UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2020~~March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-38212


Oasis Midstream Partners LP (Exact name of registrant as specified in its charter)


Delaware						47-1208855
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1001 Fannin Street, Suite 1500 Houston, Texas						77002
(Address of principal executive offices)						(Zip Code)


(281) 404-9500 (Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common units representing limited partner interests	OMP	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ý No ¨

At ~~October~~April 30, ~~2020,~~2021, there were ~~33,811,366~~48,627,680 common units representing limited partner interests ~~(consisting of 20,061,366 common units and 13,750,000 subordinated units)~~ outstanding.

OASIS MIDSTREAM PARTNERS LP

TABLE OF CONTENTS


			Page
PART I — FINANCIAL INFORMATION			1
Item 1. — Financial Statements (Unaudited)			1
Condensed Consolidated Balance Sheets at ~~September 30, 2020~~March 31, 2021 and December 31, ~~201~~92020			1
Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September 30, 2020~~March 31, 2021 and ~~2019~~2020			2
Condensed Consolidated Statements of Changes in Equity			3
Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2020~~March 31, 2021 and ~~2019~~2020			54
Notes to Condensed Consolidated Financial Statements			65
1. Organization and Nature of Operations			65
2. Summary of Significant Accounting Policies			76
3. Revenue Recognition			97
4. Transactions with Affiliates			108
5. Accrued Liabilities			119
6. Property, Plant and Equipment			119
7. Long-Term Debt			129

8. Inventory			1211
9. Commitments and Contingencies			1311
~~10. Equity-Based Compensation~~			14
1 10 . Partnership Equity and Distributions			1511
1 21 . Earnings (Loss) Per Limited Partner Unit			1512

Item 2. — Management’s Discussion and Analysis of Financial Condition and Results of Operations			1914
Item 3. — Quantitative and Qualitative Disclosures About Market Risk			3327
Item 4. — Controls and Procedures			3428
PART II — OTHER INFORMATION			3529
Item 1. — Legal Proceedings			3529
Item 1A. — Risk Factors			3629


Item 6.5 . — Exhibits			4230
SIGNATURES			4332

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. — Financial Statements (Unaudited)

OASIS MIDSTREAM PARTNERS LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020

		(In thousands, except unit data)					(In thousands, except unit data)
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	34,699	$	4,168	Cash and cash equivalents	$	7,158	$	5,147
Accounts receivable	Accounts receivable	4,470		5,969		Accounts receivable	3,658		4,295
Accounts receivable – Oasis Petroleum	Accounts receivable – Oasis Petroleum	62,800		77,571		Accounts receivable – Oasis Petroleum	82,732		66,283
Inventory	Inventory	8,094		0		Inventory	6,986		6,986
Prepaid expenses	Prepaid expenses	2,937		1,923		Prepaid expenses	4,565		3,695
Other current assets	Other current assets	1,679		138		Other current assets	140		649
Total current assets	Total current assets	114,679		89,769		Total current assets	105,239		87,055
Property, plant and equipment	Property, plant and equipment	1,177,654		1,155,503		Property, plant and equipment	1,181,003		1,180,819
Less: accumulated depreciation, amortization and impairment	Less: accumulated depreciation, amortization and impairment	(231,826)		(98,982)		Less: accumulated depreciation, amortization and impairment	(249,838)		(240,877)
Total property, plant and equipment, net	Total property, plant and equipment, net	945,828		1,056,521		Total property, plant and equipment, net	931,165		939,942
Operating lease right-of-use assets	Operating lease right-of-use assets	1,880		5,207		Operating lease right-of-use assets	1,403		1,643
Other assets	Other assets	2,334		3,172		Other assets	3,514		2,053
Total assets	Total assets	$	1,064,721	$	1,154,669	Total assets	$	1,041,321	$	1,030,693

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	2,510	$	2,478	Accounts payable	$	1,021	$	2,226
Accounts payable – Oasis Petroleum	Accounts payable – Oasis Petroleum	33,915		27,139		Accounts payable – Oasis Petroleum	27,264		28,074
Accrued liabilities	Accrued liabilities	12,854		50,210		Accrued liabilities	22,344		17,931
Accrued interest payable	Accrued interest payable	28,384		508		Accrued interest payable	496		360
Current operating lease liabilities	Current operating lease liabilities	2,006		3,005		Current operating lease liabilities	954		945
Other current liabilities	Other current liabilities	634		594		Other current liabilities	471		471
Total current liabilities	Total current liabilities	80,303		83,934		Total current liabilities	52,550		50,007
Long-term debt	Long-term debt	487,500		458,500		Long-term debt	674,238		450,000
Asset retirement obligations	Asset retirement obligations	1,808		1,747		Asset retirement obligations	791		774
Operating lease liabilities	Operating lease liabilities	973		2,216		Operating lease liabilities	491		733
Other liabilities	Other liabilities	4,961		3,644		Other liabilities	5,403		5,521
Total liabilities	Total liabilities	575,545		550,041		Total liabilities	733,473		507,035
Commitments and contingencies (Note 9)	Commitments and contingencies (Note 9)					Commitments and contingencies (Note 9)	0		0
Equity	Equity					Equity
Limited partners	Limited partners					Limited partners
Common units (20,061,366 and 20,045,196 issued and outstanding at September 30, 2020 and December 31, 2019, respectively)		172,087		225,339
Subordinated units (13,750,000 units issued and outstanding at September 30, 2020 and December 31, 2019)		29,358		66,005
Common units (48,627,680 and 20,061,366 issued and outstanding at March 31, 2021 and December 31, 2020, respectively)						Common units (48,627,680 and 20,061,366 issued and outstanding at March 31, 2021 and December 31, 2020, respectively)	307,848		193,536
Subordinated units (NaN and 13,750,000 units issued and outstanding at March 31, 2021 and December 31, 2020, respectively)						Subordinated units (NaN and 13,750,000 units issued and outstanding at March 31, 2021 and December 31, 2020, respectively)	0		44,030

General Partner	General Partner	1,027		1,026		General Partner	0		1,027
Total partners’ equity	Total partners’ equity	202,472		292,370		Total partners’ equity	307,848		238,593
Non-controlling interests	Non-controlling interests	286,704		312,258		Non-controlling interests	0		285,065
Total equity	Total equity	489,176		604,628		Total equity	307,848		523,658
Total liabilities and equity	Total liabilities and equity	$	1,064,721	$	1,154,669	Total liabilities and equity	$	1,041,321	$	1,030,693

The accompanying notes are an integral part of these condensed consolidated financial statements.

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OASIS MIDSTREAM PARTNERS LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended September 30, Nine Months Ended September 30,
2020
2019(1)
2020
2019(1)
(In thousands, except per unit data)
Revenues
Midstream services – Oasis Petroleum $ 67,401 $ 81,184 $ 206,340 $ 232,458
Midstream services – third parties 1,953 1,840 11,041 4,792
Product sales – Oasis Petroleum 15,184 20,517 39,841 60,517
Product sales – third parties 17 9 23 38
Total revenues 84,555 103,550 257,245 297,805
Operating expenses
Costs of product sales 5,958 7,001 16,605 27,088
Operating and maintenance 12,682 18,009 44,030 54,975
Depreciation and amortization 9,083 9,143 31,161 26,825
Impairment 1,458 0 103,441 0
General and administrative 8,870 7,665 26,607 24,222
Total operating expenses 38,051 41,818 221,844 133,110
Operating income 46,504 61,732 35,401 164,695
Other expenses
Interest expense, net of capitalized interest (2,753) (4,612) (38,196) (12,911)
Other expenses (7) 0 (150) (4)
Total other expenses (2,760) (4,612) (38,346) (12,915)
Net income (loss) 43,744 57,120 (2,945) 151,780
Less: Net income attributable to Delaware Predecessor 0 1,818 0 4,104
Less: Net income attributable to non-controlling interests 16,483 23,866 29,319 68,499
Net income (loss) attributable to Oasis Midstream Partners LP 27,261 31,436 (32,264) 79,177
Less: Net income attributable to General Partner 1,027 745 3,062 1,474
Net income (loss) attributable to limited partners $ 26,234 $ 30,691 $ (35,326) $ 77,703
Earnings (loss) per limited partner unit (Note 12)
Common units – basic $ 0.78 $ 0.91 $ (1.05) $ 2.30
Common units – diluted 0.78 0.91 (1.05) 2.30
Weighted average number of limited partners units outstanding (Note 12)
Common units – basic 20,045 20,027 20,044 20,022
Common units – diluted 20,048 20,038 20,044 20,039

~~__________________~~


	Three Months Ended March 31,
	2021		2020

	(In thousands, except per unit data)
Revenues
Midstream services – Oasis Petroleum	$	67,163	$	81,993
Midstream services – third parties	900		3,846
Product sales – Oasis Petroleum	32,281		20,788
Product sales – third parties	29		0
Total revenues	100,373		106,627
Operating expenses
Costs of product sales	22,776		8,432
Operating and maintenance	13,106		16,840
Depreciation and amortization	8,985		10,197
Impairment	0		101,767
General and administrative	8,450		8,451
Total operating expenses	53,317		145,687
Operating income (loss)	47,056		(39,060)
Other expenses
Interest expense, net of capitalized interest	(4,061)		(30,257)
Other expense	(69)		(42)
Total other expense, net	(4,130)		(30,299)


Net income (loss)	42,926		(69,359)
Less: Net income attributable to non-controlling interests	17,025		2,040
Net income (loss) attributable to Oasis Midstream Partners LP	25,901		(71,399)
Less: Net income attributable to General Partner	0		1,008
Net income (loss) attributable to limited partners	$	25,901	$	(72,407)
Earnings (loss) per limited partner unit (Note 11)
Common units – basic	$	0.72	$	(2.14)
Common units – diluted	0.72		(2.14)
Weighted average number of limited partners units outstanding (Note 11)
Common units – basic	22,052		20,041
Common units – diluted	22,056		20,041

~~(1)~~

~~Retrospectively adjusted for the transfer of net assets between entities under common control. See Note 2 to our unaudited condensed consolidated financial statements.~~

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

OASIS MIDSTREAM PARTNERS LP

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)


				Partnership											Partnership
		Delaware Predecessor		Common Units		Subordinated Units		General Partner		Non-controlling Interests		Total			Common Units		Subordinated Units		General Partner		Non-controlling Interests		Total

		(In thousands)													(In thousands)
Balance as of December 31, 2019		$	0	$	225,339	$	66,005	$	1,026	$	312,258	$	604,628
Balance as of December 31, 2020														Balance as of December 31, 2020	$	193,536	$	44,030	$	1,027	$	285,065	$	523,658

Contributions from non-controlling interests	Contributions from non-controlling interests	—		—		—		—		6,167		6,167		Contributions from non-controlling interests	—		—		—		6		6

Distributions to non-controlling interests	Distributions to non-controlling interests	—		—		—		—		(25,964)		(25,964)		Distributions to non-controlling interests	—		—		—		(7,615)		(7,615)
Distributions to unitholders	Distributions to unitholders	—		(10,833)		(7,425)		(1,007)		—		(19,265)		Distributions to unitholders	(10,842)		(7,425)		(1,027)		—		(19,294)
Equity-based compensation														Equity-based compensation	487		—		—		—		487
Net income														Net income	16,698		9,203		—		17,025		42,926
Conversion of Subordinated Units to Common Units														Conversion of Subordinated Units to Common Units	45,808		(45,808)		—		—		0
Common control transaction costs														Common control transaction costs	(811)		—		—		—		(811)
Distribution to Oasis for Simplification Transaction														Distribution to Oasis for Simplification Transaction	(231,509)		0		—		—		(231,509)
Elimination of non-controlling interests for Simplification Transaction														Elimination of non-controlling interests for Simplification Transaction	294,481		—		—		(294,481)		0

Balance as of March 31, 2021														Balance as of March 31, 2021	$	307,848	$	0	$	0	$	0	$	307,848

Equity-based compensation		—		66		—		—		—		66

Net income (loss)		—		(42,947)		(29,460)		1,008		2,040		(69,359)
Balance as of March 31, 2020		0		171,625		29,120		1,027		294,501		496,273
Contributions from non-controlling interests		—		—		—		—		309		309
Distributions to non-controlling interests		—		—		—		—		(14,335)		(14,335)
Distributions to unitholders		—		(10,833)		(7,425)		(1,027)		—		(19,285)
Equity-based compensation		—		67		—		—		—		67
Net income		—		6,433		4,414		1,027		10,796		22,670
Balance as of June 30, 2020		0		167,292		26,109		1,027		291,271		485,699
Contributions from non-controlling interests		—		—		—		—		(1,077)		(1,077)
Distributions to non-controlling interests		—		—		—		—		(19,973)		(19,973)
Distributions to unitholders		—		(10,833)		(7,425)		(1,027)		—		(19,285)
Equity-based compensation		—		68		—		—		—		68
Net income				15,560		10,674		1,027		16,483		43,744
Balance as of September 30, 2020		$	0	$	172,087	$	29,358	$	1,027	$	286,704	$	489,176


	Partnership
	Common Units		Subordinated Units		General Partner		Non-controlling Interests		Total

	(In thousands)
Balance as of December 31, 2019	$	225,339	$	66,005	$	1,026	$	312,258	$	604,628
Contributions from non-controlling interests	—		—		—		6,167		6,167

Distributions to non-controlling interests	—		—		—		(25,964)		(25,964)
Distributions to unitholders	(10,833)		(7,425)		(1,007)		—		(19,265)



Equity-based compensation	66		—		—		—		66
Net income (loss)	(42,947)		(29,460)		1,008		2,040		(69,359)
Balance as of March 31, 2020	$	171,625	$	29,120	$	1,027	$	294,501	$	496,273

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~Table of Contents~~

~~OASIS MIDSTREAM PARTNERS LP~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY CONTINUED~~

~~(UNAUDITED)~~

Partnership
Delaware Predecessor Common Units Subordinated Units General Partner Non-controlling Interests Total
(In thousands)
Balance as of December 31, 2018 $ 6,227 $ 192,581 $ 45,937 $ 112 $ 312,815 $ 557,672
Delaware Predecessor capital contributions, net(1)
4,902 — — — — 4,902
Contributions from non-controlling interests — — — — 2,532 2,532
Distributions to non-controlling interests — — — — (21,922) (21,922)
Distributions to unitholders — (9,020) (6,188) (112) — (15,320)
Equity-based compensation — 119 — — — 119
Other — 2,881 (79) — (2,977) (175)
Net income(1)
1,075 12,630 8,675 238 21,796 44,414
Balance as of March 31, 2019 12,204 199,191 48,345 238 312,244 572,222
Delaware Predecessor capital contributions, net(1)
2,529 — — — — 2,529
Contributions from non-controlling interests — — — — 1,709 1,709
Distributions to non-controlling interests — — — — (21,659) (21,659)
Distributions to unitholders — (9,421) (6,463) (238) — (16,122)
Equity-based compensation — 100 — — — 100
Other — (102) (115) — — (217)
Net income(1)
1,211 15,241 10,466 491 22,837 50,246
Balance as of June 30, 2019 15,944 205,009 52,233 491 315,131 588,808
Delaware Predecessor capital contributions, net(1)
3,029 — — — — 3,029
Contributions from non-controlling interests — — — — 870 870
Distributions to non-controlling interests — — — — (26,086) (26,086)
Distributions to unitholders — (9,823) (6,737) (491) — (17,051)
Equity-based compensation — 84 — — — 84
Net income(1)
1,818 18,198 12,493 745 23,866 57,120
Balance as of September 30, 2019 $ 20,791 $ 213,468 $ 57,989 $ 745 $ 313,781 $ 606,774

~~__________________~~

~~(1)Retrospectively adjusted for the transfer of net assets between entities under common control. See Note 2 to our unaudited condensed consolidated financial statements.~~

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

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OASIS MIDSTREAM PARTNERS LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended September 30,
2020
2019(1)
(In thousands)
Cash flows from operating activities:
Net income (loss) $ (2,945) $ 151,780
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 31,161 26,825
Impairment 103,441 0
Equity-based compensation expenses 201 303
Deferred financing costs amortization and other 815 660
Working capital and other changes:
Change in accounts receivable 16,270 (1,806)
Change in inventory (8,440) 0
Change in prepaid expenses (1,014) 454
Change in accounts payable and accrued liabilities 27,080 (685)
Change in other assets and liabilities, net (164) (1,953)
Net cash provided by operating activities 166,405 175,578
Cash flows from investing activities:
Capital expenditures (52,163) (186,702)
Net cash used in investing activities (52,163) (186,702)
Cash flows from financing activities:
Capital contributions from Delaware Predecessor, net 0 10,460
Capital contributions from non-controlling interests 5,399 5,111
Distributions to non-controlling interests (60,272) (69,667)
Distributions to unitholders (57,835) (48,493)
Deferred financing costs 0 (811)
Proceeds from revolving credit facility 29,000 118,000
Principal payments on revolving credit facility 0 (5,000)
Other (3) (453)
Net cash provided by (used in) financing activities (83,711) 9,147
Increase (decrease) in cash and cash equivalents 30,531 (1,977)
Cash:
Beginning of period 4,168 6,649
End of period $ 34,699 $ 4,672
Supplemental non-cash transactions:
Change in accrued capital expenditures $ (29,751) $ (9,147)
Change in asset retirement obligations 61 97

~~__________________~~

~~(1)Retrospectively adjusted for the transfer of net assets between entities under common control. See Note 2 to our unaudited condensed consolidated financial statements.~~


	Three Months Ended March 31,
	2021		2020

	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	42,926	$	(69,359)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8,985		10,197
Impairment	0		101,767
Equity-based compensation expenses	487		66
Deferred financing costs amortization and other	1,333		271
Working capital and other changes:
Change in accounts receivable	(15,812)		732
Change in inventory	0		(5,267)
Change in prepaid expenses	(870)		(397)
Change in accounts payable and accrued liabilities	2,193		23,732

Change in other assets and liabilities, net	199		(77)
Net cash provided by operating activities	39,441		61,665
Cash flows from investing activities:
Capital expenditures	(887)		(31,811)
Net cash used in investing activities	(887)		(31,811)
Cash flows from financing activities:

Capital contributions from non-controlling interests	6		6,167
Distributions to Oasis for Simplification Transaction	(231,509)		0
Distributions to non-controlling interests	(7,615)		(25,964)
Distributions to unitholders	(19,294)		(19,265)
Common control transaction costs	(811)		0
Proceeds from issuance of senior notes	450,000		0
Deferred financing costs	(11,320)		0
Borrowings on revolving credit facility	7,500		29,000
Payments on revolving credit facility	(223,500)		0
Other	0		(59)
Net cash used in financing activities	(36,543)		(10,121)
Increase in cash and cash equivalents	2,011		19,733
Cash:
Beginning of period	5,147		4,168
End of period	$	7,158	$	23,901
Supplemental cash flow information:
Cash paid for interest, net of capitalized interest	2,628		4,199
Supplemental non-cash transactions:
Change in accrued capital expenditures	(703)		(7,123)
Change in asset retirement obligations	17		20

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

OASIS MIDSTREAM PARTNERS LP

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Organization and Nature of Operations

Organization. Oasis Midstream Partners LP (the “Partnership”) is a ~~fee-based~~leading gathering and processing master limited partnership formed by its sponsor, Oasis Petroleum Inc. (together with its ~~wholly-owned~~ subsidiaries, “Oasis Petroleum”) to own, develop, operate and acquire a diversified portfolio of midstream assets in North ~~America that are integral to the crude oil and natural gas operations of Oasis Petroleum and are strategically positioned to capture volumes from other producers.~~America.

The Partnership conducts its business through its ~~ownership of development companies:~~wholly-owned subsidiaries: Bighorn DevCo LLC (“Bighorn DevCo”), Bobcat DevCo LLC (“Bobcat DevCo”), Beartooth DevCo LLC (“Beartooth DevCo”) and Panther DevCo LLC (“Panther DevCo” and collectively with Bighorn DevCo, Bobcat DevCo and Beartooth DevCo, the “DevCos”). ~~Bobcat DevCo and Beartooth DevCo are jointly-owned with Oasis Petroleum through its wholly-owned subsidiary Oasis Midstream Services LLC (“OMS”).~~

As of ~~September 30, 2020,~~March 31, 2021, the Partnership’s assets ~~and ownership interests~~ in the DevCos were as follows:

DevCo

Areas Served

Service Lines

~~Partnership Ownership~~

Bighorn DevCo

Wild Basin

–Natural gas processing

–Crude oil ~~stabilization~~

–~~Crude oil blending~~

–~~Crude oil and natural gas liquids storage~~terminaling

–Crude oil transportation

~~100.0%~~

Bobcat DevCo

Wild Basin

–Natural gas gathering

–Natural gas compression

–Gas lift supply

–Crude oil gathering

–Produced and flowback water gathering

–Produced and flowback water disposal

~~35.3%~~

Beartooth DevCo

Alger
Cottonwood
Hebron
Indian Hills
Red Bank
Wild Basin

–Produced and flowback water gathering

–Produced and flowback water disposal

–Freshwater supply and distribution

~~70.0%~~

Panther DevCo

~~Delaware~~Permian Basin

–Crude oil gathering

–Produced and flowback water gathering

–Produced and flowback water disposal

~~100%~~

Nature of business. The Partnership generates ~~the~~a substantial majority of its revenues through15~~-year,~~ fee-based contractual arrangements with Oasis Petroleum for midstream services. These services include (i) gas gathering, compression, processing, gas lift supply and natural gas liquids (“NGLs”) storage services; (ii) crude oil gathering, ~~stabilization, blending, storage~~terminaling and transportation services; (iii) produced and flowback water gathering and disposal services; and (iv) freshwater supply and distribution services. The revenue earned from these services is generally directly related to the volume of natural gas, crude oil, produced and flowback water and freshwater that flows through the Partnership’s systems.

The Partnership’s operations are supported by significant acreage dedications from Oasis ~~Petroleum. In addition,~~Petroleum and commitments from third party producers in the ~~Partnership is party to a number of third-party agreements across all of its DevCos in which~~Williston Basin and the ~~Partnership has the right to provide its full suite of midstream services to support existing and future third-party volumes.~~Permian Basin.

The Partnership is not a taxable entity for United States federal income tax purposes and is not subject to income tax in the majority of states in which the Partnership operates. As taxes are generally borne by its partners through the allocation of taxable income, the Partnership does not record deferred taxes related to the aggregate difference in the basis of its assets for financial and tax reporting purposes. The Partnership is subject to a Texas margin tax due to its operations in the ~~Delaware~~Permian Basin and recorded a de minimis state income tax provision for the three ~~and nine~~ months ended ~~September 30, 2020.~~March 31, 2021.

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2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements of the Partnership have not been audited by the Partnership’s independent registered public accounting firm, except that the Condensed Consolidated Balance Sheet at December 31, ~~2019~~2020 is derived from audited financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for fair statement of the Partnership’s financial position have been included. Management has made certain estimates and assumptions that affect reported amounts in the condensed consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results.

These interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements and should be read in conjunction with the Partnership’s audited consolidated financial statements and notes thereto included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 (“~~2019~~2020 Annual Report”).

~~2019 Delaware Acquisition.~~Simplification Transaction

On ~~November 1, 2019,~~March 30, 2021, the Partnership ~~entered into an agreement~~closed the Simplification Transaction (defined below) with Oasis Petroleum ~~pursuant~~ to ~~which~~acquire Oasis ~~Petroleum, through OMS~~Petroleum’s remaining ownership interests in Bobcat DevCo and Beartooth DevCo. In addition, the Simplification Transaction eliminated the incentive distribution rights held by the General Partner (the ~~“Delaware Predecessor”~~“IDRs”)~~, agreed~~ (see Note 4 — Transactions with Affiliates).

Prior to ~~assign to Panther DevCo, certain crude oil gathering and produced and flowback water gathering and disposal assets~~the Simplification Transaction, the Contributed Assets (defined below) were reflected as non-controlling interests in the ~~Delaware Basin (the “2019 Delaware Acquisition”). The 2019 Delaware Acquisition was accounted for as a transfer of net assets between entities under common control. As a result, the~~Partnership’s unaudited condensed consolidated financial ~~statements~~statements. In accordance with FASB authoritative guidance under ASC 810-10 for non-controlling interests in a common control transaction, the Partnership accounted for the ~~period prior to~~Simplification Transaction as an equity transaction and adjusted the ~~effective date~~carrying amount of ~~November 1, 2019 have been recast. These unaudited~~non-controlling interests in the condensed consolidated financial statements ~~include~~to reflect the results of the Delaware Predecessor for the three and nine months ended September 30, 2019, which were prepared from Oasis Petroleum’s historical cost-basis accounts and may not necessarily be indicative of the actual results hadchange in ownership interests. Furthermore, as the Partnership ~~owned~~acquired additional interests in previously consolidated subsidiaries, the ~~assets during~~Simplification Transaction did not result in a change in reporting entity, as defined under the ~~reported periods.~~FASB Accounting Standards Codification Topic 805, Business Combinations, and was accounted for on a prospective basis.

Consolidation

The Partnership’s condensed consolidated financial statements include its accounts and the accounts of the DevCos, each of which is a wholly-owned subsidiary of the Partnership and controlled by the Partnership through ~~its general partner, OMP GP LLC (the “General Partner”).~~the General Partner. All intercompany balances and transactions have been eliminated upon consolidation.

~~Variable interest entity.~~ The Partnership determined that Bobcat DevCo is a variable interest entity (“VIE”), since OMS’s equity at risk was established with non-substantive voting rights. The Partnership consolidates Bobcat DevCo in its financial statements under the VIE consolidation model, since the Partnership is the primary beneficiary and has the authority to direct the activities that most significantly affect Bobcat DevCo’s economic performance.

~~Bighorn DevCo, Beartooth DevCo and Panther DevCo are not VIEs. The Partnership consolidates these entities in its financial statements under the voting interest consolidation model.~~

~~Non-controlling interests.~~ ~~Non-controlling interests represent OMS’s retained ownership interests in Bobcat DevCo and Beartooth DevCo of 64.7% and 30%, respectively, as of September 30, 2020.~~

Risks and Uncertainties

Concentrations of market and credit risk. The Partnership has limited direct exposure to risks associated with fluctuating commodity prices due to the nature of its business and its long-term, fixed-fee contractual arrangements with its existing customers, including Oasis Petroleum. However, to the extent that the Partnership’s future contractual arrangements with customers, including Oasis Petroleum or third parties, do not provide for fixed-fee structures, the Partnership may become subject to more substantial direct commodity price risk. In addition, in response to a prolonged low commodity price environment, the Partnership’s customers could seek to amend existing contractual arrangements to reduce the volumetric fees the Partnership charges.

As a substantial majority of the Partnership’s revenues are derived from Oasis Petroleum, the Partnership is indirectly subject to risks associated with fluctuating commodity prices to the extent that lower commodity prices adversely affect Oasis Petroleum’s production, drilling schedule or financial condition.

~~Oasis Petroleum Restructuring.~~ The markets for crude oil, natural gas and NGLs have been volatile, especially over the last several months and years. Commodity prices have weakened to historical lows as a result of the demand impacts from the global novel coronavirus 2019 (“COVID-19”) pandemic, coupled with the supply impacts from actions of Saudi Arabia and Russia. In light of a volatile market environment that drove a severe downturn in crude oil and natural gas prices, as well as the unprecedented impact of the COVID-19 pandemic, Oasis Petroleum engaged with its lenders and an ad hoc committee of

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noteholders regarding restructuring alternatives. On September 29, 2020, Oasis Petroleum entered into a restructuring support agreement (“RSA”) which contemplates a restructuring pursuant to a joint “pre-packaged” plan of reorganization (the “Oasis Petroleum Restructuring Plan”) to increase financial flexibility and reduce its debt. On September 30, 2020, in connection with the Oasis Petroleum Restructuring Plan, Oasis Petroleum filed voluntary petitions for relief under chapter 11 of title 11 of the United States Bankruptcy Code (“Chapter 11”) in the United States Bankruptcy Court for the Southern District of Texas. The Partnership and its subsidiaries, OMP Operating LLC (“OMP Operating”), Bighorn DevCo, Bobcat DevCo, Beartooth DevCo and Panther DevCo, were not included in Oasis Petroleum’s Chapter 11 filing.

Oasis Petroleum continues to operate its business as “debtors-in-possession,” and the United States Bankruptcy Court for the Southern District of Texas has entered orders approving certain relief to enable Oasis Petroleum to operate in the ordinary course of business. Since Oasis Petroleum commenced its Chapter 11 bankruptcy proceedings, the Partnership has continued to interact with Oasis Petroleum under normal course pursuant to the terms of its existing commercial agreements. There are no cross-acceleration or cross-default provisions between the Oasis Petroleum credit agreement and the Partnership’s credit agreement; as a result, there was not an automatic acceleration of the Partnership’s outstanding indebtedness under the Revolving Credit Facility due to Oasis Petroleum’s Chapter 11 filing.

~~COVID-19.~~ The Partnership considered the impact of the ongoing COVID-19 pandemic on the assumptions and estimates used by management in the unaudited condensed consolidated financial statements for the reporting periods presented. As a result of lower forecasted throughput volumes driven by the significant decline in commodity prices, the Partnership recognized material asset impairment charges at March 31, 2020 (see Note 6 — Property, Plant and Equipment). Management’s estimates and assumptions were based on historical data and consideration of future market conditions. Given the uncertainty inherent in any projection, heightened by the possibility of unforeseen additional impacts from COVID-19, actual results may differ from the estimates and assumptions used, or conditions may change, which could materially affect amounts reported in the consolidated financial statements in the near term.

Significant Accounting Policies

There have been no material changes to the Partnership’s critical accounting policies and estimates from those disclosed in the ~~2019~~2020 Annual ~~Report, other than as noted below.~~Report.

~~Financial instruments — credit losses.~~ ~~On January 1, 2020, the Partnership adopted Accounting Standards Update No. 2016-13,~~ ~~Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~ (“ASU 2016-13”), which replaces the incurred loss impairment methodology with a methodology that reflects estimated credit losses expected over the life of an exposure and requires consideration of historical data, current market conditions and reasonable and supportable forecasts to develop credit loss estimates. In accordance with ASU 2016-13, the Partnership uses the expected credit loss methodology to measure impairment of financial instruments, including accounts receivable, which may result in earlier recognition of credit losses than under previous GAAP. ASU 2016-13 does not apply to receivables between entities under common control. The adoption of ASU 2016-13 did not have a material impact on the Partnership’s financial position, cash flows or results of operations.

Recent Accounting Pronouncements

Reference rate reform. In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

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(“ASU 2020-04”). The amendments provide optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP guidance to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference the London Interbank Offered Rate or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Partnership is currently evaluating its contracts and the optional expedients provided by ASU 2020-04 and the impact the new standard will have on its consolidated financial statements and related disclosures.

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3. Revenue Recognition

Disaggregation of Revenues

The following table presents revenues associated with contracts with customers for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,
2020
2019(1)
2020
2019(1)
(In thousands)
Service revenues
Crude oil, natural gas and NGL revenues $ 43,137 $ 49,624 $ 138,226 $ 143,556
Produced and flowback water revenues 26,217 33,400 79,155 93,694
Total service revenues 69,354 83,024 217,381 237,250
Product revenues
Crude oil, natural gas and NGL revenues 13,863 15,388 31,165 42,246
Freshwater revenues 1,338 5,138 8,699 18,309
Total product revenues 15,201 20,526 39,864 60,555
Total revenues $ 84,555 $ 103,550 $ 257,245 $ 297,805

~~___________________~~


	Three Months Ended March 31,
	2021		2020

	(In thousands)
Service revenues
Crude oil, natural gas and NGL revenues	$	45,094	$	53,977
Produced and flowback water revenues	22,969		31,862
Total service revenues	68,063		85,839
Product revenues
Crude oil, natural gas and NGL revenues	30,589		14,436
Freshwater revenues	1,721		6,352
Total product revenues	32,310		20,788
Total revenues	$	100,373	$	106,627

~~(1)Retrospectively adjusted for the transfer of net assets between entities under common control. See Note 2 to our unaudited condensed consolidated financial statements.~~

Prior Period Performance Obligations

The Partnership records revenue when the performance obligations under the terms of its customer contracts are satisfied. The Partnership measures the satisfaction of its performance obligations using the output method based upon the volumes of crude oil, natural gas or water that flow through its systems. In certain cases, the Partnership is required to estimate these volumes during a reporting period and record any differences between the estimated volumes and actual volumes in the following reporting period. Such differences have historically not been significant. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, revenue~~revenues recognized related to performance obligations satisfied in prior reporting periods ~~was~~were not material.

Contract Balances

Contract balances are the result of timing differences between revenue recognition, billings and cash collections. Contract assets relate to revenue recognized for accrued deficiency fees associated with minimum volume commitments where the Partnership believes it is probable there will be a shortfall payment and that a significant reversal of revenue recognized will not occur once the related performance period is completed and the customer is billed. Revenue recognized for accrued deficiency fees associated with minimum volume commitments is recorded under midstream services – third parties on the Partnership’s Condensed Consolidated Statement of Operations. Contract liabilities relate to aid in construction payments received from customers, which are recognized as revenue over the expected period of future benefit. The Partnership does not recognize contract assets or contract liabilities under its customer contracts for which invoicing occurs once the Partnership’s performance obligations have been satisfied and payment is unconditional. Contract balances are classified as current or long-term based on the timing of when the Partnership expects to receive cash for contract assets or recognize revenue for contract liabilities. Contract assets are recorded under other current assets on the Partnership’s Condensed Consolidated Balance Sheet. Contract liabilities are recorded under other current liabilities and other liabilities on the Partnership’s Condensed Consolidated Balance Sheet.The Partnership did not have any material contract asset balances as of March 31, 2021 or December 31, 2020.

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The following table summarizes the changes in contract ~~assets~~liabilities for the ~~nine~~three months ended ~~September 30, 2020:~~March 31, 2021:


	(In thousands)
Balance as of December 31, ~~2019~~2020	$	5,421
Cash received	0
Revenue recognized	~~1,538~~
~~Balance as of September 30, 2020~~	$	~~1,538~~

~~The following table summarizes the changes in contract liabilities for the nine months ended September 30, 2020:~~


	~~(In thousands)~~
~~Balance as of December 31, 2019~~	$	~~3,681~~
~~Cash received~~	~~1,793~~
~~Revenue recognized~~	~~(449)~~(112)
Balance as of ~~September 30, 2020~~March 31, 2021	$	~~5,025~~5,309

Remaining Performance Obligations

The following table presents estimated revenue allocated to remaining performance obligations for contracted revenues that are unsatisfied (or partially satisfied) as of ~~September 30, 2020~~:March 31, 2021:


		(In thousands)			(In thousands)
2020 (excluding nine months ended September 30, 2020)		$	6,067
2021		16,921
2021 (excluding three months ended March 31, 2021)				2021 (excluding three months ended March 31, 2021)	$	12,864
2022	2022	17,175		2022	17,175
2023	2023	10,896		2023	10,896
2024	2024	11,089		2024	11,089
Thereafter		2,768
2025				2025	2,768

Total	Total	$	64,916	Total	$	54,792

The partially and wholly unsatisfied performance obligations presented in the table above are generally limited to customer contracts which have fixed pricing and fixed volume terms and conditions, which generally include customer contracts with minimum volume commitment payment obligations.

The Partnership has elected practical expedients, pursuant to Accounting Standards Codification 606, Revenue from Contracts with Customers, to exclude from the presentation of remaining performance obligations: (i) contracts with index-based pricing or variable volume attributes in which such variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a series of distinct services and (ii) contracts with an original expected duration of one year or less.

4. Transactions with Affiliates

Revenues. The Partnership generates the substantial majority of its revenues through ~~15-year,~~ fee-based contractual arrangements with wholly-owned subsidiaries of Oasis Petroleum for midstream services as described in Note 1 — Organization and Nature of Operations. In addition, the Partnership sells the residue gas and NGLs recovered from its gas processing plants attributable to its third-party natural gas purchase agreements to Oasis Petroleum to market and sell to non-affiliated purchasers.

On September 30, 2020, in connection with the Oasis Petroleum Restructuring Plan, Oasis Petroleum filed voluntary petitions for relief under Chapter 11 in the United States Bankruptcy Court for the Southern District of Texas (see Note 2 — Summary of Significant Accounting Policies — Risks and Uncertainties).

Expenses. Oasis Petroleum provides substantial labor and overhead support to the Partnership pursuant to a ~~15-year~~ services and secondment agreement. Oasis Petroleum performs centralized corporate, general and administrative services for the Partnership, such as legal, corporate recordkeeping, planning, budgeting, regulatory, accounting, billing, business development, treasury, insurance administration and claims processing, risk management, health, safety and environmental, information technology, human resources, investor relations, cash management and banking, payroll, internal audit, tax and engineering. Oasis Petroleum has also seconded to the Partnership certain of its employees to operate, construct, manage and maintain the Partnership’s assets. The expenses of executive officers and non-executive employees of Oasis Petroleum are allocated to the Partnership based on the amount of time spent managing its business and operations. The Partnership reimburses Oasis

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Petroleum for direct and allocated general and administrative expenses incurred by Oasis Petroleum for the provision of these services.

The Partnership’s general and administrative expenses includes ~~$7.9~~$6.9 million and ~~$6.8~~$7.6 million from affiliate transactions with Oasis Petroleum for the three months ended ~~September~~March 31, 2021 and 2020, respectively.

Simplification Transaction. On March 30, ~~2020~~2021, the Partnership consummated the transactions contemplated by the Contribution and ~~2019, respectively,~~Simplification Agreement (the “Contribution and ~~$23.6 million~~Simplification Agreement”), dated as of March 22, 2021, by and ~~$21.6 million from affiliate transactions with~~among the Partnership, OMS Holdings LLC (“OMS Holdings”), Oasis Midstream Services LLC (“OMS”), OMP GP LLC (the “General Partner”), OMP Operating LLC (“OMP Operating”), OMP DevCo Holdings Corp, Beartooth DevCo LLC (“Beartooth DevCo”), Bobcat DevCo LLC (“Bobcat DevCo”), OMS Holdings Merger Sub, LLC, a wholly owned subsidiary of OMS Holdings (“GP Merger Sub”), and for limited purposes set forth therein, Oasis Petroleum.

Pursuant to the Contribution and Simplification Agreement, among other things, (a) Oasis Petroleum ~~for the nine months ended September 30, 2020 and 2019, respectively.~~

~~Additionally, for the periods prior~~contributed to the ~~2019 Delaware Acquisition, interest expense was recognized~~Partnership its remaining limited liability company interests in Bobcat DevCo and Beartooth DevCo of 64.7% and 30.0%,

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respectively, in exchange for total consideration of $512.5 million composed of (x) a cash distribution of $231.5 million, sourced from the net proceeds of the offering of the Senior Notes (defined below) and (y) 12,949,644 common units representing limited partner interests in the Partnership, (b) the Partnership’s incentive distribution rights (“IDRs”) were cancelled and converted into 1,850,356 common units representing limited partner interests in the Partnership (the “IDR Elimination” and such common units, the “IDR Conversion Common Units”), and (c) the IDR Conversion Common Units were distributed on a pro-rata basis by the ~~Delaware Predecessor related~~General Partner to the holders of its ~~funding activity with~~Class A Units and Class B Units, such that following such distribution, Oasis Petroleum, ~~based~~through its wholly-owned subsidiary OMS Holdings, is the sole member of the General Partner (the foregoing clauses (a), (b) and (c), the “Simplification Transaction”). The Contribution and Simplification Agreement also implemented among other things, a right of first refusal in favor of the Partnership with respect to the midstream opportunities in the Painted Woods and City of Williston operating areas of Oasis Petroleum and the amendment and restatement of the (x) agreement of limited partnership of the Partnership and (y) limited liability company agreement of the General Partner to reflect the Simplification Transaction.

The effective date of the Simplification Transaction was January 1, 2021 and was accounted for on ~~capital expenditures for~~ the ~~period using the weighted average effective interest rate for~~closing date of March 30, 2021. As a result, net income was allocated to Oasis Petroleum’s ~~long-term indebtedness. Interest expense, net~~non-controlling interests in Bobcat DevCo and Beartooth DevCo until the closing date. The cash distribution to Oasis Petroleum of ~~capitalized interest, includes $0.1~~$231.5 million ~~and $0.4~~includes: (i) $229.0 million cash component of the purchase price, (ii) $10.1 million upward adjustment to the purchase price related to the ~~Delaware Predecessor for~~expanded project dedication to OMP in South Nesson and (iii) $7.6 million downward adjustment to the ~~three~~purchase price related to activity between the effective date and ~~nine months ended September~~the close date. At March 30, ~~2019, respectively.~~2021, Oasis Petroleum’s non-controlling interests in Bobcat DevCo and Beartooth DevCo were eliminated, and Oasis Petroleum no longer owns any of the limited liability company interests of Bobcat DevCo or Beartooth DevCo.

5. Accrued Liabilities

Accrued liabilities consist of the following:


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020

		(In thousands)					(In thousands)
Accrued capital costs	Accrued capital costs	$	3,353	$	33,105	Accrued capital costs	$	2,498	$	3,200
Accrued operating expenses	Accrued operating expenses	7,329		12,149		Accrued operating expenses	8,678		8,204
Other accrued liabilities	Other accrued liabilities	2,172		4,956		Other accrued liabilities	11,168		6,527
Total accrued liabilities	Total accrued liabilities	$	12,854	$	50,210	Total accrued liabilities	$	22,344	$	17,931

6. Property, Plant and Equipment

Property, plant and equipment consists of the following:


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020

		(In thousands)					(In thousands)
Pipelines	Pipelines	$	529,470	$	523,576	Pipelines	$	531,453	$	532,546
Natural gas processing plants	Natural gas processing plants	301,728		296,609		Natural gas processing plants	303,206		301,820
Produced and flowback water facilities	Produced and flowback water facilities	123,978		121,797		Produced and flowback water facilities	123,609		123,047
Compressor stations	Compressor stations	184,735		143,276		Compressor stations	186,633		185,474
Other property and equipment	Other property and equipment	34,363		34,231		Other property and equipment	33,457		34,548
Construction in progress	Construction in progress	3,380		36,014		Construction in progress	2,645		3,384
Total property, plant and equipment	Total property, plant and equipment	1,177,654		1,155,503		Total property, plant and equipment	1,181,003		1,180,819
Less: accumulated depreciation, amortization and impairment	Less: accumulated depreciation, amortization and impairment	(231,826)		(98,982)		Less: accumulated depreciation, amortization and impairment	(249,838)		(240,877)
Total property, plant and equipment, net	Total property, plant and equipment, net	$	945,828	$	1,056,521	Total property, plant and equipment, net	$	931,165	$	939,942

~~Long-lived asset impairment~~
~~. Property, plant and equipment is stated at~~

7. Long-Term Debt

Long-term debt consists of the lower of historical cost less accumulated depreciation or fair value if impaired. The Partnership routinely evaluates the existence of triggering events which could indicate the carrying amount of its property, plant and equipment may not be recoverable. Impairment indicators include, but are not limited to, sustained decreases in commodity prices, a decline in customer well results and lower throughput forecasts, changes in customer development plans and/or increases in construction or operating costs.

The Partnership reviewed the carrying amounts of its asset groups for recoverability as of March 31, 2020, as a result of lower forecasted throughput volumes due to changes in customers’ development plans associated with lower commodity prices. The Partnership completed a Step 1 impairment analysis by comparing the undiscounted future cash flows to the carrying amounts for each of its crude oil, natural gas, freshwater and produced and flowback water asset groups in the Williston Basin and the Delaware Basin. During the nine months ended September 30, 2020, the Partnership recorded an impairment charge of $101.8 million to reduce the carrying value of its property, plant and equipment to the estimated fair value. In the Williston Basin, the Partnership recorded impairment charges of $35.8 million related to its crude oil asset group and $33.1 million related to its freshwater asset group. In the Delaware Basin, the Partnership recorded impairment charges of $17.9 million related to its crude oil asset group and $15.0 million related to its produced and flowback water asset group.

~~The Partnership determined no impairment indicators existed as of September 30, 2020 and did not record an impairment charge for the three months ended September 30, 2020.~~following:

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If commodity prices continue to decline or remain at depressed levels for a prolonged period of time, if there are shut-ins of production from customers’ existing producing wells or if there are significant changes in customers’ future development plans, including Oasis Petroleum, to the extent they affect the Partnership’s operations, such circumstances may necessitate assessment of the carrying amount of the Partnership’s affected assets for recoverability and may result in additional impairment charges in the future. In addition, if the United States oil and gas industry continues to experience an imbalance of supply and demand as it endured during the nine months ended September 30, 2020, the Partnership’s operations could be adversely affected and future impairment charges could be incurred.



	March 31, 2021		December 31, 2020

	(In thousands)
Revolving Credit Facility	$	234,000	$	450,000
8.00% senior unsecured notes due April 1, 2029	450,000		0
Less: unamortized deferred financing costs on senior unsecured notes	(9,762)		0
Total long-term debt	$	674,238	$	450,000

~~Fair value measurements.~~ Impairment expense was measured as the excess of the asset group’s carrying amount over its estimated fair value. Fair value was measured using a discounted cash flow model using Level 3 inputs. The inputs used are subject to management’s judgment and expertise and include, but are not limited to, estimated throughput volumes, estimated fixed and variable operating costs, estimated capital costs, estimated useful life of the asset group and discount rate. The estimated future cash flows were discounted at a market-based weighted average cost of capital of 10.4%. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the impairment analysis will prove to be an accurate prediction of the future.

