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Commitments and Contingencies | 3 Months Ended
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Mar. 31, 2026
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Note 7 - Commitments and Contingencies The Company assumed various commitments through the Civitas Merger which the Company has included in its commitments and contingencies calculations and disclosures as of March 31, 2026. Other than those items discussed below, there have been no changes in commitments and contingencies through the filing of this report that differ materially from those disclosed in the 2025 Form 10-K. Commitments Drilling and Completion Commitments. During the three months ended March 31, 2026, the Company entered into an agreement that includes minimum drilling and completion footage requirements on certain existing leases. If these minimum requirements are not satisfied by March 31, 2028, the Company will be required to pay liquidated damages based on the difference between the actual footage drilled and completed and the minimum requirements. As of March 31, 2026, the liquidated damages could range from zero to a maximum of $96 million, with the maximum exposure assuming no additional development activity occurs prior to March 31, 2028. As of the filing of this report, the Company expects to meet its obligations under this agreement. In connection with the Civitas Merger, the Company assumed certain oil, gas, and produced water gathering agreements that collectively contain a drilling commitment. The commitment requires the Company to drill and complete a total of 106 qualifying wells by December 31, 2026, unless the Company’s obligation is excused under the terms of the agreements. As of March 31, 2026, the Company does not expect to incur material damages associated with this commitment, and cannot reasonably estimate the amount of damages, if any, that might be incurred in connection therewith. Delivery Commitments. As of March 31, 2026, the Company has material, long-term transportation and delivery commitments with various third-parties. Under these agreements, including those acquired through the Civitas Merger, the Company would be required to make periodic deficiency payments for any shortfalls in delivering specified minimum volume commitments. In connection with the Civitas Merger, the Company assumed delivery commitments under which, as of March 31, 2026, it is required to deliver a minimum of 66 MMBbl of oil through 2030 and 53 Bcf of gas through 2029. As of March 31, 2026, if the Company failed to deliver any product under all of its agreements, the aggregate undiscounted deficiency payments would total approximately $245 million, of which $144 million relates to agreements assumed in the Civitas Merger. The Company does not expect to incur material penalties or shortfalls with regard to these commitments. Contingencies The Company is subject to litigation and claims arising in the ordinary course of business. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated. As of the filing of this report, in the opinion of management, the anticipated results of any pending litigation and claims are not expected to have a material effect on the results of operations, the financial position, or the cash flows of the Company.

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