UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
____________________________________________________________________
FORM 8-K  
  ____________________________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 4, 2016
 
  ____________________________________________________________________
OASIS PETROLEUM INC.
(Exact name of registrant as specified in its charter)
 
____________________________________________________________________
 
 
 
 
 
 
Delaware
 
001-34776
 
80-0554627
(State or other jurisdiction of
incorporation or organization)
 
(Commission
File Number)
 
(I.R.S. Employer
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)
 
¨
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))
 
 
 
 
 




Item 2.02 Results of Operations and Financial Condition.
On May 9, 2016 , Oasis Petroleum Inc. (the “Company”) announced its results for the quarter ended March 31, 2016 . A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The Company held its 2016 Annual Meeting of Stockholders (the “Annual Meeting”) on May 4, 2016. At the Annual Meeting, the Company’s stockholders approved the Second Amendment (the “Second Amendment”) to the Oasis Petroleum Inc. Amended and Restated 2010 Long Term Incentive Plan (the “Plan”), which provided for an increase in the number of shares of the Company’s common stock available for grant under the Plan by 7,500,000 shares and extended the term of the Plan to May 4, 2026.  The Second Amendment was made effective as of May 4, 2016. A description of the material terms of the Plan was included in the Company's definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on March 24, 2016. In addition, the foregoing summary is qualified in its entirety by reference to the full text of the Second Amendment, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
Item 5.07 Submission of Matters to a Vote of Security Holders.
At the Annual Meeting, the Company’s stockholders were requested to: (1) elect two Class III Directors to serve on the Company’s Board of Directors for a term of office expiring at the Company’s 2019 Annual Meeting of Stockholders; (2) ratify the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2016; (3) approve the Second Amendment; (4) approve the material terms of the Plan for purposes of complying with Section 162(m) of the Internal Revenue Code; and (5) approve the amendment of the Company's certificate of incorporation to increase the number of authorized shares of the Company's common stock. The following are the final voting results on proposals considered and voted upon at the meeting, each of which is more fully described in the Company’s proxy statement filed on March 24, 2016:
1.    Each of the Class III directors that were up for re-election was elected for a term of three years. Votes regarding the election of these directors were as follows:
NOMINEE
VOTES FOR
WITHHELD
BROKER NON-VOTES
Michael McShane
117,247,273
1,663,945
30,427,552
Thomas B. Nusz
117,188,391
1,722,827
30,427,552
2.    PricewaterhouseCoopers LLP was ratified as the Company’s independent registered public accounting firm for 2016. The voting results were as follows:
VOTES FOR
VOTES AGAINST
VOTES ABSTAINED
 
148,662,996
568,840
106,934
 
3.    The Board proposal seeking approval of the Second Amendment to the Amended and Restated 2010 Long Term Incentive Plan (the "Plan") was approved. The voting results were as follows:
VOTES FOR
VOTES AGAINST
VOTES ABSTAINED
BROKER NON-VOTES
114,223,628
4,570,856
116,734
30,427,552
4.    The Board proposal seeking approval of the material terms of the Plan for purposes of complying with Section 162(m) of the Internal Revenue Code was approved. The voting results were as follows:
VOTES FOR
VOTES AGAINST
VOTES ABSTAINED
BROKER NON-VOTES
114,574,511
4,245,960
90,747
30,427,552
5.    The Board proposal seeking approval of the amendment of the Company's certificate of incorporation to increase the number of authorized shares of the Company's common stock. The voting results were as follows:
VOTES FOR
VOTES AGAINST
VOTES ABSTAINED
 
129,690,411
18,986,807
661,552
 




Item 9.01 Financial Statements and Exhibits.
(d) Exhibits .
 
 
 
 
Exhibit No.
  
Description of Exhibit
 
 
10.1
 
Second Amendment to the Amended and Restated 2010 Long Term Incentive Plan of Oasis Petroleum Inc.
99.1
  
Press Release dated May 9, 2016.
THE INFORMATION CONTAINED IN ITEM 2.02 OF THIS CURRENT REPORT, INCLUDING EXHIBIT 99.1 ATTACHED HERETO, SHALL NOT BE DEEMED “FILED” FOR THE PURPOSES OF SECTION 18 OF THE SECURITIES AND EXCHANGE ACT OF 1934, NOR SHALL IT BE DEEMED INCORPORATED BY REFERENCE INTO ANY REGISTRATION STATEMENT OR OTHER FILING PURSUANT TO THE SECURITIES ACT OF 1933, EXCEPT AS OTHERWISE EXPRESSLY STATED IN SUCH FILING.




