,461		92,421
REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES	$	116,109	$	267,505	$	209,460		$	72,830

REFER TO NOTES ACCOMPANYING THE STATEMENTS OF REVENUES AND DIRECT

OPERATING EXPENSES

NOTES ACCOMPANYING THE STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES

Note 1 – Basis of Presentation

On May 3, 2021, QEP Energy Company (“QEP” or the “Company”), a wholly-owned subsidiary of Diamondback Energy, Inc., entered into a definitive purchase and sale agreement with Oasis Petroleum North America LLC (“Oasis” or the “Buyer”), under which Oasis agreed to acquire approximately 95,000 net acres in the Williston Basin in a cash transaction for aggregate consideration of approximately $745.0 million, subject to customary closing adjustments (the “May 2021 Properties Acquired”).

The accompanying Statements of Revenues and Direct Operating Expenses (the “Statements”) are presented on an accrual basis of accounting and relate to the operations of the May 2021 Properties Acquired and have been derived from the historical accounting records of the Company. Certain costs such as depreciation, depletion, and amortization, accretion of asset retirement obligations, general and administrative expenses, interest and corporate income taxes are omitted since these costs were not separately allocated to the working interests of the May 2021 Properties Acquired in the Company’s historical accounting records. In addition, these allocations, if made using historical general and administrative structures and tax burdens, would not produce allocations indicative of the historical performance of the May 2021 Properties Acquired, due to the differing size, structure, operations and accounting policies between QEP and Oasis. As such, the Statements are not intended to be a complete presentation of the revenues and expenses of the May 2021 Properties Acquired. Furthermore, the information may not be representative of future operations due to changes in the business and the exclusion of the omitted information.

Historical financial statements reflecting financial position, results of operations and cash flows required by accounting principles generally accepted in the United States of America (“GAAP”) are not presented as such information is not available on an individual property basis, nor is it practicable to obtain such information in these circumstances. Accordingly, the Statements are presented in lieu of the full financial statements required under Item 3-05 of the Securities and Exchange Commission’s Regulation S-X.

The accompanying Statements for the nine months ended September 30, 2021 and 2020 are unaudited. The unaudited interim Statements have been prepared on the same basis as the annual Statements. In the opinion of management, such unaudited interim statements reflect all adjustments necessary for fair presentation of the excess of revenues over direct operating expenses of the May 2021 Properties Acquired for the nine months ended September 30, 2021 and 2020.

Note 2 – Use of Estimates in Preparation of the Statements of Revenues and Direct Operating Expenses

The preparation of these Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues and direct operating expenses during the respective reporting periods. Actual results may differ from the estimates and assumptions used in the preparation of the Statements.

Note 3 – Risks and Uncertainties

The Company's revenue, profitability and future growth are substantially dependent upon the prevailing and future prices for oil, gas and natural gas liquids (“NGL”), which are affected by many factors outside of QEP's control, including changes in market supply and demand. The novel coronavirus disease (COVID-19) pandemic and related shut-down of various sectors of the global economy resulted in a significant reduction in the global demand for crude oil in 2020. Changes in market supply and demand are also impacted by the Organization of Petroleum Exporting Countries (OPEC) production levels, weather conditions, pipeline capacity constraints, inventory storage levels, basis differentials, export capacity, strength of the U.S. dollar and other factors. Field-level prices received for QEP's oil and gas production have historically been volatile and may be subject to significant fluctuations in the future.

Significant Customers

The Company's five largest customers accounted for 76% and 56% of QEP's revenues for the years ended December 31, 2020 and 2019, respectively. QEP believes that the loss of any of these customers, or any other customer, would not have a material effect on the revenues and direct operating expenses of QEP, since there are numerous potential purchasers of its production.

Note 4 – Commitments and Contingencies

The Company is involved in various commercial and regulatory claims, litigation and other legal proceedings that arise in the ordinary course of its business. In each reporting period, the Company assesses these claims in an effort to determine the degree of probability and range of possible loss for potential accrual in its financial statements. In accordance with Accounting Standards Codification (“ASC”) 450, Contingencies, an accrual is recorded for a loss contingency when its occurrence is probable and damages are reasonably estimable based on the anticipated most likely outcome or the minimum amount within a range of possible outcomes.

Legal proceedings are inherently unpredictable and unfavorable resolutions can occur. Assessing contingencies is highly subjective and requires judgment about uncertain future events. When evaluating contingencies related to legal proceedings, the Company may be unable to estimate losses due to a number of factors, including potential defenses, the procedural status of the matter in question, the presence of complex legal and/or factual issues, the ongoing discovery and/or development of information important to the matter.

Mandan, Hidatsa and Arikara Nation ("MHA Nation") Title Dispute – In June 2018, the MHA Nation notified QEP of its position that QEP has no valid lease covering certain minerals underlying the Missouri and Little Missouri Riverbeds on the Fort Berthold Reservation in North Dakota. The MHA Nation also passed a resolution purporting to rescind those portions of QEP's IMDA lease covering the disputed minerals underlying the Missouri River. QEP responded in September 2018 stating that the minerals underlying the Missouri River are properly leased. In May 2020, the Office of the Solicitor of the United States Department of the Interior (the “Department of Interior”) issued an opinion (the “Missouri River Opinion”) finding that the State of North Dakota, not the MHA Nation, is the legal owner of the minerals underlying the Missouri River. The MHA Nation has filed actions in two federal courts seeking to overturn the May 2020 decision, and in March 2021, the Department of the Interior withdrew the Missouri River Opinion.

Overriding Royalty Interest Litigation – In July 2019, owners of small overriding royalty interests in certain wells in the South Antelope oil and gas field in North Dakota filed suit against QEP, alleging QEP has improperly taken deductions for post-production expenses. On October 18, 2021, the Court granted QEP’s motion of summary judgment and entered a final judgment in QEP’s favor. Plaintiffs may appeal the judgment and must file either a motion to alter/amend the judgment or a notice of appeal.

In many cases, the Company is unable to make an estimate of the range of reasonably possible loss related to its contingencies. To the extent that the Company can reasonably estimate losses for contingencies where the risk of material loss (in excess of accruals, if any) is reasonably possible, the Company estimates such losses to be in a range of zero to approximately $10.0 million, in the aggregate.

Commitments

The Company has contracted with various third parties for gathering and processing services. Market conditions, drilling activity and compensation may prevent full utilization of the contractual capacity. As of December 31, 2020, the annual payments for gathering, processing and fractionation contracts for the corresponding years ended December 31 are as follows:

Year	Amount
	(in thousands)
2021	$	8,872
2022	$	8,159
2023	$	7,429
2024	$	5,584
2025	$	3,793
After 2025	$	926

Note 5 – Revenue Recognition

QEP recognizes revenue from the sale of oil and condensate, gas and NGL in the period that the performance obligations are satisfied. QEP's performance obligations are satisfied when the customer obtains control of product, when QEP has no further obligations to perform related to the sale, when the transaction price has been determined and when collectability is probable. The sale of oil and condensate, gas and NGL are made under contracts with customers, which typically include consideration that is based on pricing tied to local indices and volumes delivered in the current month. Reported revenues include estimates for the two most recent months using published commodity price indices and volumes supplied by field operators. Performance obligations under the Company’s contracts with customers are typically satisfied at a point in time through monthly delivery of oil and condensate, gas and/or NGL. The Company’s contracts with customers typically require payment for oil and condensate, gas and NGL sales within 30 days following the calendar month of delivery.

