EX-99.1 2 oas-6302019q2pressrele.htm EX-99.1 Document

Exhibit 99.1
Oasis Petroleum Inc. Announces Quarter Ended June 30, 2019 Earnings
Houston, Texas — August 6, 2019 — Oasis Petroleum Inc. (NYSE: OAS) (“Oasis” or the “Company”) today announced financial and operating results for the second quarter of 2019.
Recent Highlights:
•Delivered net cash provided by operating activities of $214.0 million and Adjusted EBITDA(1) of $249.6 million for the second quarter of 2019.
•Produced 84.5 MBoepd, an increase of 6.3% from the second quarter of 2018.
•Temporary downtime in OMP’s Wild Basin natural gas processing complex caused an estimated 3.0 MBoepd and $6 million in lost production and Adjusted EBITDA(1), respectively. July production averaged approximately 89 MBoepd.
•Achieved positive free cash flow year to date and continues to expect to be free cash flow positive in 2019 for the E&P business(2).
•Delaware Basin well costs are targeted at $9.6 million per ~10,000 foot lateral well.
•LOE totaled $7.32 per Boe in the second quarter of 2019, within the Company's guidance of $7.00 to $7.75 per Boe.
•Both total Company G&A expense and E&P Cash G&A(1) expense decreased 10% from the first quarter of 2019.
•Improved crude oil differentials to $0.96 off of NYMEX WTI, a significant improvement from the fourth quarter of 2018.
(1) Non-GAAP measure. See “Non-GAAP Financial Measures” below for definitions of all non-GAAP measures included herein and reconciliations to the most directly comparable measures under United States generally accepted accounting principles (“GAAP”).
(2) For more detail on E&P free cash flow, see pages six and seven of the Company’s investor presentation on the Company’s website at www.oasispetroleum.com.
“Oasis continues to execute its plan of harvesting Williston free cash flow to fund growth in the Delaware,” said Thomas B. Nusz, Oasis’ Chairman and Chief Executive Officer. “Our operational expertise and deep inventory in the Williston support full field development and we are expanding outside of Wild Basin with impressive results. In the Delaware, our learnings are advancing faster than expected, resulting in faster cycle times, lowered costs, and strong well performance. We are seeing strong performance from not only the Wolfcamp A wells, but also from recent Wolfcamp B and C wells. With assets focused in two of the best oil basins in the US, a team with a proven operating track record, and strong realizations in both basins, we are structured to succeed through volatile commodity markets.”
Financial and Operational Update and Outlook
•Production averaged 78.3 MBoepd (Williston Basin) and 6.2 MBoepd (Delaware Basin). Oasis expects production in the third quarter of 2019 to range between 87 and 90 MBoepd (approximately 71.5% oil).
•Oasis updated its differential guidance to between $1.50 and $3.00 per barrel in 2019 as compared to between $1.50 and $3.50 per barrel previously.
•CapEx of $295 million consisted of $206 million of E&P and other, $83 million of consolidated midstream and $6 million of acquisitions. The Company now expects 2019 E&P and other CapEx to be approximately $620 to $640 million. The increase primarily reflects 1) an adjustment to deflation expectations related to a lower budgeted crude oil price, 2) improved cycle times in the Delaware Basin resulting in increased spuds with the two rig program, and 3) increased non-operated spending and a number of operating wells with higher working interests.
1

Metric2Q 2019 ActualPrior
Full Year Guidance		Updated
Full Year Guidance
Production (MBoepd)84.5 86.0 - 91.086.8 - 88.5
Differential to NYMEX WTI ($ per Bbl)$0.96 $1.50 - $3.50$1.50 - $3.00
Natural gas realized price (as a % of Henry Hub)89%  N/A85%  
Lease operating expenses ($ per Boe)
$7.32 $7.00 - $7.75$7.00 - $7.75
Marketing, transportation and gathering expenses ($ per Boe)(1)
$3.69 $3.50 - $4.50$3.50 - $4.50
E&P Cash G&A ($ in millions)(2)
$17.2 $77 - $81$77 - $81
Production taxes (as a % of oil and gas revenues)7.9%  8.1% - 8.4%8.1% - 8.4%
CapEx ($ in millions)
E&P & Other CapEx(3)
$206.4 $540 - $560$620 - $640
Midstream CapEx$82.6 $195 - $219$219 - $230
Midstream CapEx attributable to Oasis (included in Midstream CapEx above)$70.9 $11 - $13$15 - $16
___________________
(1)Marketing, transportation and gathering expenses (“MT&G”) exclude the effect of non-cash valuation charges on pipeline imbalances.