~~7. Long-Term Debt~~Revolving Credit Facility

The Partnership has a revolving credit facility among OMP Operating, as borrower, Wells Fargo Bank, N.A., as Administrative Agent (the “Administrative Agent”) and the lenders party thereto (as amended, the “Revolving Credit Facility”)~~, which matures on September 25, 2022. The Revolving Credit Facility is available~~. On March 22, 2021, the Partnership entered into the Fourth Amendment to ~~fund working capital and to finance acquisitions and other capital expenditures of the Partnership. As of September 30, 2020, the aggregate commitments under~~ the Revolving Credit Facility ~~were $575.0 million.~~

Atto, among other things, (i) provide for the occurrence of the transactions pursuant to the Simplification Transaction, (ii) amend the consolidated total leverage ratio financial covenant to no greater than 5.00 to 1.00, (iii) amend the consolidated senior secured leverage ratio to no greater than 3.00 to 1.00, (iv) amend the consolidated interest coverage ratio to no less than 2.50 to 1.00, (v) provide for the issuance of the Senior Notes (defined below), (vi) decrease the aggregate lender commitments to $450.0 million, (vii) increase pricing for credit and (viii) extend the maturity date from September 25, 2022 until at least September 30, ~~2020,~~2024. In connection with the ~~Partnership had $487.5 million of borrowings outstanding under~~Fourth Amendment to the Revolving Credit Facility, ~~and a de minimis outstanding letter~~the Partnership accelerated $1.1 million of ~~credit, resulting in an unused borrowing capacity of $87.5 million. For the three and nine months ended September 30, 2020, the weighted average interest rate incurred on~~unamortized deferred financing costs.

The applicable margin for borrowings under the Revolving Credit Facility ~~was 1.9%~~is based on the Partnership’s most recently tested consolidated total leverage ratio and ~~2.6%~~varies from (a) in the case of Eurodollar Loans, 2.25% to 3.25%, ~~respectively. The weighted average interest rate incurred on borrowings under~~and (b) in the ~~Revolving Credit Facility for the nine months ended September 30, 2020 excludes the Specified Default Interest (defined below)~~case of ABR Loans or swingline loans, 1.25% to 2.25%. ~~At December 31, 2019, the Partnership had $458.5 million of borrowings outstanding under the Revolving Credit Facility and a $1.7 million outstanding letter of credit.~~

The unused portion of the Revolving Credit Facility is subject to a commitment fee ranging from 0.375% to 0.500%.

At March 31, 2021, the aggregate commitments under the Revolving Credit Facility were $450.0 million, and the Partnership had $234.0 million of borrowings outstanding and $5.5 million of outstanding letters of credit, resulting in an unused borrowing capacity of $210.5 million. For the three months ended March 31, 2021, the weighted average interest rate incurred on borrowings under the Revolving Credit Facility was 2.1%. At December 31, 2020, the Partnership had $450.0 million of borrowings outstanding under the Revolving Credit Facility and a de minimis outstanding letter of credit. The fair value of the Revolving Credit Facility approximates ~~book~~its carrying value since borrowings under the Revolving Credit Facility bear interest at variable rates, which are tied to current market rates.

In the second quarter of 2020, the Partnership identified that a Control Agreement (as defined in the Revolving Credit Facility) had not been executed for a certain bank account before the account was initially funded with cash, which represented an event of default. In May 2020, the Partnership executed a Control Agreement with respect to the bank account, thereby completing the documentation required under the Revolving Credit Facility, and entered into a limited waiver of this past event of default with the Majority Lenders (as defined in the Revolving Credit Facility), which provided forbearance of additional interest owed (“Specified Default Interest”) of $28.0 million until the earlier of (i) November 10, 2020 and (ii) an additional event of default. The Specified Default Interest is included in interest expense, net of capitalized interest on the Partnership’s Condensed Consolidated Statement of Operations for the nine months ended September 30, 2020. NaN Specified Default Interest was recorded during the three months ended September 30, 2020. The Partnership and the Administrative Agent agreed to exclude the Specified Default Interest from the interest coverage ratio financial covenant calculation.

On September 29, 2020, the Partnership and OMP Operating executed a Waiver, Discharge and Forgiveness Agreement and Forbearance Extension (the “Waiver and Forbearance Agreement”) to permanently waive payment of the Specified Default Interest, subject to certain conditions. Under the terms of the Waiver and Forbearance Agreement, the Administrative Agent and the lenders agreed to forbear from demanding payment of the Specified Default Interest until the earlier to occur of (i) an additional event of default and (ii) the occurrence of the maturity date provided for in the Senior Secured Superpriority Debtor-In-Possession Revolving Credit Agreement entered into on October 2, 2020, among Oasis Petroleum, the other parties party thereto, each of the lenders thereto and Wells Fargo Bank, N.A., as administrative agent and issuing bank. The effectiveness of the waiver, discharge and forgiveness of the Specified Default Interest is subject to certain conditions, namely, effectiveness of the Oasis Petroleum Restructuring Plan, as well as the maintenance of the material contracts between Oasis Petroleum and the Partnership or the Partnership’s subsidiaries.

The Partnership was in compliance with the covenants under the Revolving Credit Facility at ~~September~~March 31, 2021. The Revolving Credit Facility contains customary events of default, as well as cross-default provisions with other indebtedness of the Partnership and its restricted subsidiaries. If an event of default occurs and is continuing, the lenders may declare all amounts outstanding under the Revolving Credit Facility to be immediately due and payable. There are no cross-default provisions between the Revolving Credit Facility and Oasis Petroleum’s revolving credit facility.

Senior Unsecured Notes

On March 30, ~~2020.~~2021, the Partnership and OMP Finance Corp. (“OMP Finance” and together with the Partnership, the “Issuers”) issued in a private placement $450.0 million of 8.00% senior unsecured notes due April 1, 2029 (the “Senior Notes”). The Senior Notes were issued at par and resulted in net proceeds, after deducting the underwriters’ gross spread, of $442.1 million. The Partnership used the net proceeds from the Senior Notes to: (i) make a distribution to OMS of $231.5 million in connection with the Simplification Transaction, (ii) repay $204.0 million of outstanding principal borrowings and $0.5 million of accrued interest under the Revolving Credit Facility and (iii) pay approximately $6.1 million in fees and other expenses. The Partnership recorded deferred financing costs of $9.8 million in connection with the Senior Notes offering, which are being amortized over the term of the Senior Notes.

Interest on the Senior Notes is payable semi-annually on April 1 and October 1 of each year, commencing on October 1, 2021. The fair value of the Senior Notes, which are publicly traded among qualified institutional investors and represent a Level 1 measurement, was $460.1 million at March 31, 2021.

The Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Issuers, along with the Partnership’s wholly-owned subsidiaries (the “Guarantors”). The Senior Notes guarantees are joint and several obligations of the Guarantors. The Issuers and Guarantors do not have any significant restrictions on the ability to obtain funds from its subsidiaries by dividend or loan. In addition, there are no restrictions on the subsidiaries to transfer funds, and as such, there are no restricted net assets to disclose.

The indenture governing the Senior Notes contains certain covenants that, subject to certain exceptions and qualifications, among other things, limit the Partnership’s ability and the ability of its restricted subsidiaries, including OMP Finance, to incur

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or guarantee additional indebtedness or issue certain redeemable or preferred equity, make certain investments, declare or pay dividends or make distributions on equity interests or redeem, repurchase or retire equity interests or subordinated indebtedness, transfer or sell assets including equity of restricted subsidiaries, agree to payment restrictions affecting the Partnership’s restricted subsidiaries, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets, enter into transactions with affiliates, incur liens and designate certain of the Partnership’s subsidiaries as unrestricted subsidiaries. In addition, the indenture governing the Senior Notes contains cross-default provisions with other indebtedness of the Partnership and its restricted subsidiaries. There are no cross-default provisions between the Senior Notes and other indebtedness of the Partnership and its restricted subsidiaries.

8. Inventory

Inventory consists primarily of spare parts and equipment related to the Partnership’s midstream infrastructure. Inventory is stated at the lower of cost and net realizable value with cost determined on an average cost method. The Partnership assesses the carrying value of inventory and uses estimates and judgments when making any adjustments necessary to reduce the carrying value to net realizable value. Due to lower market prices, the Partnership recorded an inventory write-down of $0.4 million for the three months ended September 30, 2020 and $0.6 million for the nine months ended September 30, 2020.

The carrying value of the Partnership’s inventory was ~~$8.1~~$7.0 million at ~~September 30, 2020. The Partnership had 0 inventory at~~March 31, 2021 and December 31, ~~2019.~~2020.

9. Commitments and Contingencies

The Partnership has various contractual obligations in the normal course of its operations. Included below is a description of the Partnership’s various future commitments as of ~~September 30, 2020.~~

~~Volume commitment agreements.~~ ~~As of September 30,~~March 31, 2021. There have been no material changes to the Partnership’s commitments and contingencies disclosed in its 2020 the Partnership had certain agreements with an aggregate requirement to either deliver or purchase a minimum quantity of approximately 9.8 million barrels of water and approximately 24.8 million barrels of crude oil, prior to any applicable volume credits, within specified timeframes, all of which are 10 years or less. The estimable future commitments under these agreements were approximately $19.7 million as of September 30, 2020. The commitments under these arrangements are not recorded in the accompanying Condensed Consolidated Balance Sheet as of September 30, 2020.Annual Report.

Litigation. The Partnership is party to various legal and/or regulatory proceedings from time to time arising in the ordinary course of business. When the Partnership determines that a loss is probable of occurring and is reasonably estimable, the Partnership accrues an undiscounted liability for such contingencies based on its best estimate using information available at the time. The Partnership discloses contingencies where an adverse outcome may be material, or where in the judgment of management, the matter should otherwise be disclosed.

~~Mirada litigation.~~ On March 23, 2017, Mirada Energy, LLC, Mirada Wild Basin Holding Company, LLC and Mirada Energy Fund I, LLC (collectively, “Mirada”) filed a lawsuit against Oasis Petroleum, Oasis Petroleum North America LLC (“OPNA”), and OMS, seeking monetary damages in excess of $100 million, declaratory relief, attorneys’ fees and costs (~~Mirada Energy, LLC, et al. v. Oasis Petroleum North America LLC, et al.~~; in the 334th Judicial District Court of Harris County, Texas; Case Number 2017-19911). Mirada asserts that it is a working interest owner in certain acreage owned and operated by Oasis Petroleum in Wild Basin. Specifically, Mirada asserts that Oasis Petroleum has breached certain agreements by: (1) failing to allow Mirada to participate in Oasis Petroleum’s midstream operations in Wild Basin; (2) refusing to provide Mirada with information that Mirada contends is required under certain agreements and failing to provide information in a timely fashion; (3) failing to consult with Mirada and failing to obtain Mirada’s consent prior to drilling more than one well at a time in Wild Basin; and (4) overstating the estimated costs of proposed well operations in Wild Basin. Mirada seeks a declaratory judgment that Oasis Petroleum be removed as operator in Wild Basin at Mirada’s election and that Mirada be allowed to elect a new operator; certain agreements apply to Oasis Petroleum and Mirada and Wild Basin with respect to this dispute; Oasis Petroleum be required to provide all information within its possession regarding proposed or ongoing operations in Wild Basin; and Oasis Petroleum not be permitted to drill, or propose to drill, more than one well at a time in Wild Basin without obtaining Mirada’s consent. Mirada also seeks a declaratory judgment with respect to Oasis Petroleum’s current midstream operations in Wild Basin. Specifically, Mirada seeks a declaratory judgment that Mirada has a right to participate in Oasis Petroleum’s Wild Basin midstream operations, consisting of produced and flowback water disposal, crude oil gathering and natural gas gathering and processing; that, upon Mirada’s election to participate, Mirada is obligated to pay its proportionate costs of Oasis Petroleum’s midstream operations in Wild Basin; and that Mirada would then be entitled to receive a share of revenues from the midstream operations and would not be charged any amount for its use of these facilities for production from the “Contract Area.”

On June 30, 2017, Mirada amended its original petition to add a claim that Oasis Petroleum has breached certain agreements by charging Mirada for midstream services provided by its affiliates and to seek a declaratory judgment that Mirada is entitled to be paid its share of total proceeds from the sale of hydrocarbons received by OPNA or any affiliate of OPNA without deductions for midstream services provided by OPNA or its affiliates.

On February 2, 2018 and February 16, 2018, Mirada filed a second and third amended petition, respectively. In these filings, Mirada alleged new legal theories for being entitled to enforce the underlying contracts, and added Bighorn DevCo, Bobcat DevCo and Beartooth DevCo as defendants, asserting that these entities were created in bad faith in an effort to avoid contractual obligations owed to Mirada.

On March 2, 2018, Mirada filed a fourth amended petition that described Mirada’s alleged ownership and assignment of interests in assets purportedly governed by agreements at issue in the lawsuit. On August 31, 2018, Mirada filed a fifth amended petition that added the Partnership as a defendant, asserting that it was created in bad faith in an effort to avoid contractual obligations owed to Mirada.

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On July 2, 2019, Oasis Petroleum, OPNA, OMS, the Partnership, Bighorn DevCo, Bobcat DevCo and Beartooth DevCo (collectively “Oasis Entities”) counterclaimed against Mirada for a judgment declaring that Oasis Entities are not obligated to purchase, manage, gather, transport, compress, process, market, sell or otherwise handle Mirada’s proportionate share of oil and gas produced from OPNA-operated wells. The counterclaim also seeks attorney’s fees, costs and expenses.

On November 1, 2019, Mirada filed a sixth amended petition that stated that Mirada seeks in excess of $200 million in damages and asserted that OMS is an agent of OPNA and OPNA, OMS, the Partnership, Bighorn DevCo, Bobcat DevCo and Beartooth DevCo are agents of Oasis Petroleum. Mirada also changed its allegation that it may elect a new operator for the subject wells to instead allege that Mirada may remove Oasis Petroleum as operator.

On November 1, 2019, the Oasis Entities amended their counterclaim against Mirada for a judgment declaring that a provision in one of the agreements does not incorporate by reference any provisions in a certain participation agreement and joint operating agreement. The additional counterclaim also seeks attorney’s fees, costs and expenses. On the same day, the Oasis Entities filed an amended answer asserting additional defenses against Mirada’s claims.

On March 13, 2020, Mirada filed a seventh amended petition that did not assert any new causes of action and did not add any new parties. Mirada did add an allegation that Oasis Petroleum breached its implied duty of good faith and fair dealing with respect to certain contracts.

~~On April 30, 2020, Mirada abandoned its prior claims related to overstating the estimated costs of proposed well operations in Wild Basin.~~

On September 28, 2020, the Oasis Entities entered into a Settlement and Mutual Release Agreement (the “Mirada Settlement Agreement”) with Mirada. The Mirada Settlement Agreement provides for, among other things, payment by OPNA to certain Mirada related parties of $42.8 million (with $20 million due on the effective date of the Oasis Petroleum Restructuring Plan, and the balance due on or before 180 days after the effective date of the Oasis Petroleum Restructuring Plan) and mutual releases, including, without limitation, release of all claims asserted in the Mirada litigation against the Oasis Entities. None of the Partnership, Bighorn DevCo, Bobcat DevCo, or Beartooth DevCo will contribute to the settlement payment.

~~Solomon litigation.~~ ~~On or about August 28, 2019, Oasis Petroleum LLC, a wholly-owned subsidiary of Oasis Petroleum (“OP LLC”), was named as a defendant in the lawsuit styled~~ ~~Andrew Solomon, on behalf of himself and those similarly situated v. Oasis Petroleum, LLC~~, pending in the United States District Court for the District of North Dakota. The lawsuit alleged violations of the federal Fair Labor Standards Act (the “FLSA”) and Title 29 of the North Dakota Century Code (“Title 29”) as the result of OP LLC’s alleged practice of paying the plaintiff and similarly situated current and former employees overtime at rates less than required by applicable law, or failing to pay for certain overtime hours worked. The lawsuit requested that: (i) its federal claims be advanced as a collective action, with a class of all operators, technicians and all other employees in substantially similar positions employed by OP LLC who were paid hourly for at least one week during the three year period prior to the commencement of the lawsuit, who worked 40 or more hours in at least one workweek and/or eight or more hours on at least one workday; and (ii) its state claims be advanced as a class action, with a class of all operators, technicians, and all other employees in substantially similar positions employed by OP LLC in North Dakota during the two year period prior to the commencement of the lawsuit, who worked 40 or more hours in at least one workweek and/or worked eight or more hours in a day on at least one workday.

On September 14, 2020, OP LLC entered into a Settlement Agreement and Release of All Claims with Mr. Solomon which provides for, among other things, payment by OP LLC of $15,000 and a release by Mr. Solomon of claims against OP LLC and its affiliates, which includes, but is not limited to, all claims asserted, or which could have been asserted, against OP LLC and its affiliates arising out of or relating in any way to the Solomon litigation. On September 25, 2020, the Solomon litigation was dismissed with prejudice. None of the Partnership, Bighorn DevCo, Bobcat DevCo, Beartooth DevCo or Panther DevCo will contribute to the settlement payment.

10. ~~Equity-Based Compensation~~

The Oasis Midstream Partners LP 2017 Long Term Incentive Plan (“LTIP”) provides for the grant, at the discretion of the Board of Directors of the General Partner, of options, unit appreciation rights, restricted units, phantom units, and other unit or cash-based awards. The purpose of awards under the LTIP is to provide additional incentive compensation to individuals providing services to the Partnership and to align the economic interests of such individuals with the interests of the Partnership’s unitholders. As of September 30, 2020, the aggregate number of common units that may be issued pursuant to any and all awards under the LTIP was equal to 2,793,360 common units.

~~Restricted unit awards.~~ The Partnership has granted to independent directors of the General Partner restricted unit awards under the LTIP, which vest over a one year period. These awards are accounted for as equity-classified awards since the awards will settle in common units upon vesting. Equity-based compensation expense is accounted for under the fair value method in

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accordance with GAAP. Under the fair value method for equity-classified awards, equity-based compensation expense is measured at the grant date based on the fair value of the award and is recognized over the vesting period.

During the nine months ended September 30, 2020, the Partnership granted 16,170 restricted unit awards to certain independent directors at a weighted-average grant date fair value of $16.69 per common unit, which vest over a one year period. The Partnership recorded equity-based compensation expense of $0.1 million and $0.2 million for the three and nine months ended September 30, 2020, respectively, and $0.1 million and $0.3 million for the three and nine months ended September 30, 2019, respectively. Equity-based compensation expense is recorded under general and administrative expenses on the Partnership’s Condensed Consolidated Statements of Operations.

As of September 30, 2020, unrecognized equity-based compensation expense for outstanding restricted unit awards was $0.1 million, which is expected to be recognized over a weighted average period of 0.3 years.

~~11.~~ Partnership Equity and Distributions

The following table details the distributions paid in respect of each period in which the distributions were earned for the periods presented:

Distributions
Limited Partners General Partner
Period Record Date Distribution Date Distribution per limited partner unit Common units Subordinated units IDRs
(In thousands)
Q2 2019 August 16, 2019 August 28, 2019 $0.490 $ 9,822 $ 6,738 $ 463
Q3 2019 November 15, 2019 November 27, 2019 0.515 10,323 7,081 745
Q4 2019 February 13, 2020 February 27, 2020 0.540 10,833 7,425 1,027
Q1 2020 May 28, 2020 June 8, 2020 0.540 10,833 7,425 1,027
Q2 2020 August 14, 2020 August 27, 2020 0.540 10,833 7,425 1,027

Distributions

Limited Partners

General Partner

Period

Record Date

Distribution Date

Distribution per limited partner unit

Common units

Subordinated units

IDRs

(In thousands)

Q4 2020

March 8, 2021

March 18, 2021

$0.54

$10,842

$7,425

$1,027

Subordinated unit conversion. On March 19, 2021, the first business day following the payment of the Partnership’s distribution for the fourth quarter of 2020, the subordination period under our partnership agreement terminated in accordance with the terms thereof, and the Partnership’s 13,750,000 subordinated units representing limited partner interests, all of which were held by OMS Holdings, automatically converted into common units on a one-to-one basis.

Cash distributions. On ~~November~~May 3, ~~2020,~~2021, the Board of Directors of the General Partner declared the quarterly cash distribution for the ~~third~~first quarter of ~~2020~~2021 of ~~$0.54~~$0.55 per unit. ~~In addition, the General Partner will receive a cash~~This distribution ~~of $1.0 million attributable to the incentive distribution rights related to earnings for the third quarter of 2020. These distributions~~ will be payable on ~~November~~May 27, ~~2020~~2021 to unitholders of record as of ~~November 13, 2020.~~May 17, 2021.

Incentive distribution rights. ~~The General Partner owns all~~All of the Partnership’s ~~incentive distribution rights (“IDRs”),~~IDRs, all of which ~~entitle it to increasing percentages, up to a maximum of 50.0%, of~~were held by the ~~cash~~General Partner, were eliminated in connection with the Simplification Transaction. See Note 4 — Transactions with Affiliates.

Simplification Transaction. On March 30, 2021, the Partnership ~~distributes~~acquired Oasis Petroleum’s remaining 64.7% limited liability company interest in ~~excess~~Bobcat DevCo and its remaining 30.0% limited liability company interest in Beartooth DevCo. See Note 4 – Transactions with Affiliates.

Table of ~~$0.4313 per unit per quarter. The maximum distribution of 50.0% does not include any distributions that Oasis Petroleum may receive on common units or subordinated units that it owns.~~Contents

~~12.~~11. Earnings (Loss) Per Limited Partner Unit

Earnings (loss) per limited partner unit is computed by dividing the respective limited partners’ interest in earnings (loss) attributable to the Partnership by the weighted average number of common and subordinated units outstanding. ~~Because there is~~For periods prior to the conversion of subordinated units and IDR Elimination, the Partnership had more than one class of participating securities ~~the Partnership uses~~and used the two-class method when calculating earnings (loss) per limited partner unit. The classes of participating securities include common units, subordinated units and IDRs.

Diluted earnings (loss) per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units, such as awards under the LTIP, were exercised, settled or converted into common units. When it is determined that potential common units should be included in diluted net income (loss) per limited partner unit calculation, the impact is reflected by applying the treasury stock method. There are no adjustments made to net income (loss) attributable to Oasis Midstream Partners LP in the calculation of diluted earnings (loss) per unit. ~~Diluted weighted average limited partner units outstanding includes the dilutive effect of unvested restricted unit awards (see Note 10 — Equity-Based Compensation).~~ For the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, the diluted ~~loss~~earnings (loss) per share calculation excludes the anti-dilutive effect of unvested restricted unit awards.

