SEC Form DEFM14A filed by Oasis Midstream Partners LP

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒                            Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

☐		Preliminary Proxy Statement
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☒		Definitive Proxy Statement
☐		Definitive Additional Materials
☐		Soliciting Material Pursuant to Section 240.14a-12

Oasis Midstream Partners LP

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Dear Common Unitholders of Oasis Midstream Partners LP (“Oasis Midstream”):

On October 25, 2021, Oasis Midstream entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Crestwood Equity Partners LP (“Crestwood”), Project Falcon Merger Sub LLC, a direct wholly owned subsidiary of Crestwood (“Merger Sub”), Project Phantom Merger Sub LLC, a direct wholly owned subsidiary of Crestwood (“GP Merger Sub” and, together with Merger Sub, the “Merger Subs”), OMP GP LLC, the general partner of Oasis Midstream (“OMP GP”), and, solely for the purposes of Section 2.1(a)(i) therein, Crestwood Equity GP LLC, the general partner of Crestwood (“Crestwood GP”). Upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Oasis Midstream (the “LP Merger”), with Oasis Midstream surviving the LP Merger as a subsidiary of Crestwood, and GP Merger Sub will merge with and into OMP GP (the “GP Merger” and, together with the LP Merger, the “Mergers”), with OMP GP surviving the GP Merger as a wholly owned subsidiary of Crestwood.

At the effective time of the Mergers (the “effective time”): (i) 6,520,944 common units representing limited partner interests in Oasis Midstream (“Oasis Midstream common units”) issued and outstanding immediately prior to the effective time and owned by OMS Holdings LLC, a Delaware limited liability company (“OMS Holdings”) and subsidiary of Oasis Petroleum Inc. (“Oasis Petroleum”) (such Oasis Midstream common units, the “Sponsor Cash Units”), will be converted into and will thereafter represent the right to receive $150,000,000 in cash in the aggregate (the “ Sponsor Cash Consideration”) and each other Oasis Midstream common unit issued and outstanding immediately prior to the effective time owned by Oasis Petroleum or its subsidiaries (other than Oasis Midstream) (the “Sponsor Equity Units” and, together with the Sponsor Cash Units, the “Sponsor Units”) will be converted into and will thereafter represent the right to receive 0.7680 common units representing limited partner interests in Crestwood (“Crestwood common units”) (such consideration, the “Sponsor Equity Consideration”); (ii) each Oasis Midstream common unit issued and outstanding immediately prior to the effective time (other than the Sponsor Units) (the “Public Units”) will be converted into and will thereafter represent the right to receive 0.8700 Crestwood common units (“Public Holder Merger Consideration,” and, together with the Sponsor Equity Consideration, the “Equity Consideration” and, together with the Sponsor Cash Consideration, the “LP Merger Consideration”); and (iii) all of the limited liability company interests of OMP GP issued and outstanding as of immediately prior to the effective time will be converted into and will thereafter represent the right to receive $10,000,000 in cash.

Based on the $30.32 closing price of Crestwood common units on Monday, October 25, 2021, the last full trading day before the public announcement of the Mergers, the per unit value of Oasis Midstream common units implied by the LP Merger is $23.23 for each Sponsor Unit and $26.38 for each Public Unit, respectively, or a total common equity valuation of Oasis Midstream of approximately $1.2 billion. The implied value of the Equity Consideration to be received in exchange for each Oasis Midstream common unit will fluctuate based on the market price of Crestwood common units until the completion of the LP Merger because the Equity Consideration is payable in a fixed number of Crestwood common units. As a result, the value of the per unit Equity Consideration that Oasis Midstream common unitholders will be entitled to receive upon consummation of the LP Merger may be greater than or less than the value of the Equity Consideration on the date of this consent statement/prospectus. Accordingly, we urge you to obtain current market quotations for the Crestwood common units and Oasis Midstream common units. Oasis Midstream common units are currently traded on the Nasdaq Stock Market LLC (the “Nasdaq”) under the symbol “OMP,” and Crestwood common units are currently traded on the New York Stock Exchange (the “NYSE”) under the symbol “CEQP.”

Contemporaneously with the execution of the Merger Agreement, Oasis Midstream, Crestwood, Oasis Petroleum, OMP GP and OMS Holdings entered into a support agreement (the “Support Agreement”) regarding the Sponsor Units. Pursuant to the Support Agreement, Oasis Petroleum and OMS Holdings have agreed to, among other things (and as applicable), within 48 hours following the effectiveness of this registration statement on Form S-4, execute and deliver, or cause an affiliate to execute and deliver, a written consent (the “Written Consent”) covering all of the Sponsor Units approving the Merger Agreement and the transactions contemplated thereby. The Support Agreement and the Merger Agreement may be terminated in the event the Written Consent is not delivered. For more information, see the section titled “The Support Agreement” beginning on page 90 of this consent statement/prospectus. The delivery of the Written Consent will be sufficient to approve the Merger Agreement and the transactions contemplated thereby. Oasis Midstream is sending this document to all of the Oasis Midstream common unitholders, including Oasis Petroleum, to request that they approve the Merger Agreement and the transactions contemplated thereby by executing and returning the written consent furnished with this consent statement/prospectus. When Oasis Petroleum and/or its affiliates, as applicable, execute and return the Written Consent no other consents from the other Oasis Midstream common unitholders will be required to approve the Merger Agreement and the transactions contemplated thereby.

The board of directors of OMP GP (the “OMP GP Board”) has set December 27, 2021 as the record date for determining the holders of Oasis Midstream common units entitled to execute and deliver written consents with respect to the accompanying consent statement/prospectus.

 

 

We urge you to read the enclosed consent statement/prospectus, which includes important information about the Merger Agreement and the transactions contemplated thereby. In particular, see the section titled “Risk Factors” beginning on page 20 of the accompanying consent statement/prospectus.

In light of the fact that OMP GP and its affiliates have interests in the transactions that are different from the interests of the unaffiliated holders of Oasis Midstream common units, the OMP GP Board delegated to the Conflicts Committee of the OMP GP Board (the “Oasis Midstream Conflicts Committee”) consisting of independent directors who satisfy the requirements to serve on a conflicts committee in the Second Amended and Restated Agreement of Limited Partnership of Oasis Midstream, dated as of March 30, 2021 (the “Oasis Midstream Partnership Agreement”), the power and authority to, among other things, (i) review and evaluate any conflicts that may exist arising in connection with Crestwood’s offer (the “Potential Conflicts”) to combine with Oasis Midstream and any other arrangements or agreements related to the Mergers (the “Related Arrangements”), (ii) review and evaluate the Mergers and Related Arrangements, (iii) make any recommendations to the OMP GP Board regarding the Mergers and any Related Arrangements in light of such Potential Conflicts and (iv) determine whether or not to approve the LP Merger by “Special Approval” under the Oasis Midstream Partnership Agreement. The Oasis Midstream Conflicts Committee has unanimously, in good faith, among other things, (i) determined that the Merger Agreement and the transactions contemplated thereby, including the LP Merger, are in the best interests of Oasis Midstream and the holders of Oasis Midstream common units, excluding OMP GP and its affiliates, (ii) approved the Merger Agreement and the transactions contemplated thereby, including the LP Merger (the foregoing constituting “Special Approval” (as defined in the Oasis Midstream Partnership Agreement)) and (iii) recommended to the OMP GP Board the approval of the Merger Agreement and the consummation of the transactions contemplated thereby, including the LP Merger. Upon the approval and recommendation of the Oasis Midstream Conflicts Committee, the OMP GP Board has, by unanimous vote, in good faith, (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Mergers, are in the best interests of Oasis Midstream, and, with respect to the GP Merger, OMP GP, (ii) approved and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Mergers, (iii) approved the execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Mergers, (iv) authorized and directed that the approval of the Merger Agreement and the transactions contemplated thereby be submitted to a vote of Oasis Midstream’s limited partners pursuant to Section 14.3 of the Oasis Midstream Partnership Agreement and (v) authorized Oasis Midstream’s limited partners to act by written consent pursuant to Section 13.11 of the Oasis Midstream Partnership Agreement.

 

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under the accompanying consent statement/prospectus or determined that the accompanying document is accurate or complete. Any representation to the contrary is a criminal offense.

The accompanying consent statement/prospectus is dated December 30, 2021 and is first being mailed to the holders of Oasis Midstream common units on or about December 30, 2021.

OASIS MIDSTREAM PARTNERS LP

1001 Fannin Street, Suite 1500

Houston, Texas 77002

NOTICE OF SOLICITATION OF WRITTEN CONSENT

Oasis Midstream Partners LP (“Oasis Midstream”) is requesting that you execute and return your written consent to approve the Agreement and Plan of Merger, dated as of October 25, 2021 (the “Merger Agreement”), by and among Crestwood Equity Partners LP (“Crestwood”), Project Falcon Merger Sub LLC, a direct wholly owned subsidiary of Crestwood (“Merger Sub”), Project Phantom Merger Sub LLC, a direct wholly owned subsidiary of Crestwood (“GP Merger Sub”), Oasis Midstream, OMP GP LLC, the general partner of Oasis Midstream (“OMP GP”), and, solely for purposes of Section 2.1(a)(i) therein, Crestwood Equity GP LLC, the general partner of Crestwood (“Crestwood GP”), pursuant to which (i) Merger Sub will be merged with and into Oasis Midstream (the “LP Merger”), with Oasis Midstream surviving the LP Merger as a wholly owned subsidiary of Crestwood, and (ii) GP Merger Sub will be merged with and into OMP GP (the “GP Merger” and, together with the LP Merger, the “Mergers”), with OMP GP surviving the GP Merger as a wholly owned subsidiary of Crestwood.

In the LP Merger, (i) the 6,520,944 common units representing limited partner interests in Oasis Midstream (“Oasis Midstream common units”) issued and outstanding immediately prior to the effective time of the Mergers (the “effective time”) and owned by OMS Holdings LLC, a Delaware limited liability company and subsidiary of Oasis Petroleum Inc. (“Oasis Petroleum”) (such Oasis Midstream common units, the “Sponsor Cash Units”), will be converted into and will thereafter represent the right to receive $150,000,000 in cash in the aggregate and each other Oasis Midstream common unit issued and outstanding immediately prior to the effective time owned by Oasis Petroleum or its subsidiaries (other than Oasis Midstream) (together with the Sponsor Cash Units, the “Sponsor Units”) will be converted into and will thereafter represent the right to receive 0.7680 common units representing limited partner interests in Crestwood (“Crestwood common units”); and (ii) each Oasis Midstream common unit issued and outstanding immediately prior to the effective time (other than the Sponsor Units) (the “Public Units”) will be converted into and will thereafter represent the right to receive 0.8700 Crestwood common units.

In the GP Merger, all of the limited liability company interests in OMP GP issued and outstanding as of immediately prior to the effective time will be converted into and will thereafter represent the right to receive $10,000,000 in cash.

This consent statement/prospectus describes the Mergers, the other transactions contemplated by the Merger Agreement and the actions to be taken in connection therewith and provides additional information about the parties involved. Please give this information your careful attention. A copy of the Merger Agreement is attached as Annex A to this consent statement/prospectus.

Oasis Midstream cannot complete the transactions contemplated by the Merger Agreement unless the holders of a majority of the outstanding Oasis Midstream common units approve the Merger Agreement. Oasis Petroleum and OMS Holdings, which own approximately 69.6% of the issued and outstanding Oasis Midstream common units and 100% of the limited liability company interests in OMP GP, have entered into a support agreement (the “Support Agreement”) regarding the Sponsor Units. Pursuant to the Support Agreement, Oasis Petroleum and OMS Holdings have agreed to, among other things (and as applicable), within 48 hours following the effectiveness of this registration statement on Form S-4, execute and deliver, or cause an affiliate to execute and deliver, a written consent (the “Written Consent”) covering all of the Sponsor Units approving the Merger Agreement and the transactions contemplated thereby. The delivery of the Written Consent will be sufficient to approve the Merger Agreement and the transactions contemplated thereby. When Oasis Petroleum and/or its affiliates, as applicable, execute and return the Written Consent approving the Merger Agreement, no other consents from the other Oasis Midstream common unitholders will be required to approve the Merger Agreement and the transactions contemplated thereby.

The board of directors of OMP GP (the “OMP GP Board”) has set December 27, 2021 as the record date for the determination of Oasis Midstream common unitholders entitled to execute and deliver written consents with respect to this accompanying consent statement/prospectus.

In light of the fact that OMP GP and its affiliates have interests in the transactions that are different from the interests of the unaffiliated holders of Oasis Midstream common units, the OMP GP Board delegated to the conflicts committee of the OMP GP Board (the “Oasis Midstream Conflicts Committee”), consisting of independent directors who satisfy the requirements to serve on a conflicts committee in the Second Amended and Restated Agreement of Limited Partnership of Oasis Midstream, dated as of March 30, 2021 (the “Oasis Midstream Partnership Agreement”), the power and authority to, among other things, (i) review and evaluate any conflicts that may exist arising in connection with Crestwood’s offer (“Potential Conflicts”) to combine with Oasis Midstream and any other arrangements or agreements related to the Mergers (the “Related Arrangements”), (ii) review and evaluate the Mergers and Related Arrangements, (iii) make any recommendations to the OMP GP Board regarding the Mergers and any Related Arrangements in light of such Potential Conflicts and (iv) determine whether or not to approve the Mergers by “Special Approval” under the Oasis Midstream Partnership Agreement. The Oasis Midstream Conflicts Committee has by unanimous vote, in good faith, among other things, (i) determined that the Merger Agreement and the transactions contemplated thereby, including the LP Merger, are in the best interests of Oasis Midstream and the holders of Oasis Midstream common units, excluding OMP GP and its affiliates, (ii) approved the Merger Agreement and the transactions contemplated thereby, including the LP Merger, with such approval constituting “Special Approval” under the Oasis Midstream Partnership Agreement, and (iii) recommended to the OMP GP Board the approval of the Merger Agreement and the consummation of the transactions contemplated thereby, including the LP Merger. Upon the approval and recommendation of the Oasis Midstream Conflicts Committee, the OMP GP Board has by unanimous vote, in good faith, (i) determined that the Merger Agreement and the transactions contemplated thereby, including the LP Merger, are in the best interests of Oasis Midstream, and, with respect to the GP Merger, OMP GP, (ii) approved and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Mergers, (iii) approved the execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Mergers, (iv) authorized and directed that the approval of the Merger Agreement and the transactions contemplated thereby be submitted to a vote of Oasis Midstream’s limited partners pursuant to Section 14.3 of the Oasis Midstream Partnership Agreement and (v) authorized Oasis Midstream’s limited partners to act by written consent pursuant to Section 13.11 of the Oasis Midstream Partnership Agreement.

Please complete, date and sign the written consent furnished with this consent statement/prospectus and return it promptly to Oasis Midstream by one of the means described in the section entitled “Oasis Midstream Solicitation of Written Consents.”

On behalf of the OMP GP Board,

 

Nickolas J. Lorentzatos

Executive Vice President, General Counsel and

Corporate Secretary

December 30, 2021

ADDITIONAL INFORMATION

This document, which forms part of a registration statement on Form S-4 filed with the U.S. Securities and Exchange Commission (the “SEC”), constitutes a consent statement of Oasis Midstream Partners LP (“Oasis Midstream”) and is also a prospectus of Crestwood Equity Partners LP (“Crestwood”) under Section 5 of the U.S. Securities Act of 1933, as amended (the “Securities Act”), for Crestwood common units that will be issued to Oasis Midstream common unitholders pursuant to the Agreement and Plan of Merger, dated as of October 25, 2021 (the “Merger Agreement”).

As permitted under the rules of the SEC, this document incorporates by reference important business and financial information about Crestwood and Oasis Midstream from other documents filed with the SEC that are not included in or delivered with this document. Please read the section titled “Where You Can Find More Information.” You can obtain any of the documents incorporated by reference into this document from the SEC’s website at www.sec.gov. This information is also available to you without charge upon your request in writing or by telephone from Crestwood or Oasis Midstream at the following addresses and telephone numbers:

 

Crestwood Equity Partners LP		Oasis Midstream Partners LP
811 Main Street, Suite 3400		1001 Fannin, Suite 1500
Houston, Texas 77002		Houston, Texas 77002
Attention: Investor Relations		Attention: Investor Relations
Phone: (832) 519-2200		Phone: (281) 404-9500

Please note that copies of the documents provided to you will not include exhibits, unless the exhibits are specifically incorporated by reference into the documents or this document.

You may obtain certain copies of these documents at Crestwood’s website, https://www.crestwoodlp.com/investors/, and at Oasis Midstream’s website, http://oasismidstream.investorroom.com. None of the information contained on the website of Crestwood or Oasis Midstream is incorporated by reference into this document.

If you request any documents, Crestwood or Oasis Midstream will mail them to you by first class mail, or another equally prompt means, within one business day after receipt of your request. To ensure timely delivery of these documents, any request should be made no later than January 21, 2022.

 

CONTENTS

 

		Page
QUESTIONS AND ANSWERS ABOUT THE MERGERS			1
SUMMARY			9
Information About the Companies			9
The Mergers			9
LP Merger Consideration			9
GP Merger Consideration			10
Treatment of Oasis Midstream Equity Awards			10
The Support Agreement			10
Summary of Risk Factors			10
Approvals Required by the Oasis Midstream Common Unitholders to Complete the LP Merger and the Other Transactions Contemplated by the Merger Agreement			12
Approval of the Oasis Midstream Conflicts Committee and the OMP GP Board and Reasons for the Mergers			12
Opinion of Oasis Midstream Conflicts Committee’s Financial Advisor			13
Interests of OMP GP Directors and Executive Officers in the Mergers			13
Regulatory Approvals			14
No Appraisal or Dissenters’ Rights			14
Listing of Crestwood Common Units Issued in the Transactions; Delisting and Deregistration of Oasis Midstream Common Units			14
Conditions to the Mergers			14
Termination of Merger Agreement			16
Breakup Fee			16
Accounting Treatment of the Mergers			16
Material U.S. Federal Income Tax Consequences of the LP Merger			16
Expected Timing of the Mergers			17
Comparison of Rights of Crestwood Common Unitholders and Oasis Midstream Common Unitholders			17
Litigation Relating to the Mergers			18
Market Price Information			18
Selected Unaudited Pro Forma Condensed Consolidated Combined Financial Information			19
RISK FACTORS			20
Risks Related to the Mergers			20
Tax Risks Related to the LP Merger			27
Tax Risks Related to Owning Crestwood Units Following the LP Merger			29
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			30
INFORMATION ABOUT THE COMPANIES			31
Crestwood Equity Partners LP			31
Oasis Midstream Partners LP			31
Project Falcon Merger Sub LLC			31
Project Phantom Merger Sub LLC			32
OASIS MIDSTREAM SOLICITATION OF WRITTEN CONSENTS			32
Consents			32
Units Entitled to Consent and Consent Required			32

 

i

		Page
Submission of Consents			33
Executing Consents; Revocation of Consents			33
Solicitation of Consents; Expenses			33
Determination of the OMP GP Board and the Oasis Midstream Conflicts Committee			34
THE MERGERS			35
Effects of the Mergers			35
Background of the Mergers			35
Crestwood’s Reasons for the Mergers			48
Approval of the Oasis Midstream Conflicts Committee and the OMP GP Board and Reasons for the Mergers			49
Opinion of the Oasis Midstream Conflicts Committee’s Financial Advisor			54
Oasis Midstream, Crestwood and Pro Forma Unaudited Prospective Financial Information			60
Interests of OMP GP Directors and Executive Officers in the Mergers			65
Securities Ownership of Certain Beneficial Owners and Management			67
Expenses, Fees and Costs			67
Expected Timing of the Mergers			68
No Crestwood Unitholder Approval			68
Registration Rights Agreement			68
Accounting Treatment of the Mergers			69
Regulatory Approvals			69
Exchange of Units			69
Listing of Crestwood Common Units Issued in the Transactions; Delisting and Deregistration of Oasis Midstream Common Units After the Transactions			70
Litigation Relating to the Mergers			71
THE MERGER AGREEMENT			72
The Mergers			72
Merger Closing and Effective Time			72
Directors and Officers			73
LP Merger Consideration			73
GP Merger Consideration			73
Conditions to the Mergers			73
No Dissenters’ or Appraisal Rights			75
Representations and Warranties			75
Definition of Material Adverse Effect			78
Conduct of Business Pending the Mergers			79
Mutual Access			83
Oasis Midstream Employee Equity-Based Awards			84
Regulatory Approvals and Efforts to Close the Mergers			85
Indemnification and Insurance			86
Financing Assistance			87
Other Covenants and Agreements			87
Termination of the Merger Agreement			88
Effect of Termination			89
Breakup Fee			89

 

ii

		Page
Expenses			89
Amendment and Waiver			89
Governing Law			89
THE SUPPORT AGREEMENT			90
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED COMBINED FINANCIAL INFORMATION			91
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE LP MERGER			103
Tax Opinions Required as a Condition to Closing			103
Assumptions Related to the U.S. Federal Income Tax Treatment of the LP Merger			105
U.S. Federal Income Tax Treatment of the LP Merger			105
Tax Consequences of the LP Merger to Oasis Midstream			106
Tax Consequences of the LP Merger to Oasis Midstream Common Unitholders			106
Tax Basis and Holding Period of the Crestwood Common Units Received			108
Effect of Termination of Oasis Midstream’s Tax Year at Closing of the LP Merger			108
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF CRESTWOOD COMMON UNIT OWNERSHIP			109
Taxation of Crestwood			110
Tax Consequences of Common Unit Ownership			111
Tax Treatment of Operations			117
Disposition of Common Units			118
Uniformity of Common Units			120
Tax-Exempt Organizations and Other Investors			120
Administrative Matters			122
State, Local and Other Tax Considerations			124
DESCRIPTION OF CRESTWOOD COMMON UNITS			125
Number of Common Units			125
Where Crestwood Common Units Are Traded			125
Transfer Agent and Registrar			125
Transfer of Crestwood Common Units			125
Distributions of Available Cash			126
Capital Contributions			127
Voting Rights			127
Limited Liability			128
Issuance of Additional Interests; Preemptive Rights			129
Change of Management Provisions			130
Limited Call Right			130
Meetings; Voting			130
Status as a Limited Partner			131
Books and Reports			131
Right to Inspect Crestwood’s Books and Records			132
Registration Rights			132
DESCRIPTION OF CRESTWOOD PREFERRED UNITS			134
General			134
Distributions			134

 

iii

		Page
Board Designation Right			134
Conversion			134
Rights Upon a Change of Control			135
Voting			136
Transfer Agent and Registrar			136
COMPARISON OF RIGHTS OF CRESTWOOD COMMON UNITHOLDERS AND OASIS MIDSTREAM COMMON UNITHOLDERS			137
Purpose			137
Outstanding Units; Authorized Capital			137
Distributions; Dividends			138
Distributions of Cash Upon Liquidation			138
Merger, Sale or Other Disposition of Assets			139
Crestwood General Partner; Oasis Midstream General Partner			140
Election of General Partner			140
Election of Directors of General Partner			140
Withdrawal or Removal of the General Partner			142
Voting; Meetings			143
Transfer of General Partner Interests			145
Limited Preemptive Rights			145
Limited Call Right			146
Amendment of Governing Documents			146
Indemnification			150
Conflicts of Interest			152
Termination and Dissolution			154
HOUSEHOLDING			156
LEGAL MATTERS			157
EXPERTS			157
WHERE YOU CAN FIND MORE INFORMATION			158
ANNEX A - AGREEMENT AND PLAN OF MERGER			A-1
ANNEX B - SUPPORT AGREEMENT			B-1
ANNEX C - OPINION OF JEFFERIES LLC			C-1

 

iv

QUESTIONS AND ANSWERS ABOUT THE MERGERS

Set forth below are questions that you, as a holder of Oasis Midstream common units (as defined below), may have regarding the Mergers (as defined below) and brief answers to those questions. For more complete descriptions of the legal and other terms of the Mergers, please read this entire document, including the Merger Agreement (as defined below), which is attached as Annex A to this consent statement/prospectus, and the documents incorporated by reference into this document. You may obtain a list of the documents incorporated by reference into this document in the section entitled “Where You Can Find More Information” beginning on page 158.

 

Q:	Why am I receiving this consent statement/prospectus?

 

A:

On October 25, 2021, Oasis Midstream Partners LP (“Oasis Midstream”) and OMP GP LLC (“OMP GP”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Crestwood Equity Partners LP (“Crestwood”), Project Falcon Merger Sub LLC (“Merger Sub”), Project Phantom Merger Sub LLC (“GP Merger Sub” and, together with Merger Sub, the “Merger Subs”) and, solely for the purposes of Section 2.1(a)(i) of the Merger Agreement, Crestwood Equity GP LLC (“Crestwood GP”). Upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Oasis Midstream (the “LP Merger”), with Oasis Midstream surviving the LP Merger as a subsidiary of Crestwood, and GP Merger Sub will merge with and into OMP GP (the “GP Merger” and, together with the LP Merger, the “Mergers”), with OMP GP surviving the GP Merger as a wholly owned subsidiary of Crestwood.

The approval of the holders of a majority of outstanding common units representing limited partner interests in Oasis Midstream (“Oasis Midstream common units”) is required to approve the Merger Agreement and the other transactions contemplated thereby.

Contemporaneously with the execution of the Merger Agreement, Oasis Midstream, Crestwood, Oasis Petroleum Inc. (“Oasis Petroleum”), OMP GP and OMS Holdings LLC, a Delaware limited liability company (“OMS Holdings”), entered into a support agreement (the “Support Agreement”) regarding the Oasis Midstream common units issued and outstanding immediately prior to the effective time owned by Oasis Petroleum or its subsidiaries (other than Oasis Midstream) (the “Sponsor Equity Units” and, together with the Sponsor Cash Units (as defined below), the “Sponsor Units”). Pursuant to the Support Agreement, Oasis Petroleum and OMS Holdings have agreed to, among other things (and as applicable), within 48 hours following the effectiveness of this registration statement on Form S-4, execute and deliver, or cause an affiliate to execute and deliver, a written consent (the “Written Consent”) covering all of the Sponsor Units approving the Merger Agreement and the transactions contemplated thereby. The Support Agreement and the Merger Agreement may be terminated in the event the Written Consent is not delivered. For more information, see the section titled “The Support Agreement” beginning on page 90 of this consent statement/prospectus. Oasis Midstream is sending this consent statement/prospectus to all Oasis Midstream common unitholders, including Oasis Petroleum, to request that they approve the Merger Agreement and the transactions contemplated thereby by executing and returning the written consent furnished with this consent statement/prospectus. When Oasis Petroleum and/or its affiliates, as applicable, execute and return the Written Consent approving the Merger Agreement and the transactions contemplated thereby, no other consents from the other Oasis Midstream common unitholders will be required to approve the Merger Agreement and the transactions contemplated thereby. OMP GP’s board of directors (the “OMP GP Board”) has set December 27, 2021 as the record date (which is referred to as the “Oasis Midstream Record Date”) for determining the holders of Oasis Midstream common units entitled to execute and deliver written consents with respect to this consent statement/prospectus.

This consent statement/prospectus serves as both consent statement of Oasis Midstream and a prospectus of Crestwood in connection with the Merger Agreement, the Mergers and the transactions contemplated thereby.

 

Q:	What will happen in the Mergers?

 

A:	If the Mergers are successfully completed, Merger Sub will be merged with and into Oasis Midstream, with Oasis Midstream surviving as a wholly owned subsidiary of Crestwood, and GP Merger Sub will be merged

 

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with and into OMP GP, with OMP GP surviving as a direct wholly owned subsidiary of Crestwood. In addition, if the LP Merger is successfully completed, the Oasis Midstream common units will no longer be listed and traded on the Nasdaq Stock Market LLC (the “Nasdaq”).

 

Q:	What will Oasis Midstream common unitholders, including Oasis Petroleum, receive in the Mergers?

 

A:

At the effective time of the Mergers (the “effective time”): (i) 6,520,944 Oasis Midstream common units issued and outstanding immediately prior to the effective time and owned by OMS Holdings and Oasis Petroleum (such Oasis Midstream common units, the “Sponsor Cash Units”), will be converted into and will thereafter represent the right to receive $150,000,000 in cash in the aggregate (the “Sponsor Cash Consideration”) and each Sponsor Equity Unit will be converted into and will thereafter represent the right to receive 0.7680 common units representing limited partner interests in Crestwood (such units “Crestwood common units” and such right, the “Sponsor Exchange Ratio”) for each Sponsor Equity Unit (the “Sponsor Equity Consideration”); and (ii) each Oasis Midstream common unit issued and outstanding immediately prior to the effective time (other than the Sponsor Units) (“Public Units”) will be converted into and will thereafter represent the right to receive 0.8700 Crestwood common units (such right, the “Public Holder Exchange Ratio” for each Oasis Midstream common unit (the “Public Holder Merger Consideration” and, together with the Sponsor Equity Consideration, the “Equity Consideration”)). If at any time during the period between the date of the Merger Agreement and the effective time any change in the outstanding Oasis Midstream common units or outstanding Crestwood common units shall occur, by reason of the occurrence or record date of any unit dividend, unit distribution, subdivision, reclassification, recapitalization, split, split-up, combination, exchange of units or other similar transaction, the Sponsor Cash Consideration, the Equity Consideration (as defined below) (the combination of the Sponsor Cash Consideration and the Equity Consideration being the “LP Merger Consideration”), the Sponsor Exchange Ratio, the Public Holder Exchange Ratio and any other similarly dependent items shall be equitably adjusted to provide to Crestwood, Merger Sub and the Oasis Midstream common unitholders the same economic effect as contemplated by the Merger Agreement prior to such action.

Based on the $30.32 closing price of Crestwood common units on Monday, October 25, 2021, the last full trading day before the public announcement of the Mergers, the per unit value of Oasis Midstream common units implied by the LP Merger is $23.23 for each Sponsor Unit and $26.38 for each Public Unit, or a total common equity valuation of Oasis Midstream of approximately $1.2 billion. The implied value of the Equity Consideration to be received in exchange for each Oasis Midstream common unit will fluctuate based on the market price of Crestwood common units until the completion of the LP Merger because the Equity Consideration is payable in a fixed number of Crestwood common units. As a result, the value of the per unit Equity Consideration that Oasis Midstream common unitholders will be entitled to receive upon consummation of the LP Merger may be greater than or less than the value of the Equity Consideration on the date of this consent statement/prospectus. Accordingly, we urge you to obtain current market quotations for the Crestwood common units and Oasis Midstream common units. Oasis Midstream common units are currently traded on the Nasdaq under the symbol “OMP,” and Crestwood common units are currently traded on the New York Stock Exchange (the “NYSE”) under the symbol “CEQP.”

 

Q:	What happens if the Mergers are not completed?

 

A:

If the Mergers are not completed for any reason, holders of Oasis Midstream common units (including Oasis Petroleum) will not receive any consideration in exchange for their Oasis Midstream common units. Additionally, Oasis Midstream will remain an independent public company with Oasis Midstream common units continuing to be traded on the Nasdaq. The Merger Agreement further provides that, upon termination of the Merger Agreement under certain circumstances, Oasis Midstream (or Oasis Petroleum) may be required to pay Crestwood a breakup fee of $40,000,000 (the “breakup fee”). Following payment of the breakup fee, Oasis Midstream will not have any further liability with respect to the Merger Agreement. For more information, see the section titled “The Merger Agreement—Breakup Fee” beginning on page 89 of this consent statement/prospectus.

 

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Q:	Will any consideration be paid to Oasis Midstream common unitholders (other than Oasis Petroleum and certain of its subsidiaries) in the GP Merger?

 

A:

No. In the GP Merger, all of the limited liability company interests of OMP GP issued and outstanding immediately prior to the effective time will be converted into and will thereafter represent the right to receive $10,000,000 in cash (the “GP Merger Consideration”), which will be paid to OMS Holdings.

 

Q:	If I am an Oasis Midstream common unitholder, how will I receive the Public Holder Merger Consideration to which I become entitled?

 

A:

As soon as practicable following the effective time, the exchange agent will mail to you, (i) a notice advising you of the effectiveness of the LP Merger and the applicable terms of the exchange effected by the LP Merger; (ii) tax certification guidelines; and (iii) any other material reasonably required by the exchange agent, and in any event not later than the fifth business day following the effective time, the exchange agent shall cause to be issued and distributed to the holder(s) in whose name such Oasis Midstream common units were registered in book-entry form (i) the whole number of Crestwood common units issuable to such holder pursuant to the Merger Agreement, registered in the name of such holder(s), in the form of book-entry interests; and (ii) a check for any cash payable to such holder(s) in connection with a Crestwood distribution under Section 2.2(c) of the Merger Agreement. No fractional Crestwood common units will be issued as Equity Consideration. In lieu of receiving a fractional Crestwood common unit, all fractional Crestwood common units held by a holder will be aggregated and rounded up to the nearest whole Crestwood common unit. For more information about the exchange of Oasis Midstream common units for Crestwood common units, see “The Mergers—Exchange of Units” beginning on page 69 of this consent statement/prospectus.

 

Q:	Who is entitled to deliver written consents to approve the Merger Agreement?

 

A:

Only written consents received from holders of Oasis Midstream common units as of the Oasis Midstream Record Date, the close of business on December 27, 2021, will be counted for purposes of approving the Merger Agreement and the transactions contemplated thereby. As of the Oasis Midstream Record Date, there were 48,627,680 Oasis Midstream common units outstanding.

 

Q:	Are there any important risks related to the Mergers or Crestwood’s or Oasis Midstream’s businesses of which I should be aware?

 

A:

Yes, there are important risks related to the Mergers and Crestwood’s and Oasis Midstream’s businesses. Before making any decision on how to vote, Crestwood and Oasis Midstream urge you to read carefully and in its entirety the section titled “Risk Factors” beginning on page 20 of this consent statement/prospectus. You also should read and carefully consider the risk factors relating to Crestwood and Oasis Midstream contained in the documents that are incorporated by reference into this consent statement/prospectus, including Crestwood’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and its Quarterly Reports on Form 10-Q for the three months ended March 31, 2021, June 30, 2021 and September 30, 2021, and Oasis Midstream’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and its Quarterly Reports on Form 10-Q for the three months ended March 31, 2021, June 30, 2021 and September 30, 2021, in each case as updated from time to time in each of Crestwood and Oasis Midstream’s subsequent filings with the U.S. Securities and Exchange Commission (the “SEC”).

 

Q:	What Oasis Midstream unitholder approval is required to approve the Merger Agreement?

 

A:	The approval of the holders of a majority of Oasis Midstream’s outstanding common units is required to approve the Merger Agreement and the other transactions contemplated thereby.

Oasis Petroleum and OMS Holdings, which collectively own approximately 69.6% of the issued and outstanding Oasis Midstream common units, have entered into the Support Agreement, pursuant to which,Oasis Petroleum and OMS Holdings have agreed to, among other things (and as applicable),

 

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within 48 hours following the effectiveness of this registration statement on Form S-4, execute and deliver, or cause an affiliate to execute and deliver, the Written Consent approving the Merger Agreement and the transactions contemplated thereby. The delivery of the Written Consent will be sufficient to approve the Merger Agreement and the transactions contemplated thereby. When Oasis Petroleum and/or its affiliates, as applicable, execute and return the Written Consent approving the Merger Agreement, no other consents from the other Oasis Midstream common unitholders will be required to approve the Merger Agreement and the transactions contemplated thereby.

 

Q:	Do OMP GP directors and executive officers have interests that may differ from those of other Oasis Midstream common unitholders?

 

A:

Yes. Oasis Midstream common unitholders should be aware and take into account the fact that OMP GP directors and executive officers have interests in the Mergers that may be different from, or in addition to, the interests of Oasis Midstream common unitholders generally and that may create potential conflicts of interest (“Potential Conflicts”). The primary differentiating interest is that all of OMP GP’s officers and certain of OMP GP’s directors are also officers and/or directors of Oasis Petroleum. Other interests include rights to continuing indemnification and directors’ and officers’ liability insurance, as well as accelerated vesting of outstanding Oasis Midstream Restricted Unit Awards (as defined below). The OMP GP Board and the Oasis Midstream Conflicts Committee were aware of and carefully considered these interests, among other matters, in evaluating the terms and structure, overseeing the negotiation of, the Mergers, and in approving the Merger Agreement and the transactions contemplated thereby, including the Mergers. See the section titled “The Mergers—Interests of OMP GP Directors and Executive Officers in the Mergers” beginning on page 65 of this consent statement/prospectus.

 

Q:	What was the Oasis Midstream Conflicts Committee’s role in reviewing the Mergers with Crestwood and what did the Oasis Midstream Conflicts Committee determine?

 

A:

The Conflicts Committee of the OMP GP Board (the “Oasis Midstream Conflicts Committee”) reviewed the Merger Agreement and unanimously, in good faith, among other things (a) determined that the Merger Agreement and the transactions contemplated thereby, including the LP Merger, are in the best interests of Oasis Midstream and the holders of Oasis Midstream common units, excluding OMP GP and its affiliates, (b) approved the Merger Agreement and the transactions contemplated thereby, including the LP Merger, with such approval constituting “Special Approval” under the Second Amended and Restated Agreement of Limited Partnership of Oasis Midstream, dated as of March 30, 2021 (the “Oasis Midstream Partnership Agreement”) and (c) recommended to the OMP GP Board the approval of the Merger Agreement and the consummation of the transactions contemplated thereby, including the LP Merger. For more information regarding the recommendation of the Oasis Midstream Conflicts Committee in making such determination, see “The Mergers—Approval of the Oasis Midstream Conflicts Committee and the OMP GP Board and Reasons for the Mergers” beginning on page 49 of this consent statement/prospectus.

 

Q:	What is the deadline for returning my written consent?

 

A:	Oasis Midstream common unitholders may execute and return their written consent as soon as reasonably practicable after the date this consent statement/prospectus becomes effective and until January 29, 2022 (the “consent deadline”).

 

Q:	How do I return my Oasis Midstream written consent?

 

A:

If you are an Oasis Midstream common unitholder as of the Oasis Midstream Record Date, and after carefully reading and considering the information contained in this consent statement/prospectus you wish to return your written consent, please complete, date and sign the enclosed written consent and promptly

 

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return it as instructed. If you are a direct registered holder of Oasis Midstream common units, please send the enclosed notice of consent to the address below.

By Mail. Broadridge Financial Solutions, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

Oasis Midstream will not be holding a meeting to approve the Merger Agreement, and therefore you will be unable to vote in person.

 

Q:	What if I hold both Crestwood common units and Oasis Midstream common units?

 

A:	If you are both a Crestwood common unitholder and an Oasis Midstream common unitholder, you will still receive consent solicitation materials from Oasis Midstream. Therefore, please complete, date and sign and deliver the written consent that you receive from Oasis Midstream.

 

Q:	If I am an Oasis Midstream common unitholder, can I change or revoke my written consent?

 

A:

Yes. You may change or revoke your written consent, at any time after this consent statement/prospectus is declared effective and until the consent deadline; however, such change or revocation may not have any effect, as the delivery of the Written Consent by Oasis Petroleum or its applicable affiliate pursuant to the Support Agreement will be sufficient to approve the Merger Agreement and the transactions contemplated thereby. If you wish to change or revoke your written consent, Oasis Midstream common unitholders may do so by sending in a new written consent with a later date or by delivering a notice of revocation to Broadridge Financial Solutions, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 prior to the consent deadline.

 

Q:	What if I sell my Oasis Midstream common units after the Oasis Midstream Record Date but before the effective time?

 

A:

If you sell or otherwise transfer your Oasis Midstream common units after the Oasis Midstream Record Date but prior to the effective time, you will not receive the Public Holder Merger Consideration. You must hold your Oasis Midstream common units through the effective time to receive the Public Holder Merger Consideration.

 

Q:	What do I do if I receive more than one set of consent solicitation materials?

 

A:

You may receive more than one set of consent solicitation materials, including multiple copies of this consent statement/prospectus or the consent solicitation materials. This can occur if you hold your Oasis Midstream common units in more than one brokerage account, if you hold Oasis Midstream common units directly as a holder of record and also in street name, or otherwise through another holder of record, and in certain other circumstances. If you receive more than one set of consent solicitation materials, please return each set separately in order to ensure that all of your written consents are delivered, as applicable.

 

Q:	What will happen if I do not execute and return my written consent?

 

A:	If you are an Oasis Midstream common unitholder as of the close of business on the Oasis Midstream Record Date and you do not execute and return a written consent, it will have the same effect as a vote against the approval of the Merger Agreement and the transactions contemplated thereby.

 

Q:	Are Oasis Midstream common unitholders entitled to seek appraisal rights if they do not deliver a written consent?

 

A:	No, Oasis Midstream common unitholders do not have appraisal rights in connection with the LP Merger under applicable law or the Oasis Midstream Partnership Agreement or contractual appraisal rights under the Merger Agreement.

 

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Q:	What are the expected U.S. federal income tax consequences to an Oasis Midstream common unitholder as a result of the transactions contemplated by the Merger Agreement?

 

A:

Generally, no income or gain should be recognized by a holder of Oasis Midstream common units solely as a result of the receipt of the Public Holder Merger Consideration. However, a holder of Oasis Midstream common units may recognize income or gain in certain specific situations, including (i) with respect to any deemed distributions made to a unitholder in an amount in excess of the unitholder’s tax basis in its units, including as a result of a net decrease in such unitholder’s share of nonrecourse liabilities as a result of the LP Merger, (ii) to the extent contributions of cash or other property to Oasis Midstream after the date of the Merger Agreement and prior to the effective time of the LP Merger are treated as part of a “disguised sale” of property, (iii) if a holder is a non-U.S. person that beneficially owns or has beneficially owned at any time in the five-year period ending on the closing date of the LP Merger more than five percent of the total Oasis Midstream common units or (iv) to the extent a holder of Oasis Midstream common units is treated as receiving non-pro rata consideration as a result of the excess of the Public Holder Exchange Ratio over the Sponsor Exchange Ratio.

The amount and effect of any income or gain that may be recognized by a holder of Oasis Midstream common units will depend on such holder’s particular situation, including the ability of such holder to utilize any suspended passive losses.

For additional information, please read “Material U.S. Federal Income Tax Consequences of the LP Merger” and “Risk Factors—Risks Related to the Mergers.”

 

Q:	What are the expected U.S. federal income tax consequences for an Oasis Midstream common unitholder of the ownership of Crestwood common units after the LP Merger is completed?

 

A:

Each holder of Oasis Midstream common units who becomes a holder of Crestwood common units as a result of the LP Merger will, as is the case for existing Crestwood common unitholders, be allocated such holder’s distributive share of Crestwood’s income, gains, losses, deductions and credits. In addition to U.S. federal income taxes, such holder may be subject to other taxes, including state and local income taxes, unincorporated business taxes, and estate, inheritance or intangibles taxes that may be imposed by the various jurisdictions in which Crestwood conducts business or owns property following the LP Merger, or in which the holder is a resident. Please read “Material U.S. Federal Income Tax Consequences of Crestwood Common Unit Ownership.”

 

Q:	Upon completion of the LP Merger, how many Schedules K-1 will I receive if I am an Oasis Midstream common unitholder?

 

A:

If you are a holder of Oasis Midstream common units, you will receive two Schedules K-1 in the year in which the LP Merger closes, one from Oasis Midstream, which will describe your share of Oasis Midstream’s income, gain, loss and deduction for the portion of the tax year that you held Oasis Midstream common units prior to the effective time, and one from Crestwood, which will describe your share of Crestwood’s income, gain, loss and deduction for the portion of the tax year you held Crestwood common units following the effective time.

If the LP Merger closes in 2022, Oasis Midstream expects to furnish a Schedule K-1 to each Oasis Midstream common unitholder within 90 days of the end of calendar years 2021 and 2022, respectively. Crestwood expects to furnish a Schedule K-1 to each Crestwood common unitholder within 90 days of the closing of Crestwood’s taxable year on December 31, 2022, whether or not the LP Merger closes in 2022. Accordingly, if the LP Merger closes in 2022, a holder of Oasis Midstream common units will receive one Schedule K-1 in 2022 from Oasis Midstream, and two Schedules K-1 in 2023, one from Oasis Midstream and one from Crestwood.

 

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Q:	What are the conditions to the completion of the Mergers and the other transactions contemplated by the Merger Agreement?

 

A:

The completion of the Mergers is subject to the satisfaction or waiver of customary closing conditions, including, among others: (i) adoption of the Merger Agreement by holders of a majority of the outstanding Oasis Midstream common units entitled to vote thereon, (ii) absence of any court order or regulatory injunction prohibiting completion of the Mergers, (iii) expiration or termination of review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (iv) effectiveness of this registration statement, (v) the mailing of the combined consent statement/prospectus to all holders of Oasis Midstream common units following effectiveness of this registration statement and at least 20 days prior to the closing date, (vi) the authorization for listing of Crestwood common units to be issued in the LP Merger on the NYSE, (vii) the consummation of certain reorganization transactions (the “Pre-Closing Transactions”) and (viii) the receipt by Oasis Midstream and Crestwood of certain opinions related to U.S. federal income tax matters (see “The Merger Agreement—Conditions to the Mergers” beginning on page 73 of this consent statement/prospectus).

 

Q:	When are the Mergers and the other transactions contemplated by the Merger Agreement expected to be completed?

 

A:

As of the date of this consent statement/prospectus, it is not possible to accurately estimate the closing date for the Mergers because the Mergers are subject to the satisfaction (or, to the extent permitted by applicable law, waiver) of the conditions to Crestwood’s and Oasis Midstream’s obligations to complete the Mergers; however, Crestwood and Oasis Midstream currently expect the Mergers to close in early 2022. Due to the requirement to obtain certain governmental approvals and other conditions necessary to complete the Mergers, no assurance can be given as to when, or if, the Mergers will be completed.

 

Q:	What will happen to outstanding Oasis Midstream equity awards in the Mergers?

 

A:

At the effective time, each award of restricted units that corresponds to Oasis Midstream common units, vested or unvested (each, an “Oasis Midstream Restricted Unit Award”), that is outstanding immediately prior to the effective time, will, immediately prior to the effective time, automatically become fully vested to the extent unvested and will, without any action on the part of Oasis Midstream, Crestwood or the holder thereof and subject to satisfaction of all applicable tax withholding obligations, be cancelled and converted into a right to receive a number of unrestricted Crestwood common units equal to the product obtained by multiplying the number of Oasis Midstream common units subject to such Oasis Midstream Restricted Unit Award immediately prior to the effective time by the Public Holder Exchange Ratio, rounded up or down to the nearest whole Crestwood common unit and less any units withheld to satisfy any tax withholding obligations.

 

Q:	If I am an Oasis Midstream common unitholder, do I need to do anything at this time with my common units other than delivering my written consent?

 

A:

If you are an Oasis Midstream common unitholder, you will be entitled to receive the Public Holder Merger Consideration for your Oasis Midstream common units after the effective time. The only action you are requested to take at this time is to affirmatively deliver written consent FOR the approval of the Merger Agreement and the transactions contemplated thereby in accordance with the method of written consent set forth in the section entitled “Oasis Midstream Solicitation of Written Consents” beginning on page 32 of this consent statement/prospectus.

 

Q:	Should I surrender my Oasis Midstream common units for exchange now to receive the Public Holder Merger Consideration?

 

A:	No. Oasis Midstream common unitholders should not surrender their Oasis Midstream common units for exchange to any person at this time. After the effective time, the exchange agent will effect the exchange

 

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of the Public Units for the Public Holder Merger Consideration. See the section titled “The Mergers—Exchange of Units” beginning on page 69 of this consent statement/prospectus.

 

Q:	How will the Mergers and the other transactions contemplated by the Merger Agreement be financed?

 

A:

Crestwood has, and at the closing will have, sufficient cash, available lines of credit or other sources of immediately available funds to pay the Sponsor Cash Consideration and the GP Merger Consideration and to refinance Oasis Midstream’s indebtedness or otherwise satisfy requirements of such obligations in connection with the consummation of the transactions contemplated by the Merger Agreement. Because (i) the Public Holder Merger Consideration consists of the right to receive Crestwood common units, (ii) each Sponsor Equity Unit consists of the right to receive Sponsor Equity Consideration for each Oasis Midstream common unit owned as of the effective time and (iii) Crestwood has sufficient cash, available lines of credit or other sources of immediately available funds to pay the Sponsor Cash Consideration, no financing is required to complete the LP Merger.

 

Q:	Is the completion of the Mergers and the other transactions contemplated by the Merger Agreement subject to a financing condition?

 

A:	No. The receipt of any financing by Crestwood is not a condition to completion of the Mergers or any of the other transactions contemplated by the Merger Agreement.

 

Q.	Will the Crestwood common units issued to Oasis Midstream common unitholders be traded on an exchange?

 

A:	Yes. It is a condition to completion of the LP Merger that the Crestwood common units to be issued to Oasis Midstream common unitholders in the LP Merger be approved for listing on the NYSE, subject to official notice of issuance, under the symbol “CEQP.”

 

Q:	If I am an Oasis Midstream common unitholder, whom should I call with questions?

 

A:	If you have any questions about the transactions contemplated by the Merger Agreement or the Oasis Midstream consent solicitation materials, or desire additional copies of this consent statement/prospectus, you should contact:

Broadridge Financial

Solutions, Inc., c/o

Broadridge, 51 Mercedes

Way, Edgewood, NY 11717

Telephone: 1-800-690-6903

or

Oasis Midstream Partners LP

1001 Fannin Street, Suite 1500

Houston, Texas 77002

Attention: Investor Relations

Telephone: (281) 404-9500

 

Q:	Where can I find more information about Crestwood and Oasis Midstream?

 

A:	You can find more information about Crestwood and Oasis Midstream from the various sources described under “Where You Can Find More Information” beginning on page 158 of this consent statement/prospectus.

 

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RISK FACTORS

In addition to the other information included and incorporated by reference into this document, including the matters addressed in the section titled “Cautionary Statement Regarding Forward-Looking Statements,” you should carefully consider the following risks. In addition, you should read and consider the risks associated with each of the businesses of Crestwood and Oasis Midstream. These risks can be found in Crestwood’s and Oasis Midstream’s respective Annual Reports on Form 10-K for the year ended December 31, 2020, as updated by subsequent Quarterly Reports on Form 10-Q, all of which are filed with the SEC and incorporated by reference into this consent statement/prospectus. For further information regarding the documents incorporated into this document by reference, please see the section titled “Where You Can Find More Information” beginning on page 158 of this consent statement/prospectus. Realization of any of the risks described below, any of the events described under “Cautionary Statement Regarding Forward-Looking Statements” or any of the risks or events described in the documents incorporated by reference could have a material adverse effect on Crestwood’s, Oasis Midstream’s or the combined company’s business, financial condition, cash flows and results of operations and could result in a decline in the trading prices of their respective common units.

Risks Related to the Mergers

Because the market price of Crestwood common units will fluctuate prior to the consummation of the Mergers, Oasis Midstream common unitholders cannot be sure of the market value of Crestwood common units that they will receive in the LP Merger.

At the effective time, each Public Unit will be converted into and will thereafter represent the right to receive the Public Holder Merger Consideration. At the time that Oasis Midstream common unitholders return their written consents regarding the approval of the Merger Agreement and the transactions contemplated thereby, Oasis Midstream common unitholders will not know the actual market value of the Crestwood common units that they will receive when the LP Merger is finally completed. The actual market value of the Crestwood common units, when received by Oasis Midstream common unitholders, will depend on the market value of those units on that date. This market value may be less than the value of the Crestwood common units on the date of the Merger Agreement and on the date that Oasis Midstream common unitholders return their written consents regarding the approval of the Merger Agreement and the transactions contemplated thereby. These fluctuations in the market value of Crestwood common units may be caused by a variety of factors, including general market and economic conditions, changes in Crestwood’s businesses, operations and prospects and regulatory considerations. Such factors are difficult to predict and, in many cases, may be beyond Oasis Midstream’s and Crestwood’s control.

The fairness opinion rendered to the Oasis Midstream Conflicts Committee by Jefferies was based on market and other conditions then existing and which could be evaluated by Jefferies as of October 25, 2021, and certain financial forecasts and other information made available to Jefferies, as of the date of the opinion. As a result, the opinion does not reflect changes in facts or other matters affecting Jefferies’ opinion or of which Jefferies became aware after the date of such opinion. The Oasis Midstream Conflicts Committee has not obtained, and does not expect to obtain, an updated fairness opinion from Jefferies reflecting changes in fact or other matters that may have occurred since the signing of the Merger Agreement.

The fairness opinion rendered to the Oasis Midstream Conflicts Committee by Jefferies was provided in connection with, and at the time of, the evaluation of the LP Merger and the Merger Agreement by the Oasis Midstream Conflicts Committee. The opinion was based on market and other conditions then existing and which could be evaluated by Jefferies as of October 25, 2021, and certain financial forecasts and other information made available to Jefferies, as of the date of the opinion, which may have changed, or may change, after the date of the opinion. The Oasis Midstream Conflicts Committee has not obtained an updated opinion as of the date of this consent statement/prospectus from Jefferies and does not expect to obtain an updated opinion prior to completion of the Mergers. Changes in the operations and prospects of Crestwood or Oasis Midstream, general

 

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market and economic conditions and other factors that may be beyond the control of Crestwood and Oasis Midstream, and on which the fairness opinion was based, may have altered the value of Crestwood or Oasis Midstream or the prices of Crestwood common units or Oasis Midstream common units since the date of such opinion, or may alter such values and prices by the time the LP Merger is completed. The opinion does not speak as of any date other than the date of the opinion. For a description of the opinion that Jefferies rendered to the Oasis Midstream Conflicts Committee, see “The Mergers—Opinion of the Oasis Midstream Conflicts Committee’s Financial Advisor” beginning on page 54 of this consent statement/prospectus.

The Mergers are subject to various closing conditions and, if the closing conditions are satisfied at all, any delay in completing the Mergers may reduce or eliminate the benefits expected and delay the payment of the LP Merger Consideration to Oasis Midstream’s common unitholders.

The Mergers are subject to the satisfaction of a number of other conditions beyond the parties’ control that may prevent, delay or otherwise materially adversely affect the completion of the Mergers. These conditions include, among other things, Oasis Midstream common unitholder approval regarding the approval of the Merger Agreement and the expiration or termination of any applicable waiting period under the HSR Act. Crestwood and Oasis Midstream cannot predict with certainty whether and when any of these conditions will be satisfied. Any delay in completing the Mergers could cause the combined company not to realize, or delay the realization, of some or all of the benefits that the companies expect to achieve from the Mergers. In such context, the date on which Oasis Midstream’s common unitholders will receive the LP Merger Consideration is also uncertain.

Certain executive officers and directors of OMP GP have interests in the Mergers that are different from, or in addition to, the interests of Oasis Midstream common unitholders generally, which could have influenced their decision to support the Mergers or approve the Merger Agreement.

Certain executive officers and directors of OMP GP are parties to agreements or participants in other arrangements that give them interests in the Mergers that may be different from, or be in addition to, your interests as a common unitholder of Oasis Midstream. The primary differentiating interest is that all of OMP GP’s officers and certain of OMP GP’s directors are also officers and/or directors of Oasis Petroleum. Other interests include rights to continuing indemnification and directors’ and officers’ liability insurance, as well as accelerated vesting of outstanding Oasis Midstream Restricted Unit Awards. You should consider these interests in voting on the LP Merger. Crestwood has described these different interests under “The Mergers—Interests of OMP GP Directors and Executive Officers in the Mergers.”

The Merger Agreement and the Support Agreement limit Oasis Midstream’s ability to pursue alternatives to the Mergers.

The Merger Agreement contains provisions that make it more difficult for Oasis Midstream to sell its business to a party other than Crestwood. Oasis Petroleum and OMS Holdings have entered into the Support Agreement pursuant to which, Oasis Petroleum and OMS Holdings have agreed to, among other things (and as applicable), within 48 hours following the effectiveness of this registration statement on Form S-4, execute and deliver, or cause an affiliate to execute and deliver, the Written Consent. The delivery of the Written Consent will be sufficient to approve the Merger Agreement and the transactions contemplated thereby. When Oasis Petroleum and/or its affiliates, as applicable, execute and return the Written Consent approving the Merger Agreement, no other consents from the other Oasis Midstream common unitholders will be required to approve the Merger Agreement and the transactions contemplated thereby. See “The Support Agreement” beginning on page 90. In addition, the Merger Agreement includes the requirement that Oasis Midstream (or Oasis Petroleum in certain circumstances) pay Crestwood a breakup fee of $40,000,000 if the Merger Agreement is terminated as a result of a failure of Oasis Petroleum or its applicable affiliate to deliver the Written Consent within 48 hours after the registration statement, of which this consent statement/prospectus forms a part, becomes effective under the Securities Act of 1933, as amended (the “Securities Act”). See “The Merger Agreement—Termination of the Merger Agreement” beginning on page 88 and “The Merger Agreement—Breakup Fee” beginning on page 89. The foregoing may discourage a third-party that might have an interest in acquiring all or a significant part of

 

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Oasis Midstream from considering or proposing an acquisition, even if that party were prepared to pay consideration with a higher per unit value than the current proposed LP Merger Consideration.

Maintaining credit ratings is under the control of ratings agencies, which are independent third parties. There can be no assurances that the rating agencies will not downgrade the debt of the combined company, and such downgrade could negatively impact the combined company’s access to capital and costs of doing business.

In connection with the completion of the Mergers, ratings agencies may reevaluate Crestwood’s and Oasis Midstream’s credit ratings. Crestwood and Oasis Midstream expect that the debt of the combined company will be consistent with Crestwood’s current rating; however, credit rating agencies perform independent analysis when assigning credit ratings and there can be no assurances that such ratings will be achieved in connection with the Mergers or maintained in the future. The analysis includes a number of criteria including, but not limited to, business composition, market and operational risks, as well as various financial tests. The combined company’s ratings upon completion of the Mergers will reflect each rating organization’s opinion of the combined company’s financial strength, operating performance and ability to meet the obligations associated with its securities. A downgrade may increase Crestwood’s and Oasis Midstream’s cost of borrowing, may negatively impact Crestwood’s and Oasis Midstream’s ability to raise additional debt capital, may negatively impact Crestwood’s and Oasis Midstream’s ability to successfully compete, and may negatively impact the willingness of counterparties to deal with Crestwood and Oasis Midstream, each of which could have a material adverse effect on the business, financial condition, results of operations and cash flows of Crestwood and Oasis Midstream, as well as the market price of their respective securities.

Moreover, if Moody’s Investors Service, Inc., Fitch Ratings, Inc. and Standard & Poor’s Rating Services decrease the rating of Oasis Midstream’s and OMP Finance Corp.’s $450.0 million, 8.00% senior unsecured notes due April 1, 2029 during the 60-day period following the date the entry into the Merger Agreement was announced, then such issuers, subject to certain conditions, must offer to purchase such outstanding notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest thereon to the date of purchase.

The trading price of Crestwood’s and Oasis Midstream’s securities could decline as a result of research and reports by third-party securities analysts.

The trading market for Crestwood’s and Oasis Midstream’s securities depends, in part, on the research and reports that third-party securities analysts publish about Crestwood and Oasis Midstream and the industry in which they participate. In connection with the completion of the Mergers, one or more of these analysts could downgrade Crestwood or Oasis Midstream securities or issue other negative commentary about Crestwood or Oasis Midstream or the industry in which they participate, which could cause the trading price of such securities to decline.

The unaudited prospective financial information included herein is based on various assumptions that may not prove to be correct.

The unaudited prospective financial information set forth in “The Mergers—Oasis Midstream, Crestwood and Pro Forma Unaudited Prospective Financial Information” is based on assumptions of, and information available to, the parties at the time they were prepared and provided to the Oasis Midstream Conflicts Committee and its financial advisors. The parties cannot know whether such assumptions will prove correct. Any or all of such projections may turn out to be wrong. Such projections can be adversely affected by inaccurate assumptions or by known or unknown risks and uncertainties, many of which are beyond Crestwood’s and Oasis Midstream’s control. Many factors mentioned in this consent statement/prospectus, including the risks outlined in this “Risk Factors” section and the events or circumstances described under “Cautionary Statement Regarding Forward-Looking Statements,” will be important in determining Crestwood’s and Oasis Midstream’s future results. As a result of these contingencies, actual future results may vary materially from Oasis Midstream’s projections. In

 

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view of these uncertainties, the inclusion of financial projections in this consent statement/prospectus is not and should not be viewed as a representation that the forecast results will be achieved.

The unaudited prospective financial information included herein was not prepared with a view toward public disclosure, and such projections were not prepared with a view toward compliance with published guidelines of any regulatory or professional body. Further, any forward-looking statement speaks only as of the date on which it is made, and Crestwood and Oasis Midstream undertake no obligation, other than as required by applicable law, to update the unaudited prospective financial information included herein to reflect events or circumstances after the date those unaudited prospective financial information were prepared or to reflect the occurrence of anticipated or unanticipated events or circumstances.

The unaudited prospective financial information regarding Oasis Midstream and Crestwood included in this consent statement/prospectus has been prepared by the management of Oasis Midstream and Crestwood, respectively. Neither Oasis Midstream’s independent registered public accounting firm, PricewaterhouseCoopers LLP (“PricewaterhouseCoopers”), nor Crestwood’s independent registered public accounting firm, Ernst & Young LLP (“Ernst & Young”), have audited, reviewed, examined, compiled nor applied agreed upon procedures with respect to the unaudited prospective financial information included in this consent statement/prospectus and accordingly, PricewaterhouseCoopers and Ernst & Young do not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers and Ernst & Young reports incorporated by reference in this registration statement on Form S-4 of which this consent statement/prospectus forms a part relate to the previously issued financial statements included in Oasis Midstream’s and Crestwood’s respective Annual Reports on Form 10-K for the year ended December 31, 2020. Such reports do not extend to the unaudited prospective financial information included herein and should not be read to do so. See “The Mergers—Oasis Midstream, Crestwood and Pro Forma Unaudited Prospective Financial Information” beginning on page 60 of this consent statement/prospectus.