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.
(Registrant)
 
 
 
 
Date: May 9, 2016
 
 
 
By:
/s/ Nickolas J. Lorentzatos
 
 
 
 
 
Nickolas J. Lorentzatos
 
 
 
 
 
Executive Vice President, General Counsel and Corporate Secretary




EXHIBIT INDEX
 
 
 
 
Exhibit No.
  
Description of Exhibit
 
 
10.1
 
Second Amendment to the Amended and Restated 2010 Long Term Incentive Plan of Oasis Petroleum Inc.
99.1
  
Press Release dated May 9, 2016.





Exhibit 10.1

SECOND AMENDMENT TO THE
OASIS PETROLEUM INC.
AMENDED AND RESTATED 2010 LONG TERM INCENTIVE PLAN

THIS SECOND AMENDMENT (the " Second Amendment ") to the Oasis Petroleum Inc. Amended and Restated 2010 Long Term Incentive Plan, as amended from time to time (the “ Plan ”), is made effective as of May 4, 2016 (the “ Amendment Effective Date ”), by Oasis Petroleum Inc. (the “ Company ”), subject to approval by the Company’s stockholders.

W I T N E S S E T H :

WHEREAS , the Company previously adopted the Plan, under which the Company is authorized to grant equity-based incentive awards to certain employees and other service providers of the Company and its subsidiaries;

WHEREAS , Section 10(c) of the Plan provides that the Company’s board of directors (the “ Board ”) may amend the Plan (including to increase the number of shares of the Company’s common stock (“ Stock ”) available for awards under the Plan), subject to the approval of the Company’s stockholders if such approval is required by the rules of the New York Stock Exchange (“ NYSE ”);

WHEREAS, the Board has determined that it is in the best interests of the Company and its stockholders to amend the Plan in order to, among other things, increase the total number of shares of Stock reserved for delivery with respect to awards under the Plan in order to ensure that sufficient shares of Stock are available for future awards and to extend the term of the Plan; and
WHEREAS , the Board now desires to amend the Plan in the manner contemplated hereby, subject to approval by the Company’s stockholders at the Company’s 2016 Annual Meeting, in order to (i) to increase the number of shares of Stock available for grant under the Plan by 7,500,000 shares and to provide for restrictions on shares that may be reissued under the Plan, subject to the approval of the Company’s stockholders pursuant to applicable NYSE rules; (ii) extend the term of the Plan to May 4, 2026; and (iii) make certain other clarifying changes to the Plan.

NOW, THEREFORE, the Plan shall be amended as of the Amendment Effective Date, subject to approval by the Company’s stockholders, as set forth below:

1.    Section 4 of the Plan is hereby deleted in its entirety and replaced with the following:

4.    Stock Subject to Plan.

(a) Overall Number of Shares Available for Delivery . Subject to adjustment in a manner consistent with any adjustment made pursuant to Section 9, the total number of shares of Stock that may be delivered with respect to Awards under this Plan, since its original inception, shall not exceed 16,050,000 shares, and such total will be available for the issuance of Incentive Stock Options.

(b) Application of Limitation to Awards . The number of shares of Stock actually delivered with respect to Awards under this Plan may not exceed the number of shares of Stock available under this Plan pursuant to Section 4(a) (subject to any adjustment made pursuant to Section 9). The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of shares of Stock actually delivered with respect to an Award differs from the number of shares previously counted in connection with such Award.

(c) Availability of Shares Not Delivered under Awards . Shares of Stock subject to an Award under the Plan that expires or is canceled, forfeited, exchanged, settled in cash or otherwise terminated without the actual delivery of Stock pursuant to such Award, including (i) shares forfeited with respect to Restricted Stock, and (ii) the number of shares withheld or surrendered in payment of any taxes related to a Full Value Award, in each case, will again be available for Awards under the Plan, except that if any such shares could not again be available for Awards to a particular Participant under any applicable law or regulation, such shares shall be available exclusively for Awards to Participants who are not subject to such limitation. Notwithstanding the foregoing, with respect to any Option, Stock Appreciation Right, or other Award for which a Participant pays (or the value or amount payable under the Award is reduced by) an amount equal to or exceeding the Fair Market Value of the Stock determined as of the date of grant, the following shares will not, in each case, be available for delivery in connection with future Awards under the Plan: (i) shares tendered or withheld in payment




of any exercise or purchase price of such Award or taxes relating to such Award, (ii) shares that were subject to such Award that was exercised, or (iii) shares repurchased on the open market with the proceeds of such Award’s exercise price. If an Award may be settled only in cash, such Award shall not be counted against any of the share limits under this Section 4 but shall remain subject to the limitations in Section 5 to the extent required to preserve the status of any Award intended to qualify as “performance-based compensation” under section 162(m) of the Code.

