Oasis Petroleum Inc. Announces Quarter Ended June 30, 2014 Earnings

     Oasis Petroleum Inc. Announces Quarter Ended June 30, 2014 Earnings

PR Newswire

HOUSTON, Aug. 5, 2014

HOUSTON, Aug.5, 2014 /PRNewswire/ --Oasis Petroleum Inc. (NYSE: OAS)
("Oasis" or the "Company") today announced financial results for the quarter
ended June30, 2014 and provided an operational update.

Highlights include:

  oIncreased average daily production to 43,668 barrels of oil equivalent per
    day ("Boepd"), a 45% increase over the second quarter of 2013 and a 6%
    sequential quarter increase, excluding production from Sanish.
  oGrew Adjusted EBITDA to $254.7 million in the second quarter of 2014, an
    increase of $69.2 million over the second quarter of 2013 and a sequential
    increase of $14.9 million over the first quarter of 2014. For a definition
    of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income
    and net cash provided by operating activities, see "Non-GAAP Financial
    Measures" below.
  oInvested capital expenditures ("CapEx") of $351.8 million in the second
    quarter of 2014.
  oCompleted and placed on production 41 gross (30.8 net) operated wells in
    the second quarter of 2014.
  oStarted operating Oasis Well Services' ("OWS") second fracturing fleet.

"Oasis continues to execute on its full-year plan to enhance shareholder value
through completion technique changes and resource expansion initiatives," said
Thomas B. Nusz, Oasis' Chairman and Chief Executive Officer. "Our first
slickwater wells in Indian Hills have continued to produce well above our type
curve. In addition, early production results fromour first Three Forks
slickwater well in Red Bank and a slickwater Bakken well in Montana are
expanding the completion technique's applicability across more of our
inventory.Both of these Oasis wells are producing 35% or more over comparable
wells completed with our base completion design."

Mr. Nusz added, "Even as we move to completing 70% of our wells with different
technology than our base design, our expectation of investing a total of $1.25
billion for drilling and completions during 2014 remains unchanged.Our base
design well cost of $7.3 million in the first half of 2014, which includes the
beneficial impact of OWS, provides us the ability to complete more intense
frac jobs while remaining within our budget. While completions were pushed
back a bit and we completed six fewer wells than planned, we were able to grow
production 6% over the sequential quarter. We expect production to range
between 47,000 and 49,000 Boepd in the third quarter of 2014. In addition, we
have increased both frac spreads and cleanout crews, which will support the
additional work we are doing in the second half of the year."

Operational and Financial Update

The Company's average daily production by project area is listed in the
following table:

                                 Quarter Ended:
                                 6/30/2014  3/31/2014  6/30/2013
Average daily production (Boepd)
West Williston                   30,381     28,227     18,257
East Nesson                      13,287     12,980     9,312
Sanish ^ (1)                     —          1,649      2,602
Total                            43,668     42,856     30,171
Percent Oil                      89.1%      89.4%      90.6%

    Includes production from certain non-operated properties in the Company's
(1) Sanish project area and other non-operated leases adjacent to its Sanish
    position until March 1, 2014. These properties were sold on March 5, 2014
    (the "Sanish Divestiture").

The following table describes the Company's producing wells by project area in
the Williston Basin as of June30, 2014:

                          Bakken/Three Forks Producing Wells
                          West Williston  East Nesson    TotalWillistonBasin
                          Gross   Net     Gross  Net     Gross        Net
Producing on or before
3/31/2014: ^(1)
Operated                  338     260.1   158    125.0   496          385.1
Non-Operated              162     13.3    98     7.1     260          20.4
Production started in Q2
2014:
Operated                  26      20.0    15     10.8    41           30.8
Non-Operated              14      0.9     3      0.1     17           1.0
Total Producing Wells on
6/30/2014:
Operated                  364     280.1   173    135.8   537          415.9
Non-Operated              176     14.2    101    7.2     277          21.4

(1) Well counts include changes that occurred in the current reporting period
    for wells producing on or before March 31, 2014.

Additionally, the Company had approximately 16 rigs running during the second
quarter of 2014,and as of June 30, 2014, had an inventory of gross operated
wells waiting on completion of 35 wells in West Williston and 32 wells in East
Nesson.

The Company's average price per barrel of oil, without derivative settlements,
was $94.48 in the second quarter of 2014, compared to $91.15 in the second
quarter of 2013 and $89.66 in the first quarter of 2014. The Company's average
price differential compared to NYMEX West Texas Intermediate ("WTI") crude oil
index prices was 8% in the second quarter of 2014, compared to 3% in the
second quarter of 2013 and 9% in the first quarter of 2014.

The Company's revenues are detailed in the following table:

                           Quarter Ended:
                           6/30/2014   3/31/2014   6/30/2013
Revenues ($ in thousands):
Oil                        $ 334,559   $ 309,231   $ 226,848
Bulk oil sale              —           —           5,777
Natural gas                19,623      22,616      9,217
Well services (OWS)        14,878      15,827      11,461
Midstream (OMS)            3,318       1,845       1,279
Total revenues             $ 372,378   $ 349,519   $ 254,582

The Company's operating expenses are detailed in the following table:

                                               Quarter Ended:
                                               6/30/2014  3/31/2014  6/30/2013
Operating expenses ($ in thousands):
Lease operating expenses (LOE)                 $ 40,553   $ 39,989   $ 18,266
Well services (OWS)                            7,200      10,359     6,420
Midstream (OMS)                                1,569      561        224
Marketing, transportation and gathering        6,996      5,932      4,977
expenses (1)
Bulk oil purchase                              —          —          5,777
Non-cash valuation charges                     118        (746)      25
Total operating expenses                       $ 56,436   $ 56,095   $ 35,689
Operating expenses ($ per Boe):
Lease operating expenses (LOE)                 $ 10.21    $ 10.37    $ 6.65
Marketing, transportation and gathering        1.76       1.53       1.82
expenses (1)

(1) Excludes bulk oil purchase and non-cash valuation charges on pipeline
    imbalances.

The sequential quarter-over-quarter decrease in lease operating expenses
("LOE") per barrel of oil equivalent ("Boe") was primarily due to higher
workover costs in the first quarter of 2014 related to restoring wells that
were down due to winter weather conditions.

The increase in marketing, transportation and gathering expenses from the
first quarter of 2014 to the second quarter of 2014 is primarily due to higher
operated volumes flowing through third-party oil gathering pipelines in the
second quarter of 2014. Currently, the Company is flowing approximately 75% of
its gross operated oil production through these gathering systems. While
transporting volumes through third-party oil gathering pipelines increases
marketing, transportation and gathering expenses, it improves oil price
realizations by reducing transportation costs included in the Company's oil
price differential for sales at the wellhead.

Production taxes as a percentage of oil and gas revenues were 9.7% in the
second quarter of 2014, 9.1% in the second quarter of 2013 and 9.6% in the
first quarter of 2014. The Company's production tax rate increased in the
second quarter of 2014 compared to the second quarter of 2013 due to the
increased weighting of production in North Dakota compared to Montana, which
has lower production tax rates.

Depreciation, depletion and amortization expenses ("DD&A") totaled $97.3
million in the second quarter of 2014, $66.8 million in the second quarter of
2013 and $91.3 million in the first quarter of 2014. DD&A was $24.48 per Boe
in the second quarter of 2014, $24.33 per Boe in the second quarter of 2013
and $23.66 per Boe in the first quarter of 2014. During the first two months
of 2014, the Company had production from the wells sold in the Sanish
Divestiture, but these wells were not depreciated because the assets were held
for sale, which lowered DD&A by $0.78 per Boe in the first quarter of 2014.

General and administrative ("G&A") expenses totaled $20.8 million in the
second quarter of 2014, $16.7 million in the second quarter of 2013 and $23.5
million in the first quarter of 2014. The sequential quarter-over-quarter
decrease in G&A expenses was primarily due to lower consolidated OWS G&A
expenses in the second quarter of 2014 compared to the first quarter of 2014.
G&A expenses were $5.22 per Boe in the second quarter of 2014, $6.07 per Boe
in the second quarter of 2013 and $6.10 per Boe in the first quarter of 2014.
Amortization of stock-based compensation, which is included in G&A expenses,
was $5.2 million, or $1.30 per Boe, in the second quarter of 2014 as compared
to $3.1 million, or $1.12 per Boe, in the second quarter of 2013 and $4.5
million, or $1.17 per Boe, in the first quarter of 2014. The sequential
increase in amortization of stock-based compensation is primarily due to
growth in headcount.

The Company's derivative activities are detailed in the following table:

                                           Quarter Ended:
                                           6/30/2014    3/31/2014    6/30/2013
Derivative activities ^(1) ($ in
thousands)
Derivative settlements                     $ (11,405)   $ (2,239)    $ 1,246
Non-cash change in fair value of           (54,165)     (15,364)     11,345
derivative instruments
Net gain (loss) on derivative instruments  $ (65,570)   $ (17,603)   $ 12,591

(1) The Company's derivative instruments do not qualify for and were not
    designated as hedging instruments for accounting purposes.

Interest expense was $39.0 million for the second quarter of 2014 compared to
$21.4 million for the second quarter of 2013 and $40.2 million for the first
quarter of 2014. The $1.2 million decrease from the first quarter of 2014 was
primarily due to lower weighted average borrowings under the Company's
revolving credit facility coupled with an increase in capitalized interest in
the second quarter of 2014. Capitalized interest totaled $2.3 million for the
second quarter of 2014, $1.1 million for the second quarter of 2013 and $1.6
million for the first quarter of 2014.

Income tax expense was $23.3 million for the three months ended June30, 2014,
resulting in an effective tax rate of 37.5%. The Company's income tax expense
for the three months ended June30, 2013 was recorded at 36.0% of pre-tax net
income. The Company's effective tax rate is expected to continue to closely
approximate the statutory rate applicable to the U.S. and the blended rate for
each of the states in which the Company conducts business.

Adjusted EBITDA for the second quarter of 2014 was $254.7 million, a 37%
increase over the second quarter of 2013 of $185.5 million, and an increase of
6% from the first quarter of 2014 of $239.8 million. For a definition of
Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income and net
cash provided by operating activities, see "Non-GAAP Financial Measures"
below.

For the second quarter of 2014, the Company reported net income of$38.8
million, or$0.39per diluted share, as compared to net income of$67.1
million, or$0.72per diluted share, for the second quarter of 2013. The
Company's second quarter 2014 results were impacted by several non-cash items,
including a$54.2 millionnon-cash mark-to-market loss on derivative
instruments. Excluding these items and their tax effect, the second quarter
2014 Adjusted Net Income (non-GAAP) was$70.5 million, or$0.70 per diluted
share. Excluding similar non-cash items and their tax effect, Adjusted Net
Income (non-GAAP) for the second quarter of 2013 was$60.1 million, or$0.65
per diluted share.For a definition of Adjusted Net Income and a
reconciliation of net income to Adjusted Net Income, see "Non-GAAP Financial
Measures" below.

Capital Expenditures

The following table depicts the Company's exploration and production ("E&P")
CapEx by project area and total CapEx by category:

                                        1Q 2014     2Q 2014     YTD 2014
CapEx ($ in thousands):
E&P CapEx by Project Area
West Williston                          $ 189,288   $ 223,526   $ 412,814
East Nesson                             107,843     103,370     211,213
Total E&P CapEx ^(1)                    297,131     326,896     624,027
OWS                                     6,410       18,903      25,313
Non E&P ^ (2)                           3,957       6,036       9,993
Total Company CapEx ^(3) $ 307,498   $ 351,835   $ 659,333

    Year-to-date total E&P CapEx includes $12.5 million for Oasis Midstream
(1) Services ("OMS"), primarily related to pipelines and salt water disposal
    systems.
(2) Non-E&P CapEx includes such items as administrative capital and
    capitalized interest.
    CapEx reflected in the table above differs from the amounts shown in the
    statement of cash flows in the Company's condensed consolidated financial
(3) statements because amounts reflected in the table above include accrued
    liabilities for capital expenditures, while the amounts presented in the
    statement of cash flows are presented on a cash basis.

Liquidity

On June 30, 2014, Oasis had total cash and cash equivalents of $27.0 million.
As of June30, 2014, the Company had $100.0 million of LIBOR loans and $5.2
million of outstanding letters of credit issued under its revolving credit
facility, resulting in an unused borrowing base capacity of $1,394.8 million.

Update to Outlook for Operating Metrics

Oasis is updating its full year 2014 guidance range for LOE to $8.50 to $10.00
per Boe and production taxes to 9.7% to 10.2%.

Hedging Activity

As of August5, 2014, the Company had the following outstanding commodity
derivative contracts, all of which are priced off of WTI and settle monthly:

                         Weighted Average Prices ($/Bbl)
              Remaining  Sub-Floor  Floor     Ceiling    Swaps     BOPD     Total
              Term                                                          Barrels
2014
Full Year
Swaps         Jul - Dec                                  $ 95.90   9,500    1,738,500
Swaps with    Jul - Dec  $  70.00                        $ 92.60   6,000    1,098,000
sub-floors
Two-way       Jul - Dec             $ 95.22   $ 106.39             11,500   2,104,500
collars
Three-way     Jul - Dec  $  70.59   $ 90.59   $ 105.25             8,500    1,555,500
collars
Total 2014 hedges        $  70.34   $ 93.25   $ 105.91   $ 94.62   35,500   6,496,500
(weighted average)
2015
Full Year
Swaps         Jan - Dec                                  $ 90.15   10,000   3,650,000
Two-way       Jan - Dec             $ 86.00   $ 103.42             5,000    1,825,000
collars
First Half
Swaps         Jan -                                      $ 91.26   9,000    1,629,000
              June
Deferred      Jan -                 $ 90.00                        6,000    1,086,000
premiumputs  June
Two-way       Jan -                 $ 90.00   $ 99.10              2,000    362,000
collars       June
Total 2015 hedges                   $ 87.77   $ 102.70   $ 90.49   23,430   8,552,000
(weighted average)
Total 1H15 hedges                                                  32,000
Total 2H15 hedges                                                  15,000

Conference Call Information

Investors, analysts and other interested parties are invited to listen to the
conference call:

Date:           Wednesday, August 6, 2014
Time:           9:00 a.m. Central Time
Dial-in:        877-621-0256
Intl. Dial in:  706-634-0151
ConferenceID:  74680357
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 Wednesday,
August 13, 2014 by dialing:

Replay dial-in:  855-859-2056
Intl. replay:    404-537-3406
ConferenceID:   74680357

The conference call will also be available for replay at
www.oasispetroleum.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
Section27A of the Securities Act of 1933 and Section21E 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.

Contact:

Oasis Petroleum Inc.
Matt Ultis, (281)404-9600
Manager – Finance and Investor Relations



