XML 25 R14.htm IDEA: XBRL DOCUMENT
v3.22.1

Derivatives and Fair Value | 3 Months Ended
--- | ---
Mar. 31, 2022
Derivatives and Fair Value [Abstract] |
Derivatives and Fair Value | 8. DERIVATIVES AND FAIR VALUE The Company uses derivative financial instruments from time to time to achieve a more predictable cash flow from crude oil production by reducing the Company’s exposure to price fluctuations. On May 6, 2021, the Company entered into commodity swaps at a Dated Brent weighted average price of $66.51 per barrel for the period from and including May 2021 through October 2021 for a quantity of 672,533 barrels. On August 6, 2021, the Company entered into additional commodity swaps at a Dated Brent weighted average price of $67.70 per barrel for the period from and including November 2021 through February 2022 for a quantity of 314,420 barrels. On September 24, 2021, the Company entered into additional commodity swaps at a Dated Brent weighted average price of $72.00 per barrel for the period from and including March 2022 to June 2022 for a quantity of 460,000 barrels. On January 6, 2022, the Company entered into additional commodity swaps at a Dated Brent weighted average price of $76.53 per barrel for the period from and including July 2022 to September 2022 for a quantity of 375,000 barrels. On February 23, 2022, the Company entered into additional commodity swaps at a Dated Brent weighted average price of $85.01 per barrel for the period from and including April 2022 to June 2022 for a quantity of 234,000 barrels. See the table below for the unexpired barrels as of March 31, 2022.
Settlement Period |  |  | Type of Contract |  |  | Index |  |  | Barrels |  | Weighted Average Price
April 2022 to June 2022 |  |  | Swaps |  |  | Dated Brent |  |  | 345,000 |  | $ | 72.00
April 2022 to June 2022 |  |  | Swaps |  |  | Dated Brent |  |  | 234,000 |  | $ | 85.01
July 2022 to September 2022 |  |  | Swaps |  |  | Dated Brent |  |  | 375,000 |  | $ | 76.53
|  |  |  |  |  |  |  |  | 954,000 |  |  |
While these commodity swaps are intended to be an economic hedge to mitigate the impact of a decline in crude oil prices, the Company has not elected hedge accounting. The contracts are being measured at fair value each period, with changes in fair value recognized in net income. T he Company does not enter into derivative instruments for speculative or trading proposes. The crude oil swap contracts are measured at fair value using the Income Method. Level 2 observable inputs used in the valuation model include market information as of the reporting date, such as prevailing Brent crude futures prices, Brent crude futures commodity price volatility and interest rates. The determination of the swap contracts’ fair value includes the impact of the counterparty’s non-performance risk. To mitigate counterparty risk, the Company enters into such derivative contracts with creditworthy financial institutions deemed by management as competent and competitive market makers. At times, the Company’s counterparties require that it post collateral for changes in the net fair value of the derivative contracts. This cash collateral is reported in the line item Restricted cash on the condensed consolidated balance sheets. The following table sets forth the loss on derivative instruments on the Company’s condensed consolidated statements of operations:
|  |  |  |  | Three Months Ended March 31,
Derivative Item |  | Statement of Operations Line |  |  | 2022 |  | 2021
|  |  |  |  | (in thousands)
Crude oil swaps |  | Cash settlements paid on matured derivative contracts, net |  |  | $ | (12,500) |  | $ | (1,710)
|  | Cash settlements not paid on matured derivative contracts, net |  |  |  | (19,258) |  |  | (4,244)
|  | Derivative instruments loss, net |  |  | $ | (31,758) |  | $ | (5,954)

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentDetailAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivatives and fair value of assets and liabilities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
Name: | us-gaap_DerivativesAndFairValueTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration