XML 28 R16.htm IDEA: XBRL DOCUMENT
v3.25.3

Derivative Financial Instruments | 9 Months Ended
--- | ---
Sep. 30, 2025
Derivative Instruments Not Designated as Hedging Instruments [Abstract] |
Derivative Financial Instruments | Note 7 - Derivative Financial Instruments Summary of Oil, Gas, and NGL Derivative Contracts in Place The Company regularly enters into commodity derivative contracts to mitigate a portion of its exposure to oil, gas, and NGL price volatility and location differentials, and the associated effect on cash flows. All commodity derivative contracts that the Company enters into are for other-than-trading purposes. The Company’s commodity derivative contracts consist of price swap and collar arrangements for oil and gas production, and price swap arrangements for NGL production. In a typical commodity swap agreement, if the agreed upon published third-party index price (“index price”) is lower than the swap price, the Company receives the difference between the index price and the agreed upon swap price. If the index price is higher than the swap price, the Company pays the difference. For collar arrangements, the Company receives the difference between an agreed upon index price and the floor price if the index price is below the floor price. The Company pays the difference between the agreed upon ceiling price and the index price if the index price is above the ceiling price. No amounts are paid or received if the index price is between the floor and ceiling prices. The Company has entered into fixed price oil and gas basis swaps in order to mitigate exposure to adverse pricing differentials between certain industry benchmark prices and the actual physical pricing points where the Company’s production is sold. As of September 30, 2025, the Company had basis swap contracts with fixed price differentials between: •NYMEX WTI and Argus WTI Midland (“WTI Midland”) for a portion of its Midland Basin oil production with sales contracts that settle at WTI Midland prices; •NYMEX WTI and Argus WTI Houston Magellan East Houston Terminal (“WTI Houston MEH”) for a portion of its South Texas oil production with sales contracts that settle at WTI Houston MEH prices; •NYMEX Henry Hub (“HH”) and Inside FERC (“IF”) Waha hub in West Texas (“Waha”) for a portion of its Midland Basin gas production with sales contracts that settle at IF Waha prices; and •NYMEX HH and Inside FERC Houston Ship Channel (“IF HSC”) for a portion of its South Texas gas production with sales contracts that settle at IF HSC prices. The Company has also entered into oil swap contracts to fix the differential in pricing between the NYMEX calendar month average and the physical crude oil delivery month (“Roll Differential”) in which the Company pays the periodic variable Roll Differential and receives a weighted-average fixed price differential. The weighted-average fixed price differential represents the amount of net addition (reduction) to delivery month prices for the notional volumes covered by the swap contracts. As of September 30, 2025, the Company had commodity derivative contracts with terms through the third quarter of 2027 as summarized in the table below:
|  |  |  |  |  | Contract Period |  |  |  |  |  |
|  |  |  |  |  | Fourth Quarter 2025 |  | 2026 |  | 2027 |  |  |  |  |  |
Oil Derivatives (volumes in MBbl and prices in $ per Bbl): |  |  |  |
Swaps |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NYMEX WTI Volumes |  |  |  |  |  | 1,988 |  |  | 4,613 |  |  | — |  |  |  |  |  |  |
Weighted-Average Contract Price |  |  |  |  |  | $ | 67.91 |  |  | $ | 63.03 |  |  | $ | — |  |  |  |  |  |  |
Collars |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NYMEX WTI Volumes |  |  |  |  |  | 3,136 |  |  | 5,902 |  |  | — |  |  |  |  |  |  |
Weighted-Average Floor Price |  |  |  |  |  | $ | 60.11 |  |  | $ | 56.92 |  |  | $ | — |  |  |  |  |  |  |
Weighted-Average Ceiling Price |  |  |  |  |  | $ | 70.28 |  |  | $ | 64.84 |  |  | $ | — |  |  |  |  |  |  |
Basis Swaps |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
WTI Midland-NYMEX WTI Volumes |  |  |  |  |  | 1,178 |  |  | 4,277 |  |  | — |  |  |  |  |  |  |
Weighted-Average Contract Price |  |  |  |  |  | $ | 1.18 |  |  | $ | 0.99 |  |  | $ | — |  |  |  |  |  |  |
WTI Houston MEH-NYMEX WTI Volumes |  |  |  |  |  | 526 |  |  | 1,561 |  |  | — |  |  |  |  |  |  |
Weighted-Average Contract Price |  |  |  |  |  | $ | 1.86 |  |  | $ | 2.01 |  |  | $ | — |  |  |  |  |  |  |
Roll Differential Swaps |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NYMEX WTI Volumes |  |  |  |  |  | 3,450 |  |  | 1,329 |  |  | — |  |  |  |  |  |  |
Weighted-Average Contract Price |  |  |  |  |  | $ | 0.43 |  |  | $ | 0.35 |  |  | $ | — |  |  |  |  |  |  |
Gas Derivatives (volumes in BBtu and prices in $ per MMBtu): |  |  |  |
Swaps |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NYMEX HH Volumes |  |  |  |  |  | 8,015 |  |  | 30,990 |  |  | 7,888 |  |  |  |  |  |  |
Weighted-Average Contract Price |  |  |  |  |  | $ | 4.37 |  |  | $ | 3.94 |  |  | $ | 4.34 |  |  |  |  |  |  |
IF HSC Volumes |  |  |  |  |  | — |  |  | 957 |  |  | — |  |  |  |  |  |  |
Weighted-Average Contract Price |  |  |  |  |  | $ | — |  |  | $ | 4.07 |  |  | $ | — |  |  |  |  |  |  |
IF Waha Volumes |  |  |  |  |  | 1,134 |  |  | 10,020 |  |  | 4,603 |  |  |  |  |  |  |
Weighted-Average Contract Price |  |  |  |  |  | $ | 2.02 |  |  | $ | 2.34 |  |  | $ | 3.64 |  |  |  |  |  |  |
Collars |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NYMEX HH Volumes |  |  |  |  |  | 7,982 |  |  | 22,598 |  |  | 896 |  |  |  |  |  |  |
Weighted-Average Floor Price |  |  |  |  |  | $ | 3.25 |  |  | $ | 3.49 |  |  | $ | 4.00 |  |  |  |  |  |  |
Weighted-Average Ceiling Price |  |  |  |  |  | $ | 5.31 |  |  | $ | 5.14 |  |  | $ | 5.60 |  |  |  |  |  |  |
Basis Swaps |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
IF Waha-NYMEX HH Volumes |  |  |  |  |  | 5,046 |  |  | 574 |  |  | 2,503 |  |  |  |  |  |  |
Weighted-Average Contract Price |  |  |  |  |  | $ | (0.66) |  |  | $ | (1.75) |  |  | $ | (0.74) |  |  |  |  |  |  |
IF HSC-NYMEX HH Volumes |  |  |  |  |  | — |  |  | 973 |  |  | — |  |  |  |  |  |  |
Weighted-Average Contract Price |  |  |  |  |  | $ | — |  |  | $ | (0.18) |  |  | $ | — |  |  |  |  |  |  |
NGL Derivatives (volumes in MBbl and prices in $ per Bbl): |  |  |  |
Swaps |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
OPIS Ethane Mont Belvieu Non-TET Volumes |  |  |  |  |  | 123 |  |  | 674 |  |  | — |  |  |  |  |  |  |
Weighted-Average Contract Price |  |  |  |  |  | $ | 13.07 |  |  | $ | 12.04 |  |  | $ | — |  |  |  |  |  |  |
Commodity Derivative Contracts Entered Into Subsequent to September 30, 2025 Subsequent to September 30, 2025, and through the filing of this report, the Company entered into the following commodity derivative contracts:
|  |  |  |  |  | Contract Period |  |  |  |  |  |
|  |  |  |  |  | Fourth Quarter 2025 |  | 2026 |  | 2027 |  |  |  |  |  |
Gas Derivatives (volumes in BBtu and prices in $ per MMBtu): |  |  |  |
Swaps |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NYMEX HH Volumes |  |  |  |  |  | — |  |  | 2,743 |  |  | 3,650 |  |  |  |  |  |  |
Weighted-Average Contract Price |  |  |  |  |  | $ | — |  |  | $ | 4.08 |  |  | $ | 3.62 |  |  |  |  |  |  |
IF Waha Volumes |  |  |  |  |  | — |  |  | 553 |  |  | — |  |  |  |  |  |  |
Weighted-Average Contract Price |  |  |  |  |  | $ | — |  |  | $ | 3.05 |  |  | $ | — |  |  |  |  |  |  |
Basis Swaps |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
IF Waha-NYMEX HH Volumes |  |  |  |  |  | — |  |  | — |  |  | 996 |  |  |  |  |  |  |
Weighted-Average Contract Price |  |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | (0.70) |  |  |  |  |  |  |
Derivative Assets and Liabilities Fair Value The Company’s commodity derivatives are measured at fair value and are included in the accompanying balance sheets as derivative assets and liabilities, with the exception of derivative instruments that meet the “normal purchase normal sale” exclusion. The Company does not designate its commodity derivative contracts as hedging instruments. The fair value of commodity derivative contracts at September 30, 2025, and December 31, 2024, was a net asset of $58.5 million and $38.3 million, respectively. The following table details the fair value of commodity derivative contracts recorded in the accompanying balance sheets:
| As of September 30, 2025 |  | As of December 31, 2024
| (in thousands)
Derivative assets: |  |  |
Current assets | $ | 68,567 |  |  | $ | 48,522 |
Noncurrent assets | 4,677 |  |  | 3,973 |
Total derivative assets | $ | 73,244 |  |  | $ | 52,495 |
Derivative liabilities: |  |  |
Current liabilities | $ | 9,888 |  |  | $ | 7,058 |
Noncurrent liabilities | 4,852 |  |  | 7,142 |
Total derivative liabilities | $ | 14,740 |  |  | $ | 14,200 |
Offsetting of Derivative Assets and Liabilities As of September 30, 2025, and December 31, 2024, all derivative instruments held by the Company were subject to master netting arrangements with various financial institutions. In general, the terms of the Company’s agreements provide for offsetting of amounts payable or receivable between it and the counterparty, at the election of both parties, for transactions that settle on the same date and in the same currency. The Company’s agreements also provide that in the event of an early termination, the counterparties have the right to offset amounts owed or owing under that and any other agreement with the same counterparty. The Company’s accounting policy is to not offset these positions in its accompanying balance sheets. The following table provides a reconciliation between the gross assets and liabilities reflected on the accompanying balance sheets and the potential effects of master netting arrangements on the fair value of the Company’s commodity derivative contracts:
| Derivative Assets as of |  | Derivative Liabilities as of
| September 30, 2025 |  | December 31, 2024 |  | September 30, 2025 |  | December 31, 2024
| (in thousands)
Gross amounts presented in the accompanying balance sheets | $ | 73,244 |  |  | $ | 52,495 |  |  | $ | (14,740) |  |  | $ | (14,200) |
Amounts not offset in the accompanying balance sheets | (14,534) |  |  | (12,995) |  |  | 14,534 |  |  | 12,995 |
Net amounts | $ | 58,710 |  |  | $ | 39,500 |  |  | $ | (206) |  |  | $ | (1,205) |
The following table summarizes the commodity components of the net derivative settlement gain, and the net derivative gain line items presented within the accompanying unaudited condensed consolidated statements of cash flows (“accompanying statements of cash flows”) and the accompanying statements of operations, respectively:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
| (in thousands)
Net derivative settlement (gain) loss: |  |  |  |  |  |  |
Oil contracts | $ | (16,483) |  |  | $ | 487 |  |  | $ | (40,486) |  |  | $ | (877) |
Gas contracts | (22,384) |  |  | (16,735) |  |  | (48,187) |  |  | (46,639) |
NGL contracts | — |  |  | (243) |  |  | 2,310 |  |  | 1,228 |
Total net derivative settlement gain | $ | (38,867) |  |  | $ | (16,491) |  |  | $ | (86,363) |  |  | $ | (46,288) |
Net derivative (gain) loss: |  |  |  |  |  |  |
Oil contracts | $ | 1,172 |  |  | $ | (65,633) |  |  | $ | (50,989) |  |  | $ | (29,805) |
Gas contracts | (46,367) |  |  | (15,291) |  |  | (56,007) |  |  | (41,624) |
NGL contracts | (284) |  |  | (5,359) |  |  | 425 |  |  | 1,173 |
Total net derivative gain | $ | (45,479) |  |  | $ | (86,283) |  |  | $ | (106,571) |  |  | $ | (70,256) |
Credit Related Contingent Features As of September 30, 2025, all of the Company’s derivative counterparties were members of the Company’s Credit Agreement lender group. The Company does not enter into derivative contracts with counterparties that are not part of the lender group. Under the Credit Agreement, the Company is required to provide mortgage liens on assets having a value equal to at least 85 percent of the total PV-9, as defined in the Credit Agreement, of the Company’s proved oil and gas properties evaluated in the most recent reserve report. Collateral securing indebtedness under the Credit Agreement also secures the Company’s derivative agreement obligations.

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 182 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480401/815-10-55-182 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 185 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480401/815-10-55-185 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 184 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480401/815-10-55-184 Reference 4: http://www.xbrl.org/2003/role/exampleRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 181 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480401/815-10-55-181 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (a)(5) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4H -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4H Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4H -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4H Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 15 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480960/815-15-50-3 Reference 13: http://www.xbrl.org/2003/role/exampleRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 183 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480401/815-10-55-183 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (a)(4) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (a)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4I -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4I Reference 18: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4F -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4F Reference 19: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-2 Reference 20: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-2 Reference 21: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a)(1)(iii) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-2 Reference 22: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a)(1)(ii) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-2 Reference 23: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a)(1)(i) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-2 Reference 24: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-1B Reference 25: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-1A Reference 26: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1A -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-1A Reference 27: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1A -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-1A Reference 28: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-1A Reference 29: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent Reference 30: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 31: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

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