QEP's oil and condensate is typically sold at specific delivery points under contract terms that are common in the industry. QEP's gas and NGL are also sold under contract types that are common in the industry; however, under these contracts, the gas and its components, including NGL, may be sold to a single purchaser or the residue gas and NGL may be sold to separate purchasers. Regardless of the contract type, the terms of these contracts compensate QEP for the value of the residue gas and NGL constituent components at market prices for each product.

For product sales that have a contract term greater than one year, the Company follows ASC 606-10-50-14(a), which states the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these contracts, each monthly product delivery generally represents a separate performance obligation; therefore, future volumes are wholly unsatisfied, and disclosure of the transaction price allocated to remaining performance obligations is not required.

The following table presents QEP’s revenues disaggregated by revenue source:

	Oil and condensate sales		Gas sales		NGL sales		Transportation and processing costs included in revenue		Oil and condensate, gas and NGL sales
	(in thousands)
Year Ended December 31, 2020	$	250,018	$	18,755	$	14,295	$	(37,728)	$	245,340
Year Ended December 31, 2019	$	418,514	$	32,828	$	21,747	$	(34,190)	$	438,899
Nine Months Ended September 30, 2021 (unaudited)	$	292,775	$	26,578	$	40,820	$	(31,252)	$	328,921
Nine Months Ended September 30, 2020 (unaudited)	$	173,456	$	11,666	$	7,859	$	(27,730)	$	165,251

Note 6 – Subsequent Events

In accordance with ASC 855, Subsequent Events, the Company has evaluated subsequent events through November 18, 2021, the date the accompanying Statements were available to be issued. There were no material subsequent events that required recognition or additional disclosure in the accompanying Statements.

Supplemental Oil and Gas Reserve Information (Unaudited)

The Company is making the following supplemental disclosures of oil and gas producing activities in accordance with ASC 932, Extractive Activities - Oil and Gas, as amended by ASU 2010-03, Oil and Gas Reserve Estimation and Disclosures, and SEC Regulation S-X.

Estimated Quantities of Proved Oil and Gas Reserves

Estimates of proved oil and gas reserves have been completed in accordance with professional engineering standards. The estimated proved reserves are inherently imprecise and are continually subject to revisions based on production history, results of additional exploration and development, price changes and other factors. All of QEP’s proved undeveloped (“PUD”) reserves at December 31, 2020 were scheduled to be developed by QEP within five years from the date such locations were initially disclosed as PUD reserves. While the majority of QEP’s PUD reserves are located on leaseholds that are held by production, any PUD locations on expiring leaseholds are scheduled for development during the primary term of the lease. A summary of the Company’s changes in quantities of proved oil and condensate, gas and NGL reserves for the years ended December 31, 2020 and 2019 are as follows:

	Oil and condensate	Gas	NGL	Total
	(Mbbl)	(MMcf)	(Mbbl)	(Mboe)
Balance at December 31, 2018	107,484	149,794	29,169	161,619
Revisions of previous estimates (1)	(25,714)	(4,518)	(6,759)	(33,226)
Production	(7,924)	(13,731)	(2,193)	(12,406)
Balance at December 31, 2019	73,846	131,545	20,217	115,987
Revisions of previous estimates (2)	(14,966)	(35,055)	(3,717)	(24,526)
Production	(7,148)	(12,278)	(2,097)	(11,291)
Balance at December 31, 2020	51,732	84,212	14,403	80,170
Proved developed reserves included above
Balance at December 31, 2019	51,376	111,425	16,994	86,941
Balance at December 31, 2020	41,076	74,951	12,782	66,350
Proved undeveloped reserves included above
Balance at December 31, 2019	22,470	20,120	3,223	29,046
Balance at December 31, 2020	10,656	9,261	1,621	13,820

___________________________

(1)Revisions of previous estimates in 2019 totaling 33,226 Mboe of negative revisions includes: 30,053 Mboe of other revisions, primarily related to PUD removals that will not be developed within five years of the initial date of booking due to the reduction in future capital expenditures; 7,103 Mboe of negative revisions related to pricing, primarily driven by lower oil prices; partially offset by 5,574 Mboe of positive performance revisions.

(2)Revisions of previous estimates in 2020 totaling 24,526 Mboe of negative revisions includes: 24,818 Mboe of negative revisions related to pricing, primarily driven by lower oil prices; partially offset by positive performance revisions and positive revisions related to lower operating costs.

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Reserves

Future net cash flows were calculated at December 31, 2020 and 2019 by applying prices, which were the simple average of the first-of-the-month commodity prices, adjusted for location and quality differentials, for each of the 12 months during 2020 and 2019, with consideration of known contractual price changes. The following table provides the benchmark prices per unit, before location and quality differential adjustments, used to calculate the related reserve category:

	Year Ended December 31,
	2020		2019
Average benchmark price per unit:
Oil price (per bbl)	$	39.57	$	55.51
Gas price (per MMbtu)	$	1.99	$	2.58

Estimates for operating expenses and development costs used to compute future net cash flows were based on current costs as of each year end. All cash flows were discounted at 10% to reflect the time value of cash flows, without regard to the risk of specific properties. The estimated future costs at December 31, 2020 to develop proved undeveloped reserves were approximately $19.4 million in 2021, $28.5 million in 2022, and $37.5 million in 2023. Estimated future development costs include capital spending on major development projects, some of which will take several years to complete.

The assumptions used to derive the standardized measure of discounted future net cash flows are those required by accounting standards and do not necessarily reflect the Company’s expectations. The information may be useful for certain comparative purposes but should not be solely relied upon in evaluating QEP or its performance. Furthermore, information contained in the following table may not represent realistic assessment of future net cash flows, nor should the standardized measure of discounted future net cash flows be viewed as representative of the current value of the Company’s reserves. Management believes that the following factors should be considered when reviewing the information below:

•Future commodity prices received for selling the Company’s net production will likely differ from those required to be used in these calculations.

•Future operating and capital costs will likely differ from those required to be used in these calculations.

•Future market conditions, government regulations, reservoir conditions and risks inherent in the production of oil and condensate and gas may cause production rates in future years to vary significantly from those used in the calculations.

•Future revenues may be subject to different production, severance and property taxation rates.

•The selection of a 10% discount rate is arbitrary and may not be a reasonable factor in adjusting for future economic conditions or in considering the risk that is part of realizing future net cash flows from the reserves.

The standardized measure of discounted future net cash flows relating to proved reserves of the May 2021 Properties Acquired is presented in the table below:

	Year Ended December 31,
	2020	2019
	(in thousands)
Future cash inflows	2,062,726	4,490,576
Future production costs	(1,350,604)	(2,361,899)
Future development costs	(157,014)	(408,393)
Future net cash flows	555,108	1,720,284
10% annual discount for estimated timing of net cash flows	(194,782)	(675,153)
Standardized measure of discounted future net cash flows	360,326	1,045,131

The principal sources of changes in the standardized measure of discounted future net cash flows is presented in the table below:

	Year Ended December 31,
	2020		2019
	(in thousands)
Balance at beginning of period	$	1,045,131	$	1,891,850
Sales of oil and condensate, gas and NGL produced, net of production costs	(116,109)		(267,505)
Net change in sales prices and in production (lifting) costs related to future production	(590,582)		(634,667)
Net change due to revisions of quantity estimates	(325,594)		(574,002)
Previously estimated development costs incurred during the period	45,521		73,578
Changes in estimated future development costs	197,447		366,692
Accretion of discount	104,513		189,185
Other	(1)		—
Net change	(684,805)		(846,719)
Balance at end of period	$	360,326	$	1,045,131

Document

EXHIBIT 99.2

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated combined financial information and accompanying notes reflect the pro forma effects of:

1.On November 19, 2020 (the “Emergence Date”), Oasis Petroleum Inc. (the “Company” or “Oasis”) emerged from bankruptcy and adopted fresh start accounting in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification 852, Reorganizations, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. References to “Predecessor” relate to the period from January 1, 2018 through November 19, 2020, and references to “Successor” relate to the period from November 20, 2020 through September 30, 2021.