(d) Source of Stock Deliverable Under Awards . The shares to be delivered under the Plan pursuant to an Award shall consist, in whole or in part, of (i) authorized but unissued shares of Stock, (ii) Stock held in the treasury of the Company, or (iii) previously issued shares of Stock reacquired by the Company, including shares purchased on the open market, or (iv) any combination of the foregoing, as determined by the Committee in its discretion.

2.    Section 10(m) of the Plan is hereby deleted in its entirety and replaced with the following:

(m)     Plan Effective Date and Term . This Plan was adopted by the Board on the Effective Date, and approved by the stockholders of the Company on May 1, 2014, to be effective as of the Effective Date. The Plan was subsequently amended pursuant to the First Amendment to the Plan, effective as of May 4, 2015, and the Second Amendment to the Plan, effective as of May 4, 2016. No Awards may be granted under this Plan on and after May 4, 2026.

RESOLVED FURTHER , that except as provided above, the Plan shall continue to read in the current state.







Exhibit 99.1
Oasis Petroleum Inc. Announces Quarter Ended March 31, 2016 Earnings
Houston, Texas — May 9, 2016 — Oasis Petroleum Inc. (NYSE: OAS) (“Oasis” or the “Company”) today announced financial results for the quarter ended March 31, 2016 and provided an operational update.
Highlights include:
•
Produced over 50,000 barrels of oil equivalent per day (“Boepd”) for the sixth consecutive quarter, with production of 50,315 Boepd in the first quarter of 2016.
•
Completed and placed on production 15 gross ( 12.8 net) operated and 0.3 net non-operated wells in the first quarter of 2016 . As of March 31, 2016 , the Company had 83 gross operated wells waiting on completion.
•
Total capital expenditures (“CapEx”) were $88.0 million for the three months ended March 31, 2016 , a 68% decrease from the first quarter of 2015 and a 3% sequential quarter decrease.
•
Reduced lease operating expenses (“LOE”) per barrel of oil equivalent (“Boe”) to $6.78 , a 21% decrease from the first quarter of 2015 and a 1% sequential quarter decrease.
•
Adjusted EBITDA for the Company was $132.9 million in the first quarter of 2016 . For a definition of Adjusted EBITDA and a reconciliation of net income (loss) and net cash provided by (used in) operating activities to Adjusted EBITDA, see “Non-GAAP Financial Measures” below.
•
Increased Midstream Services (“OMS”) EBITDA by 10%, from $17.7 million in the fourth quarter of 2015 to $19.5 million in the first quarter of 2016.

“The Oasis team continues to deliver strong results as we enter 2016,” said Thomas B. Nusz, Oasis’ Chairman and Chief Executive Officer. “We completed 15 gross operated wells during the quarter in the core of the Williston Basin and produced over 50,000 Boepd. We held operating costs basically flat, quarter over quarter, and we drove well costs down to $6.5 million with further improvements in efficiency and market price reductions. We see a path to an additional 5% to 10% reduction in well costs, and we continue to test completion designs that could further enhance recoveries. Our high intensity wells continue to perform in line with our increased type curves, both in and outside of our core acreage. We continue to expect to bring on wells in Wild Basin in the fall of 2016, as our OMS infrastructure build-out remains on schedule.”

Mr. Nusz added, “We were free cash flow positive again in the first quarter of 2016, our fourth in a row, including OMS CapEx of $35 million. This is a significant financial accomplishment supported by our operational execution. As we look forward, we remain focused on solid execution and continuing to improve our capital efficiency, while continuing to retain optionality around activity levels and all capital allocation alternatives.”


1


Operational and Financial Update
Select operational and financial statistics are in the following table:
 
Quarter Ended:
 
3/31/2016
 
12/31/2015
 
3/31/2015
Production data:
 
 
 
 
 
Oil (Bopd)
42,525

 
43,294

 
44,692

Natural gas (MMcfpd)
46,740

 
44,151

 
34,525

Total production (Boepd)
50,315

 
50,652


50,446

Percent Oil
85
%
 
86
%
 
89
%
Average sales prices:
 
 
 
 
 
Oil, without derivative settlements (per Bbl)
$
28.74

 
$
37.77

 
$
40.73

Differential to NYMEX West Texas Intermediate crude oil index prices (“WTI”) (per Bbl)
4.85