The unaudited pro forma condensed consolidated combined financial information included in this consent statement/prospectus is based on various assumptions that may not prove to be correct, and it is presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the Mergers.

The unaudited pro forma condensed consolidated combined financial information contained in this consent statement/prospectus is based on various adjustments, assumptions and preliminary estimates and may not be an indication of the combined company’s financial condition or results of operations following the Mergers for several reasons. See “Unaudited Pro Forma Condensed Consolidated Combined Financial Information” beginning on page 91 of this consent statement/prospectus. The actual financial condition and results of operations of the combined company following the Mergers may not be consistent with, or evident from, the unaudited pro forma condensed consolidated combined financial information. In addition, the assumptions used in preparing the unaudited pro forma condensed consolidated combined financial information may not prove to be accurate, including the preliminary allocation of the aggregate merger consideration to the assets acquired and liabilities assumed, including property, plant and equipment, goodwill and other intangible assets, and other factors may affect the combined company’s financial condition or results of operations following the Mergers. Any potential decline in the combined company’s financial condition or results of operations may cause significant variations in the price of Crestwood common units.

A different set of factors and conditions affect Crestwood common units and could have a negative impact on the unit price.

Upon completion of the LP Merger, Oasis Midstream common unitholders who receive Crestwood common units will become unitholders of Crestwood. The businesses of Crestwood and the other companies it has acquired and may acquire in the future are different in many respects from those of Oasis Midstream. There is a risk that various factors, conditions and developments that would not affect the price of Oasis Midstream common units could negatively affect the price of Crestwood common units. Please see the section titled

 

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“Cautionary Statement Regarding Forward-Looking Statements” beginning on page 30 for a summary of some of the key factors that might affect Oasis Midstream and the prices at which Crestwood common units may trade from time to time. Oasis Midstream common unitholders are also urged to carefully read the risk factors included in Crestwood’s Annual Report on Form 10-K for the year ended December 31, 2020, as updated by the subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are filed with the SEC and incorporated by reference into this consent statement/prospectus.

Crestwood common units to be received by Oasis Midstream common unitholders as a result of the LP Merger will have different rights from Oasis Midstream common units.

Following completion of the Mergers, Oasis Midstream common unitholders will no longer hold Oasis Midstream common units but will instead become unitholders of Crestwood. There are important differences between the rights of Oasis Midstream common unitholders and the rights of Crestwood unitholders. See “Comparison of Rights of Crestwood common unitholders and Oasis Midstream common unitholders” beginning on page 137 for a discussion of the different rights associated with Oasis Midstream common units and Crestwood common units.

If the Merger Agreement is terminated, under certain circumstances, Oasis Midstream may be obligated to pay a breakup fee to Crestwood. This fee could require Oasis Midstream to seek loans or use Oasis Midstream’s available cash that would have otherwise been available for operations, distributions or other general partnership purposes.

In certain circumstances, Oasis Midstream would be obligated to pay a breakup fee to Crestwood of $40,000,000, unless the Oasis Midstream Conflicts Committee determines in good faith that the termination of the Merger Agreement, and payment of the breakup fee, would not be in the best interests of Oasis Midstream and the holders of Public Units and, in such case, the breakup fee will be paid by Oasis Petroleum. If the breakup fee is required to be paid by Oasis Midstream, Oasis Midstream may need to borrow amounts to enable it to pay these amounts to Crestwood or pay using its available cash on hand. In either case, payment of these amounts would reduce the cash Oasis Midstream has available for operations, distributions or other general partnership purposes. See “The Merger Agreement—Breakup Fee” beginning on page 89 of this consent statement/prospectus.

The failure to successfully combine the businesses of Crestwood and Oasis Midstream in the expected time frame may adversely affect Crestwood’s future results, which may adversely affect the value of Crestwood common units that Oasis Midstream common unitholders would receive in the LP Merger.

If Crestwood’s and Oasis Midstream’s businesses are not successfully integrated, the anticipated benefits of the Mergers may not be realized fully or at all or may take longer to realize than expected. In addition, the actual integration may result in additional and unforeseen expenses, which could reduce the anticipated benefits of the Mergers.

Crestwood and Oasis Midstream, including their respective subsidiaries, have operated and, until the completion of the Mergers, will continue to operate independently. It is possible that the integration process could result in material challenges, including the diversion of management’s attention from ongoing business concerns, the loss of key employees, the possibility of faulty assumptions underlying expectations regarding the integration process and associated expenses, consolidating corporate and administrative infrastructure and eliminating duplicative operations, as well as the disruption of each company’s ongoing businesses or inconsistencies in their standards, controls, procedures and policies, all of which could add unforeseen expenses or delays in the completion of the Mergers. Any or all of those occurrences could adversely affect the combined company’s ability to maintain relationships with customers and employees after the Mergers or to achieve the anticipated benefits of the Mergers. Integration efforts between the two companies will also divert management attention and resources. These integration matters could have an adverse effect on each of Crestwood and Oasis Midstream.

 

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If the LP Merger is approved by the Oasis Midstream common unitholders, the date that the Oasis Midstream common unitholders will receive the LP Merger Consideration is uncertain.

As described in this consent statement/prospectus, completing the Mergers is subject to several conditions, not all of which are controllable or waivable by Crestwood or Oasis Midstream. Accordingly, if the LP Merger is approved by Oasis Midstream common unitholders, the date that Oasis Midstream common unitholders will receive the LP Merger Consideration depends on the completion date of the LP Merger, which is uncertain.

If a governmental authority asserts objections to the Mergers, Crestwood and Oasis Midstream may be unable to complete the Mergers or, in order to do so, Crestwood and Oasis Midstream may be required to comply with material restrictions or satisfy material conditions.

The closing of the Mergers is subject to the condition that there is no law, injunction, judgment or ruling by a governmental authority in effect enjoining, restraining, preventing or prohibiting the Mergers contemplated by the Merger Agreement. If a U.S. governmental authority asserts objections to the Mergers, Crestwood or Oasis Midstream may be required to divest assets or accept behavioral or other remedies in order to complete the Mergers. There can be no assurance as to the cost, scope or impact of the actions that may be required to address any governmental authority objections to the Mergers. If Crestwood or Oasis Midstream takes such actions, it could be detrimental to it or to the combined company following the consummation of the Mergers. Furthermore, these actions could have the effect of delaying or preventing completion of the proposed Mergers or imposing additional costs on or limiting the revenue or cash available for distribution of the combined company following the consummation of the Mergers. See “The Mergers—Regulatory Approvals” beginning on page 69 of this consent statement/prospectus.

Additionally, state attorneys general or other state or local regulators could seek to block, rescind or challenge the Mergers as they deem necessary or desirable in the public interest at any time, including after completion of the Mergers. In addition, in some circumstances, a third-party could initiate a private action under antitrust laws challenging or seeking to enjoin or rescind the Mergers, before or after it is completed. Crestwood and Oasis Midstream may not prevail and may incur significant costs in defending or settling any action under the antitrust laws, including being required to divest assets or accept behavioral or other remedies in order to complete the Mergers.

The pendency of the Mergers could materially adversely affect the future business and operations of Oasis Midstream or result in a loss of Oasis Midstream employees.

In connection with the pending Mergers, it is possible that some customers, suppliers and other persons with whom Oasis Midstream has a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationship with Oasis Midstream as a result of the Mergers, which could negatively impact revenues, earnings and cash flows of Oasis Midstream, as well as the market price of Oasis Midstream common units, regardless of whether the Mergers are completed. Similarly, current and prospective employees of Oasis Midstream may experience uncertainty about their future roles with Crestwood and Oasis Midstream following completion of the Mergers, which may materially adversely affect the ability of Oasis Midstream to attract and retain key employees.

Crestwood and Oasis Midstream will incur substantial transaction-related costs in connection with the Mergers, including fees paid to legal, financial and accounting advisors, filing fees and printing costs.

Crestwood and Oasis Midstream expect to incur a number of non-recurring costs associated with negotiating and completing the Mergers, combining the operations of the two partnerships and achieving the desired synergies. These fees and costs have been and will continue to be substantial. Nonrecurring transaction costs include, but are not limited to, fees paid to legal, financial and accounting advisors, filing fees and printing costs. Thus, any net benefit of the Mergers may not be achieved in the near term, the long term or at all.

 

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Crestwood and Oasis Midstream are subject to class action lawsuits relating to the Mergers, which could materially adversely affect their business, financial condition and operating results.

Crestwood, Oasis Midstream and their directors and officers are subject to class action lawsuits relating to the Mergers and other additional lawsuits that may be filed. Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into a merger agreement. Even if such lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on Oasis Midstream’s and Crestwood’s liquidity and financial condition. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Mergers, then that injunction may delay or prevent the Mergers from being completed, which may adversely affect Oasis Midstream’s and Crestwood’s business, financial position and results of operation. Currently, Oasis Midstream and Crestwood and certain of their respective affiliates, as applicable, are subject to two separate lawsuits as more fully described on page 71.

One of the conditions to consummating the Mergers is that no injunction, order or decree prohibiting or otherwise preventing or making unlawful the consummation of the Mergers will have been issued by any court or governmental entity of competent jurisdiction in the United States. Consequently, since the Lawsuits have been filed, and other lawsuits may be filed in the future, challenging the Mergers and are successful in obtaining an injunction preventing the parties to the Merger Agreement from consummating the Mergers, such injunction may prevent the Mergers from being completed in the expected timeframe, or at all.

Failure to complete the Mergers could negatively affect the per unit price of Oasis Midstream common units and Oasis Midstream’s future businesses and financial results.

If the Mergers are not completed, the ongoing business of Oasis Midstream may be adversely affected and Oasis Midstream will be subject to several risks and consequences, including the following:

 

•

under the Merger Agreement, Oasis Midstream may be required, under certain circumstances, to pay Crestwood a breakup fee of $40,000,000;

 

•

Oasis Midstream will be required to pay certain costs relating to the Mergers, whether or not the Mergers are completed, such as legal, accounting, financial advisor and printing fees;

 

•

under the Merger Agreement, Oasis Midstream is subject to certain restrictions on the conduct of its business prior to completing the Mergers without Crestwood’s consent, which may adversely affect its ability to execute certain of its business strategies; and

 

•

matters relating to the Mergers may require substantial commitments of time and resources by Oasis Midstream management, which could otherwise have been devoted to other opportunities that may have been beneficial to Oasis Midstream as an independent company.

In addition, if the Mergers are not completed, Oasis Midstream may experience negative reactions from the financial markets, including negative impacts on the market price of its common units, and from its customers, employees, vendors, business partners and other third parties. Oasis Midstream also could be subject to litigation related to any failure to complete the Mergers or to enforcement proceedings commenced against Oasis Midstream to attempt to force it to perform its obligations under the Merger Agreement.

Oasis Midstream common unitholders are not entitled to appraisal rights in connection with the LP Merger.

Appraisal rights are statutory rights that enable unitholders to dissent from certain extraordinary transactions, such as certain mergers, and to demand that the partnership pay the fair value for their units as determined by a court in a judicial proceeding instead of receiving the consideration offered to unitholders in connection with the applicable transaction. Under the Delaware LP Act and the Oasis Midstream Partnership Agreement, Oasis Midstream common unitholders will not have rights to an appraisal of the fair value of their Oasis Midstream common units in connection with the LP Merger. See “Summary—No Appraisal or Dissenters’ Rights” beginning on page 14.

 

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The market value of the Crestwood common units could decline if large amounts of such units are sold following the Mergers

Crestwood cannot predict the effect that issuances and sales of Crestwood common units, whether taking place before the Mergers (subject to the limitations of the Merger Agreement) or after the Mergers, including issuances and sales in connection with capital markets transactions, acquisition transactions or other transactions, may have on the market value of Crestwood common units. The issuance and sale of substantial amounts of Crestwood common units, including those owned by Oasis Petroleum and its affiliates, could adversely affect the market value of such units.

Tax Risks Related to the LP Merger

No ruling has been obtained with respect to the U.S. federal income tax consequences of the LP Merger.

No ruling has been or will be requested from the Internal Revenue Service (the “IRS”) with respect to the U.S. federal income tax consequences of the LP Merger. Crestwood and Oasis Midstream are relying on the opinions of their respective counsel as to the U.S. federal income tax consequences of the LP Merger, and such counsel’s conclusions may not be sustained if challenged by the IRS. Please read the section entitled “Material U.S. Federal Income Tax Consequences of the LP Merger.”

The expected U.S. federal income tax consequences of the LP Merger are dependent upon Crestwood and Oasis Midstream being treated as partnerships for U.S. federal income tax purposes.

The expected U.S. federal income tax consequences of the LP Merger are dependent upon Crestwood and Oasis Midstream being treated as partnerships for U.S. federal income tax purposes at the time of the LP Merger. If either Crestwood or Oasis Midstream were to be treated as a corporation for U.S. federal income tax purposes at the time of the LP Merger, the consequences of the LP Merger would be materially different. If Crestwood were to be treated as a corporation for U.S. federal income tax purposes, the LP Merger would likely be a fully taxable transaction to Oasis Midstream common unitholders. For additional information, please read the section entitled “Material U.S. Federal Income Tax Consequences of the LP Merger—Assumptions Related to the U.S. Federal Income Tax Treatment of the LP Merger” beginning on page 105.

Oasis Midstream common unitholders could recognize taxable income or gain for U.S. federal income tax purposes, in certain circumstances, as a result of the LP Merger.

For U.S. federal income tax purposes, (i) prior to the LP Merger, Oasis Petroleum should be treated as selling a portion of its Oasis Midstream common units to Crestwood, and (ii) as a result of the LP Merger, (A) Oasis Midstream should be deemed to contribute all of its assets to Crestwood in exchange for Crestwood common units and the assumption of Oasis Midstream’s liabilities and (B) Oasis Midstream should then be deemed to distribute Crestwood common units to the holders of Oasis Midstream common units in liquidation of Oasis Midstream.

A deemed receipt of cash by Oasis Midstream in the LP Merger as a result of Crestwood’s deemed assumption of Oasis Midstream’s liabilities could trigger gain to Oasis Midstream if it were treated as part of a sale and any such gain would be allocated to the Oasis Midstream common unitholders pursuant to the Oasis Midstream Partnership Agreement. Oasis Midstream expects that the deemed receipt of cash by Oasis Midstream will qualify for one or more exceptions to sale treatment. Please read the section entitled “Material U.S. Federal Income Tax Consequences of the LP Merger—Tax Consequences of the LP Merger to Oasis Midstream.”

In addition, as a result of the LP Merger, Oasis Midstream common unitholders who receive Crestwood common units will become limited partners of Crestwood for U.S. federal income tax purposes and will be allocated a share of Crestwood’s nonrecourse liabilities. Each Oasis Midstream common unitholder will be treated as receiving a deemed cash distribution equal to the excess, if any, of such Oasis Midstream common

 

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unitholder’s share of nonrecourse liabilities of Oasis Midstream immediately before the LP Merger over such Oasis Midstream common unitholder’s share of nonrecourse liabilities of Crestwood immediately following the LP Merger. If the amount of any deemed cash distribution received by such Oasis Midstream common unitholder exceeds the Oasis Midstream common unitholder’s basis in its Oasis Midstream common units, such Oasis Midstream common unitholder will recognize gain in an amount equal to such excess. While there can be no assurance, Oasis Midstream and Crestwood expect that most Oasis Midstream common unitholders will not recognize gain in this manner.

Further, the contribution of property or cash by a partner to a partnership in exchange for a new or additional interest in such partnership will generally not result in the recognition of gain or loss by such partner. However, under Section 707 of the Code and the Treasury Regulations promulgated thereunder, a contribution of cash or other property by a partner to a partnership and a transfer of property (other than an interest in such partnership) by the partnership to such partner, may, in certain circumstances, be characterized, in whole or in part, as a “disguised sale” of property by the partnership to the partner, rather than as a non-taxable distribution of such property by the partnership. For example, if a partner contributes cash to a partnership, and within a reasonable period of time before or after the contribution receives a distribution of property (other than an interest in such partnership) with a value approximately equal to the cash contributed, the transfers may be treated as part of a disguised sale of the distributed property. As a result, contributions of cash or other property to Oasis Midstream after the date of the Merger Agreement and prior to the effective time of the LP Merger may be treated as part of a “disguised sale” of a portion of the Crestwood common units received in the LP Merger and may result in gain to Oasis Midstream. Any such taxable gain recognized by Oasis Midstream as part of a “disguised sale” would be allocated to the Oasis Midstream common unitholders pursuant to the Oasis Midstream Partnership Agreement.

Moreover, each Oasis Midstream common unitholder holding Oasis Midstream common units outstanding immediately prior to the effective time of the LP Merger will be entitled to receive Crestwood common units in the LP Merger in exchange for such holder’s Oasis Midstream common units at the Public Holder Exchange Ratio or the Sponsor Exchange Ratio, as applicable. As a result, there is a risk that the Public Holders of Oasis Midstream common units could be deemed, for U.S. federal income tax purposes, to have received non-pro rata Public Holder Merger Consideration, which could be taxable to such holders. Oasis Midstream intends to specially allocate unrealized gain and loss to the capital accounts of Oasis Midstream common unitholders in an effort to achieve relative capital accounts consistent with the Public Holder Exchange Ratio and the Sponsor Exchange Ratio. In the event such allocations are insufficient, Oasis Midstream may specially allocate gross income and loss to achieve capital accounts consistent with the applicable exchange ratio. Although unlikely, other characterizations are possible, and the IRS could take the position that a Public Holder of Oasis Midstream common units is required to recognize taxable income with respect to any excess consideration such holder is deemed to receive in the LP Merger. For additional information, please read the section entitled “Material U.S. Federal Income Tax Consequences of the LP Merger—Tax Consequences of the LP Merger to Oasis Midstream Common Unitholders.”

The amount and effect of any gain that may be recognized by Oasis Midstream common unitholders will depend on such Oasis Midstream common unitholder’s particular situation, including the ability of such Oasis Midstream common unitholder to utilize any suspended passive losses. Oasis Midstream common unitholders are urged to consult their tax advisor for a full understanding of the U.S. federal, state, local and foreign tax consequences of the LP Merger to them. For additional information, please read the sections entitled “Material U.S. Federal Income Tax Consequences of the LP Merger—Tax Consequences of the LP Merger to Oasis Midstream” and “Material U.S. Federal Income Tax Consequences of the LP Merger—Tax Consequences of the LP Merger to Oasis Midstream Common Unitholders.”

 

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Tax Risks Related to Owning Crestwood Units Following the LP Merger

Following the LP Merger, holders of Oasis Midstream common units will generally be subject to the same tax risks that apply to existing holders of Crestwood common units.

Following the LP Merger, holders of Oasis Midstream common units will generally be subject to the same tax risks that apply to existing holders of Crestwood common units. While such tax risks are generally similar to those of holding Oasis Midstream common units prior to the LP Merger, you should read and consider the tax risk factors applicable to holding Crestwood common units. These risks are described in Crestwood’s Annual Report on Form 10-K for the year ended December 31, 2020, as updated by the subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and in other documents that are incorporated by reference into this consent statement/prospectus. See “Where You Can Find More Information” beginning on page 158 for the location of information incorporated by reference in this consent statement/prospectus.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This document, including information included or incorporated by reference in this document, contains forward-looking statements concerning certain events and the financial condition, results of operations, plans, objectives, future performance and business of Crestwood, Oasis Midstream and their respective subsidiaries. These forward-looking statements include statements that are not historical in nature, including, but not limited to those preceded by, followed by or that contain forward-looking terminology, including the words “believe,” “expect,” “may,” “will,” “should,” “could,” “anticipate,” “estimate,” “intend” or the negation thereof, or similar expressions. Except for their respective obligations to disclose material information under U.S. federal securities laws, neither Crestwood nor Oasis Midstream undertakes any obligation to release publicly any revisions to any forward-looking statements, to report events or circumstances after the date of this document, or to report the occurrence of unanticipated events.

Forward-looking statements are not guarantees of future events. They involve risks, uncertainties and assumptions. Actual events may differ materially from those contemplated by the forward-looking statements due to, among others, the following factors:

 

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the expected timing of closing the Mergers and benefits of the Mergers;

 

•

the ability to successfully implement business plans for assets and operations;

 

•

governmental legislation and regulations, and decisions of courts, regulators and/or other governmental bodies;

 

•

industry factors that influence the supply of and demand for crude oil, natural gas and natural gas liquids (“NGLs”);

 

•

the development of unconventional shale plays as significant supply basins;

 

•

potential liability in connection with legal claims or proceedings and losses resulting therefrom;

 

•

the sufficiency of cash from operations, cash distributions from controlled entities and borrowing capacity under any credit facility to meet anticipated liquidity needs for the foreseeable future;

 

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weather conditions;

 

•

outbreak of illness, pandemic or any other public health crisis, including the COVID-19 pandemic;

 

•

the availability of crude oil, natural gas and NGLs, and the price of those commodities, to consumers relative to the price of alternative and competing fuels;

 

•

the availability of storage for hydrocarbons;

 

•

the ability of members of the Organization of the Petroleum Exporting Countries (“OPEC”) and other oil-producing countries to agree and maintain oil price and production controls;

 

•

economic conditions;

 

•

costs or difficulties related to the integration of acquisitions, including the Mergers, and success of joint ventures operations;

 

•

environmental claims;

 

•

operating hazards and other risks incidental to the provision of midstream services, including gathering, compressing, treating, processing, fractionating, transporting and storing energy products (i.e., crude oil, NGLs and natural gas) and related products (i.e., produced water);

 

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interest rates;

 

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the price and availability of debt and equity financing, including the ability to raise capital through alternatives like joint ventures;

 

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•

the ability to sell or monetize assets, to reduce indebtedness, to repurchase equity securities, to make strategic investments, or for other general partnership purposes;

 

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the matters described in the section titled “Risk Factors;” and

 

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changes in the securities and capital markets.

In addition, the acquisition of Oasis Midstream by Crestwood is subject to the satisfaction of certain conditions and the absence of events that could give rise to the termination of the Merger Agreement, the possibility that the Mergers do not close, risks that the proposed acquisition disrupts current plans and operations and business relationships or poses difficulties in attracting or retaining employees, the possibility that the costs or difficulties related to the integration of the two companies will be greater than expected and the possibility that the anticipated benefits from the Mergers cannot or will not be fully realized.

A forward-looking statement attributable to Crestwood or Oasis Midstream or persons acting on behalf of Crestwood or Oasis Midstream may include a statement of the assumptions or bases underlying the forward-looking statement. Crestwood and Oasis Midstream each believe that it has chosen these assumptions or bases in good faith and that they are reasonable. However, Crestwood and Oasis Midstream caution you that assumed facts or bases almost always vary from actual events, and the differences between assumed facts or bases and actual events can be material, depending on the circumstances. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this document and the documents incorporated by reference, including those described in the “Risk Factors” section herein. For additional information, please also see the section entitled “Where You Can Find More Information” beginning on page 158 of this consent statement/prospectus.

INFORMATION ABOUT THE COMPANIES

Crestwood Equity Partners LP

Crestwood is a master limited partnership that manages, owns and operates crude oil, natural gas and NGL midstream assets and operations. Its non-economic general partner interest is held by Crestwood GP. Crestwood’s common units are listed on the NYSE under the symbol “CEQP.” Crestwood’s principal executive office is located at 811 Main Street, Suite 3400, Houston, Texas 77002. Its telephone number is (832) 519-2200.

Oasis Midstream Partners LP

Oasis Midstream is a Delaware limited partnership with common units traded on the Nasdaq under the symbol “OMP.” Oasis Midstream owns, develops, operates and acquires a diversified portfolio of midstream assets in North America. Oasis Midstream was formed by its sponsor, Oasis Petroleum, which owns its general partner. Oasis Midstream’s executive offices are located at 1001 Fannin Street, Suite 1500, Houston, Texas  77002, and its telephone number is (281) 404-9500.

Project Falcon Merger Sub LLC

Project Falcon Merger Sub LLC is a Delaware limited liability company and a wholly owned subsidiary of Crestwood. Merger Sub was formed on October 21, 2021 solely for the purpose of consummating the LP Merger and has no operating assets. Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the Merger Agreement.

Merger Sub’s principal executive offices are located at 811 Main Street, Suite 3400, Houston, Texas 77002, and its telephone number is (832) 519-2200.

 

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Project Phantom Merger Sub LLC

Project Phantom Merger Sub LLC is a Delaware limited liability company and a wholly owned subsidiary of Crestwood. GP Merger Sub was formed on October 21, 2021 solely for the purpose of consummating the GP Merger and has no operating assets. GP Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the Merger Agreement.

GP Merger Sub’s principal executive offices are located at 811 Main Street, Suite 3400, Houston, Texas 77002, and its telephone number is (832) 519-2200.

OASIS MIDSTREAM SOLICITATION OF WRITTEN CONSENTS

Consents

The OMP GP Board is providing these consent solicitation materials to all holders of Oasis Midstream common units as of the Oasis Midstream Record Date. Oasis Midstream common unitholders are being asked to approve the Merger Agreement and the transactions contemplated thereby.

Units Entitled to Consent and Consent Required

Only holders of record of Oasis Midstream common units at the close of business on the Oasis Midstream Record Date will be notified of and be entitled to execute and deliver a written consent. Each holder of Oasis Midstream common units is entitled to one vote for each Oasis Midstream common unit held as of the Oasis Midstream Record Date.

To approve the Merger Agreement and the transactions contemplated thereby, the holders of a majority of the outstanding Oasis Midstream common units must consent to the approval of the Merger Agreement and the transactions contemplated thereby.

As of the Oasis Midstream Record Date, there were 48,627,680 Oasis Midstream common units outstanding and entitled to consent to the approval of the Merger Agreement, and directors and officers of OMP GP and their affiliates (other than Oasis Petroleum) owned and were entitled to consent with respect to 255,513 Oasis Midstream common units, representing less than 1% of the Oasis Midstream common units outstanding on that date. Oasis Midstream currently expects that OMP GP’s directors and officers will deliver written consents in favor of the approval of the Merger Agreement and the transactions contemplated thereby with respect to the Oasis Midstream common units owned by them, if any, although none of them has entered into any agreements obligating him or her to do so.

Oasis Petroleum and OMS Holdings, which collectively own approximately 69.6% of the issued and outstanding Oasis Midstream common units, has entered into the Support Agreement, pursuant to which, Oasis Petroleum and OMS Holdings have agreed to, among other things (and as applicable), within 48 hours following the effectiveness of this registration statement on Form S-4, execute and deliver, or cause an affiliate to execute and deliver, the Written Consent. The delivery of the Written Consent will be sufficient to approve the Merger Agreement and the transactions contemplated thereby. When Oasis Petroleum and/or its affiliates, as applicable, execute and return the Written Consent approving the Merger Agreement, no other consents from the other Oasis Midstream common unitholders will be required to approve the Merger Agreement and the transactions contemplated thereby. For additional information, see “The Support Agreement” beginning on page 90 of this consent statement/prospectus.

 

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Submission of Consents

You may consent to the approval of the Merger Agreement with respect to your Oasis Midstream common units by completing and signing the written consent furnished with this consent statement/prospectus and returning it to Oasis Midstream by the consent deadline.

If you hold Oasis Midstream common units as of the Oasis Midstream Record Date and you wish to give your written consent, you must fill out the enclosed written consent, date and sign it, and promptly return it as instructed. If you hold your Oasis Midstream common units directly with Computershare Trust Company, N.A., Oasis Midstream’s transfer agent, you must complete and deliver your written consent to Broadridge Financial Solutions, Inc. (“Broadridge”).

The delivery of the Written Consent from Oasis Petroleum and/or its affiliates pursuant to the Support Agreement will constitute receipt by Oasis Midstream of the requisite approval of the Merger Agreement and the transactions contemplated thereby, and a failure of any other Oasis Midstream common unitholder to deliver a written consent is not expected to have any effect on the approval of the Merger Agreement and the transactions contemplated thereby.

Executing Consents; Revocation of Consents

You may execute a written consent to approve the Merger Agreement and the transactions contemplated thereby (which is equivalent to a vote FOR the approval of the Merger Agreement and the transactions contemplated thereby) or disapprove, or abstain from consenting with respect to, the approval of the Merger Agreement and the transactions contemplated thereby (which is equivalent to a vote AGAINST the approval of the Merger Agreement and the transactions contemplated thereby). If you do not return your written consent, it will have the same effect as a vote AGAINST the approval of the Merger Agreement and the transactions contemplated thereby. If you are an Oasis Midstream common unitholder as of the close of business on the Oasis Midstream Record Date and you return a signed written consent without indicating your decision on the approval of the Merger Agreement and the transactions contemplated thereby, you will have given your consent to approve the Merger Agreement and the transactions contemplated thereby.

Your consent to the approval of the Merger Agreement and the transactions contemplated thereby may be changed or revoked at any time before the consent deadline; however, such change or revocation is not expected to have any effect, as the delivery of the Written Consent from Oasis Petroleum and/or its affiliates, as applicable, pursuant to the Support Agreement will constitute receipt by Oasis Midstream of the requisite approval of the Merger Agreement and the transactions contemplated thereby. If you wish to change or revoke a previously given consent before the consent deadline, you may do so by delivering a new written notice of consent with a later date, or by delivering a revocation notice of consent to Broadridge.

Solicitation of Consents; Expenses

The expense of preparing, printing and mailing this consent statement/prospectus is being borne equally by Oasis Midstream and Crestwood. Oasis Midstream has retained Broadridge to aid in solicitation of consents for the Oasis Midstream consent solicitation and to verify certain records related to the solicitation. Oasis Midstream will pay Broadridge a fee of approximately $35,000 as compensation for its services and will reimburse it for its reasonable out-of-pocket expenses. Officers and employees of OMP GP may solicit consents by telephone and personally, in addition to solicitation by mail. These persons will receive their regular compensation but no special compensation for soliciting consents.

 

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Determination of the OMP GP Board and the Oasis Midstream Conflicts Committee

The Oasis Midstream Conflicts Committee has unanimously, in good faith, among other things, (i) determined that the Merger Agreement and the transactions contemplated thereby, including the LP Merger, are in the best interests of Oasis Midstream and the holders of Oasis Midstream common units, excluding OMP GP and its affiliates, (ii) approved the Merger Agreement and the transactions contemplated thereby, including the LP Merger, with such approval constituting “Special Approval” under the Oasis Midstream Partnership Agreement, and (iii) recommended to the OMP GP Board the approval of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Mergers. Upon the approval and recommendation of the Oasis Midstream Conflicts Committee, the OMP GP Board has unanimously, in good faith, (i) determined that the Merger Agreement and the transactions contemplated thereby, including the LP Merger, are in the best interests of Oasis Midstream, and, with respect to the GP Merger, OMP GP, (ii) approved and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Mergers, (iii) approved the execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Mergers, (iv) authorized and directed that the approval of the Merger Agreement and the transactions contemplated thereby be submitted to Oasis Midstream’s limited partners pursuant to Section 14.3 of the Oasis Midstream Partnership Agreement and (v) authorized Oasis Midstream’s limited partners to act by written consent pursuant to Section 13.11 of the Oasis Midstream Partnership Agreement.