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The following is a calculation of the basic and diluted weighted average units outstanding for the periods presented:


		Three Months Ended September 30,		Nine Months Ended September 30,				Three Months Ended March 31,
			2020	2019	2020	2019			2021	2020

			(In thousands)						(In thousands)
Basic weighted average common units outstanding	Basic weighted average common units outstanding		20,045	20,027	20,044	20,022	Basic weighted average common units outstanding		22,052	20,041
Dilutive effect of restricted awards	Dilutive effect of restricted awards		3	11	0	17	Dilutive effect of restricted awards		4	0
Diluted weighted average common units outstanding	Diluted weighted average common units outstanding		20,048	20,038	20,044	20,039	Diluted weighted average common units outstanding		22,056	20,041

The following tables present the calculation of earnings (loss) per limited partner unit under the two-class method for each period presented:


		Nine Months Ended September 30, 2020									Three Months Ended March 31, 2021
		General Partner		Limited Partners							Limited Partners
		IDRs		Common units		Subordinated units		Total			Common units		Subordinated units		Total

		(In thousands, except per unit data)									(In thousands, except per unit data)
Net income (loss) attributable to Oasis Midstream Partners LP
Net income attributable to Oasis Midstream Partners LP										Net income attributable to Oasis Midstream Partners LP
Distribution declared	Distribution declared	$	3,081	$	32,499	$	22,275	$	57,855	Distribution declared	$	10,842	$	7,425	$	18,267
Undistributed loss attributable to Oasis Midstream Partners LP		0		(53,452)		(36,667)		(90,119)
Net income (loss) attributable to Oasis Midstream Partners LP		$	3,081	$	(20,953)	$	(14,392)	$	(32,264)
Undistributed earnings attributable to Oasis Midstream Partners LP										Undistributed earnings attributable to Oasis Midstream Partners LP	4,956		2,678		7,634
Net income attributable to Oasis Midstream Partners LP										Net income attributable to Oasis Midstream Partners LP	$	15,798	$	10,103	$	25,901

Weighted average limited partners units outstanding	Weighted average limited partners units outstanding									Weighted average limited partners units outstanding
Basic	Basic			20,044						Basic	22,052
Diluted	Diluted			20,044						Diluted	22,056

Net loss attributable to Oasis Midstream Partners LP per limited partner unit	Net loss attributable to Oasis Midstream Partners LP per limited partner unit									Net loss attributable to Oasis Midstream Partners LP per limited partner unit
Basic	Basic			$	(1.05)					Basic	$	0.72
Diluted	Diluted			(1.05)						Diluted	0.72

Anti-dilutive restricted units	Anti-dilutive restricted units			16						Anti-dilutive restricted units	8

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Nine Months Ended September 30, 2019
General Partner Limited Partners
IDRs Common units Subordinated units Total
(In thousands, except per unit data)
Net income attributable to Oasis Midstream Partners LP
Distribution declared $ 1,474 $ 29,567 $ 20,281 $ 51,322
Undistributed earnings attributable to Oasis Midstream Partners LP 0 16,514 11,341 27,855
Net income attributable to Oasis Midstream Partners LP $ 1,474 $ 46,081 $ 31,622 $ 79,177
Weighted average limited partners units outstanding
Basic 20,022
Diluted 20,039
Net income attributable to Oasis Midstream Partners LP per limited partner unit
Basic $ 2.30
Diluted 2.30
Anti-dilutive restricted units 5


		Three Months Ended September 30, 2020									Three Months Ended March 31, 2020
		General Partner		Limited Partners							General Partner		Limited Partners
		IDRs		Common units		Subordinated units		Total			IDRs		Common units		Subordinated units		Total
		(In thousands, except per unit data)
Net income attributable to Oasis Midstream Partners LP
											(In thousands, except per unit data)
Net income (loss) attributable to Oasis Midstream Partners LP										Net income (loss) attributable to Oasis Midstream Partners LP
Distribution declared	Distribution declared	$	1,027	$	10,833	$	7,425	$	19,285	Distribution declared	$	1,027	$	10,833	$	7,425	$	19,285
Undistributed earnings attributable to Oasis Midstream Partners LP		0		4,730		3,246		7,976
Net income attributable to Oasis Midstream Partners LP		$	1,027	$	15,563	$	10,671	$	27,261
Undistributed loss attributable to Oasis Midstream Partners LP										Undistributed loss attributable to Oasis Midstream Partners LP	0		(53,784)		(36,900)		(90,684)
Net income (loss) attributable to Oasis Midstream Partners LP										Net income (loss) attributable to Oasis Midstream Partners LP	$	1,027	$	(42,951)	$	(29,475)	$	(71,399)

Weighted average limited partners units outstanding	Weighted average limited partners units outstanding									Weighted average limited partners units outstanding
Basic	Basic			20,045						Basic			20,041
Diluted	Diluted			20,048						Diluted			20,041

Net income attributable to Oasis Midstream Partners LP per limited partner unit	Net income attributable to Oasis Midstream Partners LP per limited partner unit									Net income attributable to Oasis Midstream Partners LP per limited partner unit
Basic	Basic			$	0.78					Basic			$	(2.14)
Diluted	Diluted			0.78						Diluted			(2.14)

Anti-dilutive restricted units	Anti-dilutive restricted units			13						Anti-dilutive restricted units			10

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Three Months Ended September 30, 2019
General Partner Limited Partners
IDRs Common units Subordinated units Total
(In thousands, except per unit data)
Net income attributable to Oasis Midstream Partners LP
Distribution declared $ 745 $ 10,323 $ 7,081 $ 18,149
Undistributed earnings attributable to Oasis Midstream Partners LP 0 7,878 5,409 13,287
Net income attributable to Oasis Midstream Partners LP $ 745 $ 18,201 $ 12,490 $ 31,436
Weighted average limited partners units outstanding
Basic 20,027
Diluted 20,038
Net income attributable to Oasis Midstream Partners LP per limited partner unit
Basic $ 0.91
Diluted 0.91
Anti-dilutive restricted units 7

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Item 2. — Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 (“~~2019~~2020 Annual Report”), as well as the unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. Forward-looking statements give our current expectations, contain projections of results of operations or of financial condition or provide forecasts of future events. Words such as “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” “budget,” “potential,” “continue” and other similar expressions are used to identify forward-looking statements.

Forward-looking statements can be affected by the assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements discussed below and detailed under Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. Actual results may vary materially. Although forward-looking statements reflect our good faith beliefs at the time they are made, you are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and you should not consider the following list to be a complete statement of all potential risks and uncertainties. In addition, our forward-looking statements address the various risks and uncertainties associated with the extraordinary market environment and impacts resulting from the novel coronavirus 2019 (“COVID-19”) pandemic and the ~~actions of foreign oil producers (most notably Saudi Arabia and Russia) to increase crude oil production and the expected impact~~related impacts on our businesses, operations, earnings and results. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include but are not limited to:

•~~the continuation of a swift and material decline in global crude oil demand and crude oil prices for an uncertain period of time that correspondingly may lead to a significant reduction of domestic~~ crude oil and natural gas production, which in turn could result in significant declines in the actual or expected volumes transported through our pipelines and/or the reduction of commercial opportunities that might otherwise be available to us;realized prices;

•developments in the global economy as well as the public health crisis related to the COVID-19 virus and resulting demand and supply for crude oil and natural gas;

•uncertainty regarding the length of time it will take for the U.S. and the rest of the world to slow the spread of the COVID-19 virus to the point where applicable authorities are comfortable easing current restrictions on various commercial and economic activities; such restrictions are designed to protect public health but also have the effect of significantly reducing demand for crude oil and natural gas;

•uncertainty regarding the future actions of foreign oil producers ~~such as Saudi Arabia and Russia~~ and the ~~risk that they take~~related impacts such actions ~~that will prolong or exacerbate~~have on the ~~current over-supply~~balance between the supply of and demand for crude ~~oil;~~oil and natural gas and therefore the demand for midstream services;

•uncertainty regarding the timing, pace and extent of an economic recovery in the U.S. and elsewhere, which in turn will likely affect demand for crude oil and natural gas and therefore the demand for the midstream services we provide and the commercial opportunities available to us;

•the effect of an overhang of significant amounts of crude oil and natural gas inventory stored in the U.S. and elsewhere and the impact that such inventory overhang ultimately has on the timing of a return to market conditions that support increased drilling and production activities in the U.S.;

•~~an inability of Oasis Petroleum to effectively implement the Oasis Petroleum Restructuring Plan;~~

•changes to the composition of Oasis Petroleum’s board of directors pursuant to the Oasis Petroleum Restructuring Plan, which could have different views on the issues that will determine Oasis Petroleum’s strategic and operational direction and may differ materially from those of the past, including Oasis Petroleum’s strategic relationship with the Partnership;

•an inability of Oasis Petroleum or our other customers to meet their operational and development plans on a timely basis or at all;

•the execution of our business strategies;

•the demand for and price of crude oil and natural gas, on an absolute basis and in comparison to the price of alternative and competing fuels;

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•the fees we charge, and the margins we realize, from our midstream services;

•the cost of achieving organic growth in current and new markets;

•our ability to make acquisitions of other midstream infrastructure assets or other assets that complement or diversify our operations;

•our ability to make acquisitions of other assets on economically acceptable terms from Oasis Petroleum;

•our inability to perform our obligations under our contracts, whether due to non-performance by third parties, including our customers or other counterparties, market constraints, third-party constraints, legal constraints (including governmental orders or guidance), or other factors;

•the lack of asset and geographic diversification;

•the suspension, reduction or termination of our commercial agreements with Oasis Petroleum;

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•labor relations and government regulations;

•competition and actions taken by third party producers, operators, processors and transporters;

•outcomes of litigation and regulatory investigations, proceedings or inquiries;

•the demand for, and the costs of developing and conducting, our midstream infrastructure services;

•interruptions in service and fluctuations in tariff provisions of third party connecting pipelines;

•general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and crude oil and related services;conditions;

•the price and availability of equity and debt financing;

•operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control;

•potential effects arising from cyber threats, terrorist attacks and any consequential or other hostilities;

•interruption of our operations due to social, civil or political events or unrest;

•changes in environmental, safety and other laws and regulations;

•execution of our environmental, social and governance (“ESG”) initiatives;

•the effects of accounting pronouncements issued periodically during the periods covered by forward-looking statements;

•changes in our tax status;

•uncertainty regarding our future operating results; and

•certain factors discussed elsewhere in this Quarterly Report on Form 10-Q, in our ~~2019~~2020 Annual Report and in our other SEC filings.

All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. We disclaim any obligation to update or revise these statements unless required by securities law. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this Quarterly Report on Form 10-Q are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved. Some of the key factors which could cause actual results to vary from our expectations include, but are not limited to, commodity price volatility, inflation, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in projecting future throughput volumes, cash flow and access to capital, the timing of development expenditures and the other risks described under Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q.

Overview

We are a ~~fee-based~~leading gathering and processing master limited partnership formed by our sponsor, Oasis Petroleum ~~Inc. (together with its wholly-owned subsidiaries, “Oasis Petroleum”)~~(Nasdaq: OAS), to own, develop, operate and acquire a diversified portfolio of midstream assets in North ~~America that~~America. We offer full service midstream solutions to our customers covering their oil, gas and water needs. Our full scale of operations includes natural gas services (gathering, compression, processing and gas lift supply), crude oil services (gathering, terminaling and transportation) and water services (gathering and disposal of produced and flowback water and freshwater distribution). Our current assets are located in the heart of the oil-rich Williston and Permian Basins and are integral to the crude oil and natural gas operations of Oasis ~~Petroleum and~~Petroleum. Our assets are also strategically positioned to capture volumes from other producers. ~~Our midstream operations are performed within the Williston Basin and the Delaware Basin.~~ We generate the substantial majority of our revenues through long-term, fixed-fee contracts with Oasis Petroleum pursuant to which we provide crude oil, natural gas and water-related midstream services. We expect to grow acquisitively through accretive, dropdown acquisitions, as well as organically as Oasis Petroleum ~~continues to develop~~develops its acreage. We also expect to grow by increasing services provided to third parties and ~~through acquisitions of~~acquiring midstream assets from third parties.

~~Table of Contents~~

We have significant acreage dedications from Oasis Petroleum and commitments from third party producers in both the Williston and Permian Basins. In the Williston Basin, we divide our operations into two primary areas with developed midstream ~~infrastructure, both of which are supported by significant acreage dedications from Oasis Petroleum.~~infrastructure. In Wild Basin, we ~~have acreage dedications from Oasis Petroleum in which we have the right to~~ provide natural gas services (gathering, compression, processing and gas lift supply), crude oil ~~natural gas~~services (gathering, terminaling and transportation), and water services (gathering and disposal of produced and flowback water and freshwater distribution) to ~~support Oasis Petroleum’s existing and future volumes.~~our customers. Outside of Wild Basin, we ~~have acreage dedications from Oasis Petroleum for~~provide water services (gathering and disposal of produced and flowback water ~~services~~ and freshwater ~~services.~~distribution) to our customers. In the ~~Delaware~~Permian Basin, we ~~have acreage dedications from Oasis Petroleum for~~operate strategically located infrastructure where we provide crude oil ~~gathering~~services (gathering) and water services (gathering and disposal of produced and flowback ~~water gathering and disposal services. We have also received commitments and acreage dedications from third parties in the Williston Basin and the Delaware Basin, in which we have the right~~water) to ~~provide crude oil, natural gas and water services~~our customers, with connection points to ~~support existing and future third party volumes.~~key market hubs.

We conduct our business through our ~~ownership of our DevCos, two of which are jointly-owned with Oasis Petroleum. As of September 30, 2020, we own a 100% equity interest in~~wholly-owned subsidiaries: Bighorn DevCo LLC (“Bighorn DevCo”), ~~a 35.3% equity interest in~~ Bobcat DevCo LLC (“Bobcat DevCo”), ~~a 70% equity interest in~~ Beartooth DevCo LLC (“Beartooth DevCo”) and ~~a 100% equity interest in~~ Panther DevCo LLC (“Panther DevCo”~~). As of September 30, 2020, Oasis Petroleum owns a 64.7%~~ and ~~30% non-controlling equity interest in~~collectively with Bighorn DevCo, Bobcat DevCo and Beartooth DevCo, ~~respectively.~~the “DevCos”).

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We are party to long-term, fixed-fee contracts with ~~wholly-owned subsidiaries of~~ Oasis Petroleum for natural gas services, ~~(gathering, compression, processing, gas lift and natural gas liquids (“NGLs”) storage),~~ crude oil services ~~(gathering, stabilization, blending~~ and ~~storage), produced and flowback~~ water ~~services (gathering and disposal) and freshwater services (fracwater and flushwater supply and distribution).~~services. We are also a party to a long-term transportation services agreement regulated by the ~~long-term,~~ Federal Energy Regulatory Commission ~~(“FERC”) regulated transportation services agreement~~ governing the transportation of crude oil via pipeline from the Wild Basin area to Johnson’s Corner. We generate the substantial majority of our revenues through these contracts, which minimizes our direct exposure to commodity prices. The amount of revenue we generate primarily depends on the volume of crude oil, natural gas and water for which we provide midstream services. ~~We generate a substantial majority of our revenues through these contracts, which minimizes our direct exposure to commodity prices.~~ While we have increased our customer diversification by providing midstream services to third parties, we are largely dependent on Oasis Petroleum as our most significant customer.

~~Oasis Petroleum Restructuring~~Recent Developments

~~In light~~Change in Board Chair

On April 14, 2021, Daniel E. Brown was elected to serve on the board of ~~a volatile market environment that drove a severe downturn in crude oil and natural gas prices, as well as~~directors of OMP GP LLC (the “General Partner”). On April 29, 2021, Mr. Brown was elected by the ~~unprecedented impact~~board of directors of the ~~COVID-19 pandemic, Oasis Petroleum engaged with its lenders and an ad hoc committee~~General Partner to serve as Board Chair. Mr. Brown replaces Douglas E. Brooks, who was elected by the board of noteholders regarding restructuring alternatives. On September 29, 2020, Oasis Petroleum entered into a restructuring support agreement (“RSA”), which contemplates a restructuring pursuant to a joint “pre-packaged” plan of reorganization (the “Oasis Petroleum Restructuring Plan”) to increase financial flexibility and reduce its debt. On September 30, 2020, in connection with the Oasis Petroleum Restructuring Plan, Oasis Petroleum filed voluntary petitions for relief under chapter 11 of title 11directors of the ~~United States Bankruptcy Code~~General Partner on January 29, 2021 to serve as Board Chair on an interim basis.

Acquisition of Remaining Interests in Bobcat DevCo and Beartooth DevCo

On March 30, 2021, we consummated the transactions contemplated by the Contribution and Simplification Agreement (the “Contribution and Simplification Agreement”), dated as of March 22, 2021, by and among the Partnership, OMS Holdings LLC (“~~Chapter 11”~~OMS Holdings”) in, Oasis Midstream Services LLC (“OMS”), the ~~United States Bankruptcy Court for the Southern District of Texas. The Partnership and its subsidiaries,~~General Partner, OMP Operating LLC (“OMP Operating”), ~~Bighorn~~OMP DevCo Holdings Corp, Beartooth DevCo LLC (“Beartooth DevCo”), Bobcat DevCo LLC (“Bobcat DevCo”), OMS Holdings Merger Sub, LLC, a wholly owned subsidiary of OMS Holdings (“GP Merger Sub”), and for limited purposes set forth therein, Oasis Petroleum.

Pursuant to the Contribution and Simplification Agreement, among other things, (a) Oasis Petroleum caused OMS to contribute to OMP Operating (i) its remaining 64.7% limited liability company interest in Bobcat DevCo and (ii) its remaining 30% limited liability company interest in Beartooth DevCo ~~and Panther DevCo, were not included in Oasis Petroleum’s Chapter 11 filing.~~

We do not expect the Chapter 11 proceedings at Oasis Petroleum to have a significant impact on OMP’s liquidity position or ability to operate. Oasis Petroleum continues to operate its business as “debtors-in-possession”(the “Contributed Assets”), and the ~~United States Bankruptcy Court~~Partnership paid to OMS Holdings consideration of $512.5 million (together with the IDR Conversion Common Units, the “Total Consideration”) composed of (x) a cash distribution of $231.5 million, sourced from the net proceeds of the offering of the Senior Notes (as defined below) and (y) 12,949,644 common units representing limited partner interests in the Partnership, (b) the Partnership and the General Partner caused the IDRs to be cancelled and converted into 1,850,356 common units representing limited partner interests in the Partnership (the “IDR Elimination” and such common units, the “IDR Conversion Common Units”), and (c) GP Merger Sub merged with and into the General Partner, with the General Partner surviving such merger (the “GP Merger”) and, in connection with the GP Merger, Class A Units and Class B Units representing membership interests in the General Partner were automatically converted into, and thereafter represented the right to receive, the IDR Conversion Common Units on a pro rata basis, and the IDR Conversion Common Units were distributed to the holders of such Class A Units and Class B Units, such that following the GP Merger, OMS Holdings is the sole member of the General Partner (the foregoing clauses (a), (b) and (c), the “Simplification Transaction”). The Contribution and Simplification Agreement also implemented, among other things, a right of first refusal in favor of the Partnership with respect to midstream opportunities in the Painted Woods and City of Williston operating areas of Oasis Petroleum and the amendment and restatement of the (x) agreement of limited partnership of the Partnership and (y) limited liability company agreement of the General Partner to reflect the Simplification Transaction.

The effective date of the Simplification Transaction was January 1, 2021, and the closing date was March 30, 2021. Following the Simplification Transaction, Oasis Petroleum no longer owns any of the limited liability company interests of Bobcat DevCo or Beartooth DevCo.

IDR Elimination

In connection with the Simplification Transaction, all of our IDRs were cancelled and exchanged for 1,850,356 common units in accordance with the terms of the Contribution and Simplification Agreement. Additionally, the owners of the General Partner, OMS Holdings and holders of Class B Units in the General Partner, received the common units issued in exchange for the Southern District of Texas entered orders approving certain relief to enable Oasis Petroleum to operate in the ordinary course of business. Since Oasis Petroleum commenced Chapter 11 bankruptcy proceedings, we have continued to interact with Oasis Petroleum under normal courseIDR Elimination pursuant to the ~~terms~~Contribution and Simplification Agreement.

Subordinated Unit Conversion

On March 19, 2021, the first business day following the payment of our ~~existing commercial agreements. Oasis Petroleum expects to emerge from Chapter 11 in~~distribution for the fourth quarter of 2020, the subordination period under our partnership agreement terminated in accordance with the terms thereof, and we expect to continue to provide midstream services to Oasis Petroleum under normal course during this time. In addition, there are no cross-acceleration or cross-default provisions between the Oasis Petroleum credit agreement and the OMP credit agreement; accordingly, there was not an automatic accelerationour 13,750,000 subordinated units representing limited partner interests, all of ~~outstanding indebtedness under OMP’s Revolving Credit Facility as~~which were held by OMS Holdings, automatically converted into common units on a result of Oasis Petroleum’s Chapter 11 filing (see Item 1. “Financial Statements (Unaudited) — Notes to Condensed Consolidated Financial Statements — Note 2 — Summary of Significant Accounting Policies — Risks and Uncertainties”).one-to-one basis.

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Market Conditions and COVID-19

~~On March 13, 2020,~~Market conditions have improved but remain uncertain as the ~~United States declared the~~worldwide response to COVID-19 pandemic a national emergency, and several states, including Texas, North Dakota and Montana, and municipalities have declared public health emergencies. Along with these declarations, there have been extraordinary and wide-ranging actions taken by international, federal,continues to evolve. Federal, state and local public health and governmental authorities have begun implementation of programs to ~~contain~~administer vaccines, and ~~combat the outbreak and spread of COVID-19 in~~certain regions across the United States have begun to partially lift restrictions previously imposed to contain the spread of COVID-19. Global economic activity levels have improved as these restrictions have begun to be lifted, and energy demand has gradually increased. Despite moderate improvements in market conditions, uncertainties related to COVID-19 remain, including the impact of new virus strains, the risk of renewed restrictions and the ~~world, including mandates for many individuals~~uncertainty of successful administration of effective treatments and vaccines. In response to ~~substantially restrict daily activities~~the current economic environment and ~~for many businesses~~impacts of COVID-19, we have adjusted our business to ~~curtail or cease normal operations. These containment measures, while aiding~~expected lower levels of activity and operate in a sustainable and cost-efficient manner.

In response to the ~~prevention of further~~ outbreak of the COVID-19 ~~have resulted~~pandemic in a severe drop in energy demand and general economic activity. To the extent COVID-19 continues or worsens, governments may impose additional similar restrictions. We have taken, and continue to take, proactive steps to manage any disruption in our business caused by COVID-19. For instance, even though our operations were not required to close,2020, we adopted a work-from-home system for all office-based employees and ~~have~~ deployed additional safety protocols at our operating sites in order to keep ~~our~~the field-based employees and contractors supporting our operations safe ~~and to keep our~~while continuing operations running without material disruption. In the first quarter of 2021, we began a phased return-to-office program, while continuing to follow enhanced safety standards and best practices, including enhanced daily cleaning in common spaces of office locations, required use of facial coverings in common spaces, restricting use of conference rooms and group gatherings, adherence to social distancing requirements and establishing training requirements and procedures.

~~Commodity prices have experienced significant volatility~~

Highlights:

•Completed the Simplification Transaction to acquire Oasis Petroleum’s remaining interests in ~~2020 as a result~~Bobcat DevCo and Beartooth DevCo and eliminate the IDRs.