(2)E&P Cash G&A represents general and administrative (“G&A”) expenses less non-cash equity-based compensation expenses included in the Company's exploration and production (“E&P”) segment. Total 2019 cash G&A for Oasis is estimated at $92 to $96 million, which excludes non-cash amortization of equity-based compensation of approximately $41 to $45 million. See “Non-GAAP Financial Measures” below.
(3)Other CapEx includes well services and administrative capital and excludes estimated capitalized interest of approximately $15 million for 2019.
Midstream Update
•OMP continues to successfully secure third party volumes to feed the Wild Basin natural gas processing complex. In June, the complex experienced temporary operational downtime, which was resolved in early July. The gas complex has recently been processing above 280 MMscfpd with the second natural gas plant processing at times above its 200 MMscfpd design capacity.
•Oasis continues to work with third parties for gas infrastructure in the Delaware Basin and expects to provide an update in the coming months on the outcome of the selection process.
•Total Midstream CapEx is expected to range between $219 to $230 million for 2019, which reflects capturing additional third party business, incremental plant costs and an acceleration of spending from 2020 to 2019. Net CapEx from Oasis attributable to its retained interest is expected to range between $15 and $16 million.
•More details on OMP’s performance can be found in OMP’s second quarter 2019 press release issued on August 6, 2019 available on OMP’s website at www.oasismidstream.com.
2

Operational and Financial Update
The following table presents select operational and financial data for the periods presented:
 Quarter Ended:
 June 30, 2019March 31, 2019June 30, 2018
Production data:
Crude oil (Bopd)61,224 66,046 60,632 
Natural gas (Mcfpd)139,380 154,005 112,830 
Total production (Boepd)84,454 91,714 79,437 
Percent crude oil72.5 %72.0 %76.3 %
Average sales prices:
Crude oil, without derivative settlements ($ per Bbl)$58.87 $53.52 $65.82 
Differential to NYMEX WTI ($ per Bbl)0.96 1.30 2.07 
Crude oil, with derivative settlements ($ per Bbl)(1)
56.79 55.79 54.88 
Crude oil derivative settlements - net cash receipts (payments) ($ in millions)(2)
(11.6)13.5 (60.4)
Natural gas, without derivative settlements ($ per Mcf)(2)
2.29 3.66 3.38 
Natural gas, with derivative settlements ($ per Mcf)(1)(2)
2.43 3.65 3.43 
Natural gas derivative settlements - net cash receipts (payments) ($ in millions)(2)
1.8 (0.1)0.5 
Selected financial data ($ in millions):
Revenues:
Crude oil revenues(3)
$328.0 $318.1 $363.2 
Natural gas revenues29.0 50.7 34.7 
Purchased oil and gas sales(3)
109.4 148.5 128.1 
Midstream revenues
51.6 48.0 29.3 
Well services revenues11.4 10.4 18.5 
Total revenues$529.4 $575.7 $573.8 
Net cash provided by operating activities214.0 174.9 303.7 
Adjusted EBITDA(4)
249.6 269.3 241.2 
Select operating expenses:
Lease operating expenses$56.2 $58.4 $44.1 
Midstream expenses
17.4 16.7 7.7 
Well services expenses8.5 7.0 13.6 
MT&G(5)
28.4 32.7 23.1 
Non-cash valuation charges0.1 2.3 (0.2)
Purchased oil and gas expenses(3)
109.7 149.9 129.6 
Production taxes28.1 29.6 34.0 
Depreciation, depletion and amortization177.4 189.8 153.6 
Total select operating expenses$425.8 $486.4 $405.5 
Select operating expenses data:
Lease operating expense ($ per Boe)$7.32 $7.08 $6.11 
MT&G ($ per Boe)(5)
3.69 3.96 3.19 
Depreciation, depletion and amortization ($ per Boe)23.08 23.00 21.24 
E&P G&A ($ per Boe)3.35 3.33 3.25 
E&P Cash G&A ($ per Boe)(4)
2.24 2.30 2.28 
Production taxes (as a % of oil and gas revenues)7.9 %8.0 %8.6 %
___________________
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(1)Realized prices include gains or losses on cash settlements for commodity derivatives, which do not qualify for or 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)For the three and six months ended June 30, 2018, crude oil revenues, purchased oil and gas sales and purchased oil and gas expenses have been revised to correct errors related to the presentation of certain crude oil purchase and sale arrangements, which had no impact on reported net income (loss). The amounts presented herein reflect the impact of the revision.
(4)Adjusted EBITDA and E&P Cash G&A represent non-GAAP measures. See “Non-GAAP Financial Measures” below for further information and reconciliations to the most directly comparable financial measures under GAAP.
(5)Excludes non-cash valuation charges on pipeline imbalances.
G&A totaled $30.9 million in the second quarter of 2019, $28.2 million in the second quarter of 2018 and $34.5 million in the first quarter of 2019. Amortization of equity-based compensation, which is included in G&A, was $8.9 million, or $1.16 per barrel of oil equivalent (“Boe”), in the second quarter of 2019 as compared to $7.4 million, or $1.02 per Boe, in the second quarter of 2018 and $9.0 million, or $1.09 per Boe, in the first quarter of 2019. G&A for the Company’s E&P segment totaled $25.8 million in the second quarter of 2019, $23.5 million in the second quarter of 2018 and $27.5 million in the first quarter of 2019.
MT&G, excluding non-cash valuation charges on pipeline imbalances, increased $5.3 million to $28.4 million in the second quarter of 2019, as compared to $23.1 million in the second quarter of 2018, primarily attributable to higher crude oil gathering and transportation expenses related to an increase in volumes being transported on the Dakota Access Pipeline to market the Company’s equity barrels, which resulted in improved price realizations. MT&G, excluding non-cash valuation charges on pipeline imbalances, decreased $4.3 million in the second quarter of 2019, as compared to $32.7 million in the first quarter of 2019 primarily due to lower production volumes.
Interest expense was $43.2 million for the second quarter of 2019 as compared to $40.9 million for the second quarter of 2018 and $44.5 million for the first quarter of 2019. Capitalized interest totaled $3.6 million for the second quarter of 2019, $4.2 million for the second quarter of 2018 and $2.8 million for the first quarter of 2019. Cash Interest totaled $42.0 million for the second quarter of 2019, $40.5 million for the second quarter of 2018 and $42.6 million for the first quarter of 2019. For a definition of Cash Interest and a reconciliation of interest expense to Cash Interest, see “Non-GAAP Financial Measures” below.
For the three months ended June 30, 2019, the Company recorded an income tax expense of $12.2 million, resulting in a 19.3% effective tax rate as a percentage of its pre-tax income for the quarter. The Company recorded an income tax benefit of $3.7 million, resulting in a 3.3% effective tax rate as a percentage of its pre-tax loss for the three months ended March 31, 2019.
For the second quarter of 2019, the Company reported net income of $42.8 million, or $0.14 per diluted share, as compared to a net loss of $320.2 million, or $1.02 per diluted share, for the second quarter of 2018. Excluding certain non-cash items and their tax effect, Adjusted Net Income Attributable to Oasis was $11.0 million, or $0.03 per diluted share, in the second quarter of 2019, as compared to Adjusted Net Income Attributable to Oasis of $28.9 million, or $0.09 per diluted share, in the second quarter of 2018. Adjusted EBITDA for the second quarter of 2019 was $249.6 million, as compared to Adjusted EBITDA of $241.2 million for the second quarter of 2018. For definitions of Adjusted Net Income (Loss) Attributable to Oasis and Adjusted EBITDA and reconciliations to the most directly comparable GAAP measures, see “Non-GAAP Financial Measures” below.
4

Capital Expenditures and Completions
The following table depicts the Company’s total capital expenditures (“CapEx”) by category:
 1Q 2019 2Q 2019 YTD - 2Q 2019 
(In millions) 
CapEx:
E&P $165.7 $202.1 $367.8 
Well services0.1 — 0.1 
Other(1)
3.9 4.3 8.2 
Total CapEx before midstream169.7 206.4 376.1 
Midstream(2)
57.1 82.6 139.7 
Total CapEx before acquisitions226.8 289.0 515.8 
Acquisitions— 5.8 5.8 
Total CapEx(3)
$226.8 $294.8 $521.6 
___________________
(1)Other CapEx includes such items as administrative capital and capitalized interest.
(2)Midstream CapEx attributable to Oasis Midstream Partners (“OMP”) was $45.2 million and $70.9 million for the three months ended March 31, 2019 and June 30, 2019, respectively.
(3)Total CapEx (including acquisitions) reflected in the table above differs from the amounts shown in the statements 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 CapEx, while the amounts presented in the statements of cash flows is presented on a cash basis.
Oasis completed and placed on production 27 gross (20.6 net) operated wells and 0.8 net non-operated wells during the second quarter of 2019. Completions included 24 gross (17.6 net) operated wells in the Williston Basin and 3 gross (3.0 net) operated wells in the Delaware Basin. The completions cadence was back weighted during the quarter with only 2 wells completed in April.
Liquidity and Balance Sheet
As of June 30, 2019, Oasis had cash and cash equivalents of $20.3 million, total elected commitments under the Oasis credit facility of $1,350.0 million and total elected commitments under the OMP credit facility of $475.0 million. In addition, Oasis had $531.0 million of borrowings and $14.0 million of outstanding letters of credit issued under the Oasis credit facility and $408.0 million of borrowings and $8.2 million of outstanding letters of credit under the OMP credit facility, resulting in a total unused borrowing capacity of $863.8 million for both revolving credit facilities as of June 30, 2019.