 

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THE MERGERS

This discussion of the Mergers is qualified in its entirety by reference to the Merger Agreement, which is attached to this consent statement/prospectus as Annex A and incorporated by reference herein in its entirety. You should read the entire Merger Agreement carefully as it is the legal document that governs the Mergers.

Effects of the Mergers

Upon satisfaction or waiver of the conditions to closing in the Merger Agreement, on the closing date, (i) Merger Sub, a wholly owned subsidiary of Crestwood formed for the purpose of effecting the LP Merger, will merge with and into Oasis Midstream, and Oasis Midstream will be the surviving entity in the LP Merger and become a direct wholly owned subsidiary of Crestwood and (ii) GP Merger Sub, a wholly owned subsidiary of Crestwood formed for the purpose of effecting the GP Merger, will merge with and into OMP GP, and OMP GP will be the surviving entity in the GP Merger. At the effective time, each Oasis Midstream common unit issued and outstanding immediately prior to the effective time will be cancelled and converted into the right to receive the LP Merger Consideration. Additionally, all limited liability company interests of OMP GP issued and outstanding immediately prior to the effective time will be converted into the right to receive the GP Merger Consideration.

Background of the Mergers

The terms of the Mergers are the result of arm’s-length negotiations between Oasis Midstream (including the Oasis Midstream Conflicts Committee) and Crestwood and their respective advisors and affiliates. The following is a summary of the events leading up to the signing of the Merger Agreement and the key meetings, negotiations, discussions and actions by and between Oasis Midstream (including the Oasis Midstream Conflicts Committee) and Crestwood and their respective advisors and affiliates that preceded the public announcement of the Mergers.

Oasis Petroleum indirectly owns approximately 69.6% of the issued and outstanding Oasis Midstream common units and is the sole member of OMS Holdings, the sole member of OMP GP. The OMP GP Board is appointed by Oasis Petroleum. Any sale of Oasis Midstream, including the Mergers, indirectly requires the consent of Oasis Petroleum.

The OMP GP Board and Oasis Petroleum, in its capacity as the indirect majority unitholder of Oasis Midstream and the sole member of OMS Holdings, which is the sole member of OMP GP, have periodically reviewed and discussed potential strategic alternatives for Oasis Midstream, including possible business combination transactions to further enhance Oasis Midstream unitholder value. However, until the fall of 2019, these strategic reviews did not lead to serious discussions with third parties regarding a transaction. This was the case for a number of reasons, including gaps in relative valuation expectations and volatility in the oil and gas sector. Nevertheless, the OMP and Oasis Petroleum management teams periodically evaluated additional avenues for enhancing Oasis Midstream unitholder value.

Oasis Petroleum, as a publicly traded entity, believed it was in the best interests of its stockholders in the fall of 2019 to focus on repaying outstanding debt, in part through the partial monetization of its interests in Oasis Midstream. Oasis Petroleum also believed that, with respect to its own value in the stock market, there was a “sum of the parts” discount due to its ownership in Oasis Midstream. Oasis Petroleum and its wholly owned subsidiaries at that time retained material direct ownership interests in midstream assets, including the remaining interests in Bobcat DevCo and Beartooth DevCo (the “Retained Interests”), and believed it was in the best interests of its stockholders and Oasis Midstream unitholders for Oasis Midstream to purchase the Retained Interests from Oasis Petroleum.

The OMP GP Board and Oasis Petroleum also recognized that, as investors in the energy markets have been increasingly focused on the ability of companies to operate within their cash flows and to return capital to

 

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unitholders, Oasis Midstream had significantly reduced access to equity capital and intermittent access to debt capital markets, resulting in an increasing weighted average cost of capital. The OMP GP Board and Oasis Petroleum also considered that, in light of limited access to equity capital, Oasis Midstream needed greater scale as well as diversification of its customer and asset base. The OMP GP Board and Oasis Petroleum believed that increasing scale through a business combination with a third-party (whether through acquisitions or a sale to a larger peer) could substantially increase Oasis Midstream unitholder value.

In light of the foregoing, during the fall of 2019, Oasis Petroleum commenced a robust strategic review process for Oasis Midstream. The strategic review process included the evaluation of a number of strategic alternatives for Oasis Midstream with third parties, including business combinations and asset acquisitions, as well as financing alternatives for Oasis Midstream to fund the purchase of the Retained Interests. Numerous third parties were contacted during this process, including Crestwood.

This strategic review process continued until March 2020, at which time the global response to COVID-19, together with increased production from foreign oil producers (most notably Saudi Arabia and Russia), resulted in dramatic declines in oil and gas prices, negatively impacting the oil and gas industry in the United States. In response to these events, the board of directors of Oasis Petroleum (the “Oasis Petroleum Board”) determined it was in the best interests of the parties to suspend the strategic review process indefinitely.

As a result of the dramatic decline in commodity prices driven by COVID-19, on September 30, 2020, Oasis Petroleum and certain of its affiliates, excluding Oasis Midstream, 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 District of Delaware. Oasis Midstream and its subsidiaries were not included in Oasis Petroleum’s Chapter 11 proceedings, and the contractual arrangements between Oasis Midstream and Oasis Petroleum were unaffected by the Chapter 11 proceedings.

On November 19, 2020, Oasis Petroleum completed its financial restructuring and emerged from Chapter 11.

In February 2021, Party A, a publicly traded midstream company with a significantly smaller market capitalization than Oasis Midstream, reached out to Oasis Petroleum management to determine whether it would be willing to consider a potential business combination between Oasis Midstream and Party A. Following consultation with the Oasis Petroleum Board, Oasis Petroleum management indicated to Party A that it was not interested in pursuing such a transaction at such time as it was actively pursuing a series of transactions to simplify its structure as described below.

On March 30, 2021, Oasis Midstream closed the acquisition of all of the Retained Interests from Oasis Petroleum, as well as eliminated Oasis Midstream’s incentive distribution rights, in exchange for $231.5 million in cash and 14.8 million Oasis Midstream common units (collectively, the “Simplification Transaction”). Oasis Midstream and Oasis Petroleum consummated the Simplification Transaction in order to, among other things, better position Oasis Midstream and OMP GP for a potential future strategic transaction, including by streamlining the organizational structure of Oasis Midstream and its subsidiaries and consolidating the ownership of OMP GP.

Following the Simplification Transaction and through June 2021, Oasis Petroleum and Oasis Midstream management had substantive conversations with, and received indications of interest from and gave indications of interest to, multiple third parties of varying sizes regarding potential acquisitions of private midstream businesses by Oasis Midstream (“Acquisition Opportunities”). None of these Acquisition Opportunities developed into substantive negotiations.

On May 12, 2021, Michael Lou, Chief Financial Officer of Oasis Petroleum and President of Oasis Midstream, had an initial meeting with Robert Halpin, Chief Financial Officer of Crestwood, to discuss, among

 

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other things, industry trends and possible business opportunities among Oasis Petroleum, Oasis Midstream and Crestwood.

During April and May 2021, Party A contacted Oasis Petroleum management to discuss a potential business combination between Party A and Oasis Midstream. On May 28, 2021, Oasis Petroleum, on behalf of itself and its affiliates, signed a non-disclosure agreement with Party A, which included a standstill provision that terminated upon the announcement of certain business combination transactions with respect to Oasis Midstream.

As a result of Oasis Petroleum’s emergence from Chapter 11, the Simplification Transaction, Oasis Petroleum management’s belief that Oasis Petroleum’s holdings in Oasis Midstream limited the ability of its stockholders to realize the full underlying value of Oasis Petroleum, and the receipt of an updated offer with enhanced consideration from Party A, in June 2021, Oasis Petroleum determined it was in the best interests of its stockholders and Oasis Midstream that Oasis Petroleum engage Morgan Stanley & Co. LLC (“Morgan Stanley”) to assist with a strategic review process for Oasis Midstream and Oasis Petroleum’s ownership interests in Oasis Midstream, which included both potential third-party business combinations as well as a distribution by Oasis Petroleum of its ownership in Oasis Midstream to its stockholders, either as a tax-free spin-off or a taxable distribution of Oasis Midstream common units. Oasis Petroleum management informed the OMP GP Board that Oasis Petroleum believed it was appropriate at such time to focus on strategic alternatives other than the Acquisition Opportunities. In light of the strategic review of alternatives for Oasis Midstream in the fall of 2019 and beginning of 2020, as well as the Simplification Transaction, Oasis Petroleum, in consultation with representatives of Morgan Stanley, determined that a targeted effort to evaluate interest in third-party business combinations was appropriate. At the direction of Oasis Petroleum, Morgan Stanley began to reach out to a pre-identified group of third parties with sufficient scale for a potential business combination with Oasis Midstream.

On June 9, 2021, Oasis Petroleum and Oasis Midstream management held a management presentation with representatives of Party A with respect to both the Oasis Midstream business and the Party A business. Following the management presentation, Oasis Petroleum communicated to Party A that it believed a business combination with Party A was not in the best interests of Oasis Petroleum and Oasis Midstream at such time based on the adequacy of consideration as well as the pro forma leverage and distribution levels of the combined company.

Through June and July 2021, Party A provided revised indications of interest to Oasis Petroleum with respect to a business combination with Oasis Midstream, as described in more detail below, and Oasis Petroleum indicated that the proposed terms did not remedy Oasis Petroleum’s concerns with respect to a potential combination. Those concerns included Party A’s significantly smaller market capitalization (which would result in Oasis Petroleum retaining a significant equity ownership in the combined company with limited liquidity), the lack of scale of the combined company, the substantially increased pro forma leverage of the combined company, as well as a significant reduction in the ongoing distributions to be received by Oasis Midstream unitholders.

During June and July 2021, at the direction of Oasis Petroleum, representatives of Morgan Stanley discussed a potential business combination with a number of third parties, including Crestwood and Party A, and Oasis Petroleum entered into non-disclosure agreements with two interested parties in addition to Crestwood and Party A, each of which included a standstill provision that terminated upon the announcement of certain business combination transactions with respect to Oasis Midstream. Oasis Petroleum and Oasis Midstream management held management presentations with respect to the Oasis Midstream business for these potential counterparties, but ultimately such counterparties, other than Crestwood and Party A, declined to make offers to combine with Oasis Midstream.

On June 21, 2021, Daniel Brown, Chief Executive Officer of Oasis Petroleum and Board Chair of OMP GP, Mr. Lou, Robert Phillips, Chairman, President and Chief Executive Officer of Crestwood, and Mr. Halpin held a breakfast meeting where the parties had initial, high level conversations regarding the state of the industry and a possible business combination between Oasis Midstream and Crestwood.

 

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On June 28, 2021, Oasis Petroleum, on behalf of itself and its affiliates, signed a non-disclosure agreement with Crestwood, which included a standstill provision that terminated upon the announcement of certain business combination transactions with respect to Oasis Midstream.

On July 9, 2021, Crestwood and its representatives were first provided access to a virtual data room (“VDR”) to review due diligence materials requested by Crestwood, including Oasis Midstream’s preliminary financial model.

On July 9, 2021, the Oasis Petroleum Board held a special meeting at which representatives of Morgan Stanley and Tudor Pickering Holt & Co Advisors LP, strategic and financial advisor to Oasis Petroleum (“Tudor Pickering”), were present. Oasis Petroleum management and representatives of Morgan Stanley provided updates to the Oasis Petroleum Board regarding a potential Oasis Midstream business combination, including a review of a revised offer from Party A and an update on outreach efforts with other counterparties, including Crestwood.

Shortly after the July 9, 2021 meeting of the Oasis Petroleum Board, management of Oasis Midstream contacted Phillip D. Kramer, Chairman of the Oasis Midstream Conflicts Committee, and asked the Oasis Midstream Conflicts Committee to begin to organize to evaluate a potential business combination of Party A and Oasis Midstream. Following such request, Mr. Kramer contacted Richards, Layton & Finger P.A. (“Richards Layton”), which had acted as counsel to the Oasis Midstream Conflicts Committee in connection with other transactions between Oasis Midstream and Oasis Petroleum (including the Simplification Transaction) to discuss Richards Layton’s potential engagement as legal counsel to the Oasis Midstream Conflicts Committee in connection with the evaluation of a potential business combination of Party A and Oasis Midstream. Based on Richards Layton’s experience with the Oasis Midstream Conflicts Committee and Richards Layton’s experience with public mergers and acquisitions, complex transactions involving publicly traded partnerships and representations of conflicts committees, generally, the Oasis Midstream Conflicts Committee determined that Richards Layton had the requisite expertise to provide high quality advice to the Oasis Midstream Conflicts Committee and engaged Richards Layton as legal counsel.

During the week of July 12, 2021, the Oasis Midstream Conflicts Committee had a series of meetings with Richards Layton to discuss the role of the Oasis Midstream Conflicts Committee in connection with a potential business combination transaction, the duties of the Oasis Midstream Conflicts Committee and potential financial advisors to the Oasis Midstream Conflicts Committee.

On July 14, 2021, Oasis Petroleum and Oasis Midstream management held an initial management presentation with respect to the Oasis Midstream business for Crestwood.

On July 15, 2021, the Crestwood GP Board of Directors (the “Crestwood GP Board”) held a meeting to discuss the initial management presentation with respect to the Oasis Midstream business where Crestwood management were present. Crestwood management presented to the Crestwood GP Board the strategic rationale for the proposed transaction, asset footprint, cash flow comparison, proposed timeline and structure.

On July 15, 2021, the Oasis Midstream Conflicts Committee met with potential financial advisors, including Jefferies. Following such meetings and based on Jefferies’ experience with public mergers and acquisitions, complex transactions involving publicly traded partnerships and representations of conflicts committees, the Oasis Midstream Conflicts Committee determined that Jefferies had the requisite expertise to provide high quality advice to the Oasis Midstream Conflicts Committee and the Oasis Midstream Conflicts Committee determined to engage Jefferies as its financial advisor. The terms of the Oasis Midstream’s engagement with Jefferies were subsequently confirmed by a letter agreed and accepted by Oasis Midstream and the Oasis Midstream Conflicts Committee.

On July 16, 2021, Oasis Petroleum and Oasis Midstream management held a follow up management presentation with respect to the Oasis Midstream business for representatives of Party A. Following the

 

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management presentation, Oasis Petroleum management and the Oasis Petroleum Board determined it was appropriate to formally authorize the Oasis Midstream Conflicts Committee to evaluate a business combination with Party A.

On July 19, 2021, the OMP GP Board authorized the Oasis Midstream Conflicts Committee to (a) review and evaluate any conflicts that may exist arising in connection with Party A’s offer to combine with Oasis Midstream, (b) review and evaluate the potential conflicts and the potential transaction with Party A, (c) make any recommendations to the OMP GP Board regarding the proposed transaction in light of the potential conflicts and (d) determine whether or not to approve the proposed transaction by “Special Approval” under the Oasis Midstream Partnership Agreement. Oasis Petroleum advised the Oasis Midstream Conflicts Committee that, while it wanted the Oasis Midstream Conflicts Committee to evaluate the potential combination, Oasis Petroleum remained undecided regarding its willingness to pursue the transaction. On the same day, the Oasis Midstream Conflicts Committee, Jefferies and Richards Layton were provided access to the Oasis Midstream VDR, which included the preliminary financial model previously uploaded. These parties were also provided access to the Party A VDR.

On July 21, 2021, representatives of Party A held another management presentation with Oasis Petroleum and Oasis Midstream management, the members of the Oasis Midstream Conflicts Committee and representatives of Jefferies and Richards Layton with respect to Party A’s business.

Following the management presentation on July 21, 2021 and continuing through early August 2021, the Oasis Midstream Conflicts Committee and its advisors held a series of formal meetings and informal discussions regarding the potential business combination of Party A and Oasis Midstream. During these meetings, Jefferies presented certain preliminary financial analyses regarding a potential business combination with Party A to the Oasis Midstream Conflicts Committee and Richards Layton continued to provide legal advice to the Oasis Midstream Conflicts Committee regarding their duties in connection with a potential business combination transaction and with respect to legal aspects of a business combination with Party A specifically. Throughout this period, the Oasis Midstream Conflicts Committee and its advisors discussed the terms of the potential business combination and provided feedback to representatives of Oasis Midstream and Oasis Petroleum. At the end of this period, the Oasis Midstream Conflicts Committee advised management of Oasis Midstream that it was not supportive of the consideration proposed to be received by holders of Public Units in a combination with Party A and advised management of Oasis Midstream regarding a range of potential consideration that the Oasis Midstream Conflicts Committee may find more compelling.

On July 28, 2021, the Oasis Petroleum Board held a regular meeting at which representatives of Morgan Stanley, Tudor Pickering, as well as members of Oasis Petroleum management were present. Oasis Petroleum management and representatives of Morgan Stanley provided updates regarding the bid process for a potential Oasis Midstream business combination.

On July 28, 2021, the Crestwood GP Board held a meeting to approve the submission of a non-binding indication of interest to Morgan Stanley to acquire (a) Oasis Petroleum’s Oasis Midstream common units at a fixed Oasis Midstream-to-Crestwood common equity exchange ratio of 0.7000 (which consideration based on this exchange ratio would be paid $100.0 million in cash and the remainder in Crestwood common units) and (b) the public unitholders’ Oasis Midstream common units in a unit for unit exchange at a 5% premium to Oasis Midstream’s ten-day volume weighted average price.

On July 29, 2021, the OMP GP Board held a regularly scheduled meeting. At such meeting, Mr. Lou provided the members of the OMP GP Board with an update on the strategic review process, including a potential tax-free spin-off or taxable distribution that would result in the deconsolidation of Oasis Petroleum and Oasis Midstream, as well as the offer from Party A. Mr. Lou relayed that several counterparties had declined to make offers to combine with Oasis Midstream in advance of the July 29 bid submission deadline, but he believed that Crestwood would make an offer.

 

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On July 29, 2021, Crestwood submitted a non-binding indication of interest to Morgan Stanley to acquire (a) Oasis Petroleum’s Oasis Midstream common units at a fixed Oasis Midstream-to-Crestwood common equity exchange ratio of 0.7000 (which consideration based on this exchange ratio would be paid $100.0 million in cash and the remainder in Crestwood common units) and (b) the public unitholders’ Oasis Midstream common units in a unit for unit exchange at a 5% premium to Oasis Midstream’s ten-day volume weighted average price.

In late July, Oasis Petroleum and Oasis Midstream management, with assistance from representatives of Morgan Stanley, held additional due diligence sessions with Party A with respect to the assets, operations, and financial projections of Party A.

On August 10, 2021, the Oasis Petroleum Board held a special meeting at which members of Oasis Petroleum management and representatives of Morgan Stanley, Tudor Pickering and Vinson & Elkins, counsel to Oasis Petroleum and its affiliate companies, were present. Oasis Petroleum management and representatives of Morgan Stanley and Tudor Pickering provided an update to the Oasis Petroleum Board on the exploration of potential strategic alternatives for Oasis Midstream and Oasis Petroleum management provided an update on the revised and final offer from Party A received on the previous day. Oasis Petroleum management relayed to the Oasis Petroleum Board that it had received feedback from the Oasis Midstream Conflicts Committee that it was not supportive of the consideration proposed to be received by holders of Public Units in a combination with Party A. The Oasis Petroleum Board, after discussion with Oasis Petroleum management and representatives of Morgan Stanley and Tudor Pickering, determined that the proposed business combination with Party A was not in the best interests of Oasis Petroleum shareholders or Oasis Midstream unitholders because the consideration offered by Party A was not sufficient in addition to remaining concerns regarding pro forma leverage and distribution levels.

On August 11, 2021, Oasis Petroleum and Oasis Midstream management communicated to Party A that neither it nor the Oasis Midstream Conflicts Committee was willing to move forward with a business combination transaction with Party A upon the terms last offered by Party A. After this time, Party A did not provide any updated offers to Oasis Petroleum or Oasis Midstream.

On August 11, 2021, the Crestwood GP Board held a meeting to discuss the proposed merger with Oasis Midstream at which members of Crestwood management were present. Crestwood management presented the impacts of recent trading performances on the exchange ratio and the implied valuation of the indicative proposal. Crestwood management also presented to the Crestwood GP Board the five-year pro forma forecast and the relative contribution analysis for the proposed merger. Following the call, the parties agreed to hold several diligence and other process-related calls as needed and is described in more detail below.

On August 12, 2021, Mr. Brown reached out to Mr. Phillips to discuss Crestwood’s July 29 offer. Mr. Brown conveyed to Mr. Phillips that the “blended offer” to Oasis Midstream unitholders as a whole (collectively, the public unitholders and Oasis Petroleum) would need to be at-the-market price of Oasis Midstream and that Oasis Petroleum would need additional cash consideration to be willing to transact.

On August 18, 2021, Oasis Midstream and its representatives sent Crestwood a due diligence request list via email.

On August 19, 2021, Oasis Midstream management and Crestwood management attended a preliminary telephone conference to discuss the due diligence process with regards to Oasis Midstream and Crestwood. Following this time, Oasis Midstream management and Crestwood management held several diligence and process related meetings.

On August 24, 2021, Crestwood management made a financial model available to Oasis Petroleum management representing Crestwood on a standalone basis. For more information, see “—Oasis Midstream, Crestwood and Pro Forma Unaudited Prospective Financial Information—Unaudited Prospective Financial Information Regarding Crestwood.”

 

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On August 25, 2021, representatives of Crestwood held an initial management presentation for Oasis Petroleum, Oasis Midstream management and representatives of Morgan Stanley with respect to the Crestwood business.

After the initial management presentation and continuing through the announcement of the transaction, (i) Oasis Petroleum and Oasis Midstream management, with assistance from representatives of Morgan Stanley and Vinson & Elkins, and from and after September 14, 2021, representatives of Jefferies on behalf of the Oasis Midstream Conflicts Committee, submitted various due diligence questions (operational, financial and legal in nature) to Crestwood and held numerous follow up due diligence meetings with respect to the Crestwood business and (ii) Crestwood management submitted various due diligence questions (operational, financial and legal in nature) to Oasis Midstream and Oasis Petroleum and held numerous follow up due diligence meetings with respect to the Oasis Midstream business.

On September 9, 2021, Crestwood submitted a revised non-binding indication of interest to Morgan Stanley to acquire (a) all of the outstanding Oasis Midstream common units, including those held by Oasis Petroleum, via a transaction based on the market prices of Oasis Midstream and Crestwood common unit prices and to fix the exchange ratio less than one week prior to signing a definitive agreement and (b) the interests in OMP GP for $10.0 million in cash. The consideration to be received by Oasis Petroleum for its Oasis Midstream common units based on the proposed exchange ratio would be paid $100.0 million in cash and the remainder in Crestwood common units. The indication of interest also contemplated that Oasis Petroleum would be entitled to one seat on the Crestwood GP Board following closing. An at-the-market exchange ratio as of the close of trading on September 9, 2021 was 0.7763 Crestwood common units per Oasis Midstream common unit.

On September 12, 2021, the members of the OMP GP Board were provided access to Crestwood’s financial model that had previously been distributed by Crestwood to Oasis Petroleum management.

On September 12, 2021, the Oasis Petroleum Board held a special meeting at which representatives of Morgan Stanley and Tudor Pickering were present. Oasis Petroleum management presented the Oasis Petroleum Board with updates regarding a potential Oasis Midstream business combination, including a review of Crestwood’s September 9, 2021 offer. The Oasis Petroleum Board discussed with the attendees a summary business overview and certain financial information regarding a potential Oasis Midstream business combination, including with respect to Crestwood’s revised offer.

Shortly after the Oasis Petroleum Board meeting on September 12, 2021, management of Oasis Midstream contacted Mr. Kramer and asked the Oasis Midstream Conflicts Committee to organize in anticipation of being asked to evaluate a potential business combination transaction with Crestwood.

On September 14, 2021, the Oasis Midstream Conflicts Committee held an initial organizational meeting with representatives of Jefferies and Richards Layton. During the meeting, the Oasis Midstream Conflicts Committee and its advisors discussed Crestwood’s current offer and Jefferies presented an overview of Crestwood and information about the relative common unit trading prices of Oasis Midstream and Crestwood over time.

On September 15, 2021, Douglas Brooks, Chair of the Oasis Petroleum Board, reached out to representatives of Intrepid Partners LLC (“Intrepid”), financial advisor to Crestwood, to discuss the status of negotiations between the parties. Mr. Brooks indicated to Intrepid that the parties were negotiating a transaction in good faith, but that he expected incremental consideration (including cash consideration) would be necessary in order to facilitate a transaction.

On September 15, 2021, Mr. Brown called Mr. Phillips in response to Crestwood’s offer on September 9 and indicated to Mr. Phillips that, in order to facilitate a transaction, the Crestwood offer would need to include a premium for the holders of Public Units, additional cash consideration to Oasis Petroleum, an agreement from

 

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Crestwood to increase its distribution after closing and three seats for Oasis Petroleum on the Crestwood GP Board.

Over the next few days, Mr. Brown and Mr. Phillips held numerous conversations regarding the proposed combination.

On September 16, 2021, the Oasis Petroleum Board held a special meeting at which representatives of Morgan Stanley and Tudor Pickering were present. Oasis Petroleum management provided a summary update on the status of negotiations with Crestwood, as well as the contemplated transaction terms, in advance of a conversation between Mr. Brown and Mr. Phillips scheduled for the following day. The Oasis Petroleum Board also discussed certain financial information regarding the proposed transaction.

On September 18, 2021, Mr. Brown and Mr. Phillips agreed upon (i) a 5% premium to the public unitholders (based on the relative unit prices to be fixed less than one week prior to signing), (ii) an at-the-market price for Oasis Midstream common units held by Oasis Petroleum, which would include cash consideration of $150.0 million, (iii) two board seats on the Crestwood GP Board for Oasis Petroleum and (iv) a post-closing distribution increase by Crestwood of 5%. An at-the-market exchange ratio as of the close of trading on September 17, 2021 was 0.7324 Crestwood common units per Oasis Midstream common unit.

On September 21, 2021, Crestwood delivered an updated non-binding indication of interest to Morgan Stanley which reflected the terms that Mr. Brown and Mr. Phillips had discussed on September 18, as well as $10.0 million of cash consideration for the non-economic general partner interest in Oasis Midstream held indirectly by Oasis Petroleum. At this point in time, Crestwood and Oasis Petroleum had an agreement in principal on the cash consideration to Oasis Petroleum. The following negotiations among the parties (including the Oasis Midstream Conflicts Committee) related to total consideration to be received by the Oasis Midstream public unitholders and the equity consideration to be received by Oasis Petroleum.

Later on September 21, 2021, the OMP GP Board authorized the Oasis Midstream Conflicts Committee to (a) review and evaluate any conflicts that may exist arising in connection with Crestwood’s offer to combine with Oasis Midstream, (b) review and evaluate the potential transaction with Crestwood, (c) make any recommendations to the OMP GP Board regarding the proposed transactions in light of the potential conflicts and (d) determine whether or not to approve the proposed transaction by “Special Approval” under the Oasis Midstream Partnership Agreement. Oasis Petroleum delivered a letter to the Oasis Midstream Conflicts Committee detailing the non-binding indication of interest that Morgan Stanley had received from Crestwood. In the letter, Oasis Petroleum noted that if the proposal was acceptable to the Oasis Midstream Conflicts Committee, Oasis Petroleum was prepared to begin immediately negotiating definitive agreements with Crestwood and the Oasis Midstream Conflicts Committee.

On September 24, 2021, Crestwood engaged Baker Botts as legal counsel to Crestwood in connection with the proposed merger.

On September 26, 2021, Morgan Stanley, at the direction of Oasis Petroleum, delivered an initial draft of the Merger Agreement to Crestwood, which was prepared by Vinson & Elkins and proposed, among other things, that Oasis Petroleum would deliver its written consent approving the transaction after the Form S-4 to be filed by Crestwood in connection with the Mergers was declared effective by the SEC. Following receipt of the initial draft of the Merger Agreement, the parties and their respective legal counsel negotiated the Merger Agreement and prepared and negotiated the related transaction agreements and disclosure schedules until signing of the definitive documentation.

On September 27, 2021, Messrs. Brown, Brooks and Phillips had a meeting to introduce Mr. Brooks and Mr. Phillips in advance of the management presentation scheduled for the following day.

 

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On September 28, 2021, representatives of Crestwood held another management presentation with Oasis Petroleum and Oasis Midstream management, the Oasis Petroleum Board, the Oasis Midstream Conflicts Committee and representatives of Jefferies and Richards Layton with respect to Crestwood’s business.

On October 1, 2021, Baker Botts delivered a revised draft of the Merger Agreement to Vinson & Elkins.

On October 2, 2021, Oasis Petroleum and Oasis Midstream management made available an updated financial model to the OMP GP Board, the Oasis Midstream Conflicts Committee, Jefferies and Crestwood, which financial model had been updated to reflect increased volumes and capital resulting from development activity driven by Oasis Petroleum’s acquisition of Williston Basin assets from QEP Energy Company, a wholly owned subsidiary of Diamondback Energy, Inc. For more information, see “—Oasis Midstream, Crestwood and Pro Forma Unaudited Prospective Financial Information—Unaudited Prospective Financial Information Regarding Oasis Midstream.”

On October 4, 2021, members of management of Crestwood, Oasis Midstream and Oasis Petroleum met with representatives of Morgan Stanley, and Oasis Midstream management presented updates to the financial model of Oasis Midstream.

On October 4, 2021, the Oasis Midstream Conflicts Committee met with representatives of Jefferies and Richards Layton. During the meeting, representatives of Jefferies presented its preliminary analysis of the financial terms of the potential business combination of Crestwood and Oasis Midstream. During its presentation, Jefferies, among other things, reviewed the terms of Crestwood’s current offer, updates to the Oasis Midstream’s financial projections, Jefferies’ financial analysis of the potential business combination, Jefferies’ overview of Crestwood’s business and Jefferies’ combination analysis of Oasis Midstream and Crestwood. During the meeting, there was discussion regarding Jefferies presentation and Crestwood’s current offer. After discussion, the Oasis Midstream Conflicts Committee determined that, subject to the completion of Jefferies’ review and analysis, it would support the holders of Public Units receiving a 10% premium in the transaction and directed Jefferies to contact Morgan Stanley to propose such premium.

On October 5, 2021, the Crestwood GP Board held a meeting at which members of Crestwood management and representatives of Intrepid were present. At the meeting, Crestwood management presented the material terms of the proposed transaction and the timeline. The Crestwood GP Board also discussed the board representation rights and possible tax consequences resulting from the mergers. Intrepid presented a summary of Intrepid’s exchange ratio and contribution analysis it conducted.