•Completed $450.0 million private placement of ~~macroeconomic factors, including demand impacts~~8.00% senior unsecured notes due ~~to global disruptions resulting from COVID-19 and supply impacts~~2029.

•ESG leadership with gas capture rate related to ~~actions by members of the Organization of Petroleum Exporting Countries (“OPEC”) and other non-OPEC, oil producing countries, including Russia. U.S. onshore producers, including~~ Oasis Petroleum have taken actions in response to these events, including reductions to capital spending, changes to development plans and delays in production, which have reduced demand for our services and adversely impacted our ability to maintain or increase existing throughput volumes on our systems. While certain producers we provide services to, including Oasis Petroleum, brought production back online from temporary shut-ins during the third quarter, we cannot predict whether or when crude oil production and economic activities will return to normalized levels. The commodity price environment is expected to remain depressed based on over-supply, decreasing demand and a global economic recession.

~~Ultimately, a prolonged period~~ of lower commodity prices may adversely affect our operating results and cash flows. If constraints continue such that storage becomes unavailable to our customers, including Oasis Petroleum, or commodity prices remain depressed, our customers may elect to shut-in some or all of their production, delay or discontinue drilling plans or seek to amend existing contracts to reduce the volumetric fees we charge. If the United States oil and gas industry continues to experience an imbalance of supply and demand, it is likely that our operations will be so affected which could result in future impairment charges, changes to our cash distribution strategy and/or changes in how we manage and operate our business.

~~Highlights:~~99%.

•Declared the quarterly cash distribution for the first quarter of ~~$0.54~~2021 of $0.55 per unit.

•Net income was ~~$43.7~~$42.9 million and net cash from operating activities was ~~$53.3~~$39.4 million.

•Adjusted EBITDA(1) was ~~$57.1~~$56.5 million and and Adjusted EBITDA attributable to ~~Oasis Midstream Partners LP(1)~~the Partnership was ~~$37.3~~$35.9 million.

•Distributable cash flow(1) ~~(“DCF”)~~ was ~~$34.1 million and DCF coverage was 1.8x.~~

•Natural gas processing volumes were 213.1 MMscfpd in the third quarter of 2020, increasing approximately 40% from the second quarter of 2020. Approximately 61.5 MMscfpd of these natural gas processing volumes were from third party producers, up approximately 130% from the second quarter of 2020.

•~~Solid cost control drove higher margins across commodity streams. Operating income improved to 55% of revenue in the third quarter of 2020, compared to 42% in the second quarter of 2020.~~

•~~Executed agreement to permanently waive default interest charges based on certain conditions set by OMP’s lenders that are expected to be satisfied (see “Liquidity and Capital Resources” below).~~

•~~OMP is not included in Oasis Petroleum’s financial restructuring process; OMP and Oasis Petroleum continue to operate in the normal course.~~$33.0 million.

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The following table summarizes the throughput volumes, operating income (loss), depreciation, amortization and impairment and capital expenditures of each of our DevCos for the ~~three and nine months ended September 30, 2020 and 2019.~~periods presented. The amounts shown in the table below are presented on a gross basis.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended
		2020		2019		2020		2019			March 31, 2021		December 31, 2020		March 31, 2020

		(In thousands, except throughput volumes)									(In thousands, except throughput volumes)
Bighorn DevCo	Bighorn DevCo									Bighorn DevCo
Crude oil services volumes (MBopd)	Crude oil services volumes (MBopd)	31.4		47.0		33.8		49.8		Crude oil services volumes (MBopd)	27.6		26.6		44.0
Natural gas services volumes (MMscfpd)	Natural gas services volumes (MMscfpd)	213.1		236.0		203.6		210.4		Natural gas services volumes (MMscfpd)	205.7		220.8		242.4
Operating income	Operating income	$	16,728	$	17,145	$	26,987	$	40,843	Operating income	$	16,867	$	16,026	$	1,325
Depreciation, amortization and impairment	Depreciation, amortization and impairment	3,593		3,099		30,534		9,793		Depreciation, amortization and impairment	2,505		2,534		21,644

Capital expenditures	Capital expenditures	995		2,071		6,297		14,860		Capital expenditures	120		256		3,629
Bobcat DevCo	Bobcat DevCo									Bobcat DevCo
Crude oil services volumes (MBopd)	Crude oil services volumes (MBopd)	26.6		36.9		26.9		40.2		Crude oil services volumes (MBopd)	19.7		19.8		33.0
Natural gas services volumes (MMscfpd)	Natural gas services volumes (MMscfpd)	254.0		277.7		242.5		253.6		Natural gas services volumes (MMscfpd)	248.0		250.8		280.3
Water services volumes (MBowpd)	Water services volumes (MBowpd)	52.8		54.5		52.8		52.7		Water services volumes (MBowpd)	43.0		44.1		61.4
Operating income	Operating income	$	22,454	$	29,449	$	50,698	$	79,360	Operating income	$	23,537	$	17,910	$	12,422
Depreciation, amortization and impairment	Depreciation, amortization and impairment	4,090		3,484		29,657		9,655		Depreciation, amortization and impairment	3,999		4,094		21,343

Capital expenditures	Capital expenditures	(1,697)		22,946		10,356		121,250		Capital expenditures	486		2,304		11,776
Beartooth DevCo	Beartooth DevCo									Beartooth DevCo
Water services volumes (MBowpd)	Water services volumes (MBowpd)	68.0		143.9		85.0		140.3		Water services volumes (MBowpd)	71.3		83.0		133.4
Operating income (loss)	Operating income (loss)	$	6,549	$	14,078	$	(11,323)	$	42,552	Operating income (loss)	$	7,090	$	8,380	$	(19,903)
Depreciation, amortization and impairment	Depreciation, amortization and impairment	2,261		2,400		40,180		7,026		Depreciation, amortization and impairment	2,274		2,256		35,656

Capital expenditures		(492)		4,065		(756)		20,009
Capital expenditures(1)										Capital expenditures(1)	(363)		525		(575)
Panther DevCo	Panther DevCo									Panther DevCo
Crude oil services volumes (MBopd)	Crude oil services volumes (MBopd)	10.6		1.0		9.1		0.6		Crude oil services volumes (MBopd)	9.1		8.9		4.1
Water services volumes (MBowpd)	Water services volumes (MBowpd)	41.0		32.7		40.6		29.4		Water services volumes (MBowpd)	28.5		31.3		30.2
Operating income (loss)	Operating income (loss)	$	1,671	$	1,918	$	(28,037)	$	4,546	Operating income (loss)	$	1,151	$	1,371	$	(32,060)
Depreciation, amortization and impairment	Depreciation, amortization and impairment	597		160		34,231		351		Depreciation, amortization and impairment	202		192		33,321

Capital expenditures		(3,636)		7,702		6,193		20,197
Capital expenditures(1)										Capital expenditures(1)	(59)		1,130		9,610
Oasis Midstream Partners LP	Oasis Midstream Partners LP									Oasis Midstream Partners LP
DevCo operating income		$	47,402	$	62,590	$	38,325	$	167,301
DevCo operating income (loss)										DevCo operating income (loss)	$	48,645	$	43,687	$	(38,216)
Public company expenses	Public company expenses	898		858		2,924		2,606		Public company expenses	1,589		539		844
Operating income		46,504		61,732		35,401		164,695
Operating income (loss)										Operating income (loss)	47,056		43,148		(39,060)
Depreciation, amortization and impairment	Depreciation, amortization and impairment	10,541		9,143		134,602		26,825		Depreciation, amortization and impairment	8,985		9,076		111,964

Equity-based compensation expenses	Equity-based compensation expenses	68		84		201		303		Equity-based compensation expenses	487		68		66
Capitalized interest	Capitalized interest	5		331		322		633		Capitalized interest	—		2		249
Maintenance capital expenditures	Maintenance capital expenditures	598		2,703		2,934		14,314		Maintenance capital expenditures	302		3,594		2,004
Expansion capital expenditures(2)	Expansion capital expenditures(2)	(5,428)		34,081		19,156		162,002		Expansion capital expenditures(2)	231,391		621		22,436
Total capital expenditures	Total capital expenditures	(4,825)		37,115		22,412		176,949		Total capital expenditures	231,693		4,217		24,689

___________________

(1) Negative amount reflects differences between the estimated capital expenditures accrued in a reporting period and actual capital expenditures recognized in a subsequent reporting period.

~~Items Affecting Comparability~~

~~2019 Delaware Acquisition.~~ ~~On November 1, 2019, we entered into an agreement with~~(2) Includes $231.5 million related to the cash distribution to Oasis Petroleum associated with the Simplification Transaction composed of the following: (i) $229.0 million cash component of the purchase price, (ii) upward adjustment to ~~acquire certain crude oil gathering~~the purchase price of $10.1 million related to the expanded project dedication to OMP in South Nesson and ~~produced and flowback water gathering and disposal assets in~~(iii) downward adjustment to the ~~Delaware Basin (the “2019 Delaware Acquisition”). The 2019 Delaware Acquisition was accounted for as a transfer~~purchase price of ~~net assets~~$7.6 million related to activity between ~~entities under common control. As a result, the financial information for the period prior to~~ the effective date of ~~November~~January 1, ~~2019 has been recast. See~~2021 and the close date of March 30, 2021.

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~~Item 1. “Financial Statements (Unaudited) — Notes to Condensed Consolidated Financial Statements — Note 2 — Summary of Significant Accounting Policies — Basis of Presentation.”~~

Results of Operations

Revenues

We categorize our revenues as either service revenues or product sales to the respective line items described below.

•Midstream services - Oasis Petroleum. We record service revenues for fee-based arrangements with Oasis Petroleum for midstream services, including: (i) natural gas gathering, compression, processing, gas lift supply and NGL storage services; (ii) crude oil gathering, ~~stabilization, blending, storage~~terminaling and transportation services; and (iii) produced and flowback water gathering and disposal services.

•Midstream services - third parties. We record service revenues for fee-based arrangements with third parties for crude oil and produced and flowback water services provided to non-affiliated customers.

•Product sales - Oasis Petroleum. We record product sales from Oasis Petroleum for the sale of crude oil and residue gas and NGLs to certain subsidiaries of Oasis Petroleum, which we generate from purchase agreements with third parties. We also record product sales from Oasis Petroleum for the supply and distribution of freshwater to Oasis Petroleum.

•Product sales - third parties. We record product sales from third parties for the supply and distribution of freshwater to non-affiliated customers.

The following table summarizes our revenues for the periods presented:


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended
		2020		2019		Change		2020		2019		Change			March 31, 2021		December 31, 2020		Change		March 31, 2021		March 31, 2020		Change

		(In thousands)													(In thousands)
Revenues	Revenues													Revenues
Midstream services – Oasis Petroleum	Midstream services – Oasis Petroleum	$	67,401	$	81,184	$	(13,783)	$	206,340	$	232,458	$	(26,118)	Midstream services – Oasis Petroleum	$	67,163	$	61,997	$	5,166	$	67,163	$	81,993	$	(14,830)
Midstream services – third parties	Midstream services – third parties	1,953		1,840		113		11,041		4,792		6,249		Midstream services – third parties	900		326		574		900		3,846		(2,946)
Product sales – Oasis Petroleum	Product sales – Oasis Petroleum	15,184		20,517		(5,333)		39,841		60,517		(20,676)		Product sales – Oasis Petroleum	32,281		28,274		4,007		32,281		20,788		11,493
Product sales – third parties	Product sales – third parties	17		9		8		23		38		(15)		Product sales – third parties	29		17		12		29		—		29
Total revenues	Total revenues	$	84,555	$	103,550	$	(18,995)	$	257,245	$	297,805	$	(40,560)	Total revenues	$	100,373	$	90,614	$	9,759	$	100,373	$	106,627	$	(6,254)

Three months ended ~~September 30, 2020~~March 31, 2021 as compared to three months ended ~~September 30, 2019~~December 31, 2020

Total midstream revenues ~~decreased $19.0~~increased $9.8 million to ~~$84.6~~$100.4 million during the three months ended ~~September 30, 2020~~March 31, 2021 as compared to the three months ended ~~September 30, 2019~~.December 31, 2020. This ~~decrease~~increase was driven by a ~~$13.7~~$5.7 million ~~decrease~~increase in service revenues and a ~~$5.3~~$4.0 million ~~decrease~~increase in product sales.

The ~~$13.7~~$5.7 million ~~decrease~~increase in service revenues was driven by a ~~$7.2~~$7.4 million increase in crude oil and natural gas service revenues due to an increase in natural gas volumes from Oasis Petroleum in the Williston Basin, offset by a $1.6 million decrease in produced and flowback water service revenues due to ~~an $8.8~~a $1.1 million decrease in ~~service~~ revenues from Oasis Petroleum primarily due ~~primarily~~ to fewer volumes in the Williston Basin ~~partially offset by~~and a ~~$1.6~~$0.5 million ~~increase~~decrease in ~~produced and flowback water service~~ revenues from third parties due to the commencement of services to third parties in Wild Basin during 2020. In addition, there was a $6.5 million decrease in crude oil and natural gas service revenues due to a decrease in crude oil and natural gas volumes from Oasis Petroleum in the Williston Basin.parties.

The ~~$5.3~~$4.0 million ~~decrease~~increase in product sales was driven by a ~~$1.6~~$4.8 million ~~decrease~~increase in natural gas product sales to Oasis Petroleum driven by ~~fewer volumes supplied from third party producers, coupled with~~an increase in residue gas and NGL prices, partially offset by a ~~$3.8~~$0.9 million decrease in freshwater product sales due to a decrease in freshwater deliveries to Oasis Petroleum ~~as a result of a reduction in~~for well completions.

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~~Nine~~Three months ended ~~September 30, 2020~~March 31, 2021 as ~~compare~~compared to ~~nine~~.three months ended ~~September 30, 2019~~March 31, 2020

Total midstream revenues decreased ~~$40.6~~$6.3 million to ~~$257.2~~$100.4 million during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 as compared to the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. This decrease was driven by a ~~$20.7 million decrease in product sales and~~ a ~~$19.9~~$17.8 million decrease in service ~~revenues.~~revenues, partially offset by an $11.5 million increase in product sales.

The ~~$19.9~~$17.8 million decrease in service revenues was driven by ~~a $14.5~~an $8.9 million decrease in produced and flowback water service revenues due to a ~~$20.2~~$7.1 million decrease in ~~service~~ revenues from Oasis Petroleum due to fewer volumes, ~~partially offset by~~and a ~~$5.6~~$1.8 million ~~increase~~decrease in ~~produced and flowback water service~~ revenues from third parties due to ~~the commencement of services to third parties in Wild Basin.~~fewer volumes. In addition, there was ~~a $5.3~~an $8.9 million decrease in crude oil and natural gas service revenues primarily related to a decrease in crude oil and natural gas volumes in the Williston Basin.

The ~~$20.7~~$11.5 million ~~decrease~~increase in product sales was driven by ~~an $11.3~~a $16.1 million ~~decrease~~increase in natural gas product sales to Oasis Petroleum driven by ~~fewer volumes supplied from third party producers. In addition, there was~~higher residue gas and NGL prices, partially offset by a ~~$9.6~~$4.6 million decrease in freshwater product sales due to a decrease in freshwater deliveries to Oasis Petroleum ~~as a result of a reduction in~~for well completions.

Operating expenses and other expenses

The following table summarizes our operating expenses and other expenses for the periods presented:


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended
		2020		2019		Change		2020		2019		Change			March 31, 2021		December 31, 2020		Change		March 31, 2021		March 31, 2020		Change

		(In thousands)													(In thousands)
Operating expenses	Operating expenses													Operating expenses
Costs of product sales	Costs of product sales	$	5,958	$	7,001	$	(1,043)	$	16,605	$	27,088	$	(10,483)	Costs of product sales	$	22,776	$	15,780	$	6,996	$	22,776	$	8,432	$	14,344
Operating and maintenance	Operating and maintenance	12,682		18,009		(5,327)		44,030		54,975		(10,945)		Operating and maintenance	13,106		13,888		(782)		13,106		16,840		(3,734)
Depreciation and amortization	Depreciation and amortization	9,083		9,143		(60)		31,161		26,825		4,336		Depreciation and amortization	8,985		9,076		(91)		8,985		10,197		(1,212)
Impairment	Impairment	1,458		—		1,458		103,441		—		103,441		Impairment	—		—		—		—		101,767		(101,767)
General and administrative	General and administrative	8,870		7,665		1,205		26,607		24,222		2,385		General and administrative	8,450		8,722		(272)		8,450		8,451		(1)
Total operating expenses	Total operating expenses	38,051		41,818		(3,767)		221,844		133,110		88,734		Total operating expenses	53,317		47,466		5,851		53,317		145,687		(92,370)
Operating income		46,504		61,732		(15,228)		35,401		164,695		(129,294)
Other expenses
Operating income (loss)														Operating income (loss)	47,056		43,148		3,908		47,056		(39,060)		86,116
Other income (expense)														Other income (expense)
Interest expense, net of capitalized interest	Interest expense, net of capitalized interest	(2,753)		(4,612)		1,859		(38,196)		(12,911)		(25,285)		Interest expense, net of capitalized interest	(4,061)		(2,602)		(1,459)		(4,061)		(30,257)		26,196
Other expenses		(7)		—		(7)		(150)		(4)		(146)
Total other expenses		(2,760)		(4,612)		1,852		(38,346)		(12,915)		(25,431)
Other income (expense)														Other income (expense)	(69)		28,710		(28,779)		(69)		(42)		(27)
Total other income (expense)														Total other income (expense)	(4,130)		26,108		(30,238)		(4,130)		(30,299)		26,169
Net income (loss)	Net income (loss)	43,744		57,120		(13,376)		(2,945)		151,780		(154,725)		Net income (loss)	42,926		69,256		(26,330)		42,926		(69,359)		112,285
Less: Net income attributable to Delaware Predecessor		—		1,818		(1,818)		—		4,104		(4,104)
Less: Net income attributable to non-controlling interests	Less: Net income attributable to non-controlling interests	16,483		23,866		(7,383)		29,319		68,499		(39,180)		Less: Net income attributable to non-controlling interests	17,025		13,920		3,105		17,025		2,040		14,985
Net income (loss) attributable to Oasis Midstream Partners LP	Net income (loss) attributable to Oasis Midstream Partners LP	27,261		31,436		(4,175)		(32,264)		79,177		(111,441)		Net income (loss) attributable to Oasis Midstream Partners LP	25,901		55,336		(29,435)		25,901		(71,399)		97,300
Less: Net income attributable to General Partner	Less: Net income attributable to General Partner	1,027		745		282		3,062		1,474		1,588		Less: Net income attributable to General Partner	—		1,027		(1,027)		—		1,008		(1,008)
Net income (loss) attributable to limited partners	Net income (loss) attributable to limited partners	$	26,234	$	30,691	$	(4,457)	$	(35,326)	$	77,703	$	(113,029)	Net income (loss) attributable to limited partners	$	25,901	$	54,309	$	(28,408)	$	25,901	$	(72,407)	$	98,308

Three months ended ~~September 30, 2020~~March 31, 2021 as compared to three months ended ~~September 30, 2019~~December 31, 2020

Costs of product sales. Costs of product sales ~~decreased $1.0~~increased $7.0 million to ~~$6.0~~$22.8 million for the three months ended ~~September 30, 2020~~March 31, 2021 as compared to the three months ended ~~September 30, 2019.~~December 31, 2020. The ~~decrease~~increase was primarily driven by a ~~$0.8~~$7.2 million ~~decrease in freshwater costs of product sales due to reductions in freshwater purchase costs related to lower activity, coupled with a $0.4 million decrease~~increase in natural gas costs of product sales due to ~~a reduction~~an increase in natural gas purchase ~~costs.~~costs related to higher residue gas and NGL prices, partially offset by a $0.2 million decrease in freshwater costs of product sales related to lower activity.

Operating and maintenance. Operating and maintenance expenses decreased ~~$5.3~~$0.8 million to ~~$12.7~~$13.1 million for the three months ended ~~September 30, 2020~~March 31, 2021 as compared to the three months ended ~~September 30, 2019.~~December 31, 2020. The decrease was primarily driven by a

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~~$3.6~~ $0.5 million decrease in produced and flowback water operating and maintenance expenses related to lower activity, coupled with a ~~$1.7~~$0.3 million decrease in crude oil and natural gas operating and maintenance expenses primarily related to lower ~~natural gas processing~~crude oil expenses associated with reductions in contract labor costs.

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Depreciation and amortization. Depreciation and amortization expenses were $9.0 million for the three months ended March 31, 2021 and the three months ended December 31, 2020. No assets were placed into service during the three months ended March 31, 2021.

General and administrative (“G&A”) expenses. G&A expenses decreased $0.3 million to $8.5 million for the three months ended March 31, 2021 as compared to the three months ended December 31, 2020. The decrease was primarily a result of a reduction in allocated charges from Oasis Petroleum for G&A services.

Interest expense, net of capitalized interest. Interest expense, net of capitalized interest, increased $1.5 million to $4.1 million for the three months ended March 31, 2021 as compared to the three months ended December 31, 2020. The increase was primarily due to the acceleration of $1.1 million of unamortized deferred financing costs in connection with the Fourth Amendment to the Revolving Credit Facility.

Three months ended March 31, 2021 as compared to three months ended March 31, 2020

Costs of product sales. Cost of product sales increased $14.3 million to $22.8 million for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020. The increase was primarily driven by a $16.4 million increase in natural gas costs of product sales due to an increase in natural gas purchase costs related to higher residue gas and NGL prices, partially offset by a $2.2 million decrease in freshwater costs of product sales related to lower activity.

Operating and maintenance. Operating and maintenance expenses decreased $3.7 million to $13.1 million for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020. The decrease was primarily driven by a $2.0 million decrease in produced and flowback water operating and maintenance expenses, a $1.4 million decrease in natural gas operating and maintenance expenses and a $0.3 million decrease in crude oil operating and maintenance expenses, each related to reductions in activity.

Impairment. No impairment loss was recorded for the three months ended March 31, 2021. We recorded an impairment loss of $101.8 million for the three months ended March 31, 2020 to adjust the carrying value of our property, plant and equipment to fair value due to lower forecasted throughput volumes.

Depreciation and amortization. Depreciation and amortization expenses decreased ~~$0.1~~$1.2 million to ~~$9.1~~$9.0 million for the three months ended ~~September 30, 2020~~March 31, 2021 as compared to the three months ended ~~September 30, 2019.~~March 31, 2020. The decrease was driven by a reduction in the carrying value of assets following impairment charges taken in the first quarter of ~~2020, partially offset by additional assets placed in service.~~2020.

~~Impairment.~~ G&A expenses.~~We recorded an impairment loss of $1.5~~ G&A expenses remained flat at $8.5 million for the three months ended September 30, 2020 primarily related to the impairment of a right-of-use asset associated with mechanical refrigeration units leased at our natural gas processing complex in Wild Basin. No impairment loss was recorded for the three months ended September 30, 2019.

~~General and administrative (“G&A”) expenses.~~ ~~G&A expenses increased $1.2 million to $8.9 million for the three months ended September 30, 2020~~March 31, 2021 as compared to the three months ended September 30, 2019. The increase was primarily a result of an increase in allocated charges from Oasis Petroleum for G&A services related to increased support from Oasis Petroleum due to organizational growth of the midstream business segment.March 31, 2020.

Interest expense, net of capitalized interest. Interest expense, net of capitalized interest, decreased ~~$1.9~~$26.2 million to ~~$2.8~~$4.1 million for the three months ended ~~September 30, 2020~~March 31, 2021 as compared to the three months ended ~~September 30, 2019. The decrease was primarily due to a reduction in the weighted average borrowing rate from 4.1% at September 30, 2019 to 1.9% at September 30, 2020.~~

~~Nine months ended September 30, 2020 as compared to nine months ended September 30, 2019~~

~~Costs of product sales.~~ Cost of product sales decreased $10.5 million to $16.6 million for the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019. The decrease was primarily driven by a $9.5 million decrease in natural gas costs of product sales due to a reduction in natural gas purchase costs, coupled with a $1.5 million decrease in freshwater costs of product sales due to a reduction in freshwater purchase costs related to lower activity.

~~Operating and maintenance.~~ Operating and maintenance expenses decreased $10.9 million to $44.0 million for the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019. The decrease was primarily driven by a $5.8 million decrease in produced and flowback water operating and maintenance expenses related to lower activity, coupled with a $2.8 million decrease in crude oil operating and maintenance expenses and a $2.4 million decrease in natural gas operating and maintenance expenses primarily related to reductions in activity.

~~Depreciation and amortization.~~ Depreciation and amortization expenses increased $4.3 million to $31.2 million for the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019. The increase was a result of additional assets placed into service, coupled with the acceleration of depreciation expense related to mechanical refrigeration units which we began to decommission at our natural gas processing complex in Wild Basin during the second quarter of 2020.

~~Impairment.~~ Impairment expense increased to $103.4 million for the nine months ended September 30, 2020. During the nine months ended September 30, 2020, we recorded an impairment loss of $101.8 million to adjust the carrying value of our property, plant and equipment to fair value associated with impairment indicators identified at March 31, 2020. In addition, we recorded an impairment loss of $1.1 million related to the impairment of a right-of-use asset associated with mechanical refrigeration units leased at our natural gas processing complex in Wild Basin, and an impairment loss of $0.6 million to adjust the carrying value of our spare parts and equipment inventory to its net realizable value. No impairment loss was recorded for the nine months ended September 30, 2019.

~~G&A expenses.~~ ~~G&A expenses increased $2.4 million to $26.6 million for the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019.~~ The increase was primarily a result of an increase in allocated charges from Oasis Petroleum for G&A services related to increased support from Oasis Petroleum due to organizational growth of the midstream business segment, coupled with an increase in public company G&A expenses.

~~Interest expense, net of capitalized interest.~~ Interest expense, net of capitalized interest, increased $25.3 million to $38.2 million for the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019. The increasedecrease was primarily due to an additional interest charge of ~~$28.0~~$25.9 million ~~pursuant to the Limited Waiver (defined below in “Liquidity and Capital Resources — Cash flows provided by (used in) financing activities”), offset by a reduction~~recorded in the ~~weighted average borrowing rate.~~

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2020. In the fourth quarter of 2020, we received a waiver for such additional interest charge.

Liquidity and Capital Resources

Our primary sources of liquidity are cash flows generated from operations, ~~and~~ borrowings under our Revolving Credit ~~Facility.~~Facility and the issuance of the Senior Notes, as defined below. We believe cash generated from these sources will be sufficient to meet our short-term working capital needs, long-term capital expenditure requirements and quarterly cash distributions. We expect to fund future expansion capital expenditures and acquisitions primarily through a combination of borrowings under our Revolving Credit Facility and, if necessary, the issuance of additional equity or debt securities.

Our primary uses of cash have been for capital expenditures ~~towards~~for our midstream infrastructure, ~~dropdown acquisitions~~the acquisition of Oasis Petroleum’s remaining ownership interests in Bobcat DevCo and Beartooth DevCo, the acquisition of midstream infrastructure in the Permian Basin from Oasis Petroleum, distributions to our unitholders ~~payment of operating~~ and ~~maintenance expenditures and interest~~ payments ~~on outstanding debt.~~associated with cash requirements for working capital. We expect our future cash requirements relating to working capital, maintenance capital expenditures and quarterly cash distributions to our unitholders will be funded from cash flows internally generated from our operations. ~~We expect~~

Revolving credit facility. At March 31, 2021, we had $450.0 million of commitments under the Revolving Credit Facility. The Revolving Credit Facility is available to ~~have adequate liquidity~~fund working capital and to ~~meet our future cash requirements; however, extended disruptions~~finance acquisitions and other capital expenditures and does not mature until at least September 30, 2024.

At March 31, 2021, we had $234.0 million of borrowings outstanding under the Revolving Credit Facility and $5.5 million of outstanding letters of credit, resulting in an unused borrowing capacity of $210.5 million. For three months ended March 31, 2021 and 2020, the ~~financial markets and/or energy price volatility that adversely affect our business may have a material adverse effect~~weighted average interest rate incurred on ~~our financial position, results~~borrowings under the Revolving Credit Facility was 2.1% and 3.6%, respectively.

Table of ~~operations or cash flows, as well as our ability~~Contents

On March 22, 2021, we entered into the Fourth Amendment to ~~access sources of capital. Please see Part II. Item 1A. “Risk Factors”~~the Revolving Credit Facility. See “Item 1. — Financial Statements (Unaudited) — Note 7 — Long-Term Debt” for more ~~information regarding such risks.~~ information.

Senior unsecured notes.On ~~September~~March 30, ~~2020,~~2021, we issued $450.0 million of 8.00% senior unsecured notes due April 1, 2029 (the “Senior Notes”). The Senior Notes were issued at par and resulted in net proceeds of $442.1 million. We used the net proceeds from the Senior Notes to: (i) make a distribution to OMS of $231.5 million in connection with the Oasis Petroleum Restructuring Plan, Oasis Petroleum filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. The Partnership was not included in Oasis Petroleum’s Chapter 11 bankruptcy proceedings, and the Partnership does not expect such bankruptcy proceedings to have a significant impact on its liquidity position or ability to operate. There are no cross-acceleration or cross-default provisions between the Oasis Petroleum credit agreement and the OMP credit agreement; accordingly, such Chapter 11 bankruptcy proceedings at Oasis Petroleum did not trigger an automatic accelerationSimplification Transaction, (ii) repay $204.0 million of outstanding ~~indebtedness~~principal borrowings and $0.5 million of accrued interest under OMP’s Revolving Credit Facility. We believe we will continue to provide midstream services pursuant to our commercial agreements with Oasis Petroleum, and we expect to have sufficient liquidity to meet our obligations as they come due during the ~~next twelve months. We do not have any near-term debt maturities, as our~~ Revolving Credit Facility ~~matures on September 25, 2022. We do not expect a violation of any financial covenants contained~~and (iii) pay approximately $6.1 million in ~~our Revolving Credit Facility during the next twelve months.~~fees and other expenses. See “Item 1. — Financial Statements (Unaudited) — Note 7 — Long-Term Debt” for more information.

Cash flows

Our cash flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ are presented below:


		Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019			2021		2020

		(In thousands)					(In thousands)
Net cash provided by operating activities	Net cash provided by operating activities	$	166,405	$	175,578	Net cash provided by operating activities	$	39,441	$	61,665
Net cash used in investing activities	Net cash used in investing activities	(52,163)		(186,702)		Net cash used in investing activities	(887)		(31,811)
Net cash provided by (used in) financing activities		(83,711)		9,147
Increase (decrease) in cash and cash equivalents		$	30,531	$	(1,977)
Net cash used in financing activities						Net cash used in financing activities	(36,543)		(10,121)
Increase in cash and cash equivalents						Increase in cash and cash equivalents	$	2,011	$	19,733

Cash flows provided by operating activities

Net cash provided by operating activities was ~~$166.4~~$39.4 million and ~~$175.6~~$61.7 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. The ~~$9.2~~$22.2 million decrease in cash flows from operating activities for the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, as compared to ~~2019,~~2020, was primarily due to ~~lower~~net changes in working capital items, offset by higher net income ~~offset by working capital changes.~~after adjusting for non-cash items.

Working capital. Our working capital is driven by changes in accounts receivable and accounts payable and other factors, such as credit extended to, and the timing of collections from, our customers. As of ~~September 30, 2020,~~March 31, 2021, we had a working capital balance of ~~$34.4~~$52.7 million, and we had ~~$122.2~~$217.7 million of liquidity available, including ~~$34.7~~$7.2 million in cash and cash equivalents and ~~$87.5~~$210.5 million in unused borrowing capacity on our Revolving Credit Facility.

We expect to have adequate liquidity to meet our future working capital requirements; however, extended disruptions in the financial markets and/or energy price volatility that adversely affect our business may have a material adverse effect on our financial position, results of operations or cash flows.

Cash flows used in investing activities

Net cash used in investing activities was ~~$52.2~~$0.9 million and ~~$186.7~~$31.8 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. The ~~$134.5~~$30.9 million decrease in net cash used in investing activities for the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, as compared to ~~2019,~~2020, was primarily attributable to capital spending in the first quarter of 2020 related to the construction of two additional compressor stations around Wild Basin, which were placed into service during the first quarter of 2020.

Cash flows used in financing activities

Net cash used in financing activities was $36.5 million for the three months ended March 31, 2021 and $10.1 million for the three months ended March 31, 2020. The $26.4 million increase in net cash used in financing activities was primarily attributable to the cash distribution of $231.5 million to Oasis Petroleum in connection with the Simplification Transaction and an increase in repayment of outstanding borrowings under the Revolving Credit Facility, partially offset by net cash proceeds associated with the issuance of Senior Notes and a reduction in ~~capital spending on midstream infrastructure~~distributions to Oasis Petroleum associated with their retained interests in ~~Wild Basin.~~Bobcat DevCo and Beartooth DevCo.

Capital expenditures

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~~Capital expenditures.~~

Our capital expenditures are summarized in the following table ~~on a gross and net basis,~~ for the periods presented:


		1Q 2020				2Q 2020				3Q 2020				Nine Months Ended September 30, 2020					Three Months Ended March 31, 2021

		(In thousands)																		(In thousands)
Capital expenditures	Capital expenditures	Gross		Net		Gross		Net		Gross		Net		Gross		Net		Capital expenditures		Gross		Net

Maintenance capital expenditures	Maintenance capital expenditures	$	2,004	$	1,433	$	332	$	460	$	598	$	768	$	2,934	$	2,661	Maintenance capital expenditures		$	302	$	174
Expansion capital expenditures(1)	Expansion capital expenditures(1)	22,436		15,566		2,148		1,748		(5,428)		(4,352)		19,156		12,962		Expansion capital expenditures(1)		231,391		231,314
Capitalized interest		249		249		68		68		5		5		322		322
Total capital expenditures (1)(2)		$	24,689	$	17,248	$	2,548	$	2,276	$	(4,825)	$	(3,579)	$	22,412	$	15,945

Total capital expenditures (2)																		Total capital expenditures (2)		$	231,693	$	231,488

___________________

(1)~~Capital expenditures reflected~~Includes $231.5 million related to the cash distribution to Oasis Petroleum associated with the Simplification Transaction composed of the following: (i) $229.0 million cash component of the purchase price, (ii) $10.1 million upward adjustment to the purchase price related to the expanded project dedication to OMP in South Nesson and (iii) $7.6 million downward adjustment to the table above differ from capital expenditures shown in the statements of cash flows in our unaudited condensed consolidated financial statements because amounts reflected in the table above include changes in accrued capital expenditures from the previous reporting period, while amounts presented in the statements of cash flows are presented on a cash basis.

~~(2)Negative amounts reflect differences~~purchase price related to activity between the ~~estimated capital expenditures accrued in a reporting period~~effective date of January 1, 2021 and ~~actual capital expenditures recognized in a subsequent reporting period.~~

~~Our capital expenditures by DevCo are summarized in~~ the ~~following table, on a gross and net basis, for the periods presented:~~

1Q 2020 2Q 2020 3Q 2020 Nine Months Ended September 30, 2020
(In thousands)
DevCos
OMP
Ownership(1)
Gross Net Gross Net Gross Net Gross Net
Bighorn DevCo 100% $ 3,629 $ 3,629 $ 1,673 $ 1,673 $ 995 $ 995 $ 6,297 $ 6,297
Bobcat DevCo 35.3% 11,776 4,163 277 98 (1,697) (599) 10,356 3,662
Beartooth DevCo 70% (575) (403) 311 218 (492) (344) (756) (529)
Panther DevCo 100% 9,610 9,610 219 219 (3,636) (3,636) 6,193 6,193
OMP Operating 100% 249 249 68 68 5 5 322 322
Total(2)(3)
$ 24,689 $ 17,248 $ 2,548 $ 2,276 $ (4,825) $ (3,579) $ 22,412 $ 15,945

~~___________________~~

~~(1)Ownership interest as~~close date of ~~September~~March 30, ~~2020.~~2021.

(2)Capital expenditures reflected in the table above differ from capital expenditures shown in the statements of cash flows in our unaudited condensed consolidated financial statements because amounts reflected in the table above include changes in accrued capital expenditures from the previous reporting period, while amounts presented in the statements of cash flows are presented on a cash basis.

~~(3)~~

Capital expenditures by DevCo are summarized in the following table for the periods presented:



		Three Months Ended March 31, 2021

			(In thousands)
DevCos	OMP Ownership(1)			Gross		Net

Bighorn DevCo	100%			$	120	$	120
Bobcat DevCo	35.3%			486		172
Beartooth DevCo(2)	70%			(363)		(254)
Panther DevCo(2)	100%			(59)		(59)
OMP Operating(3)	100%			231,509		231,509
Total(4)				$	231,693	$	231,488

___________________

(1)Ownership interest prior to the closing of the Simplification Transaction on March 30, 2021.

(2)Negative amounts reflect differences between the estimated capital expenditures accrued in a reporting period and actual capital expenditures recognized in a subsequent reporting period.

~~2020~~(3)Includes $231.5 million related to the cash distribution to Oasis Petroleum associated with the Simplification Transaction composed of the following: (i) $229.0 million cash component of the purchase price, (ii) $10.1 million upward adjustment to the purchase price related to the expanded project dedication to OMP in South Nesson and (iii) $7.6 million downward adjustment to the purchase price related to activity between the effective date of January 1, 2021 and the close date of March 30, 2021.

(4)Capital expenditures reflected in the table above differ from capital expenditures shown in the statements of cash flows in our unaudited condensed consolidated financial statements because amounts reflected in the table above include changes in accrued capital expenditures from the previous reporting period, while amounts presented in the statements of cash flows are presented on a cash basis.

2021 Revised Capital Program. ~~We revised our planned capital program from what we disclosed in our 2019 Annual Report as a result of current market conditions.~~ Our revised ~~2020~~2021 capital program, excluding acquisitions, will accommodate a ~~gross~~ capital expenditure level of approximately ~~$29.0~~$53.0 million to ~~$32.0~~$58.0 million, ~~with approximately $21.0~~which was adjusted downward to reflect $10.1 million ~~to $24.0 million attributable to~~of capital expenditures which were settled in the ~~Partnership.~~purchase price of the Simplification Transaction. We expect to spend approximately 6%7% to 8% of EBITDA for maintenance capital expenditures, which is included in our total capital expenditure program.

We will continue to evaluate the level of capital spending throughout the year based on the following factors, among others:

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•pace of our customers’ development;

•operating and construction costs;

•our ability to achieve material supplier price reductions;

•indebtedness levels; and

•impact of new laws and regulations on our business practices.

We expect to fund our capital expenditures with cash on hand, cash generated from operating activities and borrowings under our Revolving Credit Facility.

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Cash ~~flows provided by (used in) financing activities~~

Net cash used in financing activities was $83.7 million for the nine months ended September 30, 2020 and net cash provided by financing activities was $9.1 million for the nine months ended September 30, 2019. The $92.9 million decrease in net cash from financing activities was primarily attributable to an $84.0 million decrease in net borrowings under the Revolving Credit Facility.

~~Revolving Credit Facility.~~ At September 30, 2020, we had $575.0 million of commitments under the Revolving Credit Facility. The Revolving Credit Facility is available to fund working capital and to finance acquisitions and other capital expenditures. At September 30, 2020, we had $487.5 million of borrowings outstanding under the Revolving Credit Facility and a de minimis outstanding letter of credit, resulting in an unused borrowing capacity of $87.5 million.

For the three and nine months ended September 30, 2020, the weighted average interest rate incurred on borrowings under the Revolving Credit Facility was 1.9% and 2.6%, respectively. The weighted average interest rate incurred on borrowings under the Revolving Credit Facility for the nine months ended September 30, 2020 excludes the Specified Default Interest (as defined below).

~~The Revolving Credit Facility requires the Partnership to maintain the following financial covenants as of the end of each fiscal quarter:~~

~~Consolidated Total Leverage Ratio:~~ Prior to the date on which one or more of the credit parties have issued an aggregate principal amount of at least $150.0 million of senior notes (as permitted under the Revolving Credit Facility) (such date the “Covenant Changeover Date”) and commencing with the fiscal quarter ended December 31, 2017, the Partnership and OMP Operating’s ratio of Total Debt to EBITDA (each as defined in the Revolving Credit Facility) on a quarterly basis may not exceed 4.50 to 1.00 (or during an acquisition period (as defined in the Revolving Credit Facility), 5.00 to 1.00). On a quarterly basis following the Covenant Changeover Date, the Partnership and OMP Operating’s ratio of Total Debt to EBITDA may not exceed 5.25 to 1.00.

~~Consolidated Senior Secured Leverage Ratio:~~ On a quarterly basis, commencing with the date the Covenant Changeover Date occurs, the Partnership and OMP Operating’s ratio of Consolidated Senior Secured Funded Debt to EBITDA (each as defined in the Revolving Credit Facility) may not exceed 3.75 to 1.00.

~~Consolidated Interest Coverage Ratio:~~ On a quarterly basis prior to the Covenant Changeover Date and commencing with the fiscal quarter ended December 31, 2017, the Partnership and OMP Operating’s ratio of EBITDA to Consolidated Interest Expense (each as defined in the Revolving Credit Facility) may not be less than 3.00 to 1.00 and on a quarterly basis following the Covenant Changeover Date, the Partnership and OMP Operating’s ratio of EBITDA to Consolidated Interest Expense may not be less than 2.50 to 1.00.

In the second quarter of 2020, the Partnership identified that a Control Agreement (as defined in the Revolving Credit Facility) had not been executed for a certain bank account before the account was initially funded with cash, which represented an event of default. In May 2020, the Partnership executed a Control Agreement with respect to the bank account, thereby completing the documentation required under the Revolving Credit Facility, and entered into a limited waiver of this past event of default with the Majority Lenders (as defined in the Revolving Credit Facility), which provided forbearance of additional interest owed (“Specified Default Interest”) of $28.0 million until the earlier of (i) November 10, 2020 and (ii) an additional event of default. The Specified Default Interest is included in interest expense, net of capitalized interest on the Partnership’s Condensed Consolidated Statement of Operations for the nine months ended September 30, 2020. No Specified Default Interest was recorded during the three months ended September 30, 2020. The Partnership and Administrative Agent agreed to exclude the Specified Default Interest from the interest coverage ratio financial covenant calculation.distributions

On September 29, 2020, we executed a Waiver, Discharge and Forgiveness Agreement and Forbearance Extension (the “Waiver and Forbearance Agreement”) to permanently waive payment of the Specified Default Interest, subject to certain conditions. Under the terms of the Waiver and Forbearance Agreement, the Administrative Agent and the lenders agreed to forbear from demanding payment of the Specified Default Interest until the earlier to occur of (i) an additional event of default and (ii) the occurrence of the maturity date provided for in the Senior Secured Superpriority Debtor-In-Possession Revolving Credit Agreement entered into on October 2, 2020, among Oasis Petroleum, the other parties party thereto, each of the lenders thereto and Wells Fargo Bank, N.A., as administrative agent and issuing bank. The effectiveness of the waiver, discharge and forgiveness of the Specified Default Interest is subject to certain conditions, namely, effectiveness of the Oasis Petroleum Restructuring Plan, as well as the maintenance of the material contracts between Oasis Petroleum and the Partnership or the Partnership’s subsidiaries.

~~We were in compliance with the covenants under the Revolving Credit Facility at September 30, 2020.~~

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~~Cash Distributions~~

~~On November~~May 3, ~~2020,~~2021, the Board of Directors of the General Partner declared the quarterly distribution for the ~~third~~first quarter of ~~2020~~2021 of ~~$0.54~~$0.55 per unit. ~~In addition, the General Partner will receive a cash~~This distribution ~~of $1.0 million attributable to the incentive distribution rights related to earnings for the third quarter of 2020. These distributions~~ will be payable on ~~November~~May 27, ~~2020~~2021 to unitholders of record as of ~~November 13, 2020.~~May 17, 2021.

~~As we continue to adjust our outlook for estimated impacts~~The board of an economic downturn resulting from COVID-19 and unfavorable commodity demand and prices, we could reevaluate our cash distributions to help preserve flexibility and maintain balance sheet strength. The Board of Directorsdirectors of our General Partner may change our cash distribution policy at any time, and we do not have a legal or contractual obligation to pay cash distributions quarterly or on any other basis or at our minimum quarterly distribution rate.

Non-GAAP Financial Measures

Cash Interest, Adjusted EBITDA, Distributable Cash Flow and ~~Distributable~~Free Cash Flow are supplemental non-GAAP financial measures that are used by management and external users of ~~the Partnership’s consolidated~~our financial statements, such as industry analysts, investors, lenders and rating agencies. These non-GAAP financial measures should not be considered in isolation or as a substitute for interest expense, net income (loss), operating income (loss), net cash provided by (used in) operating activities or any other measures prepared under GAAP. Because Cash Interest, Adjusted EBITDA, Distributable Cash Flow and ~~Distributable~~Free Cash Flow exclude some but not all items that affect interest expense, net income and net cash provided by operating activities and may vary among companies, the amounts presented may not be comparable to similar metrics of other companies.

Cash Interest

We define Cash Interest ~~is defined~~ as interest expense plus capitalized interest less amortization of deferred financing costs included in interest expense. Cash Interest is not a measure of interest expense as determined by GAAP. Management believes that the presentation of Cash Interest provides useful additional information to investors and analysts for assessing the interest charges incurred on ~~the Partnership’s~~our debt, excluding non-cash amortization, and ~~the Partnership’s~~our ability to maintain compliance with ~~its~~our debt covenants.