 
4.29

 
7.85

Oil, with derivative settlements (per Bbl) (1)(2)
47.68

 
57.60

 
67.89

Derivative settlements - net cash receipts (in millions) (2)
73.3

 
79.0

 
109.3

Natural gas (per Mcf) (3)
1.44

 
1.97

 
3.23

Revenues ($ in millions):
 
 
 
 
 
Oil
$
111.2

 
$
150.4

 
$
163.8

Natural gas
6.1

 
8.0

 
10.0

OWS
6.0

 
17.0

 
2.7

OMS
7.0

 
6.6

 
3.8

Total revenues
$
130.3

 
$
182.0


$
180.3

OWS and OMS operating expenses ($ in millions):
 
 
 
 
 
OWS
$
2.7

 
$
6.9

 
$
1.1

OMS
1.7

 
1.7

 
0.9

Select operating expenses:
 
 
 
 
 
LOE ($ per Boe)
$
6.78

 
$
6.85

 
$
8.62

MT&G ($ per Boe) (4)
1.60

 
1.57

 
1.60

DD&A ($ per Boe)
26.74

 
26.59

 
26.10

Exploration & production (“E&P”) general and administrative expenses (“G&A”) ($ per Boe)
4.61

 
4.70

 
4.91

Production taxes (% of oil and gas revenue)
9.2
%
 
9.9
%
 
9.6
%
(1)
Realized prices include gains or losses on cash settlements for commodity derivatives, which do not qualify for and were not designated as hedging instruments for accounting purposes.
(2)
Cash settlements represent the cumulative gains and losses on the Company’s derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled.
(3)
Natural gas prices include the value for natural gas and natural gas liquids.
(4)
Excludes non-cash valuation charges on pipeline imbalances and linefill.

The Company recorded a non-cash impairment loss of $3.6 million and $9.4 million in the first quarter of 2016 and fourth quarter of 2015, respectively, to adjust the carrying value of its properties held for sale to their estimated fair value less costs to sell.
G&A totaled $24.4 million in the first quarter of 2016 , $23.3 million in the first quarter of 2015 and $25.3 million in the fourth quarter of 2015. Amortization of stock-based compensation, which is included in G&A, was $6.7 million, or $1.47 per Boe, in the first quarter of 2016 as compared to $7.6 million, or $1.68 per Boe, in the first quarter of 2015 and $5.6 million, or $1.21 per Boe, in the fourth quarter of 2015. G&A for the Company’s E&P segment totaled $21.1 million in the first quarter of 2016 , $22.3 million in the first quarter of 2015 and $21.9 million in the fourth quarter of 2015.
Interest expense was $38.7 million for the first quarter of 2016 compared to $38.8 million for the first quarter of 2015 and $36.9 million for the fourth quarter of 2015. Capitalized interest totaled $4.5 million for the first quarter of 2016 , $3.9 million for the first quarter of 2015 and $4.8 million for the fourth quarter of 2015. Cash interest, calculated as interest expense plus

2


capitalized interest less amortization and write-offs of deferred financing costs included in interest expense, totaled $39.3 million for the first quarter of 2016, $41.1 million for the first quarter of 2015 and $40.0 million for the fourth quarter of 2015.

For the three months ended March 31, 2016 , the Company recorded an income tax benefit of $27.6 million , resulting in a 30.0% effective tax rate as a percentage of its pre-tax loss for the quarter. The Company recorded an income tax expense of $1.7 million, resulting in a 30.1% effective tax rate as a percentage of its pre-tax income for the three months ended December 31, 2015 .
Adjusted EBITDA for the first quarter of 2016 was $132.9 million . For a definition of Adjusted EBITDA and a reconciliation of net income (loss) and net cash provided by (used in) operating activities to Adjusted EBITDA, see “Non-GAAP Financial Measures” below.
For the first quarter of 2016 , the Company reported a net loss of  $64.5 million , or  $0.40  per diluted share, as compared to a net loss of  $18.0 million , or  $0.17  per diluted share, for the first quarter of 2015 . Excluding certain non-cash and non-recurring items and their tax effect, Adjusted Net Loss (non-GAAP) was  $29.0 million , or  $0.18 per diluted share, in the first quarter of 2016 , compared to Adjusted Net Income of $24.8 million , or $0.23 per diluted share, in the first quarter of 2015 . For a definition of Adjusted Net Income (Loss) and a reconciliation of net income to Adjusted Net Income (Loss), see “Non-GAAP Financial Measures” below.
Capital Expenditures
The following table depicts the Company’s total CapEx by category:
 
1Q 2016
CapEx ($ in thousands):
 
E&P
$
47,734

OMS
35,039

OWS
650

Other (1)
4,532

Total CapEx (2)
$
87,955

(1)
Other CapEx includes such items as administrative capital and capitalized interest.
(2)
CapEx reflected in the table above differs from the amounts shown in the statement of cash flows in the Company’s condensed consolidated financial statements because amounts reflected in the table above include changes in accrued liabilities from the previous reporting period for capital expenditures, while the amounts presented in the statement of cash flows are presented on a cash basis.
Liquidity
In March 2016, the Company repurchased an aggregate principal amount of $29.8 million of its outstanding senior unsecured notes for an aggregate cost of $22.3 million, including accrued interest and fees. For the three months ended March 31, 2016 , the Company recognized a pre-tax gain of $7.0 million related to these repurchases, which was net of the $0.5 million write-off of unamortized deferred financing costs.
As of March 31, 2016 , Oasis had total cash and cash equivalents of $19.4 million . In addition, Oasis had $65.0 million of borrowings and $14.2 million of outstanding letters of credit issued under its revolving credit facility, resulting in an unused borrowing base capacity of $1,070.8 million as of March 31, 2016 .

3


Hedging Activity
As of May 9, 2016 , the Company had the following outstanding commodity derivative contracts, all of which are priced off of WTI and settle monthly:
 
 
Weighted Average Prices ($/Bbl)
 
 
Type
 
Sub-Floor
 
Floor
 
Ceiling
 
BOPD
2016 Swaps
 
 
 
 
 
 
 
 
First Half (April - June)
 
 
 
$
52.08

 
$
52.08

 
33,000

Second Half (July - Dec)
 
 
 
$
49.15

 
$
49.15

 
32,000

2017 Swaps
 
 
 
 
 
 
 
 
Full Year Swaps
 
 
 
$
47.68

 
$
47.68

 
10,000

First Half (Jan - June)
 
 
 
$
45.00

 
$
45.00

 
2,000

2017 Collars
 
 
 
 
 
 
 
 
Full Year Two-way Collars
 
 
 
$
40.00

 
$
47.58

 
2,000

Full Year Three-way Collars
 
$
30.00

 
$
45.00

 
$
55.15

 
1,000

The March 2016 contracts settled at $14.2 million and will be included in the Company’s second quarter 2016 derivative settlements.
Conference Call Information
Investors, analysts and other interested parties are invited to listen to the conference call:
Date:
  
Tuesday, May 10, 2016
Time:
  
10:00 a.m. Central Time
Dial-in:
  
888-317-6003
Intl. Dial in:
  
412-317-6061
Conference ID:
  
5832849
Website:
  
www.oasispetroleum.com
A recording of the conference call will be available beginning at 12:00 p.m. Central Time on the day of the call and will be available until Tuesday, May 17, 2016 by dialing:
Replay dial-in:
  
877-344-7529
Intl. replay:
  
412-317-0088
Replay code:
  
10084066
The conference call will also be available for replay at www.oasispetroleum.com .
Contact:
Oasis Petroleum Inc.
Taylor Mason, (281) 404-9600
Manager – Investor Relations


4


Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including the Company’s drilling program, production, derivative instruments, capital expenditure levels and other guidance included in this press release. These statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include, but are not limited to, changes in oil and natural gas prices, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as the Company’s ability to access them, the proximity to and capacity of transportation facilities, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the Company’s business and other important factors that could cause actual results to differ materially from those projected as described in the Company’s reports filed with the SEC.
Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
About Oasis Petroleum Inc.
Oasis is an independent exploration and production company focused on the acquisition and development of unconventional oil and natural gas resources, primarily operating in the Williston Basin. For more information, please visit the Company’s website at www.oasispetroleum.com .



5


Oasis Petroleum Inc.
Condensed Consolidated Balance Sheet
(Unaudited)
 
March 31, 2016
 
December 31, 2015
 
(In thousands, except share data)
ASSETS
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
19,397

 
$
9,730

Accounts receivable — oil and gas revenues
92,684

 
96,495

Accounts receivable — joint interest and other
104,512

 
100,914

Inventory
10,723

 
11,072

Prepaid expenses
7,411

 
7,328

Derivative instruments
91,590

 
139,697

Other current assets
46

 
50

Total current assets
326,363

 
365,286

Property, plant and equipment
 
 
 
Oil and gas properties (successful efforts method)
6,327,027

 
6,284,401

Other property and equipment
477,343

 
443,265

Less: accumulated depreciation, depletion, amortization and impairment
(1,627,201
)
 