5

Hedging Activity
The Company’s crude oil contracts will settle monthly based on the average NYMEX West Texas Intermediate crude oil index price (“NYMEX WTI”) for fixed price swaps and two-way and three-way costless collars. The Company’s basis swaps for crude oil will settle monthly based on the fixed basis differential from Argus WTI Houston crude oil index price (“Houston”) to NYMEX WTI. The Company’s natural gas contracts will settle monthly based on the average NYMEX Henry Hub natural gas index price (“NYMEX HH”) for fixed price swaps. As of August 6, 2019, the Company had the following outstanding commodity derivative contracts:
Six Months Ending
December 31, 2019June 30, 2020December 31, 2020June 30, 2021
Crude Oil (Volume in MBopd)
Fixed Price Swaps
Volume23.8 10.0 3.0 — 
Price$57.35 $59.87 $58.85 $— 
Two-Way Collars
Volume14.0 5.0 2.0 — 
Floor$58.07 $51.50 $50.50 $— 
Ceiling$74.64 $61.76 $60.70 $— 
Three-Way Collars
Volume12.0 13.0 12.0 2.0 
Sub-Floor$40.00 $40.00 $40.00 $40.00 
Floor$51.57 $54.13 $52.48 $50.00 
Ceiling$65.40 $64.81 $63.86 $64.25 
Total Crude Oil Volume49.8 28.0 17.0 2.0 
Basis Swaps (Houston-NYMEX WTI)
Volume1.5 — — — 
Price$4.55 $— $— $— 
Natural Gas (Volume in MMBtupd)
Fixed Price Swaps
Volume30,000 — — — 
Price$2.92 $— $— $— 
The June 2019 crude oil derivative contracts settled at a net $0.6 million received in July 2019 and will be included in the Company’s third quarter 2019 derivative settlements.
Conference Call Information
Investors, analysts and other interested parties are invited to listen to the conference call:
Date:Wednesday, August 7, 2019
Time:10:00 a.m. Central Time
Live Webcast:https://www.webcaster4.com/Webcast/Page/1052/31143
Website:www.oasispetroleum.com
Sell-side analysts with a question may use the following dial-in:
Dial-in:888-317-6003
Intl. Dial in:412-317-6061
Conference ID:2649196
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 Wednesday, August 14, 2019 by dialing:
Replay dial-in:877-344-7529
6

Intl. replay:412-317-0088
Replay code:10133701
The conference call will also be available for replay for approximately 30 days at www.oasispetroleum.com.
Contact:
Oasis Petroleum Inc.
Bob Bakanauskas, (281) 404-9600
Director, Investor Relations
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 crude oil and natural gas prices, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, the ability to consummate the previously announced Delaware acreage from Oasis to OMP and realize the anticipated benefits therefrom, 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 Securities and Exchange Commission.
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 onshore, unconventional crude oil and natural gas resources in the United States. For more information, please visit the Company’s website at www.oasispetroleum.com.
Oasis Petroleum Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
June 30, 2019December 31, 2018
 (In thousands, except share data)
ASSETS
Current assets
Cash and cash equivalents$20,258 $22,190 
Accounts receivable, net396,104 387,602 
Inventory30,056 33,128 
Prepaid expenses6,018 10,997 
Derivative instruments19,089 99,930 
Intangible assets, net— 125 
Other current assets195 183 
Total current assets471,720 554,155 
Property, plant and equipment
Oil and gas properties (successful efforts method)9,283,462 8,912,189 
Other property and equipment1,301,835 1,151,772 
Less: accumulated depreciation, depletion, amortization and impairment(3,416,183)(3,036,852)
Total property, plant and equipment, net7,169,114 7,027,109 
Derivative instruments 5,636 6,945 
Long-term inventory13,286 12,260 
Operating right-of-use assets20,054 — 
Other assets30,478 25,673 
Total assets$7,710,288 $7,626,142 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$15,155 $20,166 
Revenues and production taxes payable170,534 216,695 
Accrued liabilities315,450 331,651 
Accrued interest payable37,701 38,040 
Derivative instruments 4,445 84 
Advances from joint interest partners 4,076 5,140 
Current operating lease liabilities7,837 — 
Other current liabilities3,230 — 
Total current liabilities558,428 611,776 
Long-term debt2,896,524 2,735,276 
Deferred income taxes 308,672 300,055 
Asset retirement obligations55,228 52,384 
Derivative instruments — 20 
Operating lease liabilities18,021 — 
Other liabilities6,957 7,751 
Total liabilities3,843,830 3,707,262 
Commitments and contingencies
Stockholders’ equity