Oasis Petroleum Inc.
Condensed Consolidated Balance Sheet
(Unaudited)
                                             June 30, 2014   December 31, 2013
                                             (Inthousands,exceptsharedata)
ASSETS
Current assets
Cash and cash equivalents                    $   26,957      $   91,901
Accounts receivable— oil and gas revenues   216,764         175,653
Accounts receivable— joint interest         147,056         139,459
partners
Inventory                                    17,636          20,652
Prepaid expenses                             8,907           10,191
Deferred income taxes                        25,390          6,335
Derivative instruments                       —               2,264
Advances to joint interest partners          97              760
Other current assets                         421             391
Total current assets                         443,228         447,606
Property, plant and equipment
Oil and gas properties (successful efforts   5,141,582       4,528,958
method)
Other property and equipment                 231,129         188,468
Less: accumulated depreciation, depletion,   (823,500)       (637,676)
amortization and impairment
Total property, plant and equipment, net     4,549,211       4,079,750
Assets held for sale                         —               137,066
Derivative instruments                       —               1,333
Deferred costs and other assets              44,540          46,169
Total assets                                 $   5,036,979   $   4,711,924
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable                             $   32,402      $   8,920
Revenues and production taxes payable        217,414         146,741
Accrued liabilities                          288,813         241,830
Accrued interest payable                     49,444          47,910
Derivative instruments                       62,415          8,188
Advances from joint interest partners        6,910           12,829
Other current liabilities                    3,311           —
Total current liabilities                    660,709         466,418
Long-term debt                               2,300,000       2,535,570
Deferred income taxes                        460,897         323,147
Asset retirement obligations                 37,542          35,918
Derivative instruments                       11,844          139
Other liabilities                            1,963           2,183
Total liabilities                            3,472,955       3,363,375
Commitments and contingencies
Stockholders' equity
Common stock, $0.01 par value: 300,000,000
shares authorized; 101,396,597 and           999             996
100,866,589 shares issued at June 30, 2014
and December31, 2013, respectively
Treasury stock, at cost: 244,729 and 167,155
shares at June30, 2014 and December31,     (8,677)         (5,362)
2013, respectively
Additional paid-in capital                   995,024         985,023
Retained earnings                            576,678         367,892
Total stockholders' equity                   1,564,024       1,348,549
Total liabilities and stockholders' equity   $   5,036,979   $   4,711,924



Oasis Petroleum Inc.
Condensed Consolidated Statement of Operations
(Unaudited)
                        Three Months Ended June 30,  Six Months Ended June 30,
                        2014            2013         2014           2013
                        (In thousands, except per share data)
Revenues
Oil and gas revenues    $  354,182      $  241,842   $  686,029     $ 483,493
Well services and       18,196          12,740       35,868         19,393
midstream revenues
Total revenues          372,378         254,582      721,897        502,886
Expenses
Lease operating         40,553          18,266       80,542         37,755
expenses
Well services and
midstream operating     8,769           6,644        19,689         9,558
expenses
Marketing,
transportation and      7,114           10,779       12,300         14,168
gathering expenses
Production taxes        34,493          21,397       66,296         43,486
Depreciation,
depletion and           97,276          66,790       188,548        133,051
amortization
Exploration expenses    475             392          855            2,249
Impairment of oil and   42              208          804            706
gas properties
General and
administrative          20,751          16,656       44,271         30,510
expenses
Total expenses          209,473         141,132      413,305        271,483
Gain on sale of         3,640           —            187,033        —
properties
Operating income        166,545         113,450      495,625        231,403
Other income (expense)
Net gain (loss) on      (65,570)        12,591       (83,173)       (2,021)
derivative instruments
Interest expense, net
of capitalized          (38,990)        (21,392)     (79,148)       (42,575)
interest
Other income (expense)  135             294          288            1,074
Total other income      (104,425)       (8,507)      (162,033)      (43,522)
(expense)
Income before income    62,120          104,943      333,592        187,881
taxes
Income tax expense      23,287          37,824       124,806        68,911
Net income              $  38,833       $  67,119    $  208,786     $ 118,970
Earnings per share:
Basic                   $  0.39         $  0.73      $  2.10        $ 1.29
Diluted                 0.39            0.72         2.08           1.28
Weighted average
shares outstanding:
Basic                   99,663          92,399       99,612         92,387
Diluted                 100,260         92,702       100,328        92,812



Oasis Petroleum Inc.
Selected Financial and Operational Statistics
(Unaudited)
                        Three Months Ended June 30,  Six Months Ended June 30,
                        2014            2013         2014           2013
Operating results ($ in
thousands):
Revenues
Oil                     $  334,559      $  232,625   $  643,790     $ 464,300
Natural gas             19,623          9,217        42,239         19,193
Well services and       18,196          12,740       35,868         19,393
midstream
Total revenues          372,378         254,582      721,897        502,886
Production data:
Oil (MBbls)             3,541           2,489        6,990          4,971
Natural gas (MMcf)      2,596           1,540        5,045          2,929
Oil equivalents (MBoe)  3,974           2,746        7,831          5,459
Average daily           43,668          30,171       43,264         30,162
production (Boe/d)
Average sales prices:
Oil, without derivative
settlements (per Bbl)   $  94.48        $  91.15     $  92.10       $ 92.24
^(1)
Oil, with derivative
settlements (per Bbl)   91.26           91.65        90.15          92.83
^(1) (2)
Natural gas (per Mcf)   7.56            5.98         8.37           6.55
^(3)
Costs and expenses (per
Boe of production):
Lease operating         $  10.21        $  6.65      $  10.29       $ 6.92
expenses
Marketing,
transportation and      1.76            1.82         1.65           1.54
gathering expenses ^(4)
Production taxes        8.68            7.79         8.47           7.97
Depreciation, depletion 24.48           24.33        24.08          24.37
and amortization
General and             5.22            6.07         5.65           5.58
administrative expenses

    For the three and six months ended June 30, 2013, average sales prices for
(1) oil are calculated using total oil revenues, excluding bulk oil sales of
    $5.8 million, divided by oil production.
    Realized prices include gains or losses on cash settlements for commodity
(2) derivatives, which do not qualify for and were not designated as hedging
    instruments for accounting purposes.
(3) Natural gas prices include the value for natural gas and natural gas
    liquids.
(4) Excludes bulk oil purchase and non-cash valuation charges on pipeline
    imbalances.



Oasis Petroleum Inc.
Condensed Consolidated Statement of Cash Flows
(Unaudited)
                                                     Six Months Ended June 30,
                                                     2014           2013
                                                     (In thousands)
Cash flows from operating activities:
Net income                                           $  208,786     $ 118,970
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization             188,548        133,051
Gain on sale of properties                           (187,033)      —
Impairment of oil and gas properties                 804            706
Deferred income taxes                                118,695        67,974
Derivative instruments                               83,173         2,021
Stock-based compensation expenses                    9,678          5,371
Debt discount amortization and other                 3,220          1,753
Working capital and other changes:
Change in accounts receivable                        (37,132)       (13,768)
Change in inventory                                  3,016          (4,200)
Change in prepaid expenses                           1,284          (4,402)
Change in other current assets                       (30)           330
Change in other assets                               (1,477)        —
Change in accounts payable and accrued liabilities   91,543         48,701
Change in other current liabilities                  3,311          688
Change in other liabilities                          (132)          612
Net cash provided by operating activities            486,254        357,807
Cash flows from investing activities:
Capital expenditures                                 (606,924)      (428,630)
Acquisition of oil and gas properties                (8,116)        —
Proceeds from sale of properties                     324,888        —
Costs related to sale of properties                  (2,337)        —
Redemptions of short-term investments                —              25,000
Derivative settlements                               (13,644)       2,932
Advances from joint interest partners                (5,919)        (5,593)
Net cash used in investing activities                (312,052)      (406,291)
Cash flows from financing activities:
Proceeds from revolving credit facility              100,000        —
Principal payments on revolving credit facility      (335,570)      —
Purchases of treasury stock                          (3,315)        (364)
Debt issuance costs                                  (85)           (2,998)
Other                                                (176)          —
Net cash used in financing activities                (239,146)      (3,362)
Decrease in cash and cash equivalents                (64,944)       (51,846)
Cash and cash equivalents:
Beginning of period                                  91,901         213,447
End of period                                        $  26,957      $ 161,601
Supplemental non-cash transactions:
Change in accrued capital expenditures               $  51,129      $ (6,085)
Change in asset retirement obligations               1,624          3,441

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 consolidated 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 or cash flows as determined by United States generally
accepted accounting principles, or GAAP.

The following table presents reconciliations of the non-GAAP financial measure
of Adjusted EBITDA to the GAAP financial measures of net income and net cash
provided by operating activities, respectively.

                        Three Months Ended June 30,  Six Months Ended June 30,
                        2014            2013         2014           2013
                        (In thousands)
Adjusted EBITDA
reconciliation to net
income:
Net income              $  38,833       $  67,119    $  208,786     $ 118,970
Gain on sale of         (3,640)         —            (187,033)      —
properties
Non-cash change in fair
value of derivative     54,165          (11,345)     69,529         4,953
instruments
Interest expense        38,990          21,392       79,148         42,575
Depreciation, depletion 97,276          66,790       188,548        133,051
and amortization
Impairment of oil and   42              208          804            706
gas properties
Exploration expenses    475             392          855            2,249
Stock-based             5,173           3,082        9,678          5,371
compensation expenses
Income tax expense      23,287          37,824       124,806        68,911
Other non-cash          118             25           (628)          74
adjustments
Adjusted EBITDA         $  254,719      $  185,487   $  494,493     $ 376,860
Adjusted EBITDA reconciliation to net cash provided
by operating activities:
Net cash provided by    $  277,987      $  187,260   $  486,254     $ 357,807
operating activities
Derivative settlements  (11,405)        1,246        (13,644)       2,932
Interest expense        38,990          21,392       79,148         42,575
Exploration expenses    475             392          855            2,249
Debt discount           (1,733)         (1,007)      (3,220)        (1,753)
amortization and other
Current tax expense     3,345           837          6,111          937
Changes in working      (53,058)        (24,658)     (60,383)       (27,961)
capital
Other non-cash          118             25           (628)          74
adjustments
Adjusted EBITDA         $  254,719      $  185,487   $  494,493     $ 376,860

Adjusted Net Income and Adjusted Diluted Earnings Per Share are supplemental
non-GAAP financial measures that are used by management and external users of
the Company's consolidated financial statements, such as industry analysts,
investors, lenders and rating agencies. The Company defines Adjusted Net
Income as net income 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 of oil and gas properties, 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
in the same period. Adjusted Net Income is not a measure of net income as
determined by GAAP. The Company defines Adjusted Diluted Earnings Per Share as
Adjusted Net Income divided by diluted weighted average shares outstanding.

The following table provides reconciliations of net income (GAAP) to Adjusted
Net Income (non-GAAP) and diluted earnings per share (GAAP) to Adjusted
Diluted Earnings Per Share (non-GAAP):

                        Three Months Ended June 30,  Six Months Ended June 30,
                        2014            2013         2014          2013
                        (Inthousands,exceptpersharedata)
Net income              $  38,833       $  67,119    $  208,786    $ 118,970
Non-cash change in
fair value of           54,165          (11,345)     69,529        4,953
derivative instruments
Gain on sale of         (3,640)         —            (187,033)     —
properties
Impairment of oil and   42              208          804           706
gas properties
Other non-cash          118             25           (628)         74
adjustments
Tax impact ^(1)    (19,000)        4,045        43,896        (2,145)
Adjusted Net Income     $  70,518       $  60,052    $  135,354    $ 122,558
Diluted earnings per    $  0.39         $  0.72      $  2.08       $ 1.28
share
Non-cash change in
fair value of           0.54            (0.12)       0.69          0.05
derivative instruments
Gain on sale of         (0.04)          —            (1.86)        —
properties
Impairment of oil and   —               —            0.01          0.01
gas properties
Other non-cash          —               —            (0.01)        —
adjustments
Tax impact ^(1)    (0.19)          0.05         0.44          (0.02)
Adjusted Diluted        $  0.70         $  0.65      $  1.35       $ 1.32
Earnings Per Share
Diluted weighted
average shares          100,260         92,702       100,328       92,812
outstanding
Effective tax rate      37.5       %    36.0      %  37.4       %  36.7      %

(1) The tax impact is computed utilizing the Company's effective tax rate on
    the adjustments for certain non-cash and non-recurring items.



SOURCE Oasis Petroleum Inc.

Website: http://www.oasispetroleum.com
 
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