(1,509,424
)
Total property, plant and equipment, net
5,177,169

 
5,218,242

Assets held for sale
25,845

 
26,728

Derivative instruments
7,521

 
15,776

Other assets
23,370

 
23,343

Total assets
$
5,560,268

 
$
5,649,375

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities
 
 
 
Accounts payable
$
10,101

 
$
9,983

Revenues and production taxes payable
115,412

 
132,356

Accrued liabilities
126,765

 
167,669

Accrued interest payable
24,277

 
49,413

Derivative instruments
1,018

 
—

Advances from joint interest partners
4,390

 
4,647

Other current liabilities
500

 
6,500

Total current liabilities
282,463

 
370,568

Long-term debt
2,201,938

 
2,302,584

Deferred income taxes
580,526

 
608,155

Asset retirement obligations
36,088

 
35,338

Liabilities held for sale
10,155

 
10,228

Derivative instruments
1,558

 
—

Other liabilities
3,091

 
3,160

Total liabilities
3,115,819

 
3,330,033

Commitments and contingencies
 
 
 
Stockholders’ equity
 
 
 
Common stock, $0.01 par value: 300,000,000 shares authorized; 181,298,001 shares issued and 180,582,855 shares outstanding at March 31, 2016 and 139,583,990 shares issued and 139,076,064 shares outstanding at December 31, 2015
1,774

 
1,376

Treasury stock, at cost: 715,146 and 507,926 shares at March 31, 2016 and December 31, 2015, respectively
(14,652
)
 
(13,620
)
Additional paid-in capital
1,687,261

 
1,497,065

Retained earnings
770,066

 
834,521

Total stockholders’ equity
2,444,449

 
2,319,342

Total liabilities and stockholders’ equity
$
5,560,268

 
$
5,649,375


6


Oasis Petroleum Inc.
Condensed Consolidated Statement of Operations
(Unaudited)
 
 
Three Months Ended March 31,
 
2016
 
2015
 
(In thousands, except per share data)
Revenues
 
 
 
Oil and gas revenues
$
117,315

 
$
173,859

Well services and midstream revenues
12,968

 
6,528

Total revenues
130,283

 
180,387

Operating expenses
 
 
 
Lease operating expenses
31,064

 
39,125

Well services and midstream operating expenses
4,389

 
1,952

Marketing, transportation and gathering expenses
8,552

 
7,278

Production taxes
10,753

 
16,621

Depreciation, depletion and amortization
122,449

 
118,478

Exploration expenses
363

 
843

Rig termination
—

 
1,080

Impairment
3,562

 
5,321

General and administrative expenses
24,366

 
23,324

Total operating expenses
205,498

 
214,022

Operating loss
(75,215
)
 
(33,635
)
Other income (expense)
 
 
 
Net gain on derivative instruments
14,375

 
47,072

Interest expense, net of capitalized interest
(38,739
)
 
(38,784
)
Gain on extinguishment of debt
7,016

 
—

Other income (expense)
479

 
(70
)
Total other income (expense)
(16,869
)
 
8,218

Loss before income taxes
(92,084
)
 
(25,417
)
Income tax benefit
27,629

 
7,376

Net loss
$
(64,455
)
 
$
(18,041
)
Loss per share:
 
 
 
Basic
$
(0.40
)
 
$
(0.17
)
Diluted
(0.40
)
 
(0.17
)
Weighted average shares outstanding:
 
 
 
Basic
162,922

 
109,303

Diluted
162,922

 
109,303



7


Oasis Petroleum Inc.
Selected Financial and Operational Statistics
(Unaudited)
 
 
Three Months Ended March 31,
 
2016
 
2015
Operating results (in thousands):
 
 
 
Revenues
 
 
 
Oil
$
111,206

 
$
163,813

Natural gas
6,109

 
10,046

Well services and midstream
12,968

 
6,528

Total revenues
$
130,283

 
$
180,387

Production data:
 
 
 
Oil (MBbls)
3,870

 
4,022

Natural gas (MMcf)
4,253

 
3,107

Oil equivalents (MBoe)
4,579

 
4,540

Average daily production (Boe/d)
50,315

 
50,446

Average sales prices:
 
 
 
Oil, without derivative settlements (per Bbl)
$
28.74

 
$
40.73

Oil, with derivative settlements (per Bbl) (1)
47.68

 
67.89

Natural gas (per Mcf) (2)
1.44

 
3.23

Costs and expenses (per Boe of production):
 
 
 
Lease operating expenses
$
6.78

 
$
8.62

Marketing, transportation and gathering expenses (3)
1.60

 
1.60

Production taxes
2.35

 
3.66

Depreciation, depletion and amortization
26.74

 
26.10

General and administrative expenses (“G&A”)
5.32

 
5.14

Exploration and production G&A
4.61

 
4.91

 

(1)
Realized prices include gains or losses on cash settlements for commodity derivatives, which do not qualify for and were not designated as hedging instruments for accounting purposes. Cash settlements represent the cumulative gains and losses on the Company’s derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled.
(2)
Natural gas prices include the value for natural gas and natural gas liquids.
(3)
Excludes non-cash valuation charges on pipeline imbalances.