Common stock, $0.01 par value: 900,000,000 shares authorized; 324,680,450 shares issued and 321,894,286 shares outstanding at June 30, 2019 and 320,469,049 shares issued and 318,377,161 shares outstanding at December 31, 20183,183 3,157 
Treasury stock, at cost: 2,786,164 and 2,091,888 shares at June 30, 2019 and December 31, 2018, respectively(33,330)(29,025)
Additional paid-in capital3,096,355 3,077,755 
Retained earnings610,564 682,689 
Oasis share of stockholders’ equity3,676,772 3,734,576 
Non-controlling interests189,686 184,304 
Total stockholders’ equity3,866,458 3,918,880 
Total liabilities and stockholders’ equity$7,710,288 $7,626,142 

7

Oasis Petroleum Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
 Three Months Ended June 30,Six Months Ended June 30,
 2019 2018 2019 2018 
 (In thousands, except per share data)
Revenues
Oil and gas revenues$357,004 $397,849 $725,786 $764,444 
Purchased oil and gas sales109,389 128,064 257,860 195,773 
Midstream revenues51,573 29,342 99,594 57,264 
Well services revenues11,439 18,496 21,897 30,082 
Total revenues529,405 573,751 1,105,137 1,047,563 
Operating expenses
Lease operating expenses56,228 44,141 114,672 88,922 
Midstream expenses17,368 7,688 34,097 15,673 
Well services expenses8,474 13,560 15,444 20,947 
Marketing, transportation and gathering expenses28,488 22,833 63,438 43,846 
Purchased oil and gas expenses109,662 129,579 259,566 200,173 
Production taxes28,142 34,026 57,760 65,026 
Depreciation, depletion and amortization177,358 153,570 367,191 302,835 
Exploration expenses887 617 1,717 1,386 
Impairment24 384,135 653 384,228 
General and administrative expenses30,926 28,230 65,385 56,170 
Total operating expenses457,557 818,379 979,923 1,179,206 
Gain (loss) on sale of properties(276)1,954 (3,198)1,954 
Operating income (loss)71,572 (242,674)122,016 (129,689)
Other income (expense)
Net gain (loss) on derivative instruments34,749 (120,285)(82,862)(191,401)
Interest expense, net of capitalized interest(43,186)(40,910)(87,654)(78,056)
Loss on extinguishment of debt — (13,651)— (13,651)
Other income279 218 233 35 
Total other expense, net(8,158)(174,628)(170,283)(283,073)
Income (loss) before income taxes63,414 (417,302)(48,267)(412,762)
Income tax benefit (expense)(12,240)101,001 (8,537)100,173 
Net income (loss) including non-controlling interests51,174 (316,301)(56,804)(312,589)
Less: Net income attributable to non-controlling interests8,417 3,903 15,321 7,025 
Net income (loss) attributable to Oasis$42,757 $(320,204)$(72,125)$(319,614)
Earnings (loss) attributable to Oasis per share:
Basic$0.14 $(1.02)$(0.23)$(1.06)
Diluted0.14 (1.02)(0.23)(1.06)
Weighted average shares outstanding:
Basic314,982 313,072 314,724 301,652 
Diluted314,982 313,072 314,724 301,652 


10

Oasis Petroleum Inc.
Selected Financial and Operational Statistics
(Unaudited)
 Three Months Ended June 30,Six Months Ended June 30,
 2019 2018 2019 2018 
Operating results (in thousands):
Revenues
Crude oil revenues(1)
$327,977 $363,183 $646,098 $689,493 
Natural gas revenues29,027 34,666 79,688 74,951 
Purchased oil and gas sales(1)
109,389 128,064 257,860 195,773 
Midstream revenues51,573 29,342 99,594 57,264 
Well services revenues11,439 18,496 21,897 30,082 
Total revenues$529,405 $573,751 $1,105,137 $1,047,563 
Production data:
Crude oil (MBbls)5,571 5,517 11,515 10,802 
Natural gas (MMcf)12,684 10,268 26,544 20,045 
Oil equivalents (MBoe)7,685 7,229 15,940 14,142 
Average daily production (Boe per day)84,454 79,437 88,064 78,135 
Average sales prices:
Crude oil, without derivative settlements (per Bbl)$58.87 $65.82 $56.11 $63.83 
Crude oil, with derivative settlements (per Bbl)(2)
56.79 54.88 56.27 54.81 
Natural gas, without derivative settlements (per Mcf)(3)
2.29 3.38 3.00 3.74 
Natural gas, with derivative settlements (per Mcf)(2)(3)
2.43 3.43 3.07 3.77 
Costs and expenses (per Boe of production):
Lease operating expenses$7.32 $6.11 $7.19 $6.29 
MT&G(4)
3.69 3.19 3.83 3.10 
Production taxes3.66 4.71 3.62 4.60 
Depreciation, depletion and amortization23.08 21.24 23.04 21.41 
G&A4.02 3.91 4.10 3.97 
E&P G&A 3.35 3.25 3.34 3.32 
 ___________________
(1)For the three and six months ended June 30, 2018, crude oil revenues, purchased oil and gas sales and purchased oil and gas expenses have been revised to correct errors related to the presentation of certain crude oil purchase and sale arrangements, which had no impact on reported net income (loss). The amounts presented herein reflect the impact of the revision.