2.On June 9, 2021, the Company issued $400.0 million of 6.375% senior unsecured notes due June 1, 2026 (the “Oasis Senior Notes”). The Company used the proceeds from the Oasis Senior Notes to finance a portion of the consideration for the Williston Basin Acquisition (defined below).

3.On June 29, 2021, the Company completed the divestiture of its exploration and production assets in the Texas region of the Permian Basin, effective March 1, 2021, to Percussion Petroleum Operating II, LLC for cash proceeds of $347.3 million (the “Permian Basin Sale”). The Company used a portion of the proceeds from the Permian Basin Sale to finance a portion of the consideration for the Williston Basin Acquisition (defined below).

4.On October 21, 2021, the Company completed its acquisition of approximately 95,000 net acres in the Williston Basin, effective April 1, 2021, from QEP Energy Company (“QEP”), a wholly-owned subsidiary of Diamondback Energy Inc., for total cash consideration of $585.8 million (the “Williston Basin Acquisition”). The total cash consideration was comprised of a deposit of $74.5 million paid on May 3, 2021 and $511.3 million paid at closing on October 21, 2021. The Company funded the Williston Basin Acquisition with cash on hand, including proceeds from the Permian Basin Sale and proceeds from the Oasis Senior Notes. The Company expects the Williston Basin Acquisition to qualify as an asset acquisition under accounting principles generally accepted in the United States of America, as the Williston Basin Acquisition does not meet the definition of a business under the FASB Accounting Standards Codification 805, Business Combinations, since substantially all of the fair value of the assets acquired are concentrated in a single asset group.

5.On October 25, 2021, Oasis Midstream Partners LP (“OMP”) and OMP GP LLC (“OMP GP”) entered into an Agreement and Plan of Merger (the “OMP Merger”) with Crestwood Equity Partners LP (“Crestwood”). Pursuant to the terms of the OMP Merger, the Company will receive $160.0 million in cash and approximately 21 million common units of Crestwood in exchange for its approximate 70% ownership of OMP and its non-economic general partner interest in OMP GP. In connection with and prior to completion of the OMP Merger, the Company expects to contribute substantially all of its remaining midstream assets to OMP in exchange for cash consideration of approximately $6.7 million. Upon closing of the OMP Merger, the Company expects to own approximately 22% of the limited partner interests of Crestwood. As a result of this transaction, the Company will be a single basin exploration and production company. The OMP Merger represents a strategic shift for the Company and qualifies as a discontinued operation in accordance with FASB Accounting Standards Codification 205-20, Presentation of financial statements – Discontinued Operations (“ASC 205-20”). The pro forma adjustments presented herein show the effects of the OMP Merger as discontinued operations under ASC 205-20, as well as the classification of the assets and liabilities as held for sale. The Company expects the OMP Merger to be completed in the first quarter of 2022 and will file a Form 8-K under Item 2.01 upon closing. The pro forma financial information presented in such Form 8-K may contain values, adjustments and other information that differ from those contained in the pro forma financial information presented herein to, among other things, include pro forma financial information to show the pro forma effects of the OMP Merger as a significant disposition. The foregoing differences may be material individually or in the aggregate.

The unaudited pro forma condensed consolidated combined financial information has been derived from the historical consolidated financial statements of the Company and the historical Statements of Revenues and Direct Operating Expenses of properties acquired in the Williston Basin Acquisition (which were derived from information provided by QEP).

The unaudited pro forma condensed consolidated combined balance sheet at September 30, 2021 was prepared as if the Williston Basin Acquisition and OMP Merger had occurred on September 30, 2021. No pro forma adjustments were necessary to reflect the Company’s adoption of fresh start accounting, the Permian Basin Sale and the issuance of the Oasis Senior Notes, as these transactions were already included in the Company’s historical unaudited condensed consolidated balance sheet at September 30, 2021.

The unaudited pro forma condensed consolidated combined statements of operations for the nine month period ended September 30, 2021 and for the year ended December 31, 2020 were prepared as if the fresh start accounting adjustments recorded on the Emergence Date, the OMP Merger, the Williston Basin Acquisition, the Permian Basin Sale and the issuance of the Oasis Senior Notes had occurred on January 1, 2020. In addition, the unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2018 and 2019 were included in accordance with ASC 205-20 to show the effects of the OMP Merger as a discontinued operation for comparative purposes.

The unaudited pro forma condensed consolidated combined financial statements and underlying pro forma adjustments are based upon currently available information and include certain estimates and assumptions made by the Company’s management; accordingly, actual results could differ materially from the pro forma information. Management believes that the assumptions used to prepare the unaudited pro forma condensed consolidated combined financial information and accompanying notes provide a reasonable and reliably determinable basis for presenting the significant effects of the above transactions. The following unaudited pro forma condensed consolidated combined statements of operations do not purport to represent what the Company’s results of operations would have been if the Emergence Date, the Williston Basin Acquisition, the Permian Basin Sale, the issuance of the Oasis Senior Notes and the OMP Merger had occurred on January 1, 2020. The unaudited pro forma condensed consolidated combined financial information should be read together with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 and the historical Statements of Revenues and Direct Operating Expenses and notes thereto of the Williston Basin Acquisition properties filed as Exhibit 99.1 to the Current Report on Form 8-K of which this Exhibit 99.2 is a part.

Oasis Petroleum Inc.

Condensed Consolidated Combined Balance Sheet (Unaudited)

As of September 30, 2021

(In thousands, except share data)