On October 7, 2021, representatives of Jefferies communicated to Morgan Stanley the request from the Oasis Midstream Conflicts Committee that the holders of Public Units receive a 10% premium in the transaction.

On October 8, 2021, Vinson & Elkins delivered a draft of the registration rights agreement to Baker Botts, and Oasis Petroleum delivered a draft of the master amendment to commercial agreements to Crestwood.

On October 11, 2021, the Oasis Petroleum Board held a special meeting at which representatives of Vinson & Elkins and Morgan Stanley were present. At the meeting, the Oasis Petroleum Board discussed with Oasis Petroleum management an analysis of the potential business combination with Crestwood based on Crestwood’s September 21, 2021 offer. Representatives of Vinson & Elkins provided the Oasis Petroleum Board with an overview of the current status of the transaction documents, including the Merger Agreement, and the negotiations with respect thereto and the Oasis Petroleum Board discussed with the attendees certain financial information regarding a potential transaction. The Oasis Petroleum Board, Oasis Petroleum management and representatives of Vinson & Elkins also discussed additional transaction considerations, including a potential HSR filing, certain commercial agreements between Oasis Petroleum and Oasis Midstream and other ancillary transaction documents.

 

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On October 12, 2021, the OMP GP Board held a special meeting at which members of Oasis Midstream management and representatives of Morgan Stanley and Vinson & Elkins were present. The OMP GP Board discussed with the attendees updated financial information, including updated exchange ratio information based on the relative trading of Oasis Midstream and Crestwood. Representatives of Vinson & Elkins provided the OMP GP Board with an overview of the current status of the transaction documents, including the Merger Agreement, and the negotiations with respect thereto.

On October 13, 2021, Vinson & Elkins delivered a draft of the director nomination agreement to Baker Botts, and Baker Botts delivered a draft of the Transition Services Agreement to Vinson & Elkins.

On October 14, 2021, Messrs. Brown and Phillips had a call to discuss the status of various legal and commercial discussions that the parties and their advisors had been holding, including with respect to the Merger Agreement and the master amendment to commercial agreements. During the call, Messrs. Brown and Phillips discussed the potential exchange ratio, and Mr. Phillips indicated that, due to the relative trading prices of Oasis Midstream common units and Crestwood common units as discussions had continued, Crestwood would not be able to pay an at-the-market exchange ratio to Oasis Petroleum. Mr. Brown reiterated to Mr. Phillips that the parties had always discussed an exchange ratio at-the-market price for the Oasis Midstream common units held by Oasis Petroleum. Furthermore, Mr. Brown conveyed to Mr. Phillips the request from the Oasis Midstream Conflicts Committee that the holders of Public Units receive a 10% premium. An at-the-market exchange ratio as of the close of trading on October 14, 2021 was 0.8097 Crestwood common units per Oasis Midstream common unit.

On October 15, 2021, Baker Botts delivered an issues list to Vinson & Elkins, which included various items relating to post-closing liquidity rights of Oasis Petroleum with respect to the units it would hold in Crestwood (including the proposed lock up), board representation rights, a release from Oasis Petroleum in favor of Oasis Midstream post-closing and the requirement that Oasis Petroleum pay Crestwood a breakup fee in the event that it did not deliver its written consent approving the transaction promptly following the effectiveness of the Form S-4 (the “Written Consent Termination Fee”). The following day, Baker Botts delivered a revised Merger Agreement to Vinson & Elkins reflecting the terms set forth in the issues list.

On October 15, 2021, the Oasis Midstream Conflicts Committee held a meeting with representatives of Jefferies and Richards Layton. Representatives of Jefferies reported that it had communicated to representatives of Morgan Stanley the proposal of the Oasis Midstream Conflicts Committee that the holders of Public Units receive a 10% premium in the transaction and that they had not received any feedback on such offer. Jefferies also made a presentation to the Oasis Midstream Conflicts Committee regarding, among other things, the implied exchange ratio of Crestwood common units to Oasis Midstream common units and the impact of changes in the market prices of Crestwood common units and Oasis Midstream common units on such exchange ratio and Jefferies’ financial analysis of such implied exchange ratio. Richards Layton also presented to, and discussed with, the Oasis Midstream Conflicts Committee an overview of the terms of the current draft of the Merger Agreement and related transaction documentation and a preliminary issues list relating to the Merger Agreement. There was discussion as to whether the Oasis Midstream Conflicts Committee should make any updates to its current proposal of a 10% premium to the holders of Public Units and, after discussion, the Oasis Midstream Conflicts Committee determined not to update its current proposal. Following the meeting and continuing through the approval of the Merger Agreement, Richards Layton provided Vinson & Elkins with feedback on the Merger Agreement on behalf of the Oasis Midstream Conflicts Committee.

On October 15, 2021 and continuing through October 23, 2021, Mr. Brown had numerous conversations with various members of the Oasis Petroleum Board regarding the status of negotiations with Crestwood, including discussions relating to the exchange ratio, transaction documents and commercial agreements between Oasis Petroleum and Oasis Midstream.

On October 18, 2021, Oasis Petroleum and Oasis Midstream management, Crestwood management, representatives of Vinson & Elkins and representatives of Baker Botts held an in person meeting to discuss,

 

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among other things, the issues list delivered by Baker Botts, as well as the master amendment to commercial agreements.

On October 19, 2021, Vinson & Elkins delivered a revised draft of the Merger Agreement to Baker Botts, which included, among other things, a “tail” termination fee of $20.0 million to be paid by Oasis Midstream if the Merger Agreement were terminated in certain specified circumstances and Oasis Midstream entered into an alternative transaction within a certain period of time post-termination. The draft of the Merger Agreement had eliminated the Written Consent Termination Fee.

On October 20, 2021, Oasis Petroleum and Oasis Midstream management, Crestwood management, representatives of Vinson & Elkins and representatives of Baker Botts held a follow up in person meeting to discuss the issues list previously discussed on October 18.

Later on October 20, 2021, Messrs. Brown and Phillips had a further conversation regarding the exchange ratio in the transaction. Mr. Phillips indicated to Mr. Brown that, due to the relative movement in trading prices of Oasis Midstream common units and Crestwood common units as discussions had continued, Crestwood would not transact an at-the-market exchange ratio, but was willing to transact at a blended total exchange ratio of 0.7919 to Oasis Midstream unitholders as a whole (collectively, the public unitholders and Oasis Petroleum). Mr. Brown reiterated to Mr. Phillips that Oasis Petroleum insisted on an at-the-market exchange ratio. An at-the-market exchange ratio as of the close of trading on October 20, 2021 was 0.8221 Crestwood common units per Oasis Midstream common unit.

On October 21, 2021, the Oasis Midstream Conflicts Committee held a meeting with representatives of Jefferies and Richards Layton to discuss the status of negotiations of the transaction with Crestwood. The Oasis Midstream Conflicts Committee asked Jefferies to contact Morgan Stanley and ask for a formal response to its proposal of a 10% premium to the holders of Public Units.

Following the Oasis Midstream Conflicts Committee meeting on October 21, 2021, Jefferies contacted Morgan Stanley to request a response on the Oasis Midstream Conflicts Committee’s current proposal of a 10% premium to the holders of Public Units.

On October 22, 2021, Baker Botts delivered a draft of the Support Agreement to Vinson & Elkins, which included (x) a Written Consent Termination Fee of $100.0 million payable by Oasis Midstream and (y) a waiver by Oasis Petroleum of its re-negotiation rights under certain commercial arrangements with Oasis Midstream that would be triggered by the potential transaction. Later that day, representatives of Richards Layton, at the direction of the Chairman of the Oasis Midstream Conflicts Committee, communicated to representatives of Vinson & Elkins the position of the Oasis Midstream Conflicts Committee that any Written Consent Termination Fee would be payable by Oasis Petroleum, not Oasis Midstream.

On October 22, 2021 and through October 24, 2021, Messrs. Brown and Phillips held numerous conversations regarding the exchange ratio in the transaction, including the request from the Oasis Midstream Conflicts Committee that the holders of Public Units receive a 10% premium. Mr. Phillips communicated to Mr. Brown that Crestwood was only willing to offer the holders of Public Units a 5% premium to what Oasis Petroleum received.

On October 22, 2021, representatives of Morgan Stanley, at the direction of Oasis Petroleum, informed Jefferies of a proposal from Crestwood that the holders of Public Units receive 0.8300 Crestwood common units per Oasis Midstream common unit, which was approximately a 2.1% premium (based on the relative closing prices of Oasis Midstream common units and Crestwood common units on October 22, 2021 (the “October 22 Closing Prices”)). Representatives of Jefferies informed the Chairman of the Oasis Midstream Conflicts Committee of the proposal communicated by Morgan Stanley. At the instruction of the Chairman of the Oasis Midstream Conflicts Committee, representatives of Jefferies informed Morgan Stanley that the Oasis Midstream Conflicts Committee was not supportive of the transaction at a 2.1% premium (based on the October 22 Closing Prices) to the holders of Public Units.

 

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On October 23, 2021, representatives of Morgan Stanley, at the direction of Oasis Petroleum, contacted Jefferies to determine whether the Oasis Midstream Conflicts Committee would be supportive of a transaction where the holders of Public Units receive 0.8574 Crestwood common units per Oasis Midstream common unit, which was approximately a 5.5% premium (based on the October 22 Closing Prices). Representatives of Jefferies informed the Chairman of the Oasis Midstream Conflicts Committee of the proposal communicated by Morgan Stanley.

On October 23, 2021, Vinson & Elkins delivered revised drafts of the Merger Agreement and the Support Agreement, which included, among other things, a Written Consent Termination Fee of $40,000,000.

Also on October 23, 2021, through a number of negotiations and conversations among the parties and their representatives, and considering the status of the ongoing discussions involving the Merger Agreement and other transaction documents, as well as the commercial agreements between Oasis Petroleum and Oasis Midstream that would remain in place following the potential transaction, Crestwood and Oasis Petroleum agreed in principle, subject to final board approval by all parties and the approval of the Oasis Midstream Conflicts Committee, upon a blended total exchange ratio of 0.7990 to Oasis Midstream unitholders as a whole (collectively, the public unitholders and Oasis Petroleum)), which is the blended total exchange ratio reflected in the final Merger Agreement.

On October 24, 2021, at the instruction of the Chairman of the Oasis Midstream Conflicts Committee, Jefferies contacted Morgan Stanley and delivered a proposal on behalf of the Oasis Midstream Conflicts Committee that the holders of Public Units receive 0.8750 Crestwood common units per Oasis Midstream common unit, which was approximately a 7.7% premium (based on the October 22 Closing Prices) (which increase in premium for the holders of Public Units would reduce the consideration payable to Oasis Petroleum, as the blended total exchange ratio of 0.7990 to Oasis Midstream unitholders as a whole had already been agreed in principle on the previous day between Crestwood and Oasis Petroleum, subject to final board approval). Later that day on October 24, 2021, representatives of Morgan Stanley, at the direction of Oasis Petroleum, contacted Jefferies to determine whether the Oasis Midstream Conflicts Committee would be supportive of a transaction where holders of Public Units receive 0.8655 Crestwood common units per Oasis Midstream common unit, which was approximately a 6.5% premium (based on the October 22 Closing Prices).

Later on October 24, 2021, the Oasis Midstream Conflicts Committee held a meeting with representatives of Jefferies and Richards Layton. Jefferies reviewed the negotiations on the exchange ratio premium to holders of Public Units, including the current proposal of a 6.5% premium (based on the October 22 Closing Prices), and presented materials regarding Jefferies’ analysis on various exchange ratios for holders of Public Units and Jefferies’ accretion/dilution analysis of the potential transaction. There was also discussion regarding potential counteroffers to the proposed 6.5% premium (based on the October 22 Closing Prices). After discussion, the Oasis Midstream Conflicts Committee directed Jefferies to contact Morgan Stanley and propose a 0.8700 exchange ratio for holders of Public Units, representing a 7.1% premium (based on the October 22 Closing Prices) (which increase in premium for the holders of Public Units would reduce the consideration payable to Oasis Petroleum, as the blended total exchange ratio of 0.7990 to Oasis Midstream unitholders as a whole had already been agreed in principle on the previous day between Crestwood and Oasis Petroleum, subject to final board approval), noting that a 0.8700 exchange ratio would hold expected distributions approximately equal to the current distributions to holders of Public Units. Next, Richards Layton updated the Oasis Midstream Conflicts Committee on the status of the negotiations of the terms of the Merger Agreement and discussed certain significant issues related to the Merger Agreement, including the proposed Written Consent Termination Fee of $40,000,000 payable by Oasis Midstream. After discussion, the Oasis Midstream Conflicts Committee directed Richards Layton to contact Vinson & Elkins and inform Vinson & Elkins of the Oasis Midstream Conflicts Committee’s position that any Written Consent Termination Fee should be payable by Oasis Petroleum and not Oasis Midstream.

After the Oasis Midstream Conflicts Committee meeting on October 24, 2021, Jefferies, at the instruction of the Oasis Midstream Conflicts Committee, informed Morgan Stanley of the proposal by the Oasis Midstream

 

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Conflicts Committee of a 0.8700 exchange ratio for the holders of Public Units, representing a 7.1% premium (based on the October 22 Closing Prices), and Richards Layton informed Vinson & Elkins of the Oasis Midstream Conflicts Committee’s view that the Written Consent Termination Fee be payable Oasis Petroleum. Thereafter, representatives of Morgan Stanley, at the direction of Oasis Petroleum, contacted Jefferies and delivered a proposal from Oasis Petroleum that accepted the 0.8700 exchange ratio for the holders of Public Units on the condition that the Written Consent Termination Fee would be paid by Oasis Midstream unless the Oasis Midstream Conflicts Committee determined in good faith that the termination of the Merger Agreement, and payment of the Written Consent Termination Fee, would not be in the best interests of Oasis Midstream and the holders of Public Units and, in such case, the Written Consent Termination Fee would be paid by Oasis Petroleum.

Later on October 24, 2021, the Oasis Midstream Conflicts Committee held a meeting with representatives of Jefferies and Richards Layton. Jefferies reported that Morgan Stanley had indicated that Oasis Petroleum was supportive of a transaction with the following terms: (i) a 0.8700 exchange ratio for the holders of Public Units and (ii) that the Written Consent Termination Fee would be paid by Oasis Midstream unless the Oasis Midstream Conflicts Committee determined in good faith that the termination of the Merger Agreement, and payment of the Written Consent Termination Fee, would not be in the best interests of Oasis Midstream and the holders of Public Units and, in such case, the Written Consent Termination Fee would be paid by Oasis Petroleum. After discussing such offer, the Oasis Midstream Conflicts Committee determined, subject to the satisfactory negotiation and finalization of the Merger Agreement and the related documents and the receipt of Jefferies’ fairness opinion, that it expected to accept the offer.

On October 24, 2021, Baker Botts delivered revised drafts of the Merger Agreement and Support Agreement, which accepted the Written Consent Termination Fee of $40,000,000. In connection with the discussions with respect to the exchange ratio, on October 24, 2021, Richards Layton communicated that the Oasis Midstream Conflicts Committee agreed that the Written Consent Termination Fee would be paid by Oasis Midstream unless the Oasis Midstream Conflicts Committee determined in good faith that the termination of the Merger Agreement, and payment of the Written Consent Termination Fee, would not be in the best interests of Oasis Midstream and the holders of Public Units and, in such case, the Written Consent Termination Fee would be paid by Oasis Petroleum.

On October 24, 2021, the OMP GP Board held a special meeting at which members of Oasis Midstream management and representatives of Morgan Stanley and Vinson & Elkins were present. Oasis Midstream management provided the OMP GP Board with an update on the transaction status. Representatives of Vinson & Elkins updated the OMP GP Board with respect to the current status of the transaction documentation and provided the board members with a review of the duties of the board members under the Oasis Midstream Partnership Agreement and applicable law. The OMP GP Board agreed to reconvene on the following day.

On October 24, 2021, the Oasis Petroleum Board held a special meeting at which representatives of Morgan Stanley, Tudor Pickering and Vinson & Elkins were present. The Oasis Petroleum Board discussed certain financial information relating to the potential transaction with the financial advisors, and representatives of Vinson & Elkins provided an update regarding the terms of the Merger Agreement, as well as the consents that would be required by the Oasis Petroleum Board, the OMP GP Board and the Oasis Midstream Conflicts Committee in order to approve the potential transaction.

On October 25, 2021, following the close of the U.S. stock markets, the Oasis Petroleum Board held a special meeting and, after deliberation and discussions with management and representatives of Morgan Stanley, Tudor Pickering, and Vinson & Elkins, approved the Merger Agreement and the transactions contemplated thereby, subject to the Oasis Midstream Conflicts Committee granting “Special Approval” with respect to the transaction.

On October 25, 2021, the Oasis Midstream Conflicts Committee met with representatives of Jefferies and Richards Layton to discuss the transaction. During the meeting, Richards Layton presented to the Oasis

 

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Midstream Conflicts Committee an overview and update with respect to the terms of the Merger Agreement and the related documents. Also at this meeting, Jefferies reviewed its financial analysis of the transaction, including the proposed exchange ratio for the holders of Public Units with the Oasis Midstream Conflicts Committee and, at the request of the Oasis Midstream Conflicts Committee, rendered an oral opinion to the Oasis Midstream Conflicts Committee, which was subsequently confirmed by delivery of a written opinion dated October 25, 2021, to the effect that, based upon and subject to the assumptions, limitations, qualifications and other matters set forth in the written opinion, the Public Holder Exchange Ratio and the resulting Public Holder Merger Consideration to be received in the Transaction (as defined in the opinion) by the Public Holders pursuant to the Merger Agreement is fair, from a financial point of view, to Oasis Midstream and the Public Holders. The Oasis Midstream Conflicts Committee then unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the LP Merger, are in the best interests of Oasis Midstream and the holders of Oasis Midstream common units, excluding OMP GP and its affiliates, (ii) approved the Merger Agreement and the transactions contemplated thereby, including the LP Merger (the foregoing constituting “Special Approval” (as defined in the Oasis Midstream Partnership Agreement)) and (iii) recommended to the OMP GP Board the approval of the Merger Agreement and the consummation of the transactions contemplated thereby, including the LP Merger.

Following the Oasis Midstream Conflicts Committee meeting, on October 25, 2021, the OMP GP Board convened a special meeting to discuss the Mergers with Crestwood, including the proposed final terms of the Merger Agreement. Following discussion, the OMP GP Board unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Mergers, are in the best interests of Oasis Midstream and, with respect to the GP Merger, OMP GP, (ii) approved and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Mergers, (iii) approved the execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Mergers, and (iv) authorized and directed that the approval of the Merger Agreement and the transactions contemplated thereby be submitted to a vote of Oasis Midstream’s limited partners pursuant to Section 14.3 of the Oasis Midstream Partnership Agreement and authorized Oasis Midstream’s limited partners to act by written consent pursuant to Section 13.11 of the Oasis Midstream Partnership Agreement.

On October 25, 2021, the Crestwood GP Board convened a special meeting to discuss the Mergers with Oasis Midstream and OMP GP, including the proposed final terms of the Merger Agreement and the Support Agreement. Following discussion, the Crestwood GP Board unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Mergers and the issuance of the Crestwood common units.

That evening, representatives of each of Oasis Petroleum and Oasis Midstream management, Crestwood management, Vinson & Elkins, Baker Botts and Richards Layton finalized the Merger Agreement, disclosure schedules and ancillary documents, following which Oasis Midstream, Crestwood and the other parties thereto executed and delivered the Merger Agreement. Contemporaneously with the execution of the Merger Agreement, Oasis Petroleum and OMS Holdings executed the Support Agreement.

Prior to the opening of U.S. stock markets on October 26, 2021, Crestwood and Oasis Midstream issued a joint news release announcing the Mergers.

Crestwood’s Reasons for the Mergers

The Mergers between Crestwood and Oasis Midstream will increase Crestwood’s scale and strategic positioning across its core growth basins in the Williston and Delaware Basins. In evaluating the Mergers, the Crestwood GP Board consulted with Crestwood GP’s management and legal and financial advisors. The Crestwood GP Board determined the Mergers to be in the best interests of Crestwood based on, among other factors, its belief that the Mergers will:

Expand Scale and Position in Core Basins. The Mergers will increase Crestwood’s footprint of crude oil, produced water and natural gas gathering assets in the Williston Basin. The transaction will double the inventory

 

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of tier 1 drilling locations dedicated to Crestwood’s existing assets to approximately 1,200 locations across 535,000 dedicated acres and expand Crestwood’s footprint into the western and northern parts of the Williston Basin. In the Delaware Basin, the acquired assets will provide crude oil and produced water gathering services in Loving, Ward and Winkler counties in Texas, complementary to Crestwood’s existing Nautilus natural gas gathering system and Desert Hills produced water gathering system.

Realize Commercial and Cost Reduction Synergies. In the Williston Basin, Crestwood plans to physically connect its Arrow system with Oasis Midstream’s Wild Basin system. The excess processing capacity will minimize potential processing constraints for existing Arrow customers and create opportunities to more aggressively commercialize Oasis Midstream’s assets as gas volumes across the basin continue to rapidly increase due to heightened gas capture efforts and rising gas-to-oil ratios. The result of integrating the combined systems will drive cost reduction synergies through operations and maintenance reductions and the elimination of duplicative general and administrative expenses.

Accelerate Return of Capital. The Mergers are expected to increase Crestwood’s free cash flow post-distributions to unitholders, both immediately and over the long-term, which can be used to pay down debt or returned to unitholders through higher distributions or unit buybacks.

Enhance Financial Strength, Flexibility and Credit Profile. Crestwood anticipates that the Mergers will result in an increase in its 2021E Adjusted EBITDA and free cash flow, which would significantly enhance Crestwood’s financial strength and flexibility. The Mergers are expected to be deleveraging to Crestwood with an expected fiscal year 2022 leverage ratio below 3.5x. This would result in a stronger balance sheet and substantial liquidity under Crestwood’s revolving credit facility, providing more flexibility to execute its future business plans. Crestwood expects that the increased cash flow scale and enhanced credit profile will be viewed positively by the rating agencies.

Advance Leading Gathering & Processing Sustainability Initiatives. Following the close of the Mergers, Crestwood anticipates it will implement its leading sustainability best practices as it assumes operatorship of the acquired assets in the Williston and Delaware Basins. This includes managing the acquired assets with an intense focus on flare minimization and increased methane emissions monitoring as well as a strong commitment to biodiversity, environmental stewardship, safety, and community engagement efforts. Additionally, Crestwood intends to incorporate material environmental, safety and governance metrics including a baseline of Scope 1 and Scope 2 emissions from the acquired assets that it will publish in its 2022 sustainability report along with a strategy to further manage its carbon footprint across the Williston and Delaware Basins.

Approval of the Oasis Midstream Conflicts Committee and the OMP GP Board and Reasons for the Mergers

The Oasis Midstream Conflicts Committee consists of the following three directors of the OMP GP Board who satisfy the requirements to serve on a conflicts committee in the Oasis Midstream Partnership Agreement: Phillip D. Kramer (Chairman), Matthew Fitzgerald and Harry N. Pefanis. On September 21, 2021, the OMP GP Board authorized the Oasis Midstream Conflicts Committee to (a) review and evaluate any Potential Conflicts arising in connection with Crestwood’s offer to combine with Oasis Midstream and any other Related Arrangements, (b) review and evaluate the Mergers and the Related Arrangements, (c) make any recommendations to the OMP GP Board regarding the Mergers and any Related Arrangements in light of such Potential Conflicts and (d) determine whether or not to approve the LP Merger by “Special Approval” under the Oasis Midstream Partnership Agreement.

On October 25, 2021, the Oasis Midstream Conflicts Committee unanimously, and in good faith, among other things (a) determined that the Merger Agreement and the transactions contemplated thereby, including the LP Merger, are in the best interests of Oasis Midstream and the holders of Oasis Midstream common units, excluding the OMP GP and its affiliates, (b) approved the Merger Agreement and the transactions contemplated

 

49

thereby, including the LP Merger, upon the terms and conditions set forth in the Merger Agreement, with such approval constituting “Special Approval” for all purposes under the Oasis Midstream Partnership Agreement, and (c) recommended to the OMP GP Board the approval of the Merger Agreement and the consummation of the transactions contemplated thereby, including the LP Merger.

Later on October 25, 2021, upon receiving the approval and recommendation of the Oasis Midstream Conflicts Committee, the OMP GP Board unanimously, and in good faith, (a) determined that the Merger Agreement and the transactions contemplated thereby, including the Mergers, are in the best interests of Oasis Midstream and, with respect to the GP Merger, OMP GP, (b) approved and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Mergers, (c) approved the execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Mergers and (d) authorized and directed that the approval of the Merger Agreement and the transactions contemplated thereby be submitted to a vote of Oasis Midstream’s limited partners pursuant to Section 14.3 of the Oasis Midstream Partnership Agreement and authorized Oasis Midstream’s limited partners to act by written consent pursuant to Section 13.11 of the Oasis Midstream Partnership Agreement.

The Oasis Midstream Conflicts Committee retained Richards Layton as its legal counsel and Jefferies as its financial advisor. Each of the Oasis Midstream Conflicts Committee and the OMP GP Board oversaw the performance of financial and legal due diligence conducted by their advisors, as applicable, conducted an extensive review and evaluation of the transactions contemplated by the Merger Agreement, including, with respect to the Oasis Midstream Conflicts Committee, considering withholding “Special Approval” and maintaining the status quo.

In determining to approve the transactions contemplated by the Merger Agreement, the Oasis Midstream Conflicts Committee and the OMP GP Board consulted with Oasis Midstream’s senior management and their respective outside legal and financial advisors and considered several factors that weighed in favor of the Mergers, including the following (not necessarily presented in order of relative importance):

 

•

The Public Holder Exchange Ratio of 0.8700 Crestwood common units for each Public Unit represents a Public Holder Exchange Ratio premium of 8.7% to the implied exchange ratio of Crestwood common units to Oasis Midstream common units based upon the closing prices of Crestwood common units and Oasis Midstream common units on October 25, 2021.

 

•

The belief that the Public Holder Exchange Ratio of 0.8700 Crestwood common units for each Public Unit provided greater value to the Public Holders than the long-term value of Oasis Midstream as a standalone publicly traded limited partnership.

 

•

The Public Holders will be entitled to receive more Crestwood common units per Oasis Midstream common unit than Oasis Petroleum and its affiliates.

 

•

The belief that the Public Holder Merger Consideration of 0.8700 Crestwood common units for each Public Unit represents the highest price per Public Unit that Crestwood would be willing to pay to the Public Holders at the time of the Oasis Midstream Conflicts Committee’s determination and approval.

 

•

The LP Merger is expected to be immediately accretive to the Public Holders with regard to distributable cash flow per common unit.

 

•

Crestwood has a larger public float than Oasis Midstream, which should lead to Crestwood’s having a greater ability to raise capital in the public equity markets and greater trading liquidity than Oasis Midstream as a standalone publicly traded limited partnership.

 

•

Oasis Petroleum has explored alternatives with multiple parties related to its equity interests in Oasis Midstream, including a potential transaction with a different buyer that was reviewed by the Oasis Midstream Conflicts Committee but never consummated, as well as a spin off or split off that would result in Oasis Midstream becoming a standalone entity.

 

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•

The Crestwood GP Board is elected by Crestwood’s limited partners.

 

•

Crestwood has agreed, subject to certain exceptions, to increase its regular quarterly cash distribution with respect to Crestwood common units to $0.655 for the first fiscal quarter ending following the closing of the Mergers.

 

•

From an operational perspective, the scale, asset diversity (including both oil and gas basins and commodities), and customer diversity of the combined company are expected to be more attractive than the scale, asset diversity and customer diversity of Oasis Midstream on a standalone basis.

 

•

From a financial perspective, the coverage ratio and potential for distribution growth of the combined company are expected to be more attractive than the coverage ratio and potential for distribution growth of Oasis Midstream on a standalone basis.

 

•

The financial presentation and opinion delivered by Jefferies to the Oasis Midstream Conflicts Committee on October 25, 2021, that, as of such date and based upon and subject to the assumptions, made, procedures followed, matters considered and limitations and qualifications on the scope of review undertaken as described in the opinion, the Public Holder Exchange Ratio of 0.8700 Crestwood common units for each Public Unit and the resulting Public Holder Merger Consideration to be received in the LP Merger by the Public Holders pursuant to the Merger Agreement was fair, from a financial point of view, to Oasis Midstream and the Public Holders. See the section titled “The Mergers—Opinion of the Oasis Midstream Conflicts Committee’s Financial Advisor” beginning on page 54 of this consent statement/prospectus.

 

•

The LP Merger is expected generally to be non-taxable to the Public Holders.

 

•

The Public Holder Exchange Ratio is fixed and therefore the implied value of the Public Holder Merger Consideration will increase in the event that the market price of Crestwood common units increases prior to the closing of the LP Merger.

 

•

The terms and conditions of the Merger Agreement were determined through extensive arm’s length negotiations among Oasis Petroleum, Oasis Midstream, the Oasis Midstream Conflicts Committee, Crestwood and their respective representatives and advisors.

 

•

The fact that Oasis Petroleum, which owns approximately 69.6% of the issued and outstanding Oasis Midstream common units, is in support of the Mergers and has entered into the Support Agreement pursuant to which it has agreed to, among other things, deliver its Written Consent in respect of the Oasis Midstream common units owned by it in favor of the transactions contemplated by the Merger Agreement, including the LP Merger.

 

•

The LP Merger is not subject to a vote of the holders of Crestwood common units.

 

•

The OMP GP Board adopted resolutions expressly stating that the Merger Agreement and the transactions contemplated thereby would not be approved unless it received a prior favorable recommendation from the Oasis Midstream Conflicts Committee. The Oasis Midstream Conflicts Committee understood that it had no obligation to recommend any transaction.

 

•

In connection with the consideration of the Mergers, the Oasis Midstream Conflicts Committee retained its own financial and legal advisors with knowledge and experience advising publicly traded companies with respect to transactions similar to the Mergers.

In addition, the OMP GP Board separately considered a number of additional positive factors. These included (not necessarily presented in order of relative importance):

 

•

The fact that the Oasis Midstream Conflicts Committee (consisting solely of independent directors), Oasis Midstream, and Oasis Petroleum and their advisors were extensively involved throughout the process, as well as receiving regular direct updates from Oasis Midstream’s legal advisors and Oasis Midstream’s management.

 

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•

The fact that, based on the Public Holder Exchange Ratio and the Sponsor Exchange Ratio, Oasis Midstream common unitholders will own approximately 35.0% of the outstanding Crestwood common units on a pro forma basis, including approximately 21.7% pro forma ownership by Oasis Petroleum.

 

•

The evaluation of the likely time period necessary to consummate the transactions contemplated by the Merger Agreement, and the limited number and customary nature of the closing conditions as well as Crestwood’s affirmative obligation, subject to certain exceptions and limitations, to use its reasonable best efforts to take, or cause to be taken, any and all steps and undertakings in respect of requirements under applicable regulations so as to enable closing to occur as promptly as practicable.