The following table presents a reconciliation of the GAAP financial measure of interest expense, net of capitalized interest, to the non-GAAP financial measure of Cash Interest for the periods presented:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019(1)		2020		2019(1)			2021		2020 (1)

		(In thousands)									(In thousands)
Interest expense, net of capitalized interest~~(2)~~	Interest expense, net of capitalized interest~~(2)~~	$	2,753	$	4,612	$	38,196	$	12,911	Interest expense, net of capitalized interest~~(2)~~	$	4,061	$	30,257
Capitalized interest	Capitalized interest	5		331		322		633		Capitalized interest	—		249
Amortization of deferred financing costs	Amortization of deferred financing costs	(274)		(243)		(815)		(660)		Amortization of deferred financing costs	(1,333)		(271)
Cash Interest~~(2)~~	Cash Interest~~(2)~~	2,484		4,700		37,703		12,884		Cash Interest~~(2)~~	2,728		30,235
Less: Cash Interest attributable to Delaware Predecessor		—		(196)		—		(652)
Less: Cash Interest attributable to non-controlling interests(3)		(3)		(3)		(9)		(8)
Cash Interest attributable to Oasis Midstream Partners LP(2)		$	2,481	$	4,501	$	37,694	$	12,224
Less: Cash Interest attributable to non-controlling interests(2)										Less: Cash Interest attributable to non-controlling interests(2)	(3)		(3)
Cash Interest attributable to Oasis Midstream Partners LP										Cash Interest attributable to Oasis Midstream Partners LP	$	2,725	$	30,232

__________________

(1)~~Retrospectively adjusted for~~For the transfer of net assets between entities under common control. See Item 1. “Financial Statements (Unaudited) — Notes to Condensed Consolidated Financial Statements — Note 2 — Summary of Significant Accounting Policies — Basis of Presentation.”

~~(2)Interest~~three months ended March 31, 2020, interest expense, Cash Interest and Cash Interest attributable to Oasis Midstream Partners LP ~~each includes an additional~~included a specified default interest charge of ~~$28.0 million for~~$25.9 million. This specified default interest charge was waived in the ~~nine months ended September 30, 2020 pursuant to the Limited Waiver.~~fourth quarter of 2020.

~~(3)~~(2)Amounts represent Cash Interest attributable to non-controlling interests associated with finance ~~leases.~~leases prior to the closing of the Simplification Transaction on March 30, 2021.

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Adjusted EBITDA ~~and Distributable Cash Flow~~

We define Adjusted EBITDA ~~is defined~~ as earnings ~~(loss)~~ before interest expense (net of capitalized interest), income taxes, depreciation, amortization, ~~impairment,~~ equity-based compensation expenses and other similar non-cash adjustments. We define Adjusted EBITDA attributable to Oasis Midstream Partners LP ~~is defined~~ as Adjusted EBITDA less Adjusted EBITDA attributable to Oasis Petroleum’s retained interests in two of ~~the Partnership’s DevCos, Bobcat DevCo and Beartooth DevCo.~~our DevCos. Adjusted EBITDA should not be considered an alternative to net income, ~~(loss),~~ net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Management believes that the presentation of Adjusted EBITDA provides information useful to investors and analysts for assessing ~~the Partnership’s~~our results of operations, financial performance and ~~the Partnership’s~~our ability to generate cash from ~~its~~our business operations without regard to ~~the Partnership’s~~our financing methods or capital structure coupled with ~~the Partnership’s~~our ability to maintain compliance with ~~its~~our debt covenants. The GAAP measures most directly comparable to Adjusted EBITDA are net income ~~(loss)~~ and net cash provided by operating activities.

Distributable Cash Flow ~~is defined~~and Free Cash Flow

We define Distributable Cash Flow as Adjusted EBITDA attributable to Oasis Midstream Partners LP less Cash Interest ~~attributable to Oasis Midstream Partners LP~~ and maintenance capital expenditures attributable to Oasis Midstream Partners LP. We define Free Cash Flow as Distributable Cash Flow less expansion capital expenditures attributable to Oasis Midstream Partners LP less distributions to our unitholders. Distributable Cash Flow and Free Cash Flow should not be considered an alternative to net income, ~~(loss),~~ net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Management believes that the presentation of Distributable Cash Flow and Free Cash Flow provides information useful to investors and analysts for assessing ~~the Partnership’s~~our results of operations, financial performance and ~~the Partnership’s~~our ability to generate cash from ~~its~~our business operations without regard to ~~the Partnership’s~~our financing methods or capital structure, coupled with ~~the Partnership’s~~our ability to make distributions to ~~its~~our unitholders. The GAAP measures most directly comparable to Distributable Cash Flow and Free Cash Flow are net income ~~(loss)~~ and net cash provided by operating activities.

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The following table presents reconciliations of the GAAP financial measures of net income ~~(loss)~~ and net cash provided by operating activities to the non-GAAP financial ~~measures~~measure of Adjusted EBITDA, Distributable Cash Flow and ~~Distributable~~Free Cash Flow for the periods ~~presented:~~

Three Months Ended September 30, Nine Months Ended September 30,
2020
2019(1)
2020
2019(1)
(In thousands)
Net income (loss) $ 43,744 $ 57,120 $ (2,945) $ 151,780
Depreciation and amortization 9,083 9,143 31,161 26,825
Impairment 1,458 — 103,441 —
Equity-based compensation expense 68 84 201 303
Interest expense, net of capitalized interest 2,753 4,612 38,196 12,911
Adjusted EBITDA 57,106 70,959 170,054 191,819
Less: Adjusted EBITDA attributable to Delaware Predecessor — 2,078 — 4,897
Less: Adjusted EBITDA attributable to non-controlling interests 19,808 26,913 60,553 77,396
Adjusted EBITDA attributable to Oasis Midstream Partners LP 37,298 41,968 109,501 109,526
Less: Cash Interest attributable to Oasis Midstream Partners LP 2,481 4,501 37,694 12,224
Less: Maintenance capital expenditures attributable to Oasis Midstream Partners LP 767 1,760 2,660 6,594
Distributable Cash Flow attributable to Oasis Midstream Partners LP(2)
$ 34,050 $ 35,707 $ 69,147 $ 90,708
Net cash provided by operating activities $ 53,260 $ 59,874 $ 166,405 $ 175,578
Interest expense, net of capitalized interest 2,753 4,612 38,196 12,911
Changes in working capital 1,367 6,716 (33,732) 3,987
Other non-cash adjustments (274) (243) (815) (657)
Adjusted EBITDA 57,106 70,959 170,054 191,819
Less: Net income attributable to Delaware Predecessor — 2,078 — 4,897
Less: Adjusted EBITDA attributable to non-controlling interests 19,808 26,913 60,553 77,396
Adjusted EBITDA attributable to Oasis Midstream Partners LP 37,298 41,968 109,501 109,526
Less: Cash Interest attributable to Oasis Midstream Partners LP 2,481 4,501 37,694 12,224
Less: Maintenance capital expenditures attributable to Oasis Midstream Partners LP 767 1,760 2,660 6,594
Distributable Cash Flow attributable to Oasis Midstream Partners LP(2)
$ 34,050 $ 35,707 $ 69,147 $ 90,708

~~__________________~~

~~(1)Retrospectively adjusted~~presented. No amounts were allocated to non-controlling interests for the transfer of net assets between entities under common control. See Item 1. “Financial Statements (Unaudited) — Notes to Condensed Consolidated Financial Statements — Note 2 — Summary of Significant Accounting Policies — Basis of Presentation.”

~~(2)Distributable Cash Flow attributable to Oasis Midstream Partners LP is reduced by an additional interest charge of $28.0 million for the nine~~three months ended ~~September 30, 2020 pursuant to~~March 31, 2021 since the ~~Limited Waiver.~~effective date of the Simplification Transaction was January 1, 2021:

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~~Off-Balance Sheet Arrangements~~


	Three Months Ended March 31,
	2021		2020

	(In thousands)
Net income (loss)	$	42,926	$	(69,359)
Depreciation and amortization	8,985		10,197
Impairment	—		101,767
Equity-based compensation expenses	487		66
Interest expense, net of capitalized interest	4,061		30,257
Adjusted EBITDA	56,459		72,928
Less: Adjusted EBITDA attributable to non-controlling interests	20,572		26,538
Adjusted EBITDA attributable to Oasis Midstream Partners LP	35,887		46,390
Cash interest attributable to Oasis Midstream Partners LP	2,725		30,232
Maintenance capital expenditures attributable to Oasis Midstream Partners LP	174		1,433
Distributable Cash Flow	$	32,988	$	14,725
Expansion capital expenditures attributable to Oasis Midstream Partners LP	231,314		15,566
LP distributions	18,267		18,258
GP distributions	1,027		1,027
Free Cash Flow	$	(217,620)	$	(20,126)

Net cash provided by operating activities	$	39,441	$	61,665
Interest expense, net of capitalized interest	4,061		30,257
Changes in working capital	14,290		(18,723)
Other non-cash adjustments	(1,333)		(271)
Adjusted EBITDA	56,459		72,928
Less: Adjusted EBITDA attributable to non-controlling interests	20,572		26,538
Adjusted EBITDA attributable to Oasis Midstream Partners LP	35,887		46,390
Cash interest attributable to Oasis Midstream Partners LP	2,725		30,232
Maintenance capital expenditures attributable to Oasis Midstream Partners LP	174		1,433
Distributable Cash Flow	$	32,988	$	14,725
Expansion capital expenditures attributable to Oasis Midstream Partners LP	231,314		15,566
LP distributions	18,267		18,258
GP distributions	1,027		1,027
Free Cash Flow	$	(217,620)	$	(20,126)

In the ordinary course of business, we enter into various commitment agreements and other contractual obligations, some of which are not recognized in our condensed consolidated financial statements, in accordance with GAAP. As of September 30, 2020, our material off-balance sheet arrangements and transactions include a de minimis outstanding letter of credit issued under our Revolving Credit Facility (see Item 1. “Financial Statements (Unaudited) — Notes to Condensed Consolidated Financial Statements — Note 7 — Long-Term Debt”) and $2.5 million in surety bonds issued as financial assurance on certain agreements. See Item 1. “Financial Statements (Unaudited) — Notes to Condensed Consolidated Financial Statements — ~~Note 9 — Commitments and Contingencies”for a description of our commitments and contingencies.~~

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates from those disclosed in our ~~2019~~2020 Annual Report other than as disclosed in Note 2 to our unaudited condensed consolidated financial statements.

Item 3. — Quantitative and Qualitative Disclosures About Market Risk

The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risk. The term “market risk” refers to the risk of loss arising from adverse changes in commodity prices and interest rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures.

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Concentration of customer credit risk. We are dependent on Oasis Petroleum as our most significant customer, and we expect to derive a substantial majority of our revenues from Oasis Petroleum for the foreseeable future. As a result, any event, whether in our dedicated areas or otherwise, that adversely affects Oasis Petroleum’s production, drilling schedule, financial condition, leverage, market reputation, liquidity, results of operations or cash flows may adversely affect our revenues and cash available for distribution. Further, we are subject to the risk of non-payment or non-performance by Oasis Petroleum. We cannot predict the extent to which Oasis Petroleum’s business would be impacted if conditions in the energy industry were to deteriorate, nor can we estimate the impact such conditions would have on Oasis Petroleum’s ability to execute its drilling and development program or to perform under our agreements. Any material non-payment or non-performance by Oasis Petroleum could reduce our ability to make distributions to our unitholders. On September 30, 2020, in connection with the Oasis Petroleum Restructuring Plan, Oasis Petroleum filed voluntary petitions for relief under chapter 11 of title 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (see Item 1. “Financial Statements (Unaudited) — Notes to Condensed Consolidated Financial Statements — Note 2 — Summary of Significant Accounting Policies — Risks and Uncertainties”).

We did not experience any significant defaults on accounts receivable during the ~~nine~~three months ended ~~September 30, 2020. Please see Part II. Item 1A. “Risk Factors” for more information regarding credit risk of our customers.~~March 31, 2021.

Commodity price risk. We have limited direct exposure to risks associated with fluctuating commodity prices due to the nature of our business and our long-term, fixed-fee arrangements with Oasis Petroleum. However, to the extent that our future contractual arrangements with Oasis Petroleum or third parties do not provide for fixed-fee structures, we may become subject to commodity price risk. Additionally, as a substantial portion of our revenues are derived from Oasis Petroleum, we will be indirectly subject to risks associated with fluctuating commodity prices to the extent that lower commodity prices adversely affect Oasis Petroleum’s production, drilling schedule, financial condition, leverage, market reputation, liquidity, results of operations or cash flows. As further described in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the commodity price environment is expected to remain depressed based on over-supply and decreasing demand of crude oil and related products. We cannot predict whether or when crude oil production and economic activities will return to normalized levels. Please see Part II, Item 1A. “Risk Factors” for more information regarding commodity price risks.

Interest rate risk. ~~We ha~~ve ~~a Revolving Credit Facility which provides for an aggregate commitment amount of $575.0 million as of September 30, 2020.~~ At ~~September 30, 2020,~~March 31, 2021, we had ~~$487.5~~outstanding $450.0 million of senior unsecured notes at a fixed cash interest rate of 8.00% per annum. At March 31, 2021 we had $234.0 million of borrowings outstanding under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to the applicable margin (as described below) plus (i) with respect to Eurodollar Loans, the Adjusted LIBO Rate (as defined in the Revolving Credit Facility) or (ii) with respect to ABR Loans (as defined in the Revolving Credit Facility), the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1.00% or (c) the Adjusted LIBO Rate for a one-month interest period on such day plus 1.00% (each as defined in the Revolving Credit Facility). The applicable margin for borrowings under the Revolving Credit Facility is based on the Partnership’s most recently tested consolidated total leverage ratio and varies from (a) in the case of Eurodollar Loans, ~~1.75%~~2.25% to ~~2.75%~~3.25%, and (b) in the case of ABR Loans or swingline loans, ~~0.75%~~1.25% to ~~1.75%~~2.25%. The unused portion of the Revolving Credit Facility is subject to a commitment fee ranging from 0.375% to 0.500%.

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At ~~September 30, 2020,~~March 31, 2021, the outstanding borrowings under our Revolving Credit Facility bore interest at the London Interbank Offered Rate plus a ~~1.75%~~2.50% margin. We do not currently, but may in the future, utilize interest rate derivatives to reduce interest rate exposure in an attempt to reduce interest rate expense related to debt issued under our Revolving Credit Facility. Interest rate derivatives would be used solely to modify interest rate exposure and not to modify the overall leverage of the debt portfolio.

Item 4. — Controls and Procedures

Evaluation of disclosure controls and procedures. As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”), our principal executive officer, and our Chief Financial Officer (“CFO”), our principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~September 30, 2020.~~March 31, 2021. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective at ~~September 30, 2020.~~March 31, 2021.

Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that occurred during the three months ended ~~September 30, 2020,~~March 31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. — Legal Proceedings

~~Our operations are subject to a variety of risks~~See “Part I, Item 1. — Financial Statements (Unaudited) — Note 9 — Commitments and disputes normally incident to our business. As a result, we may, at any given time, be a defendant in various legal proceedings and litigation arising in the ordinary course of business. However, except as disclosed below, we are not currently subject to any potentially material litigation. We maintain insurance policies with insurers in amounts and with coverage and deductibles that we, with the advice of our insurance advisors and brokers, believe are reasonable and prudent. We cannot, however, assure our unitholders that this insurance will be adequate to protect us from all material expenses related to potential future claims for personal and property damage or that these levels of insurance will be available in the future at economical prices.

~~Mirada litigation.~~Contingencies” On March 23, 2017, Mirada Energy, LLC, Mirada Wild Basin Holding Company, LLC and Mirada Energy Fund I, LLC (collectively, “Mirada”) filed a lawsuit against Oasis Petroleum, Oasis Petroleum North America LLC (“OPNA”), and OMS, seeking monetary damages in excess of $100 million, declaratory relief, attorneys’ fees and costs (~~Mirada Energy, LLC, et al. v. Oasis Petroleum North America LLC, et al.; in the 334th Judicial District Court of Harris County, Texas; Case Number 2017-19911). Mirada asserts that it~~which is ~~a working interest owner in certain acreage owned and operated~~incorporated herein by Oasis Petroleum in Wild Basin. Specifically, Mirada asserts that Oasis Petroleum has breached certain agreements by: (1) failing to allow Mirada to participate in Oasis Petroleum’s midstream operations in Wild Basin; (2) refusing to provide Mirada with information that Mirada contends is required under certain agreements and failing to provide information in a timely fashion; (3) failing to consult with Mirada and failing to obtain Mirada’s consent prior to drilling more than one well at a time in Wild Basin; and (4) overstating the estimated costs of proposed well operations in Wild Basin. Mirada seeks a declaratory judgment that Oasis Petroleum be removed as operator in Wild Basin at Mirada’s election and that Mirada be allowed to elect a new operator; certain agreements apply to Oasis Petroleum and Mirada and Wild Basin with respect to this dispute; Oasis Petroleum be required to provide all information within its possession regarding proposed or ongoing operations in Wild Basin; and Oasis Petroleum not be permitted to drill, or propose to drill, more than one well at a time in Wild Basin without obtaining Mirada’s consent. Mirada also seeks a declaratory judgment with respect to Oasis Petroleum’s current midstream operations in Wild Basin. Specifically, Mirada seeks a declaratory judgment that Mirada has a right to participate in Oasis Petroleum’s Wild Basin midstream operations, consisting of produced and flowback water disposal, crude oil gathering and natural gas gathering and processing; that, upon Mirada’s election to participate, Mirada is obligated to pay its proportionate costs of Oasis Petroleum’s midstream operations in Wild Basin; and that Mirada would then be entitled to receive a share of revenues from the midstream operations and would not be charged any amount for its use of these facilities for production from the “Contract Area.”

~~On July 2, 2019, Oasis Petroleum, OPNA, OMS, the Partnership, Bighorn DevCo, Bobcat DevCo and Beartooth DevCo (collectively “Oasis Entities”) counterclaimed against Mirada~~reference, for a ~~judgment declaring that Oasis Entities are not obligated to purchase, manage, gather, transport, compress, process, market, sell or otherwise handle Mirada’s proportionate share~~description of ~~oil and gas produced from OPNA-operated wells. The counterclaim also seeks attorney’s fees, costs and expenses.~~

~~Table of Contents~~material legal proceedings.

~~On April 30, 2020, Mirada abandoned its prior claims related to overstating the estimated costs of proposed well operations in Wild Basin.~~

On September 28, 2020, the Oasis Entities entered into a Settlement and Mutual Release Agreement (the “Mirada Settlement Agreement”) with Mirada. The Mirada Settlement Agreement provides for, among other things, payment by OPNA to certain Mirada related parties of $42.8 million (with $20 million due on the effective date of the Oasis Petroleum Restructuring Plan, and the balance due on or before 180 days after the effective date of the Oasis Petroleum Restructuring Plan) and mutual releases, including, without limitation, release of all claims asserted in the Mirada litigation against the Oasis Entities. None of the Partnership, Bighorn DevCo, Bobcat DevCo or Beartooth DevCo will contribute to the settlement payment.

~~Solomon litigation.~~ ~~On or about August 28, 2019, Oasis Petroleum LLC, a wholly-owned subsidiary of Oasis Petroleum(“OP LLC”), was named as a defendant in the lawsuit styled~~ ~~Andrew Solomon, on behalf of himself and those similarly situated v. Oasis Petroleum LLC~~, pending in the United States District Court for the District of North Dakota. The lawsuit alleged violations of the federal Fair Labor Standards Act (the “FLSA”) and Title 29 of the North Dakota Century Code (“Title 29”) as the result of OP LLC’s alleged practice of paying the plaintiff and similarly situated current and former employees overtime at rates less than required by applicable law, or failing to pay for certain overtime hours worked. The lawsuit requested that: (i) its federal claims be advanced as a collective action, with a class of all operators, technicians, and all other employees in substantially similar positions employed by OP LLC who were paid hourly for at least one week during the three-year period prior to the commencement of the lawsuit, who worked 40 or more hours in at least one workweek and/or eight or more hours on at least one workday; and (ii) its state claims be advanced as a class action, with a class of all operators, technicians, and all other employees in substantially similar positions employed by OP LLC in North Dakota during the two-year period prior to the commencement of the lawsuit, who worked 40 or more hours in at least one workweek and/or worked eight or more hours in a day on at least one workday.

Item 1A. — Risk Factors

Our business faces many risks. Any of the risks discussed elsewhere in this Form 10-Q and our other SEC filings could have a material impact on our business, financial position or results of operations. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business operations.

For a discussion of our potential risks and uncertainties, see the information in Item 1A. “Risk Factors” in our ~~2019~~ 2020 Annual ~~Report. Other than as described below, there~~Report. There have been no material changes in our risk factors from those described in our ~~2019~~2020 Annual ~~Report.~~

~~Events outside of our control, including a pandemic, epidemic or outbreak of an infectious disease, such as the recent global outbreak of COVID-19, have materially adversely affected,~~Report and ~~may further materially adversely affect, our business.~~

We face risks related to pandemics, epidemics, outbreaks or other public health events that are outside of our control, and could significantly disrupt our operations and adversely affect our business and financial condition. For example, the recent global outbreak of COVID-19 has reduced demand for crude oil and natural gas and, consequently the demand for midstream services, because of significantly reduced global and national economic activity. On March 13, 2020, the United States declared the COVID-19 pandemic a national emergency, and several states, including Texas, North Dakota and Montana, and municipalities have declared public health emergencies. Along with these declarations, there have been extraordinary and wide-ranging actions taken by international, federal, state and local public health and governmental authorities to contain and combat the outbreak and spread of COVID-19 in regions across the United States and the world, including mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. To the extent COVID-19 continues or worsens, governments may impose additional similar restrictions.

In addition, the impact of COVID-19 or other public health events may adversely affect our operations or the health of our workforce and the workforces of our customers and service providers by rendering employees or contractors unable to work or unable to access our and their facilities for an indefinite period of time. There can be no assurance that our personnel will not besubsequent SEC filings.

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~~impacted by these pandemic diseases or ultimately lead to a reduction in our workforce productivity or increased medical costs or insurance premiums as a result of these health risks.~~

Further, the technology required for the corresponding transition to remote work increases our vulnerability to cybersecurity threats, including threats to gain unauthorized access to sensitive information or to render data or systems unusable, the impact of which may have material adverse effects on our business and operations. See “Item 1A. Risk Factors — Risks Related to Our Business — A cyber incident could result in information theft, data corruption, operational disruption and/or financial loss” in our Annual Report on Form 10-K for the year ended December 31, 2019.