(2)Realized prices include gains or losses on cash settlements for commodity derivatives, which do not qualify for or were not designated as hedging instruments for accounting purposes. Cash settlements represent the cumulative gains and losses on the Company’s derivative instruments for the periods presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were settled.
(3)Natural gas prices include the value for natural gas and natural gas liquids.
(4)Excludes non-cash valuation charges on pipeline imbalances.
Oasis Petroleum Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 Six Months Ended June 30,
 2019 2018 
 (In thousands)
Cash flows from operating activities:
Net loss including non-controlling interests$(56,804)$(312,589)
Adjustments to reconcile net loss including non-controlling interests to net cash provided by operating activities:
Depreciation, depletion and amortization367,191 302,835 
Loss on extinguishment of debt — 13,651 
(Gain) loss on sale of properties3,198 (1,954)
Impairment653 384,228 
Deferred income taxes8,617 (100,293)
Derivative instruments82,862 191,401 
Equity-based compensation expenses17,924 14,130 
Deferred financing costs amortization and other12,245 10,518 
Working capital and other changes:
Change in accounts receivable, net(12,914)(5,866)
Change in inventory3,029 (4,721)
Change in prepaid expenses3,918 573 
Change in accounts payable, interest payable and accrued liabilities(36,514)40,849 
Change in other assets and liabilities, net(4,473)(746)
Net cash provided by operating activities388,932 532,016 
Cash flows from investing activities:
Capital expenditures(525,501)(536,959)
Acquisitions(5,781)(524,255)
Proceeds from sale of properties— 2,236 
Derivative settlements3,629 (96,823)
Other— (933)
Net cash used in investing activities(527,653)(1,156,734)
Cash flows from financing activities:
Proceeds from revolving credit facilities1,178,000 1,933,000 
Principal payments on revolving credit facilities(1,025,000)(1,265,000)
Repurchase of senior unsecured notes— (423,143)
Proceeds from issuance of senior unsecured notes— 400,000 
Deferred financing costs(482)(6,790)
Purchases of treasury stock(4,305)(6,064)
Distributions to non-controlling interests(10,093)(6,846)
Other(1,331)(87)
Net cash provided by financing activities136,789 625,070 
Increase (decrease) in cash and cash equivalents(1,932)352 
Cash and cash equivalents:
Beginning of period22,190 16,720 
End of period$20,258 $17,072 
Supplemental non-cash transactions:
Change in accrued capital expenditures$(30,598)$90,040 
Change in asset retirement obligations3,840 5,407 
Issuance of shares in connection with acquisition— 371,220 

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Non-GAAP Financial Measures
E&P Cash G&A is defined as the total general and administrative expenses included in the Company’s exploration and production segment less non-cash equity-based compensation expenses included in its exploration and production segment. E&P Cash G&A is not a measure of general and administrative expenses as determined by GAAP. Management believes that the presentation of E&P Cash G&A provides useful additional information to investors and analysts to assess the Company’s operating costs in comparison to peers without regard to equity-based compensation programs, which can vary substantially from company to company.
The following table presents a reconciliation of the GAAP financial measure of general and administrative expenses included in its exploration and production segment to the non-GAAP financial measure of E&P Cash G&A for the periods presented:
Exploration and Production
 Three Months Ended June 30,Six Months Ended June 30,
 2019 2018 2019 2018 
(In thousands)
E&P general and administrative expenses$25,761 $23,492 $53,288 $46,971 
Equity-based compensation expenses(8,522)(7,012)(17,102)(13,463)
E&P Cash G&A$17,239 $16,480 $36,186 $33,508 
Cash Interest 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 Cash Interest as interest expense plus capitalized interest less amortization and write-offs of deferred financing costs and debt discounts included in interest expense. Cash Interest is not a measure of interest expense as determined by GAAP.