 

•

The lack of a financing condition to closing and the overall scope of the conditions to closing.

In addition, the OMP GP Board and the Oasis Midstream Conflicts Committee considered the following factors to be generally negative or unfavorable in making its determination and approvals concerning the Merger Agreement (not necessarily presented in order of relative importance):

 

•

The Oasis Midstream Conflicts Committee did not conduct an auction process or other solicitation of interest from third parties for the acquisition of Oasis Midstream common units; however, management of Oasis Petroleum and Oasis Midstream conducted an auction process with multiple parties and none of the inquiries or discussions led to attractive offers.

 

•

Oasis Petroleum and its affiliates will receive a combination of cash and Crestwood common units for their Oasis Midstream common units. Public Holders will only receive Crestwood common units for their Oasis Midstream common units.

 

•

The ratio of debt to EBITDA of the combined company, while lower than average for publicly traded gathering and processing companies, is slightly higher than Oasis Midstream’s ratio of debt to EBITDA on a standalone basis.

 

•

The Mergers would be dilutive to the Public Holders with regard to expected distributions per common unit taking into account future distribution increases forecasted by Oasis Midstream management on Oasis Midstream common units; however, the Oasis Midstream Conflicts Committee recognized that such distribution increases would require an assessment by the OMP GP Board in the future and there is a risk that such distribution increases may not be achieved. Furthermore, the distribution coverage ratio of the combined company is expected to be higher than the distribution coverage ratio of Oasis Midstream on a standalone basis.

 

•

In the event the Merger Agreement is terminated because Oasis Petroleum does not timely deliver the Written Consent in favor of the Merger Agreement and the transactions contemplated thereby, Oasis Midstream will pay Crestwood a $40,000,000 breakup fee unless the Oasis Midstream Conflicts Committee determines in good faith that the termination of the Merger Agreement, and the payment of the breakup fee, is not in the best interests of Oasis Midstream and the Public Holders and, in such case, the breakup fee will be paid by Oasis Petroleum.

 

•

Other than the distribution increase announced by Crestwood as part of the Mergers, Crestwood has publicly communicated low to no distribution growth on Crestwood common units in the near term.

 

•

The Public Holder Exchange Ratio is fixed and therefore the implied value of the consideration payable to the Public Holders will decrease in the event that the market price of common units of Crestwood decreases prior to the closing of the Mergers.

 

•

The Mergers may not be completed in a timely manner, or at all, and a failure to complete the Mergers could result in significant costs and disruption to Oasis Midstream’s normal business and negatively affect the trading price of Oasis Midstream common units.

 

•

Litigation may be commenced in connection with the Mergers and such litigation may increase costs and result in a diversion of management focus.

 

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•

The Oasis Midstream common unitholders are not entitled to dissenters’ or appraisal rights under the Merger Agreement, the Oasis Midstream Partnership Agreement or Delaware law.

 

•

Executive officers and directors of OMP GP have certain interests in the Mergers that may be different from, or in addition to, the interests of Public Holders generally. See the section titled “The Mergers—Interests of OMP GP Directors and Executive Officers in the Mergers” beginning on page 65 of this consent statement/prospectus.

After taking into account the factors set forth above (other than those separately considered by the OMP GP Board), as well as others, the Oasis Midstream Conflicts Committee concluded that the risks, uncertainties, restrictions and potentially negative factors associated with the transactions contemplated by the Merger Agreement were outweighed by the potential benefits thereof to the Public Holders. Similarly, after taking into account the factors set forth above, as well as the recommendation and approval of the Oasis Midstream Conflicts Committee, the OMP GP Board concluded that the risks, uncertainties and restrictions and potentially negative factors associated with the Mergers were outweighed by the potential benefits thereof to Oasis Midstream and its unitholders.

The foregoing discussion of factors considered by the Oasis Midstream Conflicts Committee and the OMP GP Board is not intended to be exhaustive but summarizes the material factors considered by the Oasis Midstream Conflicts Committee and the OMP GP Board, as applicable.

In view of the variety of factors considered in connection with their evaluation of the Mergers and the complexity of these matters, neither the Oasis Midstream Conflicts Committee nor the OMP GP Board found it useful or attempted to quantify or assign any relative or specific weights to the various factors considered in making their determinations. In addition, each of the members of the Oasis Midstream Conflicts Committee and the OMP GP Board may have given differing weights to different factors. Overall, the Oasis Midstream Conflicts Committee and the OMP GP Board believed that the positive factors supporting the transactions contemplated by the Merger Agreement outweighed the negative factors they considered.

Oasis Midstream, OMP GP, the Oasis Midstream Conflicts Committee and the OMP GP Board have not, including, without limitation, in making the determinations set forth above, assumed any obligations to the Public Holders (whether fiduciary, contractual, implied, or otherwise) other than those obligations that exist in the Oasis Midstream Partnership Agreement. Under the Oasis Midstream Partnership Agreement, whenever OMP GP makes a determination or takes or omits to take any other action (including action taken by the OMP GP Board or any committee thereof (including the Oasis Midstream Conflicts Committee)), in its capacity as the general partner of Oasis Midstream, OMP GP, the OMP GP Board or the applicable committee thereof (including the Oasis Midstream Conflicts Committee) must make such determination or take or omit to take such other action in good faith (as described in the Oasis Midstream Partnership Agreement). Nothing in this consent statement/prospectus or the actions or determinations of OMP GP, the Oasis Midstream Conflicts Committee, or the OMP GP Board described in this consent statement/prospectus should be read to mean that OMP GP, the Oasis Midstream Conflicts Committee or the OMP GP Board assumed any obligations to Oasis Midstream or its limited partners (whether fiduciary, contractual, implied, or otherwise) other than those obligations that exist in the Oasis Midstream Partnership Agreement. You are urged to read the full text of the Oasis Midstream Partnership Agreement, which is incorporated by reference into this consent statement/prospectus. See the section titled “Where You Can Find More Information” beginning on page 158 of this consent statement/prospectus.

In considering whether to consent to the adoption of the Merger Agreement and the transactions contemplated thereby, holders of Oasis Midstream common units should be aware that the executive officers and directors of OMP GP have certain interests in the Mergers that may be different from, or in addition to, the interests of Public Holders generally. See the section titled “The Mergers—Interests of OMP GP Directors and Executive Officers in the Mergers” beginning on page 65 of this consent statement/prospectus.

 

53

It should be noted that this explanation of the reasoning of the OMP GP Board and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth in “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 30 of this consent statement/prospectus.

Opinion of the Oasis Midstream Conflicts Committee’s Financial Advisor

The Oasis Midstream Conflicts Committee engaged Jefferies to act as its financial advisor in connection with the Merger Agreement and the transactions contemplated thereby. As part of that engagement, the Oasis Midstream Conflicts Committee requested that Jefferies evaluate the fairness, from a financial point of view, to the Public Holders and Oasis Midstream, of the Public Holder Exchange Ratio and the Public Holder Merger Consideration. In this section, we refer to the holders of Oasis Midstream common units other than the General Partner and its affiliates (which affiliates include Oasis Petroleum but exclude Oasis Midstream and its subsidiaries) as the “Public Holders.” At a meeting of the Oasis Midstream Conflicts Committee held on October 25, 2021, Jefferies rendered an oral opinion, confirmed by delivery of a written opinion dated as of the same date, to the Oasis Midstream Conflicts Committee to the effect that, as of that date and based on and subject to the various assumptions made, procedures followed, matters considered and limitations and qualifications on the scope of review undertaken as described in its opinion, the Public Holder Exchange Ratio in the LP Merger and the resulting Public Holder Merger Consideration was fair, from a financial point of view, to the Public Holders and Oasis Midstream.

The full text of Jefferies’ opinion, which describes the assumptions made, procedures followed, matters considered and limitations and qualifications on the scope of review undertaken by Jefferies in rendering its opinion, is attached as Annex C to this consent statement/prospectus and is incorporated herein by reference. Jefferies’ opinion is for the use and benefit of the Oasis Midstream Conflicts Committee (in its capacity as such) in its consideration of the LP Merger, and Jefferies’ opinion does not address the relative merits of the transaction contemplated by the Merger Agreement as compared to any alternative transaction or opportunity that might be available to Oasis Midstream, nor does it address the underlying business decision by OMP GP to engage in the Mergers or the terms of the Merger Agreement or the documents referred to therein. Jefferies’ opinion does not constitute a recommendation to any Public Holder as to whether such Public Holder should consent to the Merger Agreement or any other matter. The following summary is qualified in its entirety by reference to the full text of Jefferies’ opinion.

In arriving at its opinion, Jefferies, among other things:

 

(i)

reviewed a draft of the Merger Agreement provided to it on October 25, 2021;

 

(ii)

reviewed certain publicly available financial and other information about the Oasis Midstream;

 

(iii)

reviewed certain information furnished to it by the management of OMP GP, relating to the business, operations and prospects of Oasis Midstream, including financial forecasts and analyses under various business assumptions;

 

(iv)

reviewed certain publicly available financial and other information about Crestwood;

 

(v)

reviewed certain information furnished to it by the management of OMP GP, relating to the business, operations and prospects of Crestwood, including financial forecasts and analyses under various business assumptions;

 

(vi)

held discussions with members of senior management of OMP GP concerning the matters described in clauses (ii) through (v) above;

 

(vii)

reviewed valuation multiples for Oasis Midstream and compared them with those of certain publicly traded companies that Jefferies deemed relevant; and

 

(viii)

conducted such other financial studies, analyses and investigations as Jefferies deemed appropriate.

 

54

In its review and analysis and in rendering its opinion, Jefferies assumed and relied upon, but did not assume any responsibility to independently investigate or verify, the accuracy and completeness of all financial and other information that was supplied or otherwise made available by OMP GP, or that was publicly available to Jefferies (including, without limitation, the information described above), or that was otherwise reviewed by Jefferies. Jefferies relied on assurances of the management of OMP GP that it is not aware of any facts or circumstances that would make such information inaccurate or misleading. In its review, Jefferies did not obtain any independent evaluation or appraisal of any of the assets or liabilities of, nor did Jefferies conduct a physical inspection of any of the properties or facilities of Oasis Midstream or Crestwood, nor has Jefferies been furnished with any such evaluations or appraisals or any such physical inspections, nor did Jefferies assume any responsibility to obtain any such evaluations, appraisals or physical inspections.

With respect to the financial forecasts provided to and examined by Jefferies, Jefferies noted that projecting future results of any company is inherently subject to uncertainty. With respect to the forecasts of Oasis Midstream and Crestwood provided to Jefferies by management of OMP GP for use by Jefferies in its analyses, OMP GP informed Jefferies, and Jefferies assumed, that such financial forecasts were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of OMP GP as to the future financial performance of Oasis Midstream and Crestwood. Jefferies expressed no opinion as to the financial forecasts provided to Jefferies by the management of OMP GP or the assumptions on which they are made.

Jefferies’ opinion is based on economic, monetary, regulatory, market and other conditions existing and which could be evaluated as of October 25, 2021. Jefferies expressly disclaimed any undertaking or obligation to advise any person of any change in any fact or matter affecting its opinion of which Jefferies becomes aware after October 25, 2021.

Jefferies made no independent investigation of any legal or accounting matters affecting Oasis Midstream or Crestwood, and Jefferies assumed the correctness in all respects material to its analysis of all legal and accounting advice given to the Oasis Midstream Conflicts Committee, including, without limitation, advice as to the legal, accounting and tax consequences of the terms of, and transactions contemplated by, the Merger Agreement to Oasis Midstream. In addition, in preparing its opinion, Jefferies did not take into account any tax consequences of the Mergers to Oasis Petroleum or any Public Holder. Jefferies assumed that the Mergers will be consummated in accordance with the terms of the Merger Agreement without waiver, modification or amendment of any term, condition or agreement and in compliance with applicable laws, documents and other requirements in all respects material to Jefferies’ analysis and that the final form of the Merger Agreement would be substantially similar to the draft dated October 25, 2021 previously provided to Jefferies in all respects material to its opinion. Jefferies assumed that the future distribution increase will be in effect and will apply to the first quarterly distribution following the closing of the LP Merger in accordance with the Merger Agreement. Jefferies also assumed that in the course of obtaining the necessary regulatory or third-party approvals, consents and releases for the transaction, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on Oasis Midstream, Crestwood or the contemplated benefits of the Mergers in any respect material to Jefferies’ opinion.

Jefferies’ opinion was provided for the use and benefit of the Oasis Midstream Conflicts Committee in its consideration of the transaction, and Jefferies’ opinion does not address the relative merits of the transactions contemplated by the Merger Agreement as compared to any alternative transaction or opportunity that might be available to Oasis Midstream, nor did it address the underlying business decision by OMP GP to engage in the Mergers or the terms of the Merger Agreement or the documents referred to in the Merger Agreement. In addition, the Oasis Midstream Conflicts Committee did not ask Jefferies to address, and the opinion did not address, the fairness to, or any other consideration of, the holders of any class of securities, creditors or other constituencies of Oasis Midstream, other than the Public Holders and Oasis Midstream. Jefferies opinion does not address the consideration to be received by Oasis Petroleum in the transaction, or the allocation of Equity Consideration and Sponsor Cash Consideration between Oasis Petroleum and the Public Holders. Jefferies

 

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expressed no opinion as to the price at which Oasis Midstream common units or Crestwood common units will trade at any time in the future. Jefferies did not express any view or opinion as to the fairness, financial or otherwise, of the amount or nature of any compensation payable or to be received by any of OMP GP’s officers, directors, or employees, or any class of such persons, in connection with the Mergers relative to the Public Holder Merger Consideration to be received by the Public Holders or otherwise. Jefferies’ opinion was authorized by the Fairness Committee of Jefferies.

In connection with rendering its opinion to the Oasis Midstream Conflicts Committee, Jefferies performed a variety of financial and comparative analyses, which are summarized below. The following summary is not a complete description of all analyses performed and factors considered by Jefferies in connection with its opinion. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant quantitative and qualitative methods of financial analysis and the applications of those methods to the particular circumstances and, therefore, is not necessarily susceptible to partial analysis or summary description. Jefferies believes that its analyses must be considered as a whole. Considering any portion of Jefferies’ analyses or the factors considered by Jefferies or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Jefferies’ analyses and opinion. Jefferies did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion, but rather arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole.

With respect to the selected public company analysis summarized below, no company used as a comparison was identical or directly comparable to Oasis Midstream or Crestwood. This analysis necessarily involved complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the values of the companies concerned.

The estimates of the future performance of Oasis Midstream and Crestwood in or underlying Jefferies’ analyses are not necessarily indicative of future results or values, which may be significantly more or less favorable than those estimates. In performing its analyses, Jefferies considered industry performance, general business, economic, monetary, regulatory, market and other conditions and other matters, many of which were beyond the control of Oasis Midstream, Crestwood and Jefferies. Estimates of the financial value of companies do not purport to be appraisals or necessarily reflect the prices at which companies or securities actually may be sold or acquired. Accordingly, the estimates used in, and the range of the valuations resulting from, any particular analysis described below are inherently subject to substantial uncertainty and should not be taken as Jefferies’ view of the actual value of Oasis Midstream or Crestwood, or their respective securities.

The Public Holder Exchange Ratio in the LP Merger and the resulting Public Holder Merger Consideration to be received in the LP Merger by the Public Holders pursuant to the Merger Agreement was determined through negotiations between OMP GP and Crestwood, and the Oasis Midstream Conflicts Committee decision to approve the Merger Agreement was solely that of the Oasis Midstream Conflicts Committee. Jefferies’ opinion and financial analyses were only one of many factors considered by the Oasis Midstream Conflicts Committee in its evaluation of the Public Holder Exchange Ratio and the resulting Public Holder Merger Consideration to be received in the LP Merger by the Public Holders pursuant to the Merger Agreement, and should not be viewed as determinative of the views of the Oasis Midstream Conflicts Committee with respect to the Mergers or the Public Holder Exchange Ratio in the LP Merger and the resulting Public Holder Merger Consideration.

Financial Analyses

The following is a summary of the material financial analyses provided to the Oasis Midstream Conflicts Committee and performed by Jefferies in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand Jefferies’ financial analyses, the

 

56

tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Jefferies’ financial analyses. For purposes of the financial analyses described below, (i) the term “Adjusted EBITDA” means earnings before interest expense (net of capitalized interest), income taxes, depreciation, amortization, equity-based compensation expenses and other similar non-cash adjustments, (ii) the term “free cash flow” refers to a calculation of the estimated future cash flows generated by Oasis Midstream or Crestwood, as the case may be, which is defined as Adjusted EBITDA less net maintenance capital expenditures and growth capital expenditures and, with respect to Crestwood, also excludes cash interest expense, income taxes, the cash received by Crestwood from its Powder River Basin operations in excess of revenue recognized and Crestwood’s proportionate share of its unconsolidated affiliates’ distributable cash flow, (iii) the term “Oasis Midstream forecasts” means financial forecasts and estimates relating to Oasis Midstream prepared by the management of OMP GP, and (iv) the term “Crestwood forecasts” means financial forecasts and estimates relating to Crestwood prepared by management of Crestwood and provided to Jefferies by management of OMP GP for use by Jefferies in its analyses. For more information relating to the Oasis Midstream forecasts and the Crestwood forecasts, see “The Mergers—Oasis Midstream, Crestwood and Pro Forma Unaudited Prospective Financial Information” beginning on page 60.

Selected Public Companies Analysis. Jefferies performed a selected public companies analysis by reviewing and comparing the trading multiples and estimated distribution yields of certain publicly traded midstream companies, referred to in this section as the “selected public companies,” to those of Oasis Midstream and Crestwood. Although none of the selected public companies are directly comparable to Oasis Midstream or Crestwood, the companies included were selected because they are midstream companies with operations, asset profiles, financial profiles, service profiles, geographic exposure and/or entity structure that, in Jefferies’ experience and professional judgment, for purposes of this analysis, may be considered similar to certain aspects of those of Oasis Midstream and Crestwood. In its selected public companies analysis, Jefferies considered the following metrics, using market data as of October 25, 2021 and information from public company filings, publicly available information and broker research estimates:

 

•

Enterprise Value/2021 EBITDA, which Jefferies calculated as the market value of equity based on closing prices as of October 25, 2021, plus debt, plus preferred equity, plus noncontrolling interest, plus the value of general partnership interest, and less cash and cash equivalents (“enterprise value”) divided by estimated earnings before interest, taxes, depreciation and amortization (“EBITDA”) (as projected by broker research analysts) for the calendar year 2021;

 

•

Enterprise Value/2022 EBITDA, which Jefferies calculated as enterprise value divided by estimated EBITDA (as projected by broker research analysts) for the calendar year 2022;

 

•

Estimated Current Distribution Yield, which Jefferies calculated as the projected distribution per common unit for 2021 divided by the price per common unit as of October 25, 2021; and

 

•

Estimated 2022 Distribution Yield, which Jefferies calculated as the projected distribution per common unit for 2022 divided by the price per common unit as of October 25, 2021.

Set forth below are the selected public companies used in Jefferies’ analysis:

 

•

Targa Resources Corp.

 

•

Western Midstream Partners, L.P.

 

•

DCP Midstream, LP

 

•

Equitrans Midstream Corporation

 

•

EnLink Midstream LLC

 

•

Hess Midstream LP

 

57

•

Antero Midstream Corporation

 

•

Rattler Midstream LP

 

•

Summit Midstream Partners, L.P.

Jefferies calculated the following mean and median trading multiples and estimated distribution yields of the selected public companies as follows:

 

			Mean				Median
EV/2021 EBITDA			9.6	x			9.7	x
EV/2022 EBITDA			9.0	x			9.4	x
Estimated Current Distribution Yield			5.3	%			5.5	%
Estimated 2022 Distribution Yield			5.9	%			5.7	%

Based on its review of the selected public companies and Jefferies professional judgment, Jefferies selected reference ranges for Oasis Midstream and Crestwood, and calculated the implied price per common unit for each of Oasis Midstream and Crestwood, and the resulting implied exchange ratios. Jefferies did not rely solely on the quantitative results of the selected public companies analysis, but also made qualitative judgments concerning differences between the business, financial, operating characteristics and prospects of Oasis Midstream, Crestwood and the selected public companies that could affect the public trading values of each in order to provide a context in which to consider the results of the qualitative analysis. These qualitative judgments related primarily to the differing growth prospects, sizes, asset profiles and capital structures between Oasis Midstream, Crestwood and the selected public companies. The selected reference ranges for Oasis Midstream and Crestwood, the implied price per common unit for each of Oasis Midstream and Crestwood and the resulting implied exchange ratios calculated by Jefferies are set forth below:

 

2021 Estimated Enterprise Value/ Adjusted EBITDA
		Oasis Midstream		Crestwood
Multiple Reference Range		7.0x-8.0x		8.0x-9.0x
Implied Unit Price		$19.81-$24.58		$25.22-$34.28
Implied Exchange Ratio		0.578-0.975

 

2022 Estimated Enterprise Value/ Adjusted EBITDA
		Oasis Midstream			Crestwood
Multiple Reference Range		6.5x-7.5x			7.5x-8.5x
Implied Unit Price		$20.11-$25.31		$	16.28-$24.75
Implied Exchange Ratio		0.813-1.555

 

Current Distribution Yield
			Oasis Midstream								Crestwood
Distribution per Unit			$2.24								$2.50
Yield Reference Range			10.50	%			9.50	%			9.50	%			8.50	%
Implied Unit Price			$21.33				$23.58				$26.32				$29.41
Implied Exchange Ratio			0.725-0.896

 

2022E Distribution Yield
		Oasis Midstream				Crestwood
Distribution per Unit		$2.56				$2.50
Yield Reference Range		11.00%		10.00%		9.50%			8.50%
Implied Unit Price		$23.27		$25.60		$26.32		$	29.41
Implied Exchange Ratio		0.791-0.973

Jefferies compared the implied exchange ratio ranges resulting from the selected companies analysis to the Public Holder Exchange Ratio and noted that the Public Holder Exchange Ratio was within the implied exchange ratio ranges derived by Jefferies from the selected companies analysis.

 

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Discounted Cash Flow Analysis. Jefferies performed a discounted cash flow analysis of Oasis Midstream, using an exit multiple approach, to calculate a range of implied present values of the free cash flows that Oasis Midstream was forecasted to generate through the full fiscal year ending December 31, 2024 utilizing the Oasis Midstream forecasts. Terminal values of Oasis Midstream were calculated by applying to Oasis Midstream’s EBITDA for the fiscal year ending December 31, 2024 a selected exit multiple range of 6.5x to 7.5x, which range was selected by Jefferies in its professional judgement. The present values of the cash flows and terminal values were then calculated using a selected discount rate range of 11.28% to 12.28%, which was based on the estimated weighted average cost of capital of Oasis Midstream derived by application of the capital asset pricing model. Jefferies derived a range of illustrative enterprise values for Oasis Midstream by adding the range of present values it derived above. Jefferies then subtracted from the range of illustrative enterprise values it derived for Oasis Midstream (i) the amount of Oasis Midstream’s net debt as of September 30, 2021 as set forth in the Oasis Midstream’s most recent quarterly report on Form 10-Q and (ii) the value of OMP GP’s interest in Oasis Midstream (which Jefferies assumed to be $10.0 million as set forth in the Merger Agreement) to derive a range of illustrative equity values for Oasis Midstream of $1.350 billion to $1.399 billion. Jefferies then divided the range of illustrative equity values by the total number of fully diluted outstanding Oasis Midstream common units, as provided by the management of OMP GP, and approved for Jefferies’ use by OMP GP, to derive a range of illustrative present values per Oasis Midstream common unit of $27.76 to $28.76.

Jefferies performed a discounted cash flow analysis of Crestwood, using an exit multiple approach, to calculate a range of implied present values of the free cash flows that Crestwood was forecasted to generate through the full fiscal year ending December 31, 2024 utilizing the Crestwood forecasts. Terminal values of Crestwood were calculated by applying to Crestwood’s forecasted EBITDA for the fiscal year ending December 31, 2024 a selected exit multiple range of 7.5x to 8.5x, which range was selected by Jefferies in its professional judgement. The present values of the cash flows and terminal values were then calculated using a selected discount rate range of 10.37% to 11.37%, which was based on the estimated weighted average cost of capital of Crestwood derived by application of the capital asset pricing model. Jefferies derived a range of illustrative enterprise values for Crestwood by adding the range of present values it derived above. Jefferies then subtracted from the range of illustrative enterprise values it derived for Crestwood (i) the estimated amount of Crestwood’s net debt as of September 30, 2021, (ii) the estimated amount of Crestwood’s preferred equity, and (iii) the estimated value of non-controlling interests in Crestwood, in each case as provided to Jefferies by the management of OMP GP for use by Jefferies in its analysis, to derive a range of illustrative equity values for Crestwood of $1.728 billion to $1.842 billion. Jefferies then divided the range of illustrative equity values by the total number of fully diluted outstanding Crestwood common units, as provided by the management of OMP GP, and approved for Jefferies’ use by OMP GP, to derive a range of illustrative present values per Crestwood common unit of $26.34 to $28.07.

Jefferies then calculated the implied exchange ratio range resulting from the discounted cash flow analysis to be 0.808 to 1.354 common units of Crestwood for each common unit of Oasis Midstream. Jefferies noted that the Public Holder Exchange Ratio of 0.8700 Crestwood common units for each Oasis Midstream common unit held by a Public Holder was within the implied exchange ratio range derived by Jefferies from the discounted cash flow analysis.

The discounted cash flow analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including cash flow estimates, terminal values and discount rates. The analysis did not purport to be indicative of the actual values or expected values of Oasis Midstream or Crestwood, or of the Oasis Midstream common units or the Crestwood common units.

Miscellaneous

Oasis Midstream has agreed to pay Jefferies an engagement fee of $300,000, which was payable upon the Oasis Midstream Conflict Committee’s engagement of Jefferies, and a fee of $1.0 million, which was payable

 

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upon delivery of Jefferies’ opinion. Oasis Midstream has also agreed to reimburse Jefferies for expenses, including fees and expenses of counsel, incurred in connection with Jefferies’ engagement, and to indemnify Jefferies and related parties against liabilities arising out of or in connection with the services rendered and to be rendered by Jefferies under its engagement.

In the past two years, Jefferies has not provided financial advisory or financing services to Oasis Midstream or its affiliates, or to Oasis Petroleum, Crestwood or entities affiliated with Oasis Petroleum or Crestwood. In addition, Jefferies has agreed that it will not, during the duration of its engagement, enter into any engagement to provide investment banking or financial advisory services to Oasis Midstream, Oasis Petroleum or Crestwood, without the prior written consent of the Oasis Midstream Conflicts Committee. Jefferies maintains a market in the securities of Oasis Midstream, and in the ordinary course of its business, Jefferies and its affiliates may trade or hold securities of Oasis Midstream, Oasis Petroleum, Crestwood, and/or their respective affiliates for its own account and for the accounts of its customers and, accordingly, may at any time hold long or short positions in those securities. In addition, Jefferies may seek to, in the future, provide financial advisory and financing services to Oasis Midstream, Oasis Petroleum, Crestwood or entities that are affiliated with Oasis Petroleum or Crestwood, for which Jefferies would expect to receive compensation.

Jefferies was selected to act as financial advisor to the Oasis Midstream Conflicts Committee in connection with the transactions because, among other factors, Jefferies is an internationally recognized investment banking firm with substantial experience in merger and acquisition transactions, its familiarity with Oasis Midstream and its business and Jefferies’ reputation. Jefferies is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, leveraged buyouts, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities and private placements.

Oasis Midstream, Crestwood and Pro Forma Unaudited Prospective Financial Information

Oasis Midstream and Crestwood do not as a matter of course make public long-term projections as to future sales, earnings or other results due to, among other reasons, the uncertainty of the underlying assumptions and estimates. As a result, the unaudited prospective financial information should not be taken as a reliable indication of future results. However, the management of Oasis Midstream and Crestwood have included the unaudited prospective financial information set forth below to present the financial information made available and utilized in connection with the Oasis Midstream Conflicts Committee’s respective evaluations of the LP Merger and the other transactions contemplated by the Merger Agreement. Jefferies used certain of the unaudited prospective financial information in connection with its financial analysis and opinion described in the section titled “—Opinion of the Oasis Midstream Conflicts Committee’s Financial Advisor,” with the approval of the Oasis Midstream Conflicts Committee. The inclusion of this information should not be regarded as an indication that any of Oasis Midstream, Crestwood, their respective advisors or other representatives or any other recipient of this information considered, or now considers, it to be necessarily predictive of actual future performance or events, or that it should be construed as financial guidance, and such summary projections set forth below should not be relied on as such. The unaudited prospective financial information is not being included in this consent statement/prospectus in order to influence any holder of Oasis Midstream common units to make an investment decision with respect to the LP Merger or to influence any holder of Oasis Midstream common units as to whether such unitholder should deliver a written consent or act with respect to the approval of the Merger Agreement, the LP Merger or the other transactions contemplated by the Merger Agreement or any other matter.

This information was prepared solely for internal use and is subjective in many respects. The Oasis Midstream unaudited prospective financial information, and the Crestwood unaudited prospective financial information (each as defined below and collectively referred to herein as the “unaudited prospective financial information”) were based solely upon information available to Oasis Midstream’s management and, with respect to the Crestwood unaudited prospective financial information, to Crestwood, at the time of their preparation.

While presented with numeric specificity, the unaudited prospective financial information reflects numerous estimates and assumptions that were deemed to be reasonable as of the respective dates the estimates and

 

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assumptions were made, but are inherently uncertain and may be beyond the control of Oasis Midstream’s and Crestwood’s management. These assumptions include, but are not limited to, Oasis Midstream’s and Crestwood’s future results, ability to implement its business plan, industry factors that influence the supply of and demand for crude oil, natural gas and NGLs, the availability of crude oil, natural gas and NGLs, and the price of those commodities to consumers relative to the price of alternative and competing fuels, and other matters described in the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors.” The unaudited prospective financial information reflects both assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgment, and thus is susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. Oasis Midstream and Crestwood can give no assurance that the unaudited prospective financial information and the underlying estimates and assumptions will be realized.

In addition, since the unaudited prospective financial information is inherently forward looking and covers multiple years, such information by its nature becomes less predictive with each successive year. Actual results may differ materially from those set forth below, and important factors that may affect actual results and cause the unaudited prospective financial information to be inaccurate include, but are not limited to, risks and uncertainties relating to Oasis Midstream and Crestwood’s businesses, industry performance, the regulatory environment, general business and economic conditions and other matters described under the section of this consent statement/prospectus entitled “Risk Factors.” See also “Cautionary Statement Regarding Forward-Looking Statements” and “Where You Can Find More Information.”

