Acquisitions | Acquisitions 2019 Delaware Acquisition. On November 1, 2019, the Partnership entered into an agreement with Oasis Petroleum, pursuant to which Oasis Petroleum agreed to assign to Panther DevCo certain crude oil gathering and produced and flowback water gathering and disposal assets in the Delaware Basin in exchange for cash consideration of approximately $24.9 million. The Partnership funded the cash consideration with borrowings under the Revolving Credit Facility. For the period from November 1, 2019 through December 31, 2019, the Partnership recognized $1.4 million in revenues and $0.7 million in net income related to the 2019 Delaware Acquisition. The 2019 Delaware Acquisition was accounted for as a transfer of net assets between entities under common control. Prior to the 2019 Delaware Acquisition, Oasis Petroleum’s midstream services in the Delaware Basin were performed by OMS and were not included in the consolidated financial statements of the Partnership. In accordance with FASB authoritative guidance under Accounting Standards Codification Topic 805-50 (“ASC 805-50”), the Partnership recorded the net assets acquired at historical carrying value and recast its financial statements to include such net assets from the date of common control. The Partnership recast its consolidated financial statements as of and for the year ended December 31, 2018, and prior to the effective date of November 1, 2019 for the year ended December 31, 2019. For those periods requiring recast, the consolidated financial statements for periods prior to the effective date were prepared from Oasis Petroleum’s historical cost-basis accounts. The following table summarizes the assets acquired, liabilities assumed and consideration paid: Effective November 1, 2019 (In thousands) Cash consideration paid to Oasis Petroleum $ 24,939 Property, plant and equipment $ 35,272 Accumulated depreciation and amortization (439) Accrued capital costs (9,256) Accrued operating expenses (746) Asset retirement obligations (132) Total net assets acquired $ 24,699 Consideration paid in excess of book value of net assets (1) $ 240 ___________________ (1) Consideration paid in excess of book value was recorded to Partnership equity as a deemed distribution in accordance with FASB authoritative guidance for common control transactions. The following tables present the Partnership’s financial position, results of operations and cash flows giving effect to the 2019 Delaware Acquisition as of and for the year ended December 31, 2018: December 31, 2018 As Previously Reported 2019 Delaware Acquisition As Recasted (In thousands) ASSETS Current assets Cash and cash equivalents $ 6,649 $ — $ 6,649 Accounts receivable 2,481 — 2,481 Accounts receivable – Oasis Petroleum 80,805 217 81,022 Prepaid expenses 1,418 — 1,418 Other current assets 22 — 22 Total current assets 91,375 217 91,592 Property, plant and equipment 933,155 9,423 942,578 Less: accumulated depreciation and amortization (62,730) — (62,730) Total property, plant and equipment, net 870,425 9,423 879,848 Other assets 2,452 — 2,452 Total assets $ 964,252 $ 9,640 $ 973,892 LIABILITIES AND EQUITY Current liabilities Accounts payable $ 2,180 $ — $ 2,180 Accounts payable – Oasis Petroleum 33,014 — 33,014 Accrued liabilities 57,657 3,297 60,954 Accrued interest payable 442 — 442 Total current liabilities 93,293 3,297 96,590 Long-term debt 318,000 — 318,000 Asset retirement obligations 1,514 116 1,630 Total liabilities 412,807 3,413 416,220 Equity Limited partners Common units 192,581 — 192,581 Subordinated units 45,937 — 45,937 General Partner 112 — 112 Total partners’ equity 238,630 — 238,630 Non-controlling interests 312,815 — 312,815 Delaware Predecessor — 6,227 6,227 Total equity 551,445 6,227 557,672 Total liabilities and equity $ 964,252 $ 9,640 $ 973,892 Year Ended December 31, 2018 As Previously Reported 2019 Delaware Acquisition As Recasted (In thousands, except per unit data) Revenues Midstream services – Oasis Petroleum $ 248,216 $ 2,147 $ 250,363 Midstream services – third parties 2,604 — 2,604 Product sales – Oasis Petroleum 17,476 — 17,476 Product sales – third parties 3,327 — 3,327 Total revenues 271,623 2,147 273,770 Operating expenses Costs of product sales 7,433 — 7,433 Operating and maintenance 63,123 562 63,685 Depreciation and amortization 28,404 5 28,409 General and administrative 23,897 — 23,897 Total operating expenses 122,857 567 123,424 Operating income 148,766 1,580 150,346 Other income (expense) Interest expense, net of capitalized interest (2,343) (237) (2,580) Other income (expense) (14) — (14) Total other expense, net (2,357) (237) (2,594) Income before income taxes 146,409 1,343 147,752 Income tax expense — — — Net income 146,409 1,343 147,752 Less: Net income attributable to Delaware Predecessor — 1,343 1,343 Less: Net income attributable to non-controlling interests 96,354 — 96,354 Net income attributable to OMP LP 50,055 — 50,055 Less: Net income attributable to General Partner 112 — 112 Net income attributable to limited partners $ 49,943 $ — $ 49,943 Earnings per limited partner unit (Note 14) Common units – basic and diluted $ 1.82 $ — $ 1.82 Weighted average number of limited partners units outstanding (Note 14) Common units – basic 14,504 — 14,504 Common units – diluted 14,519 — 14,519 Year Ended December 31, 2018 As Previously Reported 2019 Delaware Acquisition As Recasted (In thousands) Cash flows from operating activities: Net income $ 146,409 $ 1,343 $ 147,752 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 28,404 5 28,409 Equity-based compensation expenses 356 — 356 Deferred financing costs amortization and other (519) — (519) Working capital and other changes: Change in accounts receivable 3,411 (217) 3,194 Change in prepaid expenses (640) — (640) Change in accounts payable and accrued liabilities 27,613 201 27,814 Change in other assets and liabilities, net (22) — (22) Net cash provided by operating activities 205,012 1,332 206,344 Cash flows from investing activities: Capital expenditures (276,810) (6,216) (283,026) Net cash used in investing activities (276,810) (6,216) (283,026) Cash flows from financing activities: Capital contributions from non-controlling interests 140,277 — 140,277 Capital contributions from Delaware Predecessor, net — 4,884 4,884 Proceeds from sale of common units, net of offering costs 44,503 — 44,503 Distributions to non-controlling interests (128,903) — (128,903) Distribution to Oasis Petroleum for contributed assets (172,429) — (172,429) Distributions to unitholders (44,918) — (44,918) Deferred financing costs (966) — (966) Proceeds from revolving credit facility 275,000 — 275,000 Principal payments on revolving credit facility (35,000) — (35,000) Net cash provided by financing activities 77,564 4,884 82,448 Increase in cash and cash equivalents 5,766 — 5,766 Cash: Beginning of period 883 — 883 End of period $ 6,649 $ — $ 6,649 Supplemental cash flow information: Cash paid for interest, net of capitalized interest $ 1,817 $ 237 $ 2,054 Supplemental non-cash transactions: Change in accrued capital expenditures $ (4,890) $ 3,096 $ (1,794) Change in asset retirement obligations 198 116 314 Reimbursement of capital expenditures from Oasis Petroleum 7,176 — 7,176 2018 Dropdown Acquisition. On November 19, 2018, the Partnership completed transactions contemplated by a contribution agreement (the “Contribution Agreement”) dated as of November 7, 2018, with OMS Holdings LLC (“OMS Holdings”), OMS, OMP GP LLC, OMP Operating, and for certain limited purposes set forth therein, Oasis Petroleum. Pursuant to the Contribution Agreement, Oasis Petroleum caused OMS to contribute to OMP Operating, as the Partnership’s designee, (a) an additional 15% limited liability company interest in Bobcat DevCo, and (b) an additional 30% limited liability company interest in Beartooth DevCo (collectively, the “Contributed Assets”) for consideration of approximately $251.4 million (the “Purchase Price”), consisting of approximately $172.4 million in cash and 3,950,000 common units, representing limited partner interests |