The following table presents a reconciliation of the GAAP financial measure of interest expense to the non-GAAP financial measure of Cash Interest for the periods presented:
 Three Months Ended June 30,Six Months Ended June 30,
 2019 2018 2019 2018 
(In thousands)
Interest expense$43,186 $40,910 $87,654 $78,056 
Capitalized interest3,645 4,227 6,463 8,678 
Amortization of deferred financing costs(1,823)(1,937)(3,593)(3,698)
Amortization of debt discount(3,006)(2,731)(5,890)(5,349)
Cash Interest$42,002 $40,469 $84,634 $77,687 
Adjusted EBITDA and Free Cash Flow 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 EBITDA as earnings before interest expense, income taxes, depreciation, depletion, amortization, exploration expenses and other similar non-cash or non-recurring charges. The Company defines Free Cash Flow as Adjusted EBITDA attributable to Oasis less Cash Interest and CapEx, excluding capitalized interest. Adjusted EBITDA and Free Cash Flow are not measures of net income (loss) or cash flows as determined by GAAP.
The following table presents reconciliations of the GAAP financial measures of net income (loss) including non-controlling interests and net cash provided by (used in) operating activities to the non-GAAP financial measures of Adjusted EBITDA and Free Cash Flow for the periods presented:
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 Three Months Ended June 30,Six Months Ended June 30,
 2019 2018 2019 2018 
(In thousands)
Net income (loss) including non-controlling interests$51,174 $(316,301)$(56,804)$(312,589)
(Gain) loss on sale of properties276 (1,954)3,198 (1,954)
Loss on extinguishment of debt — 13,651 — 13,651 
Net (gain) loss on derivative instruments(34,749)120,285 82,862 191,401 
Derivative settlements(1)
(9,817)(59,849)3,629 (96,823)
Interest expense, net of capitalized interest43,186 40,910 87,654 78,056 
Depreciation, depletion and amortization177,358 153,570 367,191 302,835 
Impairment24 384,135 653 384,228 
Exploration expenses887 617 1,717 1,386 
Equity-based compensation expenses8,911 7,376 17,924 14,130 
Income tax (benefit) expense12,240 (101,001)8,537 (100,173)
Other non-cash adjustments120 (226)2,395 (17)
Adjusted EBITDA249,610 241,213 518,956 474,131 
Adjusted EBITDA attributable to non-controlling interests 11,693 5,148 21,896 9,452 
Adjusted EBITDA attributable to Oasis237,917 236,065 497,060 464,679 
Cash Interest(42,002)(40,469)(84,634)(77,687)
Capital expenditures(2)
(294,875)(358,534)(521,668)(1,525,762)
Capitalized interest3,645 4,227 6,463 8,678 
Free Cash Flow$(95,315)$(158,711)$(102,779)$(1,130,092)
Net cash provided by operating activities$214,006 $303,657 $388,932 $532,016 
Derivative settlements(1)
(9,817)(59,849)3,629 (96,823)
Interest expense, net of capitalized interest43,186 40,910 87,654 78,056 
Exploration expenses887 617 1,717 1,386 
Deferred financing costs amortization and other(5,315)(5,043)(12,245)(10,518)
Current tax (benefit) expense76 120 (80)120 
Changes in working capital6,467 (38,973)46,954 (30,089)
Other non-cash adjustments120 (226)2,395 (17)
Adjusted EBITDA249,610 241,213 518,956 474,131 
Adjusted EBITDA attributable to non-controlling interests 11,693 5,148 21,896 9,452 
Adjusted EBITDA attributable to Oasis237,917 236,065 497,060 464,679 
Cash Interest(42,002)(40,469)(84,634)(77,687)
Capital expenditures(2)
(294,875)(358,534)(521,668)(1,525,762)
Capitalized interest3,645 4,227 6,463 8,678 
Free Cash Flow$(95,315)$(158,711)$(102,779)$(1,130,092)
___________________
(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.
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(2)Capital expenditures (including acquisitions) reflected in the table above differ from the amounts shown in the statements of cash flows in the Company’s condensed consolidated financial statements because amounts reflected in the table include changes in accrued liabilities from the previous reporting period for capital expenditures, while the amounts presented in the statements of cash flows are presented on a cash basis. Acquisitions totaled $5.8 million for the three and six months ended June 30, 2019, and $3.5 million and $894.5 million for the three and six months ended June 30, 2018, respectively.
The following tables present reconciliations of the GAAP financial measure of income (loss) before income taxes including non-controlling interests 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 June 30,Six Months Ended June 30,
 2019 2018 2019 2018 
 (In thousands)
Income (loss) before income taxes including non-controlling interests$14,925 $(454,662)$(141,533)$(482,847)
(Gain) loss on sale of properties276 (1,954)3,198 (1,954)
Loss on extinguishment of debt — 13,651 — 13,651 
Net (gain) loss on derivative instruments(34,749)120,285 82,862 191,401 
Derivative settlements(1)
(9,817)(59,849)3,629 (96,823)
Interest expense, net of capitalized interest38,977 40,727 79,697 77,611 
Depreciation, depletion and amortization172,687 149,250 357,506 294,454 
Impairment24 384,135 653 384,228 
Exploration expenses887 617 1,717 1,386 
Equity-based compensation expenses8,522 7,012 17,102 13,463 
Other non-cash adjustments120 (226)2,395 (17)
Adjusted EBITDA$191,852 $198,986 $407,226 $394,553 
___________________
(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.