			Transaction Accounting Adjustments
	As Reported		Discontinued Operations			Williston Basin Acquisition			Pro Forma
ASSETS
Current assets
Cash and cash equivalents	$	448,608	$	(23,032)	(a)	$	(111,296)	(b)	$	314,280
Accounts receivable, net	269,740		(5,225)		(a)	—			264,515
Inventory	28,309		(10,149)		(a)	4,954		(c)	23,114
Prepaid expenses	4,274		(1,061)		(a)	—			3,213
Other current assets	2,326		(152)		(a)	—			2,174
Current assets held for sale	—		1,035,656		(a)	—			1,035,656
Total current assets	753,257		996,037			(106,342)			1,642,952
Property, plant and equipment
Oil and gas properties (successful efforts method)	733,585		2,760		(a)	620,953		(c)	1,357,298
Other property and equipment	962,174		(914,330)		(a)	1,315		(c)	49,159
Less: accumulated depreciation, depletion and amortization	(112,915)		29,549		(a)	—			(83,366)
Total property, plant and equipment, net	1,582,844		(882,021)			622,268			1,323,091
Restricted cash – non–current	400,000		—			(400,000)		(b)	—
Derivative instruments	39,717		—			—			39,717
Long-term inventory	17,510		—			3,748		(c)	21,258
Operating right-of-use assets	5,115		(917)		(a)	—			4,198
Intangible assets	41,624		(40,958)		(a)	—			666
Goodwill	70,534		(70,534)		(a)	—			—
Other assets	88,911		(1,607)		(a)	(69,980)		(b),(c)	17,324
Total assets	$	2,999,512	$	—		$	49,694		$	3,049,206
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	5,522	$	(489)	(a)	$	—		$	5,033
Revenues and production taxes payable	232,217		(1,336)		(a)	8,997		(c)	239,878
Accrued liabilities	129,000		(34,537)		(a)	7,831		(c),(d)	102,294
Accrued interest payable	26,361		(18,412)		(a)	—			7,949
Derivative instruments	266,337		—			—			266,337
Advances from joint interest partners	1,874		—			—			1,874
Current operating lease liabilities	1,914		(973)		(a)	—			941
Other current liabilities	1,859		(564)		(a)	—			1,295
Current liabilities held for sale	—		713,944		(a)	—			713,944
Total current liabilities	665,084		657,633			16,828			1,339,545
Long-term debt	1,041,895		(650,390)		(a)	—			391,505
Deferred income taxes	984		—			—			984
Asset retirement obligations	45,974		(885)		(a)	14,850		(c)	59,939
Derivative instruments	142,516		—			—			142,516
Operating lease liabilities	1,706		—			—			1,706
---	---	---	---	---	---	---	---	---	---	---
Other liabilities	8,022		(6,358)		(a)	16,216		(c)	17,880
Total liabilities	1,906,181		—			47,894			1,954,075
Commitments and contingencies
Stockholders’ equity
Common stock, $0.01 par value: 60,000,000 shares authorized; 20,096,011 shares issued and 19,905,228 shares outstanding at September 30, 2021 and 20,093,017 shares issued and 20,093,017 shares outstanding at December 31, 2020	200		—			—			200
Treasury stock, at cost: 190,783 shares at September 30, 2021 and no shares at December 31, 2020	(14,560)		—			—			(14,560)
Additional paid-in capital	866,992		—			—			866,992
Retained earnings	51,810		—			1,800		(c)	53,610
Oasis share of stockholders’ equity	904,442		—			1,800			906,242
Non-controlling interests(1)	188,889		—			—			188,889
Total stockholders’ equity	1,093,331		—			1,800			1,095,131
Total liabilities and stockholders’ equity	$	2,999,512	$	—		$	49,694		$	3,049,206

_______________

(1) The minority interest ownership in OMP held by public unitholders will be eliminated upon completion of the OMP Merger.

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.

Oasis Petroleum Inc.

Condensed Consolidated Combined Statements of Operations (Unaudited)

Nine Months Ended September 30, 2021

(In thousands, except per share data)

			Transaction Accounting Adjustments					Transaction Accounting Adjustments			Other Transaction Accounting Adjustments
	As Reported		Discontinued Operations			As Adjusted		Williston Basin Acquisition			Williston Basin Acquisition			Permian Basin Sale			Oasis Senior Notes			Pro Forma
Revenues
Oil and gas revenues	$	782,324	$	(866)	(a)	$	781,458	$	328,921	(c)	$	—		$	(70,278)	(f)	$	—		$	1,040,101
Purchased oil and gas sales	183,885		92,465		(b)	276,350		—			—			(21,282)		(f)	—			255,068
Midstream revenues	183,807		(183,807)		(a)	—		—			—			—			—			—
Other services revenues	542		—			542		—			—			—			—			542
Total revenues	1,150,558		(92,208)			1,058,350		328,921			—			(91,560)			—			1,295,711
Operating expenses
Lease operating expenses	98,888		47,526		(a)	146,414		66,034		(c)	—			(11,675)		(f)	—			200,773
Midstream expenses	83,841		(83,841)		(a)	—		—			—			—			—			—
Other services expenses	47		—			47		—			—			—			—			47
Gathering, processing and transportation expenses	52,596		38,324		(a)	90,920		24,792		(c)	—			(2,542)		(f)	—			113,170
Purchased oil and gas expenses	187,745		88,044		(b)	275,789		—			—			(23,663)		(f)	—			252,126
Production taxes	50,933		—			50,933		28,635		(c)	—			(3,324)		(f)	—			76,244
Depreciation, depletion and amortization	112,581		(28,605)		(a)	83,976		—			68,645		(d)	(8,621)		(f)	—			144,000
Exploration expenses	1,936		—			1,936		—			—			(331)		(f)	—			1,605
Impairment	5		(2)		(a)	3		—			—			(3)		(f)	—			—
General and administrative expenses	60,461		1,039		(a)	61,500		—			951		(e)	(860)		(f)	—			61,591
Total operating expenses	649,033		62,485			711,518		119,461			69,596			(51,019)			—			849,556
Gain on sale of properties	228,473		—			228,473		—			—			(227,415)		(g)	—			1,058
Operating income (loss)	729,998		(154,693)			575,305		209,460			(69,596)			(267,956)			—			447,213
Other expense
Net loss on derivative instruments(1)	(550,342)		—			(550,342)		—			—			—			—			(550,342)
Interest expense, net of capitalized interest	(49,421)		26,372		(a)	(23,049)		—			—			—			(11,797)		(i)	(34,846)
Other expense	(859)		63		(a)	(796)		—			—			275		(f)	—			(521)
Total other expense	(600,622)		26,435			(574,187)		—			—			275			(11,797)			(585,709)
Income (loss) from continuing operations before income taxes	129,376		(128,258)			1,118		209,460			(69,596)			(267,681)			(11,797)			(138,496)
Income tax benefit (expense)	—		—			—		—			—			—			—			—
Net income (loss) from continuing operations including non-controlling interests	129,376		(128,258)			1,118		209,460		(69,596)		(267,681)		(11,797)		(138,496)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Net income from continuing operations attributable to non-controlling interests	27,654		(27,654)		(a)	—		—		—		—		—		—
Net income (loss) from continuing operations attributable to Oasis	$	101,722	$	(100,604)		$	1,118	$	209,460	$	(69,596)	$	(267,681)	$	(11,797)	$	(138,496)
Net earnings (loss) from continuing operations attributable to Oasis per share:
Basic	$	5.11														$	(6.96)
Diluted	4.96															(6.96)
Weighted average shares outstanding:
Basic	19,905															19,905
Diluted	20,508															19,905

_______________

(1) The Company recorded an unrealized loss on derivative instruments of $390.3 million during the nine months ended September 30, 2021.

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.

Oasis Petroleum Inc.

Condensed Consolidated Combined Statements of Operations (Unaudited)

Year Ended December 31, 2020

(In thousands, except per share data)