8


Oasis Petroleum Inc.
Condensed Consolidated Statement of Cash Flows
(Unaudited)  
 
Three Months Ended March 31,
 
2016
 
2015
 
(In thousands)
Cash flows from operating activities:
 
 
 
Net loss
$
(64,455
)
 
$
(18,041
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
Depreciation, depletion and amortization
122,449

 
118,478

Gain on extinguishment of debt
(7,016
)
 
—

Impairment
3,562

 
5,321

Deferred income taxes
(27,629
)
 
(7,376
)
Derivative instruments
(14,375
)
 
(47,072
)
Stock-based compensation expenses
6,730

 
7,606

Deferred financing costs amortization and other
5,066

 
1,655

Working capital and other changes:
 
 
 
Change in accounts receivable
(995
)
 
63,313

Change in inventory
349

 
(602
)
Change in prepaid expenses
241

 
1,892

Change in other current assets
4

 
5,539

Change in other assets
77

 
—

Change in accounts payable, interest payable and accrued liabilities
(64,056
)
 
(42,341
)
Change in other current liabilities
(6,000
)
 
—

Change in other liabilities
(3
)
 
(11
)
Net cash provided by (used in) operating activities
(46,051
)
 
88,361

Cash flows from investing activities:
 
 
 
Capital expenditures
(103,411
)
 
(359,113
)
Derivative settlements
73,313

 
109,259

Advances from joint interest partners
(257
)
 
(828
)
Net cash used in investing activities
(30,355
)
 
(250,682
)
Cash flows from financing activities:
 
 
 
Repurchase of senior unsecured notes
(22,308
)
 
—

Proceeds from revolving credit facility
214,000

 
145,000

Principal payments on revolving credit facility
(287,000
)
 
(480,000
)
Deferred financing costs
(751
)
 
—

Proceeds from sale of common stock
183,164

 
463,218

Purchases of treasury stock
(1,032
)
 
(1,520
)
Net cash provided by financing activities
86,073

 
126,698

Increase (decrease) in cash and cash equivalents
9,667

 
(35,623
)
Cash and cash equivalents:
 
 
 
Beginning of period
9,730

 
45,811

End of period
$
19,397

 
$
10,188

Supplemental non-cash transactions:
 
 
 
Change in accrued capital expenditures
$
(19,230
)
 
$
(90,189
)
Change in asset retirement obligations
1,212

 
1,413


9


Non-GAAP Financial Measures
Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of the Company’s financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation, depletion, amortization, exploration expenses and other similar non-cash or non-recurring charges. Adjusted EBITDA is not a measure of net income (loss) or cash flows as determined by United States generally accepted accounting principles, or GAAP.
The following table presents reconciliations of the GAAP financial measures of net income (loss) and net cash provided by (used in) operating activities to the non-GAAP financial measure of Adjusted EBITDA for the periods presented:

 
Three Months Ended March 31,
 
2016
 
2015
 
(In thousands)
Net loss
$
(64,455
)
 
$
(18,041
)
Gain of extinguishment of debt
(7,016
)
 
—

Net gain on derivative instruments
(14,375
)
 
(47,072
)
Derivative settlements (1)  
73,313

 
109,259

Interest expense, net of capitalized interest
38,739

 
38,784

Depreciation, depletion and amortization
122,449

 
118,478

Impairment
3,562

 
5,321

Rig termination
—

 
1,080

Exploration expenses
363

 
843

Stock-based compensation expenses
6,730

 
7,606

Income tax benefit
(27,629
)
 
(7,376
)
Other non-cash adjustments
1,207

 
(4
)
Adjusted EBITDA
$
132,888

 
$
208,878

 
 
 
 
Net cash provided by (used in) operating activities
$
(46,051
)
 
$
88,361

Derivative settlements (1)  
73,313

 
109,259

Interest expense, net of capitalized interest
38,739

 
38,784

Rig termination
—

 
1,080

Exploration expenses
363

 
843

Deferred financing costs amortization and other
(5,066
)
 
(1,655
)
Changes in working capital
70,383

 
(27,790
)
Other non-cash adjustments
1,207

 
(4
)
Adjusted EBITDA
$
132,888

 
$
208,878

(1)
Cash settlements represent the cumulative gains and losses on the Company’s derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled.