Midstream Services
 Three Months Ended June 30,Six Months Ended June 30,
 2019 2018 2019 2018 
 (In thousands)
Income before income taxes including non-controlling interests$51,016 $37,815 $97,074 $69,796 
Interest expense, net of capitalized interest4,209 183 7,957 445 
Depreciation, depletion and amortization8,893 6,900 18,080 13,529 
Equity-based compensation expenses515 409 980 780 
Adjusted EBITDA$64,633 $45,307 $124,091 $84,550 

Well Services
 Three Months Ended June 30,Six Months Ended June 30,
 2019 2018 2019 2018 
 (In thousands)
Income before income taxes including non-controlling interests$1,499 $8,051 $2,319 $16,158 
Depreciation, depletion and amortization3,358 3,930 7,287 7,619 
Equity-based compensation expenses527 409 1,088 795 
Adjusted EBITDA$5,384 $12,390 $10,694 $24,572 

Adjusted Net Income (Loss) Attributable to Oasis and Adjusted Diluted Earnings (Loss) Attributable to Oasis 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) Attributable to Oasis as net income (loss) after adjusting first for (1) the impact of certain non-cash items, including non-cash changes in the fair value of derivative instruments, impairment, and other similar non-cash charges, or non-recurring items, (2) the impact of net income attributable to non-controlling interests and (3) 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) Attributable to Oasis is not a measure of net income (loss) as determined by GAAP. The Company defines Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share as Adjusted Net Income (Loss) Attributable to Oasis divided by diluted weighted average shares outstanding.
The following table presents reconciliations of the GAAP financial measure of net income (loss) attributable to Oasis to the non-GAAP financial measure of Adjusted Net Income (Loss) Attributable to Oasis and the GAAP financial measure of diluted earnings (loss) attributable to Oasis per share to the non-GAAP financial measure of Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share for the periods presented:
 Three Months Ended June 30,Six Months Ended June 30,
 2019 2018 2019 2018 
 (In thousands, except per share data)
Net income (loss) attributable to Oasis$42,757 $(320,204)$(72,125)$(319,614)
(Gain) loss on sale of properties276 (1,954)3,198 (1,954)
Loss on extinguishment of debt — 13,651 — 13,651 
Net (gain) loss on derivative instruments(34,749)120,285 82,862 191,401 
Derivative settlements(1)
(9,817)(59,849)3,629 (96,823)
Impairment24 384,135 653 384,228 
Amortization of deferred financing costs1,823 1,937 3,593 3,698 
Amortization of debt discount3,006 2,731 5,890 5,349 
Other non-cash adjustments120 (226)2,395 (17)
Tax impact(2)
7,565 (111,592)14,273 (121,102)
Adjusted Net Income Attributable to Oasis$11,005 $28,914 $44,368 $58,817 
Diluted earnings (loss) attributable to Oasis per share$0.14 $(1.02)$(0.23)$(1.06)
(Gain) loss on sale of properties— (0.01)0.01 (0.01)
Loss on extinguishment of debt — 0.04 — 0.04 
Net (gain) loss on derivative instruments(0.11)0.38 0.26 0.63 
Derivative settlements(1)
(0.03)(0.19)0.01 (0.32)
Impairment— 1.23 — 1.26 
Amortization of deferred financing costs0.01 0.01 0.01 0.01 
Amortization of debt discount0.01 0.01 0.02 0.02 
Other non-cash adjustments— — 0.01 — 
Tax impact(2)
0.01 (0.36)0.05 (0.38)
Adjusted Diluted Earnings Attributable to Oasis Per Share$0.03 $0.09 $0.14 $0.19 
Diluted weighted average shares outstanding(3)
314,982 315,664 316,081 304,859 
Effective tax rate applicable to adjustment items19.2 %24.2 %(14.0)%24.2 %
___________________
(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.
(3)No unvested stock awards were included in computing Adjusted Diluted Earnings Attributable to Oasis Per Share for the three months ended June 30, 2019 because the effect was anti-dilutive under the treasury stock method. For the six months ended June 30, 2019 and the three and six months ended June 30, 2018, the Company included 1,357,000, 2,592,000 and 3,207,000, respectively, of unvested stock awards in computing Adjusted Diluted Earnings Attributable to Oasis Per Share due to the dilutive effect under the treasury stock method.
16