			Transaction Accounting Adjustments			Other Transaction Accounting Adjustments
	Successor and Predecessor Pro Forma Combined		Williston Basin Acquisition			Williston Basin Acquisition			Permian Basin Sale			Oasis Senior Notes			Pro Forma
Revenues
Oil and gas revenues	$	687,655	$	245,340	(c)	$	—		$	(99,289)	(f)	$	—		$	833,706
Purchased oil and gas sales	257,744		—			—			(25,132)		(f)	—			232,612
Other services revenues	7,051		—			—			—			—			7,051
Total revenues	952,450		245,340			—			(124,421)			—			1,073,369
Operating expenses
Lease operating expenses	182,923		74,712		(c)	—			(22,336)		(f)	—			235,299
Other services expenses	6,658		—			—			—			—			6,658
Gathering, processing and transportation expenses	131,082		30,287		(c)	—			(6,662)		(f)	—			154,707
Purchased oil and gas expenses	249,334		—			—			(25,554)		(f)	—			223,780
Production taxes	51,377		24,232		(c)	—			(4,421)		(f)	—			71,188
Depreciation, depletion and amortization	284,791		—			96,885		(d)	(39,798)		(f)	—			341,878
Exploration expenses	2,748		—			—			(209)		(f)	—			2,539
Rig termination	1,279		—			—			(1,279)		(f)	—			—
Impairment	4,825,530		—			—			(995,682)		(f)	—			3,829,848
General and administrative expenses	142,885		—			3,668		(e)	(3,461)		(f)	—			143,092
Litigation settlement	22,750		—			—			—			—			22,750
Total operating expenses	5,901,357		129,231			100,553			(1,099,402)			—			5,031,739
Gain on sale of properties	10,407		—			—			227,415		(g)	—			237,822
Operating income (loss)	(4,938,500)		116,109			(100,553)			1,202,396			—			(3,720,548)
Other income (expense)
Net gain on derivative instruments	148,950		—			—			—			—			148,950
Interest expense, net of capitalized interest	(143,856)		—			—			—			(27,156)		(i)	(171,012)
Gain on extinguishment of debt	83,867		—			—			—			—			83,867
Other income (expense)	870		—			—			(5)		(f)	—			865
Total other income (expense), net	89,831		—			—			(5)			(27,156)			62,670
Income (loss) from continuing operations before income taxes	(4,848,669)		116,109			(100,553)			1,202,391			(27,156)			(3,657,878)
Income tax benefit (expense)	269,743		—			—			(81,051)		(h)	—			188,692
Net income (loss) from continuing operations	$	(4,578,926)	$	116,109		$	(100,553)		$	1,121,340		$	(27,156)		$	(3,469,186)
Net loss from continuing operations attributable to Oasis per share:
Basic	$	(229.05)													$	(173.54)
Diluted	(229.05)														(173.54)
Weighted average shares outstanding:
Basic	19,991	19,991
---	---	---
Diluted	19,991	19,991

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.

Oasis Petroleum Inc.

Condensed Consolidated Combined Statements of Operations (Unaudited)

Year Ended December 31, 2020

(In thousands, except per share data)

	Predecessor															Successor
			Transaction Accounting Adjustments								Transaction Accounting Adjustments							Transaction Accounting Adjustments
	Historical Predecessor		Discontinued Operations			Fresh Start Accounting–Discontinued Operations			As Adjusted		Fresh Start Accounting–Continuing Operations			As Further Adjusted(1)		Historical Successor		Discontinued Operations			As Adjusted		Successor and Predecessor Pro Forma Combined(2)
Revenues
Oil and gas revenues	$	603,585	$	(2,075)	(a)	$	—		$	601,510	$	—		$	601,510	$	86,442	$	(297)	(a)	$	86,145	$	687,655
Purchased oil and gas sales	186,367		50,744		(b)	—			237,111		—			237,111		7,227		13,406		(b)	20,633		257,744
Midstream revenues	166,631		(166,631)		(a)	—			—		—			—		26,031		(26,031)		(a)	—		—
Other services revenues	6,836		—			—			6,836		—			6,836		215		—			215		7,051
Total revenues	963,419		(117,962)			—			845,457		—			845,457		119,915		(12,922)			106,993		952,450
Operating expenses
Lease operating expenses	118,372		42,034		(a)	—			160,406		—			160,406		17,841		4,676		(a)	22,517		182,923
Midstream expenses	42,987		(42,987)		(a)	—			—		—			—		10,572		(10,572)		(a)	—		—
Other services expenses	6,658		—			—			6,658		—			6,658		—		—			—		6,658
Gathering, processing and transportation expenses	85,896		31,988		(a)	—			117,884		—			117,884		9,124		4,074		(a)	13,198		131,082
Purchased oil and gas expenses	185,893		43,163		(b)	—			229,056		—			229,056		7,357		12,921		(b)	20,278		249,334
Production taxes	45,439		—			—			45,439		—			45,439		5,938		—			5,938		51,377
Depreciation, depletion and amortization	291,115		(20,113)		(a)	—			271,002		—			271,002		16,094		(2,305)		(a)	13,789		284,791
Exploration expenses	2,748		—			—			2,748		—			2,748		—		—			—		2,748
Rig termination	1,279		—			—			1,279		—			1,279		—		—			—		1,279
Impairment	4,937,143		(111,613)		(a)	—			4,825,530		—			4,825,530		—		—			—		4,825,530
General and administrative expenses	145,294		310		(a)	(904)		(j)	144,700		(16,618)		(m)	128,082		14,224		579		(a)	14,803		142,885
Litigation settlement	22,750		—			—			22,750		—			22,750		—		—			—		22,750
Total operating expenses	5,885,574		(57,218)			(904)			5,827,452		(16,618)			5,810,834		81,150		9,373			90,523		5,901,357
Gain on sale of properties	10,396		—			—			10,396		—			10,396		11		—			11		10,407
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Operating income (loss)	(4,911,759)		(60,744)			904			(4,971,599)		16,618			(4,954,981)		38,776		(22,295)			16,481		(4,938,500)
Other income (expense)
Net gain (loss) on derivative instruments	233,565		—			—			233,565		—			233,565		(84,615)		—			(84,615)		148,950
Interest expense, net of capitalized interest	(181,484)		39,648		(a)	—			(141,836)		—			(141,836)		(3,168)		1,148		(a)	(2,020)		(143,856)
Gain on extinguishment of debt	83,867		—			—			83,867		—			83,867		—		—			—		83,867
Reorganization items, net	786,831		—			(120,915)		(k)	665,916		(665,916)		(n)	—		—		—			—		—
Other income (expense)	1,407		(136)		(a)	—			1,271		—			1,271		(402)		1		(a)	(401)		870
Total other income (expense), net	924,186		39,512			(120,915)			842,783		(665,916)			176,867		(88,185)		1,149			(87,036)		89,831
Loss from continuing operations before income taxes	(3,987,573)		(21,232)			(120,011)			(4,128,816)		(649,298)			(4,778,114)		(49,409)		(21,146)			(70,555)		(4,848,669)
Income tax benefit	262,962		—			—			262,962		3,334		(o)	266,296		3,447		—			3,447		269,743
Net loss from continuing operations including non-controlling interests	(3,724,611)		(21,232)			(120,011)			(3,865,854)		(645,964)			(4,511,818)		(45,962)		(21,146)			(67,108)		(4,578,926)
Net income (loss) from continuing operations attributable to non-controlling interests	(84,283)		6,546		(a)	77,737		(l)	—		—			—		3,950		(3,950)		(a)	—		—
Net loss from continuing operations attributable to Oasis	$	(3,640,328)	$	(27,778)		$	(197,748)		$	(3,865,854)	$	(645,964)		$	(4,511,818)	$	(49,912)	$	(17,196)		$	(67,108)	$	(4,578,926)
Net loss from continuing operations attributable to Oasis per share:
Basic	$	(11.46)														$	(2.50)						$	(229.05)
Diluted	(11.46)															(2.50)							(229.05)
Weighted average shares outstanding:
Basic	317,644															19,991							19,991
Diluted	317,644	19,991	19,991
---	---	---	---

_______________

(1) Represents the Company’s results of operations after giving effect to the OMP Merger and fresh start accounting adjustments.

(2) Represents the combined results of operations of the Predecessor and Successor after giving effect to the OMP Merger and fresh start accounting adjustments.

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.

Oasis Petroleum Inc.