10


The following tables present reconciliations of the GAAP financial measure of income (loss) before income taxes to the non-GAAP financial measure of Adjusted EBITDA for the Company’s three reportable business segments on a gross basis for the periods presented:

Exploration and Production
 
Three Months Ended March 31,
 
2016
 
2015
 
(In thousands)
Loss before income taxes
$
(105,764
)
 
$
(34,008
)
Gain of extinguishment of debt
(7,016
)
 
—

Net gain on derivative instruments
(14,375
)
 
(47,072
)
Derivative settlements (1)
73,313

 
109,259

Interest expense, net of capitalized interest
38,739

 
38,784

Depreciation, depletion and amortization
120,842

 
117,540

Impairment
1,131

 
5,321

Rig termination
—

 
1,080

Exploration expenses
363

 
843

Stock-based compensation expenses
6,547

 
7,542

Other non-cash adjustments
1,207

 
(4
)
Adjusted EBITDA
$
114,987

 
$
199,285

(1)
Cash settlements represent the cumulative gains and losses on the Company’s derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled.

Well Services
 
Three Months Ended March 31,
 
2016
 
2015
 
(In thousands)
Income before income taxes
$
4,011

 
$
9,608

Depreciation, depletion and amortization
4,248

 
4,518

Stock-based compensation expenses
664

 
543

Adjusted EBITDA
$
8,923

 
$
14,669


Midstream Services
 
Three Months Ended March 31,
 
2016
 
2015
 
(In thousands)
Income before income taxes
$
15,157

 
$
9,289

Depreciation, depletion and amortization
1,684

 
1,186

Impairment
2,431

 
—

Stock-based compensation expenses
219

 
204

Adjusted EBITDA
$
19,491

 
$
10,679



11


Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share are supplemental non-GAAP financial measures that are used by management and external users of the Company’s financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted Net Income (Loss) as net income (loss) after adjusting first for (1) the impact of certain non-cash and non-recurring items, including non-cash changes in the fair value of derivative instruments, impairment, and other similar non-cash and non-recurring charges, and then (2) the non-cash and non-recurring items’ impact on taxes based on the Company’s effective tax rate applicable to those adjusting items in the same period. Adjusted Net Income (Loss) is not a measure of net income (loss) as determined by GAAP. The Company defines Adjusted Diluted Earnings (Loss) Per Share as Adjusted Net Income (Loss) divided by diluted weighted average shares outstanding.
The following table presents reconciliations of the GAAP financial measure of net income (loss) to the non-GAAP financial measure of Adjusted Net Income (Loss) and the GAAP financial measure of diluted earnings (loss) per share to the non-GAAP financial measure of Adjusted Diluted Earnings (Loss) Per Share for the periods presented:
 
 
Three Months Ended March 31,
 
2016
 
2015
 
(In thousands, except per share data)
Net loss
$
(64,455
)
 
$
(18,041
)
Gain on extinguishment of debt
(7,016
)
 
—

Net gain on derivative instruments
(14,375
)
 
(47,072
)
Derivative settlements (1)
73,313

 
109,259

Impairment
3,562

 
5,321

Rig termination
—

 
1,080

Other non-cash adjustments
1,207

 
(4
)
Tax impact (2)
(21,191
)
 
(25,719
)
Adjusted Net Income (Loss)
$
(28,955
)
 
$
24,824

 
 
 
 
Diluted loss per share
$
(0.40
)
 
$
(0.17
)
Gain on extinguishment of debt
(0.04
)
 
—

Net gain on derivative instruments
(0.09
)
 
(0.43
)
Derivative settlements (1)
0.45

 
1.00

Impairment
0.02

 
0.05

Rig termination
—

 
0.01

Other non-cash adjustments
0.01

 
—

Tax impact (2)
(0.13
)
 
(0.23
)
Adjusted Diluted Earnings (Loss) Per Share
$
(0.18
)
 
$
0.23


 
 
 
Diluted weighted average shares outstanding
162,922

 
109,303

 
 
 
 
Effective tax rate applicable to adjustment items
37.4
%
 
37.5
%
(1)
Cash settlements represent the cumulative gains and losses on the Company’s derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled.
(2)
The tax impact is computed utilizing the Company’s effective tax rate applicable to the adjustments for certain non-cash and non-recurring items.


12