Natural Gas and Oil Reserves Information (Unaudited)

12 Months Ended

Dec. 31, 2024

Natural Gas and Oil Reserves Information (Unaudited)

(12)

Natural Gas and Oil Reserves Information (Unaudited)

Set forth below is a summary of the Company's proved natural gas and oil reserves:


	Year Ended December 31,
	2024						2023						2022
	Oil (MBbls)			Natural Gas (MMcf)			Oil (MBbls)			Natural Gas (MMcf)			Oil (MBbls)			Natural Gas (MMcf)
Proved Reserves:
Beginning of period		548			4,940,226			549			6,697,570			627			6,118,083
Revisions of previous estimates		(49	)		(1,180,157	)		(47	)		(1,803,628	)		(61	)		(6,870	)
Extensions and discoveries		—			531,258			116			570,751			137			1,090,420
Acquisitions of minerals in place		—			—			—			—			6			260
Sales of minerals in place		(118	)		(1,681	)		—			—			(78	)		(3,707	)
Production		(50	)		(527,548	)		(70	)		(524,467	)		(82	)		(500,616	)
End of period		331			3,762,098			548			4,940,226			549			6,697,570
Proved Developed Reserves:
Beginning of period		548			2,734,175			480			2,531,462			627			2,245,660
End of period		331			2,731,812			548			2,734,175			480			2,531,462
Proved Undeveloped Reserves:
Beginning of period		—			2,206,051			69			4,166,108			—			3,872,423
End of period		—			1,030,286			—			2,206,051			69			4,166,108

Revisions of previous estimates. Revisions of previous estimates in 2024 and 2023 were primarily attributable to the significantly lower natural gas and oil prices that were used to determine proved reserves at the end of each year, which resulted in many of the Company's proved undeveloped locations being excluded from reserves since they did not generate an adequate return at those lower prices. Revisions of previous natural gas estimates in 2022 were insignificant.

Extensions and discoveries. Extensions and discoveries for 2024, 2023 and 2022 were primarily comprised of proved reserve additions attributable to the wells drilled in the current year that were not classified as proved undeveloped in prior years and additional proved undeveloped locations that are planned to be drilled in the Company's current development plan that were not included in the prior year's reserve estimates.

Sales of minerals in place. During 2024, the Company sold its interest in certain non-operated wells for $1.2 million.

The following table sets forth the standardized measure of discounted future net cash flows relating to proved reserves:


	As of December 31,
	2024			2023			2022
	(In thousands)
Cash Flows Relating to Proved Reserves:
Future Cash Flows	$	6,959,475		$	11,829,623		$	40,405,829
Future Costs:
Production		(2,760,616	)		(4,019,901	)		(5,473,650	)
Development and Abandonment		(1,014,446	)		(2,285,853	)		(4,175,721	)
Future Income Taxes		(22,990	)		(341,677	)		(5,741,914	)
Future Net Cash Flows		3,161,423			5,182,192			25,014,544
10% Discount Factor		(1,563,229	)		(2,807,562	)		(12,404,908	)
Standardized Measure of Discounted Future Net Cash Flows	$	1,598,194		$	2,374,630		$	12,609,636

The following table sets forth the changes in the standardized measure of discounted future net cash flows relating to proved reserves:


	Year Ended December 31,
	2024			2023			2022
	(In thousands)
Standardized Measure, Beginning of Year	$	2,374,630		$	12,609,636		$	5,775,605
Net change in sales price, net of production costs		(1,478,758	)		(14,069,134	)		8,600,315
Development costs incurred during the year which were previously estimated		452,533			1,004,650			788,450
Revisions of quantity estimates		(693,905	)		(1,583,876	)		(42,423	)
Accretion of discount		250,170			1,551,704			680,010
Changes in future development and abandonment costs		764,629			1,095,844			(869,115	)
Changes in timing and other		94,058			(374,087	)		(113,744	)
Extensions and discoveries		380,544			215,249			2,456,124
Acquisitions of minerals in place		—			—			604
Sales of minerals in place		(3,542	)		—			(3,313	)
Sales, net of production costs		(664,653	)		(855,699	)		(2,779,960	)
Net changes in income taxes		122,488			2,780,343			(1,882,917	)
Standardized Measure, End of Year	$	1,598,194		$	2,374,630		$	12,609,636

The standardized measure of discounted future net cash flows was determined based on the simple average of the first of month market prices for natural gas and oil for each year. Prices used in determining quantities of natural gas and oil reserves and future cash inflows from natural gas and oil reserves represent prices received at the Company's sales point. These prices have been adjusted from posted or index prices for both location and quality differences. Prices used in determining natural gas and oil reserves quantities and cash flows are as follows:


	Year Ended December 31,
	2024		2023		2022
Crude Oil: $/barrel	$	71.07	$	72.63	$	91.21
Natural Gas: $/Mcf	$	1.84	$	2.39	$	6.03

Proved reserve information utilized in the preparation of the financial statements were based on estimates prepared by the Company's petroleum engineering staff in accordance with guidelines established by the Securities and Exchange Commission and the Financial Accounting Standards Board, which require that reserve reports be prepared under existing economic and operating conditions with no provision for price and cost escalation except by contractual agreement. All of the Company's reserves are located onshore in the continental United States of America. The Company retained an independent petroleum consultant to conduct an audit of the Company's 2024 reserve estimates. The purpose of this audit was to provide additional assurance on the reasonableness of internally prepared reserve estimates. The engineering firm was selected for their geographic expertise and their historical experience.

Future development and production costs are computed by estimating the expenditures to be incurred in developing and producing proved natural gas and oil reserves at the end of the year, based on year-end costs and assuming continuation of existing economic conditions. Future income tax expenses are computed by applying the appropriate statutory tax rates to the future pre-tax net cash flows relating to proved reserves, net of the tax basis of the properties involved. The future income tax expenses give effect to permanent differences and tax credits, but do not reflect the impact of future operations.