Condensed Consolidated Statements of Operations (Unaudited)

Year Ended December 31, 2019

(In thousands, except per share data)

			Transaction Accounting Adjustments
	As Reported		Discontinued Operations			Pro Forma
Revenues
Oil and gas revenues	$	1,408,771	$	(962)	(a)	$	1,407,809
Purchased oil and gas sales	408,791		72,223		(b)	481,014
Midstream revenues	212,208		(212,208)		(a)	—
Other services revenues	41,974		—			41,974
Total revenues	2,071,744		(140,947)			1,930,797
Operating expenses
Lease operating expenses	223,384		65,306		(a)	288,690
Midstream expenses	62,146		(62,146)		(a)	—
Other services expenses	28,761		—			28,761
Gathering, processing and transportation expenses	128,806		45,220		(a)	174,026
Purchased oil and gas expenses	409,180		65,734		(b)	474,914
Production taxes	112,592		—			112,592
Depreciation, depletion and amortization	787,192		(15,552)		(a)	771,640
Exploration expenses	6,658		—			6,658
Rig termination	384		—			384
Impairment	10,257		—			10,257
General and administrative expenses	143,506		5,089		(a)	148,595
Total operating expenses	1,912,866		103,651			2,016,517
Loss on sale of properties	(4,455)		—			(4,455)
Operating income (loss)	154,423		(244,598)			(90,175)
Other income (expense)
Net loss on derivative instruments	(106,314)		—			(106,314)
Interest expense, net of capitalized interest	(176,223)		16,936		(a)	(159,287)
Gain on extinguishment of debt	4,312		—			4,312
Other income	440		129		(a)	569
Total other income (expense), net	(277,785)		17,065			(260,720)
Loss from continuing operations before income taxes	(123,362)		(227,533)			(350,895)
Income tax benefit	32,715		—			32,715
Net loss from continuing operations including non-controlling interests	(90,647)		(227,533)			(318,180)
Net income from continuing operations attributable to non-controlling interests	37,596		(37,596)		(a)	—
Net loss from continuing operations attributable to Oasis	$	(128,243)	$	(189,937)		$	(318,180)
Net loss attributable to Oasis from continuing operations per share:
Basic	$	(0.41)				$	(1.01)
Diluted	(0.41)					(1.01)
Weighted average shares outstanding:
Basic	315,002					315,002
Diluted	315,002					315,002

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.

Oasis Petroleum Inc.

Condensed Consolidated Statements of Operations (Unaudited)

Year Ended December 31, 2018

(In thousands, except per share data)

			Transaction Accounting Adjustments
	As Reported		Discontinued Operations			Pro Forma
Revenues
Oil and gas revenues	$	1,590,024	$	—		$	1,590,024
Purchased oil and gas sales	550,344		1,464		(b)	551,808
Midstream revenues	120,504		(120,504)		(a)	—
Other services revenues	61,075		—			61,075
Total revenues	2,321,947		(119,040)			2,202,907
Operating expenses
Lease operating expenses	193,912		53,611		(a)	247,523
Midstream expenses	32,758		(32,758)		(a)	—
Other services expenses	41,200		—			41,200
Gathering, processing and transportation expenses	107,193		24,770		(a)	131,963
Purchased oil and gas expenses	553,461		1,445		(b)	554,906
Production taxes	133,696		—			133,696
Depreciation, depletion and amortization	636,296		(12,285)		(a)	624,011
Exploration expenses	27,432		—			27,432
Impairment	384,228		—			384,228
General and administrative expenses	121,346		6,403		(a)	127,749
Total operating expenses	2,231,522		41,186			2,272,708
Gain on sale of properties	28,587		—			28,587
Operating income (loss)	119,012		(160,226)			(41,214)
Other income (expense)
Net gain on derivative instruments	28,457		—			28,457
Interest expense, net of capitalized interest	(159,085)		2,343		(a)	(156,742)
Loss on extinguishment of debt	(13,848)		—			(13,848)
Total other income (expense), net	(144,355)		2,343			(142,012)
Loss from continuing operations before income taxes	(25,343)		(157,883)			(183,226)
Income tax benefit	5,843		—			5,843
Net loss from continuing operations including non-controlling interests	(19,500)		(157,883)			(177,383)
Net income from continuing operations attributable to non-controlling interests	15,796		(15,796)		(a)	—
Net loss from continuing operations attributable to Oasis	$	(35,296)	$	(142,087)		$	(177,383)
Net loss attributable to Oasis from continuing operations per share:
Basic	$	(0.11)				$	(0.58)
Diluted	(0.11)					(0.58)
Weighted average shares outstanding:
Basic	307,480					307,480
Diluted	307,480					307,480

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.

Notes to Unaudited Pro Forma Condensed Consolidated Combined Financial Information

1. Basis of Presentation

On October 21, 2021, the Company completed its previously announced acquisition of approximately 95,000 net acres in the Williston Basin, effective April 1, 2021, from QEP Energy Company (“QEP”), a wholly-owned subsidiary of Diamondback Energy Inc., for total cash consideration of $585.8 million (the “Williston Basin Acquisition”). The total cash consideration was comprised of a deposit of $74.5 million paid on May 3, 2021 and $511.3 million paid at closing on October 21, 2021. The Company funded the Williston Basin Acquisition with cash on hand, including proceeds from the divestiture of its exploration and production assets in the Texas region of the Permian Basin on June 29, 2021 (the “Permian Basin Sale”) and proceeds from the issuance of $400.0 million 6.375% senior unsecured notes due June 1, 2026 (the “Oasis Senior Notes”) on June 9, 2021. The Company expects the Williston Basin Acquisition to qualify as an asset acquisition under accounting principles generally accepted in the United States of America as the Williston Basin Acquisition does not meet the definition of a business under the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations, since substantially all of the fair value of the assets acquired are concentrated in a single asset group. The Company has applied the cost accumulation model under FASB ASC 805-50, Business Combinations - Acquisitions of Assets Rather than a Business (“ASC 805-50”), and as such, recognized the Williston Basin Acquisition at cost, which includes transaction costs. The Company does not expect any material deferred income taxes from the Williston Basin Acquisition, as the tax basis of the assets acquired and liabilities assumed was equal to the book basis at closing.

On October 25, 2021, Oasis Midstream Partners LP (“OMP”) and OMP GP LLC (“OMP GP”) entered into an Agreement and Plan of Merger (the “OMP Merger”) with Crestwood Equity Partners LP (“Crestwood”). Pursuant to the terms of the OMP Merger, the Company will receive $160.0 million in cash and approximately 21 million common units of Crestwood in exchange for its approximate 70% ownership of OMP and its non-economic general partner interest in OMP GP. In connection with and prior to completion of the OMP Merger, the Company expects to contribute substantially all of its remaining midstream assets to OMP in exchange for cash consideration of approximately $6.7 million. Upon closing of the OMP Merger, the Company expects to own approximately 22% of the limited partner interests of Crestwood. As a result of this transaction, the Company will be a single basin exploration and production company. The OMP Merger represents a strategic shift for the Company and qualifies as discontinued operations in accordance with FASB ASC 205-20, Presentation of financial statements – Discontinued Operations (“ASC 205-20”). The pro forma adjustments presented herein show the effects of the OMP Merger as discontinued operations under ASC 205-20, as well as the classification of the assets and liabilities as held for sale. The Company expects the OMP Merger to be completed in the first quarter of 2022 and will file a Form 8-K under Item 2.01 upon closing. The pro forma financial information presented in such Form 8-K may contain values, adjustments and other information that differ from those contained in the pro forma financial information presented herein to, among other things, include pro forma financial information to show the pro forma effects of the OMP Merger as a significant disposition. The foregoing differences may be material individually or in the aggregate.