As the potential impact from COVID-19 is uncertain due to the ongoing and dynamic nature of the circumstances, it is difficult to predict the extent to which it may negatively affect our business, including, without limitation, our operating results, financial position and liquidity, the duration of any potential disruption of our business, how and the degree to which the outbreak may impact our customers, supply chain and distribution network, the health of our employees, the productivity and sustainability of our workforce, our insurance premiums, costs attributable to our emergency measures, payments from customers and uncollectable accounts, limitations on travel, the availability of industry experts and qualified personnel and the market for our securities. Any potential impact will depend on future developments and new information that may emerge regarding the severity and duration of COVID-19 and the actions taken by authorities to contain it or treat its impact, all of which are beyond our control. These potential impacts, while uncertain, could continue to adversely affect global economies and financial markets and result in a persistent economic downturn that could have an adverse effect on the industries in which we and our customers operate and on the demand for our midstream services, our operating results and our future prospects. We cannot predict when the continuing adverse effect on us will end, and depending on the duration of the pandemic and its severity, this adverse effect could worsen.

Because a substantial majority of our revenue currently is, and over the long term is expected to be, derived from Oasis Petroleum, any development that materially and adversely affects Oasis Petroleum’s operations, financial condition or market reputation could have a material and adverse impact on us.

We are substantially dependent on Oasis Petroleum as our most significant current customer, and we expect to derive a substantial majority of our revenues from Oasis Petroleum for the foreseeable future. As a result of the recent COVID-19 outbreak or other adverse public health developments, including voluntary and mandatory quarantines, travel restrictions and other restrictions, the operations of our customers, including Oasis Petroleum, have and may continue to experience delays or disruptions and temporary suspensions of operations. Additionally, on September 30, 2020, in connection with the Oasis Petroleum Restructuring Plan, Oasis Petroleum filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. As a result, we are subject to an increased risk of non-payment or non-performance by Oasis Petroleum. While Oasis Petroleum has stated it intends to operate in the normal course and intends to interact with its commercial counterparties as usual, no assurances can be given as to the timing or outcome of the bankruptcy process. Any event, whether in our areas of operation or otherwise, including a pandemic event such as COVID-19 and current geopolitical events involving OPEC and other non-OPEC, oil-producing countries, that adversely affects Oasis Petroleum’s production, drilling and completion schedule, financial condition, leverage, market reputation, liquidity, results of operations or cash flows may adversely affect our revenues and distributable cash. Accordingly, we are indirectly subject to the business risks of Oasis Petroleum, including, among others:

•~~worldwide and regional economic conditions impacting the global supply and demand for crude oil, natural gas and NGLs;~~

•~~the actions of OPEC and other non-OPEC, oil-producing countries, including Russia;~~

•events that impact global market demand, including impacts from global health epidemics and concerns, such as the COVID-19 pandemic, which has reduced and may continue to reduce demand for crude oil, natural gas and NGLs because of reduced economic activity;

•~~a reduction in or slowing of Oasis Petroleum’s anticipated drilling and production schedule, which would directly and adversely impact demand for our midstream infrastructure;~~

•~~shut-in of existing production by Oasis Petroleum in areas dedicated to us, which would adversely affect our throughput volumes and revenues;~~

•~~the volatility of crude oil and natural gas prices, which could have a negative effect on the value of Oasis Petroleum’s properties, its drilling programs or its ability to finance its operations;~~

•~~the existence of substantial unresolved doubt about the ability of Oasis Petroleum to continue as a going concern;~~

•~~the effects of Oasis Petroleum’s filings of voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code on Oasis Petroleum’s business;~~

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•~~rulings by the United States Bankruptcy Court for the Southern District of Texas in Oasis Petroleum’s Chapter 11 proceedings;~~

•Oasis Petroleum’s ability to operate within the restrictions and liquidity limitations of the Senior Secured Superpriority Debtor-In-Possession Revolving Credit Agreement and any other related orders entered in connection with Oasis Petroleum’s Chapter 11 proceedings;

•~~Oasis Petroleum’s ability to maintain strategic control as debtors-in-possession during the pendency of Oasis Petroleum’s Chapter 11 proceedings;~~

•the length of time that Oasis Petroleum will operate with Chapter 11 protection and the continued availability of operating capital to Oasis Petroleum during the pendency of Oasis Petroleum’s Chapter 11 proceedings;

•~~Oasis Petroleum’s increased advisory costs during the pendency of its Chapter 11 proceedings;~~

•~~the risks associated with restrictions on Oasis Petroleum’s ability to pursue some of its business strategies during the pendency of Oasis Petroleum’s Chapter 11 proceedings;~~

•~~Oasis Petroleum’s ability to satisfy the conditions precedent to consummation of the Oasis Petroleum Restructuring Plan;~~

•~~the potential adverse effects of Oasis Petroleum’s Chapter 11 proceedings on its business, cash flows, liquidity, financial condition and results of operations;~~

•risks associated with changes to the composition of Oasis Petroleum’s board of directors pursuant to the Oasis Petroleum Restructuring Plan, which could have different views on the issues that will determine Oasis Petroleum’s strategic and operational direction and may differ materially from those of the past, including Oasis Petroleum’s strategic relationship with the Partnership.

•~~the ultimate outcome of Oasis Petroleum’s Chapter 11 proceedings in general;~~

•~~the potential material adverse effects on Oasis Petroleum of claims that are not discharged in its Chapter 11 proceedings;~~

•changes in regulations or statutes applicable to us or Oasis Petroleum, which could have a negative effect on the value of our facilities or services or Oasis Petroleum’s properties, its drilling programs or its ability to finance its operations;

•~~the availability of capital on an economic basis to fund Oasis Petroleum’s exploration and development activities;~~

•~~Oasis Petroleum’s ability to replace reserves;~~

•~~Oasis Petroleum’s ability to market and deliver commodities downstream of our systems;~~

•~~Oasis Petroleum’s drilling and operating risks, including potential environmental liabilities;~~

•~~severe weather that may adversely affect Oasis Petroleum’s production and operations;~~

•~~limitations on Oasis Petroleum’s operations resulting from its debt restrictions and financial covenants;~~

•~~adverse effects of governmental and environmental regulation; and~~

•~~losses from pending or future litigation.~~

In addition, although Oasis Petroleum has dedicated certain acreage to us under each of our commercial agreements with Oasis Petroleum, these commercial agreements do not contain any material minimum volume commitments. Accordingly, if commodity prices continue to decline or remain at their current levels for a prolonged period, Oasis Petroleum has the ability to substantially reduce its drilling and completion expenditures and/or shut-in existing producing wells, which would decrease our throughput volumes from Oasis Petroleum and related revenue streams under our commercial agreements.

Further, we are subject to the risk of non-payment or non-performance by Oasis Petroleum, including with respect to our long-term contracts for natural gas gathering, compression, processing and gas lift; crude oil gathering, stabilization, blending, storage and transportation; produced and flowback water gathering and disposal; and freshwater distribution. If Oasis Petroleum were to default under any of these contracts, we would have the contractual right to bring suit against Oasis Petroleum to enforce the terms of such contract, and there can be no assurance that we would obtain a recovery, or that any such recovery that would fully compensate us for the consequence of such default. We neither can predict the extent to which Oasis Petroleum’s business would be impacted if conditions in the energy industry continue to deteriorate or continue in their current state for an extended period of time, nor can we estimate the impact such conditions would have on Oasis Petroleum’s ability to execute its drilling and development program or perform under our commercial agreements. Any material non-payment or non-performance by Oasis Petroleum could reduce our ability to make distributions to our unitholders.

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Also, due to our relationship with Oasis Petroleum, our ability to access the capital markets, or the pricing or other terms of any capital markets transactions, may be adversely affected by any impairment to Oasis Petroleum’s financial condition or adverse changes in its credit ratings. Further, if we were to seek a credit rating in the future, our credit rating may be adversely affected by Oasis Petroleum’s leverage or its dependence on the cash flows from us to service its indebtedness, as credit rating agencies such as Standard & Poor’s Ratings Services and Moody’s Investors Service may consider the credit profile of Oasis Petroleum and its affiliates because of their ownership interest in and control of us.

Any material limitation on our ability to access capital as a result of our relationship with Oasis Petroleum or adverse changes at Oasis Petroleum could limit our ability to obtain future financing under favorable terms, or at all, or could result in increased financing costs in the future. Similarly, material adverse changes at Oasis Petroleum could have a material adverse effect on our unit price, limiting our ability to raise capital through equity issuances or debt financing, or could negatively affect our ability to engage in, expand or pursue our business activities, and could also prevent us from engaging in certain transactions that might otherwise be considered beneficial to us.

~~Our exposure to commodity price risk may change over time and we cannot guarantee the terms of any existing or future agreements for our midstream services with third parties or with Oasis Petroleum.~~

We currently generate the majority of our revenues pursuant to fee-based agreements under which we are paid based on volumetric fees, rather than the underlying value of the commodity. Consequently, our existing operations and cash flows have minimal direct exposure to commodity price risk. However, Oasis Petroleum and our other upstream customers are exposed to commodity price risk, and extended reduction in commodity prices could reduce the future production volumes available for our midstream services below expected levels. Since the beginning of 2020, the daily spot prices for NYMEX WTI crude oil have ranged from a high of $63.27 per barrel to a low of $(36.98) per barrel, and the daily spot prices for NYMEX Henry Hub natural gas have ranged from a high of $2.57 per MMBtu to a low of $1.33 per MMBtu. The recent significant decline in crude oil prices has largely been attributable to the recent actions of Saudi Arabia and Russia, which have resulted in substantial increases in the global supply of crude oil. Specifically, in March 2020, Saudi Arabia and Russia failed to agree on a plan to extend production cuts that expired on April 1, 2020 within OPEC and other non-OPEC, oil-producing countries, including Russia. Subsequently, Saudi Arabia announced plans to increase production to record levels and to reduce the prices at which they sell crude oil. These events, combined with the continued global outbreak of COVID-19, which has significantly impacted both crude oil prices and natural gas prices due to substantially reduced demand for crude oil and natural gas because of reduced global and national economic activity, contributed to a sharp drop in prices for crude oil in the first quarter of 2020. The impact has not been as severe on natural gas prices, but such prices are susceptible to global actions impacting supply and demand.

In April 2020, OPEC announced an agreement among OPEC and other non-OPEC countries, including Russia, to reduce aggregate global production by approximately 10 million barrels a day in May and June of 2020, with gradually decreasing reductions in daily production through the end of 2020. While these cuts in production may offset some of the oversupply of the global crude oil market, crude oil prices have remained low and we cannot predict whether or when crude oil production and global economic activities will return to normalized levels.

Additionally, although we intend to maintain fee-based pricing terms on both new contracts and existing contracts for which prices have not yet been set, our efforts to negotiate such terms may not be successful, which could have a material adverse effect on our business. Furthermore, Oasis Petroleum and our other upstream customers may seek to renegotiate certain terms of our existing commercial agreements, including amendments to reduce the amount of fees that we charge under such agreements. If the current distressed nature of the global economy, and specific pressure on the crude oil and natural gas sector, causes us to have to accept fee reductions or other concessions in order to keep these contracts in place, such concessions may nonetheless have a material adverse effect on our revenues and distributable cash flows.

~~Restrictions in our Revolving Credit Facility could adversely affect our business, financial condition, results of operations and ability to make quarterly cash distributions to our unitholders.~~

Our Revolving Credit Facility contains a number of restrictive covenants that impose significant operating and financial restrictions on us, including restrictions on our ability to, among other things:

•~~incur or guarantee additional debt;~~

•~~redeem or repurchase units or make distributions under certain circumstances;~~

•~~make certain investments and acquisitions;~~

•~~incur certain liens or permit them to exist;~~

•~~enter into certain types of transactions with affiliates;~~

•~~merge or consolidate with another company; and~~

•~~transfer, sell or otherwise dispose of assets.~~

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Our Revolving Credit Facility also contains covenants requiring us to maintain certain financial ratios and tests. Our ability to meet those financial ratios and tests can be affected by events beyond our control, and we cannot assure unitholders that we will meet any such ratios and tests.

In addition, our Revolving Credit Facility contains a condition to borrowing and a representation that no material adverse effect has occurred, which includes, among other things, a material adverse change in, or material adverse effect on the business, operations, property or condition (financial or otherwise) of us or our wholly-owned subsidiaries. If a material adverse effect were to occur, we would not be able to borrow under our credit facility and circumstances may arise that could lead to an event of default under the provisions of the Revolving Credit Facility, which could cause all of our existing indebtedness to become immediately due and payable.

The provisions of our Revolving Credit Facility may affect our ability to obtain future financing and pursue attractive business opportunities and our flexibility in planning for, and reacting to, changes in business conditions. In addition, a failure to comply with the provisions of our Revolving Credit Facility could result in a default or an event of default that could enable our lenders to declare the outstanding principal of that debt, together with accrued and unpaid interest, to be immediately due and payable. If the payment of our debt is accelerated, our assets may be insufficient to repay such debt in full, and our unitholders could experience a partial or total loss of their investment. Please read “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

A shortage of equipment and skilled labor could reduce equipment availability and labor productivity and increase labor and equipment costs, which could have a material adverse effect on our business and results of operations.

Midstream infrastructure assets require special equipment and laborers skilled in multiple disciplines, such as equipment operators, mechanics and engineers, among others. Our reliance on skilled employees and independent contractors exposes us to the possibility of delay or interruption of our operations because of COVID-19. It is impossible to predict the effect of the continued spread, or fear of continued spread, of COVID-19 globally. Should COVID-19 continue to spread globally or within the U.S., our business, financial condition and results of operations could be materially and adversely impacted because it could result in a loss of available, skilled contractors or services. If we experience shortages of necessary equipment or skilled labor in the future, our labor and equipment costs and overall productivity could be materially and adversely affected. If our equipment or labor prices increase or if we experience materially increased health and benefit costs for employees, our results of operations could be materially and adversely affected.

~~The loss of key personnel could adversely affect our ability to operate.~~

We depend on the services of a relatively small group of our General Partner’s and Oasis Petroleum’s senior management and technical personnel. The public health concerns posed by COVID-19 could pose a risk to these key personnel and may render these individuals unable to work or travel. The extent to which COVID-19 may impact these key personnel, and subsequently our business, cannot be predicted at this time. We continue to monitor the situation, have actively implemented policies and practices to address the situation, and may adjust our current policies and practices as more information and guidance become available. We do not maintain, nor do we plan to obtain, any insurance against the loss of any of these individuals. Because competition for experienced personnel in the industry is intense, we may not be able to find acceptable replacements with comparable skills and experience. The loss of the services of our General Partner’s or Oasis Petroleum’s senior management or technical personnel could have a material adverse effect on our business, financial condition and results of operations.

~~Contracts with customers are subject to additional risk in the event of a bankruptcy proceeding.~~

To the extent any of our customers, including Oasis Petroleum, are in financial distress or commence bankruptcy proceedings, our contracts with them, including provisions relating to dedications of production, may be subject to renegotiation or rejection under applicable provisions of the United States Bankruptcy Code. If a contract with a customer is altered or rejected in bankruptcy proceedings, we could lose some or all of the expected revenues associated with that contract, which could cause the market price of our common units to decline. This may be exacerbated in the future as the COVID-19 outbreak and the governmental responses thereto continue. These factors, combined with volatile prices of crude oil and natural gas may precipitate a continued economic slowdown and/or a recession. Concerns about global economic growth have had a significant adverse impact on global financial markets and commodity prices. If the economic climate in the United States or abroad continues to deteriorate, demand for crude oil, natural gas and related products could further diminish, which will impact the demand for our customers’ products and therefore negatively affect our customers’ results of operations, liquidity and financial condition, resulting in significant financial distress for our customers.

If third-party pipelines or other facilities interconnected to our midstream systems become partially or fully shut down or otherwise unavailable, or if the volumes we gather or treat do not meet the quality specifications of such pipelines or facilities, our business, financial condition, results of operations, cash flows and ability to make distributions to our unitholders could be adversely affected.

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Our midstream systems are connected to other pipelines or facilities, some of which are owned by third parties. The continuing operation of such pipelines or facilities is not within our control. In addition, these downstream operators may impose specifications for the products that they are willing to accept. If the total mix of a product fails to meet the applicable product quality specifications, these downstream operators may refuse to accept all or a part of the products or may invoice us for the costs to handle or damages from receiving out-of-specification products.

If any of these pipelines or facilities becomes partially or fully shutdown or otherwise unable to gather, transport, treat or process natural gas or crude oil, or if the volumes we gather or transport do not meet the quality specifications of such pipelines or facilities, our business, financial condition, results of operations, cash flows and ability to make distributions to our unitholders could be adversely affected.

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Item 6.5. — Exhibits


Exhibit No.						Description of Exhibit

2.1*						Contribution and Simplification Agreement, dated March 22,2021, between Oasis Midstream Partners LP, OMS Holdings LLC, OMP GP LLC, OMP Operating LLC, OMP DevCo Holdings Corp., Beartooth DevCo Holdings Corp., Bobcat DevCo LLC, and for certain limited purposes set forth therein, Oasis Petroleum Inc. (incorporated herein by reference to Exhibit 2.1 to the form 8-K filed by the Partnership on March 22, 2021).

3.1						Second Amended and Restated Agreement of Limited Partnership of Oasis Midstream Partners LP, dated as of March 30, 2021 (incorporated herein by reference to Exhibit 3.1 to the form 8-K filed by the Partnership on April 1, 2021).

3.2						Second Amended and Restated Limited Liability Company Agreement of OMP GP LLC, dated as of March 30, 2021 (incorporated herein by reference to Exhibit 3.2 to the form 8-K filed by the Partnership on April 1, 2021).

4.1						Indenture, dated as of March 30, 2021, by and among Oasis Midstream Partners LP, as issuer, OMP Finance Corp., as co-issuer, OMP Operating LLC, OMP DevCo Holdings Corp., Beartooth DevCo LLC, Bighorn DevCo LLC, Bobcat DevCo LLC, and Panther DevCo LLC, as guarantors, and Regions Bank, an Alabama banking corporation, as trustee (incorporated herein by reference to Exhibit 4.1 to the form 8-K filed by the Partnership on April 1, 2021).

10.1						~~Waiver, Discharge And Forgiveness Agreement And Forbearance Extension~~Fourth Amendment to Credit Agreement, dated ~~September 29, 2020,~~March 22, 2021, by and among Oasis Midstream Partners LP, as parent, OMP Operating ~~the Partnership, the Administrative Agent~~LLC, as borrower, Bighorn DevCo LLC, a Delaware limited liability company, as a guarantor, Panther DevCo LLC, a Delaware limited liability company, as a guarantor, Wells Fargo Bank, N.A., as administrative agent and lender, and the ~~guarantors~~lenders party thereto (incorporated herein by reference to Exhibit 10.1 to the form 8-K filed by the Partnership on ~~September 29, 2020)~~March 22, 2021).

10.2						~~Amendment No. 1 to the Second Amended and Restated Limited Liability Company~~Purchase Agreement, dated as of March 26, 2021, among Oasis Midstream Partners LP, OMP Finance Corp, as co-issuer, OMP Operating LLC, OMP DevCo Holdings Corp., Beartooth DevCo LLC, Bighorn DevCo LLC, Bobcat DevCo LLC, ~~dated as of September 29, 2020, by~~ and ~~between OMP Operating~~Panther DevCo LLC, as ~~the managing member,~~guarantors, and ~~Oasis Midstream Services~~Citigroup Capital Markets LLC, as ~~a member~~representative of the several initial purchasers (incorporated herein by reference to Exhibit 10.1 to the form 8-K filed by the Partnership on April 1, 2021).

10.3						Form of Supplement to Incentive Unit Award Agreement (incorporated herein by reference to Exhibit 10.2 to the form 8-K filed by the Partnership on ~~September 29, 2020)~~April 1, 2021).

~~10.3~~10.4(a)						~~Amendment No.~~Third Amended and Restated Limited Liability Company Agreement of Bobcat DevCo LLC, dated as of March 30, 2021 and effective as of January 1, ~~to the Second~~2021, by and between OMP Operating LLC, a Delaware limited liability company, and OMP DevCo Holdings Corp., a Delaware corporation.

10.5(a)						Third Amended and Restated Limited Liability Company Agreement of Beartooth DevCo LLC, dated as of ~~September 29, 2020,~~March 30, 2021 and effective as of January 1, 2021, by and between OMP Operating LLC, ~~as the member,~~a Delaware limited liability company, and OMP DevCo Holdings Corp., a Delaware corporation.

21.1 (a)						List of Subsidiaries of Oasis Midstream ~~Services LLC, as the original member (incorporated herein by reference to Exhibit 10.3 to the form 8-K filed by the Partnership on September 29, 2020).~~Partners LP.

31.1(a)						Sarbanes-Oxley Section 302 certification of Principal Executive Officer.

31.2(a)						Sarbanes-Oxley Section 302 certification of Principal Financial Officer.

32.1(b)						Sarbanes-Oxley Section 906 certification of Principal Executive Officer.

32.2(b)						Sarbanes-Oxley Section 906 certification of Principal Financial Officer.

101.INS(a)						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH(a)						XBRL Schema Document.

101.CAL(a)						XBRL Calculation Linkbase Document.

101.DEF(a)						XBRL Definition Linkbase Document.

101.LAB(a)						XBRL Labels Linkbase Document.

101.PRE(a)						XBRL Presentation Linkbase Document.

104(a)						Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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___________________

(a) Filed herewith.

(b) Furnished herewith.

* Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Partnership undertakes to furnish supplemental copies of any of the omitted schedules upon request by the U.S. Securities and Exchange Commission.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

OASIS MIDSTREAM PARTNERS LP

By: OMP GP LLC, its general partner

Date:

~~November 4, 2020~~May 6, 2021

By:

/s/ Taylor L. Reid

Taylor L. Reid

Chief Executive Officer and Director
(Principal Executive Officer)

By:

/s/ Richard N. Robuck

Richard N. Robuck

Senior Vice President and Chief Financial Officer
(Principal Accounting Officer and Principal Financial Officer)

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	Nine Months Ended September 30, 2019
	General Partner		Limited Partners
	IDRs		Common units		Subordinated units		Total

	(In thousands, except per unit data)
Net income attributable to Oasis Midstream Partners LP
Distribution declared	$	1,474	$	29,567	$	20,281	$	51,322
Undistributed earnings attributable to Oasis Midstream Partners LP	0		16,514		11,341		27,855
Net income attributable to Oasis Midstream Partners LP	$	1,474	$	46,081	$	31,622	$	79,177

Weighted average limited partners units outstanding
Basic			20,022
Diluted			20,039

Net income attributable to Oasis Midstream Partners LP per limited partner unit
Basic			$	2.30
Diluted			2.30

Anti-dilutive restricted units			5


	Three Months Ended September 30, 2019
	General Partner		Limited Partners
	IDRs		Common units		Subordinated units		Total
	(In thousands, except per unit data)
Net income attributable to Oasis Midstream Partners LP
Distribution declared	$	745	$	10,323	$	7,081	$	18,149
Undistributed earnings attributable to Oasis Midstream Partners LP	0		7,878		5,409		13,287
Net income attributable to Oasis Midstream Partners LP	$	745	$	18,201	$	12,490	$	31,436

Weighted average limited partners units outstanding
Basic			20,027
Diluted			20,038

Net income attributable to Oasis Midstream Partners LP per limited partner unit
Basic			$	0.91
Diluted			0.91

Anti-dilutive restricted units			7