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Revenue from Contracts with Customers
 12 Months Ended
Dec. 31, 2024
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers
Note 2 – Revenue from Contracts with Customers
The Company recognizes its share of revenue from the sale of produced oil, gas, and NGLs from its Midland Basin, South Texas, and Uinta Basin assets. Oil, gas, and NGL production revenue presented within the accompanying statements of operations reflects revenue generated from contracts with customers.
The tables below present oil, gas, and NGL production revenue by product type for each of the Company’s operating areas:
For the year ended December 31, 2024
Midland BasinSouth Texas
Uinta Basin
Total
(in thousands)
Oil production revenue$1,447,679 $542,704 $197,098 $2,187,481 
Gas production revenue118,455 123,685 6,932 249,072 
NGL production revenue634 234,098 — 234,732 
Total$1,566,768 $900,487 $204,030 $2,671,285 
Relative percentage59 %34 %7 %100 %

For the year ended December 31, 2023
Midland BasinSouth TexasTotal
(in thousands)
Oil production revenue$1,347,780 $465,995 $1,813,775 
Gas production revenue175,183 152,700 327,883 
NGL production revenue687 221,544 222,231 
Total$1,523,650 $840,239 $2,363,889 
Relative percentage64 %36 %100 %
For the year ended December 31, 2022
Midland BasinSouth TexasTotal
(in thousands)
Oil production revenue$1,816,597 $453,471 $2,270,068 
Gas production revenue432,831 358,049 790,880 
NGL production revenue986 283,972 284,958 
Total$2,250,414 $1,095,492 $3,345,906 
Relative percentage67 %33 %100 %
The Company recognizes oil, gas, and NGL production revenue at the point in time when control of the product transfers to the purchaser, which may differ depending on the applicable contractual terms. Transfer of control determines the presentation of transportation, gathering, processing, and other post-production expenses (“costs and other deductions”) within the accompanying statements of operations. Costs and other deductions incurred by the Company prior to transfer of control are recorded within the oil, gas, and NGL production expense line item on the accompanying statements of operations. When control is transferred, sales are based on a market price that may be affected by fees and other deductions incurred by the purchaser subsequent to the transfer of control. In general, the Company generates production revenue from a combination of the following types of contracts:
•The Company sells oil and gas production at or near the wellhead and receives an agreed-upon market price from the purchaser. Under this type of arrangement, control transfers at or near the wellhead.
•The Company has certain processing arrangements that include the delivery of unprocessed gas to a midstream processor’s facility for processing. Upon completion of processing, the midstream processor purchases the NGLs and redelivers residue gas back to the Company in-kind. For the NGLs extracted during processing, the midstream processor remits payment to the Company. For the residue gas taken in-kind, the Company has separate sales contracts where control transfers at points downstream of the processing facility. The Company also has certain oil sales that occur at market locations downstream of the production area. Given the structure of these arrangements and where control transfers, the Company separately recognizes costs and other deductions incurred prior to control transfer. These fees are recorded within the oil, gas, and NGL production expense line item on the accompanying statements of operations.
•The Company has certain arrangements where oil volumes are transported by railcar to purchasers. For these sales arrangements, the Company generally delivers produced oil to customers at defined locations, including domestic rail terminal facilities primarily along the Gulf Coast. Upon delivery, the Company is entitled to an agreed upon index price, net of pricing differentials for each barrel sold. The Company recognizes revenue when control transfers to the customer and the Company has no further contractual obligation to the customer. Costs associated with the transportation of these oil volumes are recorded within the oil, gas, and NGL production expense line item on the accompanying statements of operations.
The Company does not believe that significant judgments are required with respect to the determination of the transaction price, including amounts that represent variable consideration, as volume and price carry a low level of estimation uncertainty given the precision of volumetric measurements and the use of index pricing with generally predictable differentials. Accordingly, the Company does not consider estimates of variable consideration to be constrained.
The Company’s performance obligations arise upon the production of hydrocarbons from wells in which the Company has an ownership interest. The performance obligations are considered satisfied upon control transferring to a purchaser at the wellhead, inlet, or tailgate of the midstream processor’s processing facility, rail terminal, or other contractually specified delivery point. For volumes sold at, or in close proximity to the wellhead, the time period between production and satisfaction of performance obligations is generally less than one day. For volumes transported by rail, this period is generally less than two weeks. As of December 31, 2024, there were no material unsatisfied or partially unsatisfied performance obligations.
Revenue is recorded in the month when performance obligations are satisfied. However, settlement statements from the purchasers of hydrocarbons and the related cash consideration are received 30 to 90 days after production has occurred. As a result, the Company must estimate the amount of production delivered to the customer and the consideration that will ultimately be received for sale of the product. Estimated revenue due to the Company is recorded within the accounts receivable line item on the accompanying balance sheets until payment is received. The accounts receivable balances from contracts with customers within the accompanying balance sheets as of December 31, 2024, and 2023, were $246.4 million and $175.3 million, respectively. To estimate accounts receivable from contracts with customers, the Company uses knowledge of its properties, historical performance, contractual arrangements, index pricing, quality and transportation differentials, and other factors as the basis for these estimates. Differences between estimates and actual amounts received for product sales are recorded in the month that payment is received from the purchaser.