On November 19, 2020 (the “Emergence Date”) the Company emerged from bankruptcy and adopted fresh start accounting in accordance with the FASB ASC 852, Reorganizations, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. References to “Predecessor” relate to the period from January 1, 2018 through November 19, 2020, and references to “Successor” relate to the period from November 20, 2020 through September 30, 2021.

The unaudited pro forma condensed consolidated combined financial information has been derived from the historical consolidated financial statements of the Company and the historical Statements of Revenues and Direct Operating Expenses of properties acquired in the Williston Basin Acquisition (which were derived from information provided by QEP). The unaudited pro forma condensed consolidated combined balance sheet at September 30, 2021 was prepared as if the Williston Basin Acquisition and OMP Merger had occurred on September 30, 2021. No pro forma adjustments were necessary to reflect the Company’s adoption of fresh start accounting, the Permian Basin Sale and the issuance of the Oasis Senior Notes as these transactions were already included in the Company’s historical unaudited condensed consolidated balance sheet at September 30, 2021. The unaudited pro forma condensed consolidated combined statements of operations for the nine month period ended September 30, 2021 and for the year ended December 31, 2020 were prepared as if the fresh start accounting adjustments recorded on Emergence Date, the OMP Merger, the Williston Basin Acquisition, the Permian Basin Sale and the issuance of the Oasis Senior Notes had occurred on January 1, 2020. In addition, the unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2018 and 2019 were included in accordance with FASB ASC 205-20 to show the effects of the OMP Merger for comparative purposes.

The unaudited pro forma condensed consolidated combined financial statements and underlying pro forma adjustments are based upon currently available information and include certain estimates and assumptions made by management; accordingly, actual results could differ materially from the pro forma information. Management believes the assumptions provide a reasonable and reliably determinable basis for presenting the significant effects of the transactions described above. These unaudited pro forma condensed consolidated combined financial statements are provided for illustrative purposes only and may or may not provide an indication of results in the future.

2. Pro Forma Adjustments and Assumptions

Balance Sheet

The unaudited pro forma condensed consolidated combined balance sheet at September 30, 2021 reflects the following adjustments:

(a) Represents the assets and liabilities classified as held for sale in connection with the OMP Merger. The Company expects the OMP Merger to be completed within one year, and as such, has classified the assets and liabilities held for sale as current.

(b) Represents the cash paid to QEP of $74.5 million on May 3, 2021 and $511.3 million on October 21, 2021 for the Williston Basin Acquisition, as follows:

	(In thousands)
Cash and cash equivalents	$	111,296
Restricted cash – non–current	400,000
Other assets	74,506
Total cash paid	$	585,802

(c) Represents the allocation of the total cost of the Williston Basin Acquisition to the assets acquired and liabilities assumed, as follows:

	(In thousands)
Total Cost
Cash Consideration:
Cash paid at closing on October 21, 2021	$	511,296
Cash deposit paid on May 3, 2021	74,506
Total cash paid	585,802
Liabilities Assumed:
Asset retirement obligations	14,850
Suspended funds	8,997
Unfavorable contracts(1)	21,724
Total liabilities assumed	45,571
Transaction costs(2)	4,123
Total cost of Williston Basin Acquisition	$	635,496
Allocation of Total Cost
Assets
Inventory	$	4,954
Oil and gas properties(3)	620,953
Other property and equipment	1,315
Long-term inventory	3,748
Other assets	4,526
---	---	---
Total assets	$	635,496
Liabilities
Revenues and production taxes payable	$	(8,997)
Accrued liabilities	(5,508)
Asset retirement obligations	(14,850)
Other liabilities	(16,216)
Total liabilities	$	(45,571)

(1) Represents an estimated aggregate minimum volume commitment (“MVC”) of $21.7 million related to unfavorable contracts acquired in the Williston Basin Acquisition that the Company has determined to be probable and reasonably estimable at the close of the transaction.

(2) Prior to the closing of the Williston Basin Acquisition, the Company expensed $1.8 million of transaction costs as incurred under general and administrative expenses during the nine months ended September 30, 2021. At closing, the Company reduced general and administrative expenses by $1.8 million and recorded these costs as part of the total cost of the Williston Basin Acquisition in accordance with FASB ASC 805-50. In addition, the Company estimates it will accrue an additional $2.3 million of transaction costs that will be recorded as part of the total cost of the Williston Basin Acquisition.

(3) Includes $583.5 million recorded to proved developed oil and gas properties and $22.6 million recorded to proved undeveloped oil and gas properties.

(d) Represents (i) the estimated additional transaction costs from the Williston Basin Acquisition of approximately $2.3 million, and (ii) the current portion of an estimated MVC of $5.5 million assumed in the Williston Basin Acquisition. See footnote (c)

above for additional details.

Statements of Operations

The unaudited pro forma condensed consolidated combined statements of operations for the nine month period ended September 30, 2021 and the year ended December 31, 2020, as well as the unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2018 and 2019 reflect the following adjustments:

(a) Represents the classification of revenues and expenses from the OMP Merger as discontinued operations. The Company will have continuing cash outflows to Crestwood following the completion of the OMP Merger for gathering, processing, transportation and water handling costs pursuant to the existing contractual arrangements between the Company and OMP that will be assigned to Crestwood at closing. Historically, these transactions were eliminated within lease operating expenses and gathering, processing and transportation expenses for operated properties and within oil and gas revenues for non-operated properties.

(b) Represents the purchase of residue gas and natural gas liquids (“NGLs”), which were subsequently sold to third parties. The Company has historically eliminated the intercompany purchase of residue gas and NGLs from OMP in its consolidated financial statements within midstream expenses. In addition, the subsequent sale of residue gas and NGLs to third parties that was purchased from OMP has historically been reported within midstream revenues. The Company has reclassified these transactions to purchased oil and gas expenses and purchased oil and gas sales, respectively, to reflect the expected continuing impact.

The unaudited pro forma condensed consolidated combined statements of operations for the nine month period ended September 30, 2021 and the year ended December 31, 2020 reflect the following adjustments:

(c) Represents the revenues and direct operating expenses from the oil and gas properties acquired in the Williston Basin Acquisition.

(d) Represents the incremental depreciation, depletion and amortization and accretion expense related to the assets acquired in the Williston Basin Acquisition. Depletion was calculated using the unit-of-production method under the successful efforts method of accounting and was adjusted for (i) the increase in depletion reflecting the acquisition cost and production volumes attributable to the oil and gas properties and (ii) the revision to the depletion rate reflecting the reserve volumes attributable to the oil and gas properties. The pro forma depletion rate attributable to the Williston Basin Acquisition was $8.47 per barrel of oil equivalent. This adjustment also includes the depreciation expense attributable to other property, plant and equipment and

accretion expense attributable to asset retirement obligations of $0.3 million and $0.6 million for the nine months ended September 30, 2021, respectively, and $0.3 million and $0.8 million for the year ended December 31, 2020, respectively.

(e) Represents the estimated impact from additional employees hired by the Company in connection with the Williston Basin Acquisition of $2.8 million for the nine months ended September 30, 2021 and $3.7 million for the year ended December 31, 2020. In addition, general and administrative expenses for the nine months ended September 30, 2021 was offset by $1.8 million of transaction costs previously expensed as incurred prior to closing of the Williston Basin Acquisition that were subsequently capitalized and recorded as part of the total cost of the Williston Basin Acquisition at closing in accordance with FASB ASC 805-50.

(f) Represents the elimination of the revenues and expenses associated with the assets divested in the Permian Basin Sale.

(g) The Company recorded a gain on sale of properties of $227.4 million from the Permian Basin Sale in its historical unaudited condensed consolidated financial statements for the nine months ended September 30, 2021. This pro forma adjustment records this gain on sale of properties in the results of operations for the year ended December 31, 2020 and removes it from the results of operations for the nine months ended September 30, 2021.

(h) Represents the estimated income tax impact from the Permian Basin Sale at the applicable state and federal statutory tax rate.

(i) Represents interest expense associated with the Oasis Senior Notes of $11.1 million and amortization of deferred financing costs of $0.7 million during the nine months ended September 30, 2021 and interest expense of $25.5 million and amortization of deferred financing costs of $1.6 million during the year ended December 31, 2020. The Company issued the Oasis Senior Notes on June 9, 2021 and used the proceeds to finance a portion of the Williston Basin Acquisition. The Company’s historical unaudited condensed consolidated financial statements already includes interest expense from the Oasis Senior Notes from June 9, 2021 until September 30, 2021.

(j) Represents the unrecognized compensation cost that was immediately expensed on the Emergence Date primarily for Class B units in OMP GP.

(k) Represents reorganization items recognized on the Emergence Date that are attributable to discontinued operations, as follows:

	(In thousands)
Gain on debt discharge(1)	$	28,014
Gain on revaluation adjustments	92,901
Total reorganization items, net	$	120,915

(1) Represents the write-off of a specified default interest charge incurred during 2020 by OMP that was waived on the Emergence Date.

(l) Represents the impacts to non-controlling interests from the application of fresh start accounting attributable to discontinued operations as follows: (i) net loss from fresh start adjustments attributable to non-controlling interests of $86.8 million; offset by (ii) net income from reorganization adjustments attributable to non-controlling interests of $9.1 million.

(m) Represents the immediate vesting on the Emergence Date of Predecessor restricted stock awards of $6.7 million, Predecessor performance share units of $4.7 million, Predecessor phantom unit awards of $1.0 million and unamortized prepaid cash incentives of $4.2 million that were each attributable to continuing operations.

(n) Represents reorganization items recognized on the Emergence Date that are attributable to continuing operations, as follows:

	(In thousands)
Gain on debt discharge	$	964,569
Loss on revaluation adjustments	(225,336)
Write-off of unamortized debt discount	(38,373)
Professional fees	(16,352)
Write-off of unamortized deferred financing costs	(12,739)
Debtor-in-possession credit facility fees	(5,853)
Total reorganization items, net	$	665,916

(o) Represents income tax expense of $9.7 million from reorganization adjustments attributable to continuing operations, offset by the income tax benefit from fresh start adjustments of $6.4 million attributable to continuing operations.

3. Supplemental Oil and Gas Reserve Information

Estimated Quantities of Proved Oil and Natural Gas Reserves

The table below summarizes the Company’s estimated net proved reserves at December 31, 2020 based on reports prepared by DeGolyer and MacNaughton, the Company’s independent reserve engineers. In preparing its reports, DeGolyer and MacNaughton evaluated 100% of the reserves and discounted values at December 31, 2020 in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to companies involved in oil and natural gas producing activities.

In addition, the following table also sets forth information as of December 31, 2020 about the estimated net proved reserves attributable to the Permian Basin Sale and Williston Basin Acquisition, and the pro forma estimated net proved reserves of the Company as if the Permian Basin Sale and Williston Basin Acquisition had occurred on December 31, 2020. The reserve estimates attributable to the Permian Basin Sale at December 31, 2020 presented in the table below were derived from the reports prepared by DeGolyer and MacNaughton. The reserve estimates attributable to the Williston Basin Acquisition at December 31, 2020 presented in the table below were prepared based upon information provided by QEP and was prepared in accordance with the authoritative guidance of the FASB and the SEC on oil and natural gas reserve estimation and disclosures.

Reserve estimates are inherently imprecise and are generally based upon extrapolation of historical production trends, analogy to similar properties and volumetric calculations. Accordingly, reserve estimates are expected to change, and such changes could be material and occur in the near term as future information becomes available.

	December 31, 2020
	OAS Historical	Permian Basin Sale	Williston Basin Acquisition	Pro Forma
Proved Reserves(1)
Developed:
Oil (MMBbls)	85.4	(13.2)	41.1	113.3
Natural gas (Bcf)	262.7	(20.8)	75.0	316.9
NGL (MMBbls)(2)	—	—	12.8	12.8
Total estimated proved developed reserves (MMBoe)	129.2	(16.7)	66.4	178.9
Undeveloped:
Oil (MMBbls)	34.3	(11.0)	10.7	34.0
Natural gas (Bcf)	113.5	(16.3)	9.3	106.5
NGL (MMBbls)(2)	—	—	1.6	1.6
Total estimated proved undeveloped reserves (MMBoe)	53.3	(13.7)	13.8	53.4

_______________

(1) The reserve estimates were prepared using SEC pricing, calculated as the unweighted arithmetic average first-day-of-the-month prices for the prior twelve months. For the Company’s historical reserves, including the reserves attributable to the Permian Basin Sale, SEC pricing was $39.54 per Bbl for crude oil and $2.03 per MMBtu for natural gas for the year ended

December 31, 2020. For the reserves data provided by QEP attributable to the Williston Basin Acquisition, SEC pricing was $39.57 per Bbl for crude oil and $1.99 per MMBtu for natural gas for the year ended December 31, 2020. These prices were adjusted by location and quality differentials.

(2) The reserves attributable to the Williston Basin Acquisition were historically reported by QEP on a three-stream basis, while the Company has historically reported reserves on a two-stream basis.

Changes in commodity prices may significantly impact the Company’s estimates of oil and natural gas reserves. Sustained lower commodity prices can reduce the quantity of the Company’s reserves by causing the economic limit of the proved developed and proved undeveloped wells (the point at which the costs to operate exceed the value of estimated future production, assuming constant prices and costs under SEC rules) to occur earlier in their productive lives than would be the case with higher prices. The undeveloped reserves may also be reduced by the elimination of wells because they would not meet the investment criteria to be economically producible at such prices and costs. The proved undeveloped reserves may also be eliminated by the deferral of drilling of otherwise economic wells beyond the five year proved reserve development horizon as a result of revisions to the Company’s development plan adopted in response to lower prices or otherwise.

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves

The following table presents the Standardized Measure of Discounted Future Net Cash Flows relating to the proved oil and natural gas reserves of the Company, adjusted for the properties sold in the Permian Basin Sale and the properties acquired in the Williston Basin Acquisition on a pro forma combined basis as of December 31, 2020. The Standardized Measure shown below represents estimates only and should not be construed as the current market value of the Company’s estimated oil and natural gas reserves or those estimated oil and natural gas reserves attributable to the properties sold in the Permian Basin Sale and the properties acquired in the Williston Basin Acquisition.

	December 31, 2020
	OAS Historical		Permian Basin Sale		Williston Basin Acquisition		Pro Forma
	(In thousands)
Future cash inflows	$	5,197,220	$	(1,010,896)	$	2,062,726	$	6,249,050
Future production costs	(2,792,921)		404,546		$	(1,350,604)	(3,738,979)
Future development costs	(610,658)		177,445		$	(157,014)	(590,227)
Future outflows for income tax	(232,849)		64,673		(10,945)		(179,121)
Future net cash flows	1,560,792		(364,232)		544,163		1,740,723
10% annual discount for estimated timing of cash flows	(611,915)		203,962		(192,758)		(600,711)
Standardized measure of discounted future net cash flows	$	948,877	$	(160,270)	$	351,405	$	1,140,012

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