The accompanying unaudited prospective financial information was not prepared with a view toward public disclosure, nor was it prepared with a view toward compliance with generally accepted accounting principles (“GAAP”), published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation of prospective financial information. In the view of Oasis Midstream’s and Crestwood’s management, was prepared on a reasonable basis, reflects the best estimates and judgments then-available, and presents, to the best of management’s knowledge and belief, the then-expected course of action and financial performance of Oasis Midstream and Crestwood. However, this information is not fact and should not be relied upon as being necessarily indicative of future results, and readers of this consent statement/prospectus are cautioned not to place undue reliance on the unaudited prospective financial information. The unaudited prospective financial information regarding Oasis Midstream and Crestwood included in this consent statement/prospectus has been prepared by the management of Oasis Midstream and Crestwood, respectively. Neither Oasis Midstream’s independent registered public accounting firm, PricewaterhouseCoopers, nor Crestwood’s independent registered public accounting firm, Ernst & Young, have audited, reviewed, examined, compiled nor applied agreed upon procedures with respect to the unaudited prospective financial information included in this consent statement/prospectus and accordingly, PricewaterhouseCoopers and Ernst & Young do not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers and Ernst & Young reports incorporated by reference in this registration statement on Form S-4 of which this consent statement/prospectus forms a part relate to the previously issued financial statements included in Oasis Midstream’s and Crestwood’s respective Annual Reports on Form 10-K for the year ended December 31, 2020. Such reports do not extend to the unaudited prospective financial information included herein and should not be read to do so.

Furthermore, the unaudited prospective financial information does not take into account any circumstances or events occurring after the date it was prepared. Oasis Midstream and Crestwood can give no assurance that, had the unaudited prospective financial information been prepared either as of the date of the Merger Agreement or as of the date of this consent statement/prospectus, similar estimates and assumptions would be used. Except as required by applicable securities laws, Oasis Midstream and Crestwood do not intend to, and disclaim any obligation to, make publicly available any update or other revision to the unaudited prospective financial information to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error, including with

 

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respect to the accounting treatment of the Mergers under GAAP, or to reflect changes in general economic or industry conditions.

The unaudited prospective financial information does not take into account all of the possible financial and other effects on Oasis Midstream or Crestwood of the Mergers, the effect on Oasis Midstream or Crestwood of any business or strategic decision or action that has been or will be taken as a result of the Merger Agreement having been executed, or the effect of any business or strategic decisions or actions that would likely have been taken if the Merger Agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the Mergers. Further, the unaudited prospective financial information does not take into account the effect on Oasis Midstream or Crestwood of any possible failure of the Mergers to occur. None of Oasis Midstream, Crestwood, or their respective affiliates, officers, directors, advisors or other representatives has made, makes or is authorized in the future to make any representation to any Oasis Midstream or Crestwood unitholder or other person regarding Oasis Midstream’s or Crestwood’s ultimate performance compared to the information contained in the unaudited prospective financial information or that the forecasted results will be achieved. The inclusion of the unaudited prospective financial information should not be deemed an admission or representation by Oasis Midstream, Crestwood, their respective affiliates, officers, directors, advisors or other representatives that it is viewed as material information of Oasis Midstream or Crestwood, particularly in light of the inherent risks and uncertainties associated with such forecasts. The summary of the unaudited prospective financial information included below is not being included to influence your decision whether to consent to the approval of the Merger Agreement or any other matter for which Oasis Midstream is soliciting consents of the holders of Oasis Midstream common units, but is being provided solely because certain of such information was among the financial information made available to and utilized in connection with the Oasis Midstream Conflicts Committee’s evaluation of the Mergers and the other transactions contemplated by the Merger Agreement.

In light of the foregoing, and considering the uncertainties inherent in any forecasted information, holders of Oasis Midstream common units are cautioned not to place undue reliance on such information, and Oasis Midstream urges all holders of Oasis Midstream common units to review Oasis Midstream’s most recent SEC filings for a description of Oasis Midstream’s reported financial results and Crestwood’s most recent SEC filings for a description of Crestwood’s reported financial results. See the section entitled “Where You Can Find More Information” beginning on page 158 of this consent statement/prospectus.

Unaudited Prospective Financial Information Regarding Oasis Midstream

In preparing the Oasis Midstream unaudited prospective financial information described below, the management team of Oasis Midstream used conservative, flat pricing assumptions of a NYMEX WTI oil price of $45.00 per barrel and a Henry Hub natural gas price of $2.50 per metric million British thermal unit to represent the threshold index pricing required to deliver the volumes and cash flows assumed in the forecast.

In addition to the assumptions above regarding commodity price environment, in developing the Oasis Midstream unaudited prospective financial information, Oasis Midstream’s management made numerous assumptions regarding Oasis Midstream’s business, including, but not limited to:

 

•

future rig activity and well connects from current Oasis Midstream customers;

 

•

growth capital to service the assumed future development activity largely consisting of pipeline construction, well connects and additional compression;

 

•

maintenance capital to maintain and operate the existing asset base;

 

•

operating cost assumptions across Oasis Midstream’s crude, gas, produced water and freshwater service offerings; and

 

•

Oasis Midstream’s commercial discussions and perspectives regarding prospective new contracts on a contract-by-contract basis.

 

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The following table presents selected unaudited prospective financial data of Oasis Midstream (referred to herein as the “Oasis Midstream unaudited prospective financial information”):

 

		Year ended December 31,
		2021E				2022E				2023E				2024E
		(in millions, except per unit data)
Adjusted EBITDA(1)		$	208			$	249			$	290			$	311
Distributable Cash Flow(2)		$	158			$	182			$	224			$	239
Capital Expenditures		$	70			$	115			$	114			$	77
Free Cash Flow (Pre-Distribution)(3)		$	102			$	89			$	131			$	190
Distributions per Oasis Midstream Common Unit		$	2.27			$	2.56			$	2.88			$	3.20
Net Leverage(4)			2.8	x			2.7	x			2.4	x			2.1	x

 

(1)

Adjusted EBITDA is defined as earnings before interest expense (net of capitalized interest), income taxes, depreciation, amortization, equity-based compensation expenses and other similar non-cash adjustments. Adjusted EBITDA includes any cash-based public company general and administrative expenses.

(2)	Distributable Cash Flow is defined as Adjusted EBITDA attributable to Oasis Midstream less Cash Interest and maintenance capital expenditures attributable to Oasis Midstream.

(3)	Free Cash Flow is defined as Distributable Cash Flow less growth capital expenditures attributable to Oasis Midstream less distributions to its unitholders. Free Cash Flow (Pre-Distribution) adds unitholder distributions back to Free Cash Flow.

(4)	Net Leverage is defined as net debt (total debt less cash and cash equivalents) divided by Adjusted EBITDA for the last twelve-month period to the date reported.

Unaudited Prospective Financial Information Regarding Crestwood

Crestwood provided unaudited prospective financial information of Crestwood on a standalone basis for years 2021 to 2026 to OMP (the “Crestwood unaudited prospective financial information”), which Oasis Midstream shared with the Oasis Midstream Conflicts Committee. The Crestwood unaudited prospective financial information provided by Crestwood management assumed the following oil and natural gas price prices (with oil prices based on NYMEX WTI pricing and natural gas prices based on Henry Hub pricing), in each case based on Crestwood management’s generated outlook for future commodity price levels as of August 25, 2021:

 

		Oil and Gas Price Assumptions
		2021E				2022E				2023E				2024E				2025E				2026E
Commodity Prices
Oil ($/Bbl)		$	62			$	64			$	62			$	62			$	63			$	64
Gas ($/MMBtu)		$	3.07			$	3.30			$	2.84			$	3.03			$	3.17			$	3.15

In addition to the assumptions above regarding the commodity price environment, in developing the Crestwood unaudited prospective financial information, Crestwood management made numerous assumptions regarding Crestwood’s business, including, but not limited to:

 

•

the existing customer contracts and assumed development activity;

 

•

well connects based on long-term guidance from producer customers;

 

•

operating and maintenance expenses across all service offerings;

 

•

general and administrative expenses for corporate overhead;

 

•

growth capital requirements primarily to build out the pipeline and compression infrastructure needed to service the increasing volumes of Crestwood’s existing customers;

 

•

maintenance capital to continue operating assets according to safety, environmental, compliance and reliability standards.

 

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The following table presents the Crestwood unaudited prospective financial information provided by Crestwood’s management:

 

		Year ended December 31,
		2021E				2022E				2023E				2024E				2025E				2026E
		(in millions, except per unit data)
Adjusted EBITDA(1)		$	595			$	556			$	556			$	610			$	662			$	685
Growth Capital Expenditures(2)		$	44			$	51			$	50			$	49			$	51			$	61
Distributable Cash Flow(3)		$	471			$	438			$	424			$	457			$	522			$	556
Free Cash Flow (After Distributions)(4)		$	169			$	128			$	116			$	149			$	213			$	236
Distributions per Crestwood Common Unit		$	2.50			$	2.50			$	2.50			$	2.50			$	2.50			$	2.50
Net Leverage(5)			3.53	x			3.41	x			3.34	x			2.94	x			2.38	x			1.97	x

 

(1)

EBITDA is defined as income before income taxes, plus debt-related costs (interest and debt expense, net and loss on modification/extinguishment of debt) and depreciation, amortization and accretion expense. Adjusted EBITDA considers the adjusted earnings impact of Crestwood’s unconsolidated affiliates by adjusting its equity earnings or losses from our unconsolidated affiliates to reflect Crestwood’s proportionate share (based on the distribution percentage) of their EBITDA, excluding gains and losses on long-lived assets and other impairments. Adjusted EBITDA also considers the impact of certain significant items, such as unit-based compensation charges, gains or losses on long-lived assets, impairments of goodwill, third-party costs incurred related to potential and completed acquisitions, certain environmental remediation costs, the change in fair value of commodity inventory-related derivative contracts, costs associated with the realignment and restructuring of our operations and corporate structure, and other transactions identified in a specific reporting period. The change in fair value of commodity inventory-related derivative contracts is considered in determining Adjusted EBITDA given that the timing of recognizing gains and losses on these derivative contracts differs from the recognition of revenue for the related underlying sale of inventory to which these derivatives relate. Changes in the fair value of other derivative contracts is not considered in determining Adjusted EBITDA given the relatively short-term nature of those derivative contracts. EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, as they do not include deductions for items such as depreciation, amortization and accretion, interest and income taxes, which are necessary to maintain our business. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income, operating cash flow or any other measure of financial performance presented in accordance with GAAP. EBITDA and Adjusted EBITDA calculations may vary among entities, so Crestwood’s computation may not be comparable to measures used by other companies, including Oasis Midstream.

(2)	Growth Capital Expenditures is defined as capital expenditures made to construct additional assets, expand and upgrade existing systems, or acquire additional assets.

(3)

Distributable Cash Flow is defined as Adjusted EBITDA, adjusted for cash interest expense, maintenance capital expenditures, income taxes, the cash received from our Powder River Basin operations in excess of revenue recognized, and Crestwood’s proportionate share of its unconsolidated affiliates’ distributable cash flow. Distributable Cash Flow should not be considered an alternative to cash flows from operating activities or any other measure of financial performance calculated in accordance with GAAP as those items are used to measure operating performance, liquidity, or the ability to service debt obligations. Crestwood believes that Distributable Cash Flow provides additional information for evaluating its ability to declare and pay distributions to unitholders. Distributable cash flow, as Crestwood defines it, may not be comparable to distributable cash flow or similarly titled measures used by other companies, including Oasis Midstream.

(4)

Free Cash Flow is defined as distributable cash flow attributable to common unitholders less growth capital expenditures and distributions to common unitholders. Free Cash Flow should not be considered an alternative to cash flows from operating activities or any other measure of liquidity calculated in accordance with GAAP as those items are used to measure liquidity or the ability to service debt obligations. Crestwood believes that free cash flow after distributions provides additional information for evaluating our ability to

 

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generate cash flow after paying our distributions to common unitholders and paying for our growth capital expenditures.

(5)	Net Leverage is defined as net debt (total debt less cash and cash equivalents) divided by EBITDA for the last twelve-month period to the date reported.

Certain of the measures included in the Oasis Midstream unaudited prospective financial information and the Crestwood unaudited prospective financial information are non-GAAP financial measures, including, but not limited to, EBITDA, Adjusted EBITDA, Distributable Cash Flow and Free Cash Flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by Oasis Midstream and Crestwood are not reported by all of their competitors and may not be comparable to similarly titled amounts used by other companies.

OASIS MIDSTREAM AND CRESTWOOD DO NOT INTEND TO, AND DISCLAIM ANY OBLIGATION TO, UPDATE, CORRECT OR OTHERWISE REVISE THE OASIS MIDSTREAM UNAUDITED PROSPECTIVE FINANCIAL INFORMATION OR THE CRESTWOOD UNAUDITED PROSPECTIVE FINANCIAL INFORMATION TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE OF THE MERGER AGREEMENT OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE OASIS MIDSTREAM UNAUDITED PROSPECTIVE FINANCIAL INFORMATION OR THE CRESTWOOD UNAUDITED PROSPECTIVE FINANCIAL INFORMATION ARE NO LONGER APPROPRIATE (EVEN IN THE SHORT TERM).

Interests of OMP GP Directors and Executive Officers in the Mergers

OMP GP has the sole responsibility for conducting Oasis Midstream’s business and managing Oasis Midstream’s operations, and its board of directors and executive officers make decisions on Oasis Midstream’s behalf. Therefore, references to “Oasis Midstream’s executive officers” or “Non-Employee Directors of Oasis Midstream” used throughout this section reference those directors and executive officers of OMP GP. OMP GP’s executive officers, who make decisions on behalf of Oasis Midstream, are officers of and employed by Oasis Petroleum and shall continue to be employed by Oasis Petroleum following consummation of the Mergers.

Oasis Midstream common unitholders should be aware of and take into account the fact that OMP GP directors and executive officers have interests in the Mergers that may be different from, or in addition to, those of the Oasis Midstream common unitholders generally. The primary differentiating interest is that all of OMP GP’s officers and certain of OMP GP’s directors are also officers and/or directors of Oasis Petroleum. Other interests include rights to continuing indemnification and directors’ and officers’ liability insurance, as well as accelerated vesting of outstanding Oasis Midstream Restricted Unit Awards. The OMP GP Board was aware of and carefully considered these interests, among other matters, in evaluating the terms and structure, and overseeing the negotiation, of the Mergers, in approving the Merger Agreement and the transactions contemplated thereby, including the Mergers. These interests are described in more detail below, and certain of them are quantified in the narrative and the tables below.

Indemnification, Exculpation and Insurance

In connection with the Mergers, Crestwood has agreed that all rights to indemnification, advancement and exculpation existing in favor of the current or former directors and officers of Oasis Midstream and its subsidiaries in the organizational documents of Oasis Midstream, OMP GP or any of their respective subsidiaries or in any indemnification agreements between Oasis Midstream, OMP GP or any of their respective affiliates and the current or former directors and officers of Oasis Midstream, in each case, as in effect on the date of the Merger Agreement, for acts or omissions occurring prior to the effective time are assumed and performed by the surviving company, with any payments thereof guaranteed by Crestwood, and continue in full force and effect for a period of six years after the effective time, except as otherwise required by applicable law.

 

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The Merger Agreement requires Crestwood and the surviving company to maintain in effect Oasis Midstream’s current directors’ and officers’ liability insurance covering each person currently covered by such liability insurance policy for acts or omissions occurring prior to the effective time for a period of six years after the effective time, but in no event will Crestwood and the surviving company be required to pay more than three times the last aggregate annual premium paid by Oasis Midstream prior to the date of the Merger Agreement (the “Maximum Amount”) to obtain such coverage. If Oasis Midstream elects in its sole discretion, Oasis Midstream may instead obtain extended reporting coverage under its existing insurance programs prior to the effective time. In no event will the aggregate cost of such policy extension exceed six times the Maximum Amount.

Treatment of Oasis Midstream Equity Awards

Oasis Midstream has granted Oasis Midstream Restricted Unit Awards under the Oasis Midstream 2017 Long Term Incentive Plan (the “LTIP”) to the members of the board of OMP GP who are not employees of OMP GP or of Oasis Petroleum (each, a “Non-Employee Director” and collectively, the “Non-Employee Directors”). In addition, certain Class B Units representing membership interests in OMP GP held by certain OMP GP’s executive officers were previously converted into and exchanged for the right to receive restricted Oasis Midstream common units in connection with the simplification transactions completed on March 30, 2021 pursuant to Incentive Unit Award Agreements, as amended and later supplemented (the “Incentive Unit Agreements”) (including, for the avoidance of doubt, that certain Incentive Unit Award Agreement dated as of May 22, 2017 and that certain Supplement to Incentive Unit Award Agreement dated as of March 30, 2021), such that certain of Oasis Midstream’s executive officers also hold restricted Oasis Midstream common units.

Pursuant to the terms of the Merger Agreement, each unvested Oasis Midstream Restricted Unit Awards held by an Oasis Midstream executive officer or Non-Employee Director will, at the effective time, automatically, and without any action on the part of Oasis Midstream, Crestwood, or the holder thereof become fully vested and be converted into the right to receive a number of unrestricted limited partner interests in Crestwood equal to the product of (a) the number of Oasis Midstream common units subject to such award as of immediately prior to the effective time and (b) the Public Holder Exchange Ratio, rounded up or down to the nearest whole Crestwood common unit and less any units withheld to satisfy tax withholding obligations.

The following table sets forth, for each Oasis Midstream executive officer, the aggregate number of restricted Oasis Midstream common units held by such executive officer as of December 23, 2021.

 

Oasis Midstream Executive Officer Name		Number of Restricted Oasis Midstream Common Units Held
Taylor L. Reid			13,670
Michael H. Lou			13,670
Nickolas J. Lorentzatos			13,670

The following table sets forth, for each Non-Employee Director, the aggregate number of Oasis Midstream common units subject to Oasis Midstream Restricted Unit Awards granted under the LTIP held by such Non-Employee Director as of December 23, 2021.

 

Oasis Midstream Non-Employee Director Name		Number of Oasis Midstream Common Units Subject to Outstanding Oasis Midstream Restricted Unit Awards (#)
Phillip D. Kramer			5,438
Matthew D. Fitzgerald			5,438
Harry N. Pefanis			5,438

 

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Securities Ownership of Certain Beneficial Owners and Management

To Oasis Midstream’s knowledge, the following tables set forth certain information regarding the beneficial ownership of Oasis Midstream common units as of the close of business on December 23, 2021 (except as noted in the footnotes below) and with respect to: (1) each person known by Oasis Midstream to beneficially own 5% or more of the outstanding Oasis Midstream common units; (2) each member of the board of directors of OMP GP; (3) each named executive officer of Oasis Midstream; and (4) the members of the board of directors of OMP GP and Oasis Midstream’s current executive officers as a group.

Principal Unitholders

The following table contains information regarding the only person Oasis Midstream knows of that beneficially owns more than 5% of outstanding Oasis Midstream common units as of December 23, 2021. Percentage of class amounts are based on 48,627,680 of Oasis Midstream common units outstanding as of December 23, 2021.

 

		Common units beneficially owned
Name of beneficial owner		Number				Percentage
Oasis Petroleum Inc. (1)			33,846,032				69.6	%

 

(1)	1001 Fannin Street, Suite 1500, Houston, Texas 77002.

Unit Ownership of Directors and Executive Officers

The following table sets forth, as of December 23, 2021, the beneficial ownership of Oasis Midstream common units by:

 

•

each of OMP GP’s directors;

 

•

each of OMP GP’s named executive officers; and

 

•

all of OMP GP’s directors and executive officers as a group.

 

		Common units beneficially owned
Name of beneficial owner		Number				Percentage
Daniel E. Brown (1)			—				*
Matthew D. Fitzgerald (1)			33,201				*
Phillip D. Kramer (1)			44,201				*
Nickolas J. Lorentzatos (1)			26,612				*
Michael H. Lou (1)			45,712				*
Harry N. Pefanis (1)			46,278				*
Taylor L. Reid (1)			40,712				*
Richard N. Robuck (1)			18,797				*
All directors and executive officers as a group (8 people)			255,513				*

 

*	Less than 1%

(1)	1001 Fannin Street, Suite 1500, Houston, Texas 77002

Expenses, Fees and Costs

All fees, costs and expenses incurred by Crestwood and Oasis Midstream in connection with the Mergers will be paid by the party incurring those fees, costs or expenses, whether or not the Mergers are completed, except that the fees and expenses incurred in connection with the printing, filing and mailing of this document (including applicable SEC filing fees but excluding legal fees in connection therewith) and filing fees payable under the HSR Act will be borne equally by Crestwood and Oasis Midstream.

 

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In the event of a termination of the Merger Agreement under certain circumstances, Oasis Midstream (or Oasis Petroleum) may be required to pay Crestwood a breakup fee of $40,000,000. See “The Merger Agreement—Breakup Fee” beginning on page 89 of this consent statement/prospectus.

Expected Timing of the Mergers

Crestwood and Oasis Midstream currently expect to complete the Mergers in early 2022, subject to the receipt of required regulatory approvals and the satisfaction or waiver of the other conditions to completion of the Mergers. Because many of the conditions to completion of the Mergers is beyond the control of Crestwood and Oasis Midstream, the exact timing for completion of the Mergers cannot be predicted with any degree of certainty.

No Crestwood Unitholder Approval

Crestwood unitholders are not required to approve the Merger Agreement or the issuance of Crestwood common units in connection with the LP Merger.

Registration Rights Agreement

In connection with the closing of the Mergers, Crestwood will enter into a registration rights agreement (the “registration rights agreement”) with Oasis Petroleum and certain of its subsidiaries, pursuant to which Oasis Petroleum and certain of its subsidiaries will have customary rights, including, among other things, requiring Crestwood to file and maintain the effectiveness of a registration statement with respect to the resale of the Crestwood common units owned by Oasis Petroleum and certain of its subsidiaries (including by having their Crestwood common units registered for resale in certain other registration statements filed by Crestwood or in certain underwritten offerings proposed by Crestwood) and, under certain circumstances, requiring Crestwood to initiate up to three underwritten offerings for such Crestwood common units, subject to a minimum threshold.

Also pursuant to the registration rights agreement, Oasis Petroleum and certain of its subsidiaries will agree not to directly or indirectly sell or otherwise dispose of their Crestwood common units received in the LP Merger for a period ending 90 days following the closing date of the transactions contemplated by the Merger Agreement, subject to certain exceptions, including a pro rata dividend of such Crestwood common units to Oasis Petroleum stockholders. Additionally, for a period of two years following the closing date of the transactions contemplated by the Merger Agreement, Crestwood will have a right of first offer in connection with certain sales by Oasis Petroleum and its subsidiaries of its Crestwood common units.

This summary of the registration rights agreement is qualified in its entirety by reference to the form of registration rights agreement attached as Exhibit A to the Merger Agreement, which is attached to this consent statement/prospectus as Annex A and incorporated by reference herein in its entirety.

Director Nomination Agreement

In connection with the closing of the Mergers, Crestwood will enter into a director nomination agreement with Oasis Petroleum (the “director nomination agreement”). The director nomination agreement will grant Oasis Petroleum certain designation rights pursuant to which Oasis Petroleum may cause the Crestwood GP Board to elect the designees selected by Oasis Petroleum including by increasing its size from nine to eleven directors. At the closing, and for so long as it and its affiliates own 15% of the issued and outstanding Crestwood common units, Oasis Petroleum may designate two directors to the Crestwood GP Board. Oasis Petroleum may designate one director if Oasis Petroleum and its affiliates hold at least 10% (but less than 15%) of the issued and outstanding Crestwood common units.

This summary of the director nomination agreement is qualified in its entirety by reference to the form of director nomination agreement attached as Exhibit B to the Merger Agreement, which is attached to this consent statement/prospectus as Annex A and incorporated by reference herein in its entirety.

 

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Transition Services Agreement

In connection with the closing of the Mergers, Crestwood will enter into a transition services agreement with a subsidiary of Oasis Petroleum pursuant to which such subsidiary will provide customary transition services to Crestwood for a limited duration.

This summary of the transition services agreement is qualified in its entirety by reference to the form of transition services agreement attached as Exhibit C to the Merger Agreement, which is attached to this consent statement/prospectus as Annex A and incorporated by reference herein in its entirety.

Master Amendment to Commercial Agreements

In connection with the closing of the Mergers, Oasis Petroleum and Oasis Midstream will enter into a master amendment to commercial agreements to amend certain commercial agreements between Oasis Petroleum and Oasis Midstream at closing (the “master amendment to commercial agreements”).

This summary of the master amendment to commercial agreements is qualified in its entirety by reference to the form of master amendment to commercial agreements attached as Exhibit D to the Merger Agreement, which is attached to this consent statement/prospectus as Annex A and incorporated by reference herein in its entirety.

Accounting Treatment of the Mergers

In accordance with accounting principles generally accepted in the United States and in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic 805-Business Combinations, Crestwood will account for the LP Merger as an acquisition of a business.

Regulatory Approvals

Under the HSR Act, and related rules and regulations, certain transactions, including the Mergers, may not be completed until notification and report forms have been filed with the Antitrust Division and the FTC, and the applicable waiting period (and any extensions of such waiting period) has expired or been terminated. Crestwood and Oasis Midstream each filed the required notification and report forms under the HSR Act on November 9, 2021.

At any time before or after the effective time, the Antitrust Division, the FTC could take action under the U.S., including seeking to prevent the Mergers, to rescind the Mergers or to conditionally approve the Mergers upon the divestiture of assets of Crestwood or Oasis Midstream or behavioral commitments, or subject to other remedies. In addition, U.S. state attorneys general could take action under the antitrust laws as they deem necessary or desirable in the public interest, including, without limitation, seeking to enjoin the Mergers or permitting completion subject to divestitures, behavioral commitments, or other regulatory concessions or conditions. There can be no assurance that regulatory authorities will not impose conditions on the completion of the Mergers or require changes to the terms of the Mergers. Private parties may also seek to take legal action under the antitrust laws under some circumstances. There can be no assurance that a challenge to the Mergers on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.

Exchange of Units

American Stock Transfer & Trust Company ("AST") will serve as the exchange agent for purposes of issuing the Public Holder Merger Consideration.

As soon as reasonably practicable after the effective time (and in any event not later than the fifth business day following the effective time), the exchange agent will mail to each holder of record of Public Units, which at

 

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the effective time were converted into the right to receive the Public Holder Merger Consideration, (i) a notice advising such Public Holder of the effectiveness of the LP Merger and the applicable terms of the exchange effected thereby; (ii) tax certification guidelines; and (iii) any other material reasonably required by the exchange agent. The exchange agent will cause to be issued and distributed to the holder(s) as soon as reasonably practicable and no later than the fifth business day following the effective time in whose name such Oasis Midstream common units were registered in book-entry: (i) the whole number of Crestwood common units issuable to such holder pursuant to the Merger Agreement, registered in the name of such holder(s), in the form of book-entry interests; and (ii) a check for any cash payable to the Public Holders in connection with a Crestwood distribution. No interest will be paid or will accrue on any amounts payable pursuant to Section 2.2(c) of the Merger Agreement.

All Crestwood common units to be issued pursuant to the Merger Agreement will be deemed issued and outstanding as of the effective time, and whenever a distribution is declared by the Crestwood GP Board in respect of the Crestwood common units, the record date for which is at or after the effective time, that declaration shall include distributions in respect of all Crestwood common units to be issued pursuant to the Mergers.

All Equity Consideration issued to those holder(s) whose name such Oasis Midstream common units were registered in book-entry form in accordance with the terms of the Merger Agreement and any cash paid as distributions pursuant to Section 2.2(c) of the Merger Agreement will be deemed to have been issued (or paid) in full satisfaction of all rights pertaining to such Oasis Midstream common units. After the effective time, the transfer books of Oasis Midstream will be closed, and there will be no further registration of transfers on the transfer books of Oasis Midstream common units. If, after the effective time, Oasis Midstream common units are presented to Oasis Midstream or the exchange agent for any reason, they will be cancelled and exchanged as provided in the Merger Agreement.

Each of Crestwood, the Merger Subs and the exchange agent will be entitled to deduct and withhold from the consideration otherwise payable pursuant to the Merger Agreement, such amounts as Crestwood, the Merger Subs and the exchange agent are required to deduct and withhold under law, with respect to the making of such payment (and to the extent deduction and withholding is required, such deduction and withholding may be taken in Crestwood common units); provided, that Crestwood, the Merger Subs or the exchange agent, as applicable, will notify Oasis Midstream and OMP GP of any such determination to deduct or withhold and will cooperate in good faith to minimize any such deductions or withholding to the extent permissible under law. To the extent that amounts are withheld and paid over to the applicable governmental entity, such withheld or deducted amounts will be treated as having been paid to the person in respect of which such deduction and withholding were made. If deduction or withholding is taken in Crestwood common units, Crestwood, the Merger Subs or the exchange agent, as applicable, shall be treated as having sold such Crestwood common units for an amount of cash equal to the fair market value of such Crestwood common units at the time of such deemed sale.

One year after the effective time, any portion of the exchange fund that remains undistributed to former Oasis Midstream common unitholders will be delivered to Crestwood upon demand, and any holders of Oasis Midstream common units who have not surrendered such units to the exchange agent in compliance with the Merger Agreement may thereafter look only to Crestwood for payment of their claim for the Public Holder Merger Consideration and any distributions payable pursuant to the Merger Agreement.

Listing of Crestwood Common Units Issued in the Transactions; Delisting and Deregistration of Oasis Midstream Common Units After the Transactions

It is a condition to the completion of the transactions that the Crestwood common units to be issued in the LP Merger to the unitholders of Oasis Midstream as contemplated by the Merger Agreement will have been approved for listing on the NYSE, subject to official notice of issuance. Upon completion of the LP Merger, the Oasis Midstream common units will cease to be listed on the Nasdaq and will be deregistered under the Exchange Act.

 

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Litigation Relating to the Mergers

In December 2021, the Plaintiffs filed lawsuits in the United States District Court for the Southern District of New York and the United States District Court for the District of Delaware challenging the LP Merger and the disclosures made in connection with the LP Merger. The Lawsuits are brought against Oasis Midstream and OMP GP’s board of directors, as well as with respect to the Eckert-Smith Lawsuit, Crestwood, Merger Sub, GP Merger Sub, OMP GP and Crestwood GP. The Lawsuits allege that the Defendants violated Sections 14(a) and 20(a) of the Exchange Act in connection with the Registration Statement. The Lawsuits allege that the Registration Statement filed on December 7, 2021 omitted material information about, among other things, Oasis Midstream’s and Crestwood’s financial projections and the analyses conducted by Oasis Midstream Conflicts Committee’s financial advisor. The Plaintiffs seek to enjoin Defendants from proceeding with or consummating the LP Merger unless and until the Defendants disclose the allegedly omitted information summarized above. In addition, the Plaintiff in the Mays Lawsuit also seeks costs and disbursements, including reasonable attorneys’ fees and expenses, among other relief. The Plaintiff in the Eckert-Smith Lawsuit seeks rescission or rescissory damages in the event the LP Merger is consummated and attorneys’ and experts’ fees, among other relief.

Defendants’ dates to answer, move to dismiss, or otherwise respond to the Lawsuits have not yet been set. Defendants cannot predict the outcome of this or any other lawsuit that might be filed subsequent to the date of the filing of this Registration Statement, nor can Defendants predict the amount of time and expense that will be required to resolve such litigation. Defendants believe the Lawsuits are without merit and intend to defend vigorously against the Lawsuits and any other actions challenging the Mergers.

 

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THE MERGER AGREEMENT

The following section summarizes material provisions of the Merger Agreement. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is important to you. This summary is subject to, and qualified in its entirety by reference to, the Merger Agreement, which is attached as Annex A to this consent statement/prospectus and is incorporated by reference herein. The rights and obligations of the parties are governed by the express terms and conditions of the Merger Agreement and not by this summary or any other information contained in this consent statement/prospectus. You are urged to read the Merger Agreement carefully and in its entirety before making any decisions regarding the Mergers.

The Merger Agreement summary is included in this consent statement/prospectus only to provide you with information regarding the terms and conditions of the Merger Agreement, and not to provide any other factual information about Crestwood or Oasis Midstream or their respective subsidiaries, affiliates or businesses. Accordingly, the representations and warranties and other provisions of the Merger Agreement should not be read alone, but instead should be read together with the information provided elsewhere in this consent statement/prospectus and in the documents incorporated by reference herein. See “Where You Can Find More Information” beginning on page 158 of this consent statement/prospectus.

The representations, warranties and covenants contained in the Merger Agreement and described in this document were made only for purposes of the Merger Agreement and as of specific dates and may be subject to more recent developments, were made solely for the benefit of the other parties to the Merger Agreement and may be subject to limitations agreed upon by the contracting parties, including being qualified by reference to confidential disclosures which may modify, qualify or create exceptions to the representations and warranties, for the purposes of allocating risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may apply standards of materiality in a way that is different from what may be viewed as material by you or other investors. The representations and warranties contained in the Merger Agreement do not survive the effective time of the Mergers. Moreover, information concerning the subject matter of the representations, warranties, covenants and agreements may change after the date of the Merger Agreement.

Crestwood and Oasis Midstream will provide additional disclosure in their filings with the SEC, to the extent that they are aware of the existence of any material facts that are required to be disclosed under federal securities laws and that might otherwise contradict the terms and information contained in the Merger Agreement and will update such disclosure as required by federal securities laws.

The Mergers

The Merger Agreement by and among Crestwood, Merger Sub, GP Merger Sub, Oasis Midstream, OMP GP and, solely for the purposes of certain sections therein, Crestwood GP, provides for the merger of Merger Sub with and into Oasis Midstream, with Oasis Midstream as the surviving entity and becoming a wholly owned subsidiary of Crestwood, and the merger of GP Merger Sub with and into OMP GP, with OMP GP as the surviving entity and becoming a wholly owned subsidiary of Crestwood. The Oasis Midstream and OMP GP organizational documents immediately prior to the effective time of the Mergers will be the governing documents of Oasis Midstream and OMP GP after the Mergers unless and until such documents are amended following the Mergers.

Merger Closing and Effective Time

The closing of the Mergers will be on the second business day after the satisfaction or waiver of the conditions to closing (other than conditions that by their nature are to be satisfied at closing), which are described in the section titled “—Conditions to the Mergers” unless Crestwood and Oasis Midstream agree in writing to a different date. The Mergers will be effective at the time the certificates of merger are filed with the Secretary of State of the State of Delaware by each of OMP GP and Oasis Midstream, or at such later time as the parties agree

 

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upon and is specified in the certificates of merger in accordance with the Delaware Limited Liability Company Act (the “Delaware LLC Act”) and the Delaware LP Act.

Directors and Officers

Certain directors and officers of Crestwood will be the initial directors and officers of OMP GP following the effective time and will hold their respective positions until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

LP Merger Consideration

At the effective time, (i) the Sponsor Cash Units will be converted into and will thereafter represent the right to receive Sponsor Cash Consideration and each Sponsor Equity Unit will be converted into and will thereafter represent the right to receive Sponsor Equity Consideration; and (ii) each Public Unit will be converted into and will thereafter represent the right to receive the Public Holder Merger Consideration.

GP Merger Consideration

At the effective time, all limited liability company interests of OMP GP outstanding immediately prior to the effective time will be converted into the right to receive GP Merger Consideration.

Conditions to the Mergers

Conditions to Each Party’s Obligations

Each party’s obligation to complete the Mergers is subject to the fulfillment or waiver of the following conditions at or prior to the effective time:

 

•

the Merger Agreement must have been approved by the holders of a majority of the outstanding Oasis Midstream common units voting as a single class entitled to vote thereon;

 

•

the absence of any injunction, law, order or decree by any court or other governmental entity of competent jurisdiction which prohibits or prevents the consummation of the Mergers;

 

•

the expiration or termination of any waiting period or any timing agreement under the HSR Act must have occurred;

 

•

this consent statement/prospectus shall have been mailed to all holders of Oasis Midstream common units following effectiveness of the registration statement on Form S-4 (of which this consent statement/prospectus forms a part) and at least 20 days prior to the closing date of the transactions contemplated by the Merger Agreement;

 

•

the registration statement on Form S-4 (of which this consent statement/prospectus forms a part) must be effective and no stop order suspending the effectiveness of the registration statement shall have been issued and no proceeding for such purpose shall have been initiated or threatened by the SEC; and

 

•

the receipt of an opinion from Vinson & Elkins (or other nationally recognized tax counsel reasonably satisfactory to Oasis Midstream and Crestwood) that (a) the gross income of Oasis Midstream for all of the calendar year that immediately precedes the calendar year that includes the closing date and each calendar quarter of the calendar year that includes the closing date for which financial data is available meets the 90% qualifying income test, (b) the gross income of Crestwood for all of the calendar year that immediately precedes the calendar year that includes the closing date and each calendar quarter of the calendar year that includes the closing date for which financial data is available meets the 90% qualifying income test and (c) the combined gross income of Oasis Midstream and Crestwood for all of the calendar year that immediately precedes the calendar year that includes the closing date and each calendar quarter of the calendar year that includes the closing date for which financial data is available meets the 90% qualifying income test.

 

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Conditions to Oasis Midstream’s Obligations

The obligations of Oasis Midstream and OMP GP to effect the Mergers is further subject to the fulfillment, or waiver by both Oasis Midstream and OMP GP, at or prior to the effective time of the following conditions:

 

•

the representations and warranties of Crestwood, Merger Sub and GP Merger Sub in the Merger Agreement must be true and correct as of the closing date as though made at and as of the closing date (without giving effect to any materiality, material adverse effect and similar qualifiers) except where the failure to be true and correct would not, in the aggregate, have a material adverse effect on Crestwood, Merger Sub or GP Merger Sub, provided that the representations and warranties that speak only as of a particular date or period need only be true and correct as of such date or period, except:

 

•

the representations and warranties of Crestwood, Merger Sub and GP Merger Sub regarding the capitalization of Crestwood and its subsidiaries must be true and correct as of the closing date as though made at and as of the closing date, except for immaterial inaccuracies; and

 

•

the representations and warranties of Crestwood, Merger Sub and GP Merger Sub regarding the absence of a material adverse effect at Crestwood since June 30, 2021 must be true and correct as of the closing date;

 

•

Crestwood must have performed, in all material respects, all of its obligations and complied with all covenants required by the Merger Agreement to be performed or complied with prior to the effective time;

 

•

Crestwood must have delivered to Oasis Midstream a certificate, certifying to the effect that the two foregoing conditions to closing have been satisfied;

 

•

the Crestwood common units to be issued in the LP Merger must have been approved for listing on the NYSE, subject to official notice of issuance;

 

•

Oasis Midstream and OMP GP must have received an opinion of Vinson & Elkins (or other nationally recognized tax counsel reasonably satisfactory to Oasis Midstream, which includes Baker Botts) that for U.S. federal income tax purposes (i) Oasis Midstream should not recognize any income or gain as a result of the LP Merger, and (ii) no taxable income or gain should be recognized by holders of Oasis Midstream common units (in their capacity as holders of Oasis Midstream common units) as a result of the LP Merger (other than any income or gain resulting from (A) any decrease in partnership liabilities pursuant to Section 752 of the Code, (B) the deemed sale of Crestwood common units pursuant to the withholding provisions of the Merger Agreement, (C) the payment of the Sponsor Cash Consideration, (D) the receipt of any Equity Consideration that is not pro rata (including as a result of the excess of the Public Holder Exchange Ratio over the Sponsor Exchange Ratio), (E) a disguised sale attributable to contributions of cash or other property to Oasis Midstream after the date of the Merger Agreement and prior to the effective time, (F) the receipt of the GP Merger Consideration, (G) the application of Section 897 of the Code and the Treasury Regulations thereunder to any non-U.S. holder of Oasis Midstream common units that has beneficially owned more than five percent of the total Oasis Midstream common units at any time in the five-year period ending on the closing date or (H) the enactment or amendment of special gain recognition rules applicable to persons other than corporations that hold Oasis Midstream common units that were received in exchange for incentive distribution rights of Oasis Midstream) (see “Material U.S. Federal Income Tax Consequences of the LP Merger” beginning on page 103); and

 

•

Crestwood must have delivered to Oasis Midstream a duly executed counterpart to each of the registration rights agreement, the director nomination agreement and the transition services agreement, each of which is attached to the Merger Agreement as Exhibit A, Exhibit B and Exhibit C, respectively.

 

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Conditions to Crestwood’s Obligations

The obligation of Crestwood to effect the Mergers is further subject to the fulfillment, or waiver by Crestwood, at or prior to the effective time, of the following conditions:

 

•

the representations and warranties of Oasis Midstream and OMP GP in the Merger Agreement must be true and correct as of the closing date as though made at and as of the closing date (without giving effect to any materiality, material adverse effect and similar qualifiers) except where the failure to be true and correct would not, in the aggregate, have a material adverse effect on Oasis Midstream, provided that the representations and warranties that speak only as of a particular date or period need only be true and correct as of such date or period, except:

 

•

the representations and warranties of Oasis Midstream and OMP GP regarding the capitalization of Oasis Midstream and OMP GP must be true and correct except for immaterial inaccuracies as of the closing date as though made at and as of` the closing date; and

 

•

the representations and warranties of Oasis Midstream and OMP GP regarding the absence of a material adverse effect at Oasis Midstream since June 30, 2021 must be true and correct as of the date of the Merger Agreement and as of the closing date;

 

•

Oasis Midstream and OMP GP must have performed, in all material respects, all of its obligations and complied with all covenants required by the Merger Agreement to be performed or complied with prior to the effective time;

 

•

Oasis Midstream must have delivered to Crestwood a certificate, certifying to the effect that the two foregoing conditions to closing have been satisfied;

 

•

Crestwood must have received an opinion from Baker Botts to the effect that for U.S. federal income tax purposes (a) Crestwood should not recognize any income or gain as a result of the LP Merger (other than any gain resulting from any decrease in partnership liabilities pursuant to Section 752 of the Code) and (b) no income or gain should be recognized by holders of Crestwood common units immediately prior to the LP Merger as a result of the Mergers (other than any gain resulting from any decrease in partnership liabilities pursuant to Section 752 of the Code);

 

•

Oasis Petroleum and its subsidiaries, as applicable, must have delivered to Crestwood a duly executed counterpart to each of the registration rights agreement, transition services agreement, the Support Agreement, the master amendment to commercial agreements and the director nomination agreement; and

 

•

the Pre-Closing Transactions shall have occurred.

No Dissenters’ or Appraisal Rights

No dissenters’ or appraisal rights are available with respect to the Mergers or the other transactions contemplated by the Merger Agreement.

Representations and Warranties

The Merger Agreement contains general representations and warranties made by each of Crestwood, Merger Sub and GP Merger Sub, on the one hand, and Oasis Midstream and OMP GP on the other, to the other parties, regarding aspects of their respective businesses, financial condition and structure, as well as other facts pertinent to the Mergers. These representations and warranties are in many respects subject to materiality, knowledge and other similar qualifications contained in the Merger Agreement and expire at the effective time. The representations and warranties of each of Crestwood, Merger Sub and GP Merger Sub, on the one hand, and Oasis Midstream and OMP GP on the other, were made solely for the benefit of the other parties. In addition, those representations and warranties were intended not as statements of actual fact, but rather as a way of

 

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allocating risk between the parties, were modified by the disclosure schedules attached to the Merger Agreement, were subject to the materiality standard described in the Merger Agreement (which may differ from what may be viewed as material by you) and were made only as of the date of the Merger Agreement and the closing date or another date as is specified in the Merger Agreement. Information concerning the subject matter of these representations or warranties may have changed since the date of the Merger Agreement. Crestwood and Oasis Midstream will provide additional disclosure in their SEC reports to the extent that they are aware of the existence of any material facts that are required to be disclosed under federal securities laws and that might otherwise contradict the terms and information contained in the Merger Agreement and will update such disclosure as required by federal securities laws.

Oasis Midstream and Oasis General Partner

Oasis Midstream and OMP GP made a number of representations and warranties to Crestwood, Merger Sub and GP Merger Sub, including representations and warranties related to the following matters:

 

•

the organization, qualification to do business and good standing of Oasis Midstream, OMP GP and their respective subsidiaries;

 

•

the capital structure of Oasis Midstream, OMP GP and their respective subsidiaries;

 

•

the authority of Oasis Midstream and OMP GP to enter into the Merger Agreement and to consummate the transactions contemplated thereby, and the governmental and regulatory approvals necessary, to enter into the Merger Agreement and consummate the transactions contemplated thereby, and the absence of any loss, or creation of any lien, or violation of the organizational documents of Oasis Midstream or OMP GP and their respective subsidiaries or any applicable laws resulting from the consummation of the transactions contemplated by the Merger Agreement;

 

•

Oasis Midstream’s SEC filings and the financial statements contained therein;

 

•

Oasis Midstream’s internal controls over financial reporting and disclosure controls and procedures;

 

•

the absence of undisclosed liabilities for Oasis Midstream and its subsidiaries;

 

•

compliance with laws and permits;

 

•

environmental laws and regulations;

 

•

employee benefit plans and other employee benefits matters;

 

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the absence of a material adverse effect since June 30, 2021;

 

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litigation, investigations, claims or judgments against Oasis Midstream or its subsidiaries;

 

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the accuracy of the information supplied by Oasis Midstream and its subsidiaries for this consent statement/prospectus and the registration statement of which it is a part;

 

•

certain regulatory matters related to Oasis Midstream and its subsidiaries;

 

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Oasis Midstream, its subsidiaries and OMP GP’s taxes, tax returns and other tax matters;

 

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certain employment and labor matters related to Oasis Midstream, OMP GP and their subsidiaries;

 

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intellectual property matters;

 

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owned and leased real property and rights-of-way;

 

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insurance policies;

 

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the receipt by the Oasis Midstream Conflicts Committee of an opinion from Jefferies as to the fairness from a financial point of view to the unaffiliated holders of Public Units of the Public Holder Exchange Ratio and the resulting Public Holder Merger Consideration to be received by the unafilliated holders of Public Units;

 

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Oasis Midstream, OMP GP and their respective subsidiaries’ material contracts;

 

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investment bankers, brokers or finder fees in connection with the consummation of the LP Merger;

 

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the inapplicability of any state takeover laws to the Mergers or other transactions contemplated by the Merger Agreement;

 

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the Investment Company Act of 1940;

 

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the assets held by Oasis Petroleum and its subsidiaries for use in the operation of Oasis Midstream and its subsidiaries will be held by Oasis Midstream following the Pre-Closing Transactions, subject to certain exceptions; and

 

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the absence of any additional Crestwood, Merger Sub or GP Merger Sub representations or warranties beyond those in the Merger Agreement.

Crestwood, Merger Sub and GP Merger Sub

Crestwood, Merger Sub and GP Merger Sub each also made a number of representations and warranties to Oasis Midstream and OMP GP, including representations and warranties related to the following matters:

 

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organization, qualification to do business and good standing of Crestwood, Merger Sub, GP Merger Sub and their subsidiaries;

 

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the equity interests of Crestwood and capital structure of Merger Sub and GP Merger Sub;

 

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the authority of Crestwood, Merger Sub and GP Merger Sub, and governmental and regulatory approvals necessary, to enter into the Merger Agreement and consummate the transactions contemplated thereby, and the absence of any loss, or creation of any lien, or violation of the organizational documents of Crestwood and its subsidiaries, or any applicable laws resulting from the consummation of the transactions contemplated by the Merger Agreement;

 

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Crestwood and its subsidiaries’ SEC filings and the financial statements contained therein;

 

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Crestwood’s internal controls over financial reporting and disclosure controls and procedures;

 

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the absence of undisclosed liabilities for Crestwood and its subsidiaries;

 

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compliance with laws and permits;

 

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environmental laws and regulations;

 

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employee benefit plans and other employee benefits matters;

 

•

the absence of a material adverse effect since June 30, 2021;

 

•

litigation, investigations, claims or judgments against Crestwood or its subsidiaries;

 

•

the accuracy of the information supplied by Crestwood or its subsidiaries for this consent statement/prospectus and the registration statement of which it is a part;

 

•

certain regulatory matters related to Crestwood and its subsidiaries;

 

•

Crestwood and its subsidiaries’ taxes and tax returns and other tax matters;

 

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certain employment and labor matters related to Crestwood and its subsidiaries;

 

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intellectual property;

 

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owned and leased real property and rights-of-way;

 

•

Crestwood and its subsidiaries’ insurance policies;

 

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Crestwood, Merger Sub, GP Merger Sub and their subsidiaries’ material contracts;

 

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investment bankers, brokers or finder fees in connection with the consummation of the LP Merger;

 

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•

the inapplicability of any state takeover laws to the Mergers or other transactions contemplated by the Merger Agreement;

 

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the lack of beneficial ownership of Oasis Midstream common units by Crestwood or any affiliate;

 

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Crestwood’s available funds to consummate the GP Merger and pay the Sponsor Cash Consideration and the other transactions contemplated by the Merger Agreement; and

 

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the absence of any additional representations or warranties by Oasis Midstream and OMP GP beyond those in the Merger Agreement.

Definition of Material Adverse Effect

Many of the representations and warranties of Crestwood, Merger Sub, GP Merger Sub, Oasis Midstream and OMP GP are qualified by a material adverse effect standard. For purposes of the Merger Agreement, “material adverse effect,” with respect to either Crestwood or Oasis Midstream, is defined to mean an event, change, effect, development or occurrence that has had, or is reasonably likely to have, a material adverse effect on (i) the business, financial condition or continuing results of operations of either (a) Crestwood and its subsidiaries, taken as a whole or (b) Oasis Midstream and its subsidiaries, taken as a whole, as the case may be, in either case, or (ii) the ability of Crestwood, Oasis Midstream, Merger Subs, OMP GP and each of their respective subsidiaries to consummate the transactions contemplated by the Merger Agreement, other than any event, change, effect, development or occurrence:

 

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disclosed in any of the applicable party’s SEC filings prior to the date of the Merger Agreement (excluding any disclosure set forth in any risk factor section or any section relating to forward looking statements) or as disclosed on the applicable party’s disclosure schedule to the Merger Agreement;

 

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generally affecting the economy, the financial or securities markets, or political, legislative or regulatory conditions, in each case, in the United States or elsewhere in the world, including any changes in supply, demand, currency exchange rates, interest rates, tariff policy, monetary policy or inflation (so long as it does not disproportionately affect the applicable party relative to similarly situated companies); or

 

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resulting from or arising out of:

 

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changes or developments in the industries in which the applicable party or its subsidiaries conduct their business;

 

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changes or developments in prices for oil, natural gas or other commodities or for the applicable party’s raw material inputs and end products, including general market prices and regulatory changes generally affecting the industries in which the applicable party or any of its subsidiaries operate;

 

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the negotiation, execution, announcement, pendency or the existence of, or compliance with the Merger Agreement or the transactions contemplated thereby (including its impact on the relationships, contractual or otherwise, of the applicable party and its subsidiaries with employees, labor unions, customers, suppliers or partners, and including any lawsuit, action or other proceeding with respect to the Mergers or the other transactions contemplated by the Merger Agreement);

 

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taking of any action required by the Merger Agreement or the Support Agreement or at the request of (i) Crestwood, Merger Sub or GP Merger Sub, in the case of Oasis Midstream, or (ii) Oasis Midstream, in the case of Crestwood;

 

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adoption, implementation, promulgation, repeal, modification, reinterpretation or proposal of any rule, regulation, ordinance, order, protocol or any other law of or by governmental entity, or market administrator;

 

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•

changes in GAAP or accounting standards or interpretations thereof;

 

•

earthquakes, any weather-related or other force majeure event, hurricanes, tsunamis, tornadoes, floods, mudslides, wildfires, pandemics (excluding the response to and impact of the COVID-19 pandemic) or outbreak or other natural disasters, or hostilities or acts of war or terrorism, sabotage, civil disobedience, cyber-attack or any escalation or general worsening of the foregoing;

 

•

failure by the applicable party to meet any internal or external projections, forecasts, estimates, milestones or budgets or financial or operating predictions of revenues, earnings or other financial or operating metrics for any period (although this exclusion does not affect a determination that the underlying event, change, effect, development or occurrence would have, individually or in the aggregate, a material adverse effect); or

 

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any changes in the unit price or trading volume of the equity interests of Crestwood or Oasis Midstream, as the case may be, or in their respective credit ratings (although this exclusion does not affect a determination that the underlying event, change, effect, development or occurrence would have, individually or in the aggregate, a material adverse effect); except, in each case with respect to the first, second, fifth, sixth and seventh bullet points above, to the extent disproportionately affecting Crestwood or Oasis Midstream, as the case may be, and its subsidiaries, taken as a whole, relative to other similarly situated companies in the industries in which such party and its subsidiaries operate.

Conduct of Business Pending the Mergers

Oasis Midstream

Oasis Midstream has agreed that, until the earlier of the termination of the Merger Agreement in accordance with its terms or the effective time, except (i) as required by law or any applicable stock exchange or regulatory authority, (ii) as may be consented to in writing by Crestwood (which consent will not be unreasonably withheld, delayed or conditioned), (iii) as may be contemplated or required by the Merger Agreement or (iv) as set forth on Oasis Midstream’s disclosure schedule to the Merger Agreement, Oasis Midstream will and will cause its subsidiaries to use reasonable best efforts to:

 

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conduct their businesses in the ordinary course;

 

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preserve substantially intact their present lines of business and preserve its relationships with significant customers and suppliers; and

 

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keep in full force and effect all material permits.

Oasis Midstream and OMP GP have further agreed that, on behalf of themselves and their subsidiaries, until the earlier of the termination of the Merger Agreement or the effective time, except (i) as required by law or any applicable stock exchange or regulatory authority, (ii) as may be consented to by Crestwood (which consent will not be unreasonably withheld, delayed or conditioned), (iii) as may be contemplated or required by the Merger Agreement or (iv) as set forth on Oasis Midstream’s disclosure schedule, each of Oasis Midstream and OMP GP:

 

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will not adopt any amendment to its organizational documents, and will not permit Oasis Midstream’s subsidiaries to adopt any material amendments to their organizational documents;

 

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will not, and will not permit its subsidiaries to, issue, sell, pledge, dispose of, encumber, split, combine or reclassify or authorize the issuance, sale, pledge, disposition, encumbrance, split, combination or reclassification of any securities of Oasis Midstream, OMP GP or any of their subsidiaries or any securities convertible into equity interests of thereof, except (1) issuances of Oasis Midstream common units in respect of vesting, exercise or settlement of any Oasis Midstream Restricted Unit Awards outstanding as of the date of the Merger Agreement or as may be granted to directors as permitted under Oasis Midstream’s benefit plan that is in the ordinary course of business and consistent with

 

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Crestwood’s past practices, (2) for transactions among Oasis Midstream and its wholly owned subsidiaries or among Oasis Midstream’s wholly owned subsidiaries which remain subsidiaries after the consummation of such transaction or (3) pledges or encumbrances due to a permitted lien;

 

•

except in the ordinary course of business, will not, and not permit its subsidiaries to, authorize or pay any dividend or make any distribution with respect to outstanding equity interests, except (1) by a wholly owned subsidiary to Oasis Midstream or its subsidiaries in the ordinary course of business, (2) those required under the organizational documents of such person and (3) regular quarterly cash distributions with customary record and payment dates on Oasis Midstream common units of $0.56 per Oasis Midstream common unit per quarter;

 

•

will not, and will not permit its material subsidiaries to, adopt a plan of complete or partial liquidation, dissolution, merger, or any reorganization, or enter into a letter of intent or agreement in principle with respect thereto other than the LP Merger, or reorganizations solely among Oasis Midstream and its wholly owned subsidiaries or among its wholly owned subsidiaries or in connection with an acquisition not prohibited by the Merger Agreement;

 

•

will not, and will not permit its subsidiaries to, make, directly or indirectly, any acquisition by merging or otherwise purchasing any assets (including equity interests) or any business of any person or make any loans, advances or capital contributions to, or investments in excess of $5.0 million in the aggregate;

 

•

will not, and will not permit its subsidiaries to, sell, lease, license, transfer, exchange or swap or dispose of any properties or non-cash assets with a value of more than $5.0 million in the aggregate, except (1) of obsolete or worthless equipment, (2) of inventory, commodities and produced hydrocarbons, crude oil and refined products in the ordinary course of business or (3) among Oasis Midstream and its wholly owned subsidiaries or among its wholly owned subsidiaries;

 

•

will not, and will not permit its subsidiaries to, authorize any capital expenditures, except (1) as set forth in Oasis Midstream’s disclosure schedule or (2) those made in response to any emergency, whether caused by war, terrorism, weather events, public health events (including pandemics and COVID-19), outages or otherwise;

 

•

will not, directly or indirectly, purchase, redeem or otherwise acquire any equity interests of Oasis Midstream or any subsidiary that is not wholly owned;

 

•

except as disclosed on Oasis Midstream’s disclosure schedule or required by law or any Oasis Midstream benefit plan as in effect on the date of the Merger Agreement, will not, and will not permit its subsidiaries to, (1) materially increase the compensation or benefits payable or provided to Oasis Midstream’s or OMP GP’s directors or officers, (2) enter into or materially amend any material employment, change of control, severance or retention agreement with any director, officer or employee of Oasis Midstream or OMP GP, (3) establish, adopt, enter into, terminate or amend any benefit plan, (4) enter into, terminate or amend any collective bargaining agreement, (5) make any change in Oasis Midstream or its material subsidiaries’ key management structure, including the termination of existing officers (other than for cause) or the hiring of additional officers (except to replace any officers who are terminated in accordance with the foregoing), (6) grant any Oasis Midstream equity awards to an individual other than a director, or (7) enter into or make any loans or advances to any of its officers, directors, employees, agents, or consultants (other than those for travel or reasonable business expenses consistent with past practices);

 

•

will not, and will not permit its subsidiaries to, materially change financial accounting policies or procedures or any of its methods of reporting material items for financial accounting purposes, except as required by GAAP, SEC rule or policy or law;

 

•

will not, and will not permit its subsidiaries to become liable for any indebtedness for borrowed money or any guarantee of such indebtedness for borrowed money, except (1) among Oasis Midstream and its

 

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wholly owned subsidiaries or among its wholly owned subsidiaries, (2) incurred to replace, renew, extend, refinance or refund any existing indebtedness on substantially the same or more favorable terms, (3) for any guarantees by Oasis Midstream of indebtedness for borrowed money of wholly owned subsidiaries or guarantees by its wholly owned subsidiaries of indebtedness for borrowed money of Oasis Midstream or any wholly owned subsidiary, and (4) certain limited amounts incurred pursuant to Oasis Midstream’s revolving credit agreement, provided that such indebtedness does not impose or result in any additional restrictions or limitations that would be material to Oasis Midstream and its subsidiaries, or, following the closing of the Mergers, Crestwood and its subsidiaries, other than any obligation to make payments on such indebtedness and other than any restrictions or limitations to which Oasis Midstream or any subsidiary is subject as of the date of the Merger Agreement;

 

•

other than in the ordinary course of business, will not, and will not permit its subsidiaries to, (A) modify, amend or terminate, or waive any rights under any Oasis Midstream material contract in a manner or with an effect that is materially adverse to Oasis Midstream and its subsidiaries as a whole or (B) enter into any Oasis Midstream material contract (other than such contracts which are currently under negotiation by Oasis Midstream and third parties that are beyond the term sheet negotiation phase as of the date of the Merger Agreement) that (1) involves a potential liability or receivable, as the case may be, in excess of $10.0 million on an annual basis, (2) has a term greater than one year and (3) cannot be cancelled by Oasis Midstream or any of its subsidiaries without material penalty or further payment;

 

•

will not, and will not permit its subsidiaries to, enter into (A) an Oasis Midstream material contract (or any material amendment to any Oasis Midstream material contract) with any affiliate or (B) any other agreement, arrangement, contract or other transaction with any affiliate (other than Oasis Midstream and its subsidiaries) other than agreements, arrangement or contracts made in the ordinary course of business on an arm’s length basis;

 

•

will not, and will not permit its subsidiaries to, waive, release, assign, settle or compromise any claim, action or proceeding, other than waivers, releases, assignments, settlements or compromises (1) equal to or lesser than the amounts reserved for it on the balance sheet as of June 30, 2021 or (2) that do not exceed $10.0 million in the aggregate;

 

•

will not, and will not permit its subsidiaries to (except in the ordinary course of business) (1) change its fiscal year or any material method of tax accounting, (2) make, change or revoke any material tax election, (3) enter into any closing agreement, with respect to, or otherwise settle or compromise, any material tax liability, (4) file any material amended tax return, or (5) surrender a claim for a material refund of taxes;

 

•

will not, and will not permit any of its subsidiaries to prepay, redeem or repurchase any of Oasis Midstream’s and OMP Finance Corp.’s $450 million, 8.00% senior unsecured notes due April 1, 2029;

 

•

will not, and will not permit any of its subsidiaries to, engage in any activity or conduct its business in a manner that would cause less than 90% of the gross income of Oasis Midstream for any calendar quarter since its formation and prior to the effective time to be treated as “qualifying income” within the meaning of Section 7704(d) of the Code;

 

•

permit the lapse (without renewal or replacement) of any existing material policy of insurance relating to the assets, operations and business activities of Oasis Midstream or its subsidiaries; and

 

•

will not, and will not permit any of its subsidiaries to, agree to take any of the foregoing actions.

Notwithstanding the foregoing, from the date of the Merger Agreement until the earlier of the effective time or the termination date, Oasis Midstream and its subsidiaries may take or refrain from taking any COVID-19 action so long as (i) prior thereto, Oasis Midstream consults with, and considers in good faith, Crestwood’s suggestions and/or feedback, or (ii) such COVID-19 action would not reasonably be expected to materially impact Oasis Midstream’s ability to operate in the ordinary course of business or materially delay or impede the consummation of the LP Merger.

 

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