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Fair Value Measurements | 6 Months Ended
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Jun. 30, 2026
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Note 5 - Fair Value Measurements As the Company uses the market approach to determine the fair value of its derivative instruments, these fair values are also compared to the values given by counterparties for reasonableness. Sin ce natural gas and NGL swaps, fixed-price power sales, and fixed price power p urchases are based on measurements derived indirectly from observable inputs or from quoted prices from markets that are less liquid, they are classified as Level 2 within the fair value hierarchy. The heat rate call options are classified as Level 3 within the fair value hierarchy because their valuation relies on significant unobservable inputs. These inputs include correlation between the underlying power and natural gas commodities and volatility assumptions for non-liquid delivery periods, which require management judgment and are not directly observable in the market. The Company factors its own non-performance risk into the valuation of derivatives using current published credit default swap rates. As of June 30, 2026 and December 31, 2025, the impact of the non-performance risk adjustment to the Company's fair value of commodity derivative liabilities was $0.1 million and $1.6 million, respectively. The following tables set forth by level within the fair value hierarchy, the financial assets and liabilities that were accounted for at fair value on a recurring basis:
|  |  |  | June 30, 2026
|  |  |  | Fair Value Measurements Using: |  |
(in thousands) |  |  |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
Financial assets |  |  |  |  |  |  |  |
Derivative instruments |  |  |  |  |  |  |  |
Natural gas derivatives |  |  |  | $ | 106,473 |  |  | $ | — |  |  | $ | 106,473 |
NGL derivatives |  |  |  | 7,054 |  |  | — |  |  | 7,054 |
Natural gas basis swaps |  |  |  | 9,382 |  |  | — |  |  | 9,382 |
Power derivatives |  |  |  | 8,337 |  |  | 13,891 |  |  | 22,228 |
Financial liabilities |  |  |  |  |  |  |  |
Derivative instruments |  |  |  |  |  |  |  |
Natural gas derivatives |  |  |  | 2,818 |  |  | — |  |  | 2,818 |
Power derivatives |  |  |  | 6,880 |  |  | — |  |  | 6,880 |
|  |  |  | December 31, 2025
|  |  |  | Fair Value Measurements Using: |  |
(in thousands) |  |  |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
Financial assets |  |  |  |  |  |  |  |
Derivative instruments |  |  |  |  |  |  |  |
Natural gas derivatives |  |  |  | $ | 57,135 |  |  | $ | — |  |  | $ | 57,135 |
NGL derivatives |  |  |  | 13,807 |  |  | — |  |  | 13,807 |
Natural gas basis swaps |  |  |  | 17,272 |  |  | — |  |  | 17,272 |
Power derivatives |  |  |  | 1,347 |  |  | 771 |  |  | 2,118 |
Financial liabilities |  |  |  |  |  |  |  |
Derivative instruments |  |  |  |  |  |  |  |
Natural gas derivatives |  |  |  | 6,572 |  |  | — |  |  | 6,572 |
NGL derivatives |  |  |  | 407 |  |  | — |  |  | 407 |
Natural gas basis swaps |  |  |  | 1,328 |  |  | — |  |  | 1,328 |
Power derivatives |  |  |  | 3,514 |  |  | 2,415 |  |  | 5,929 |
The following table is the quantitative information regarding significant unobservable inputs used in the measurement of Level 3 positions:
June 30, 2026
Valuation Technique |  | Significant Unobservable Input |  | Range |  | Weighted Average |  | Description
Kirk Spread Option Model |  | Power and natural gas price correlation |  | 92.7 | % |  |  |  | 92.7 | % |  | Estimated correlation between underlying commodities
Kirk Spread Option Model |  | Power volatility (non-liquid hours) |  | 53.4 | % |  | 65.2 | % |  | 59.3 | % |  | Extrapolated from observable 5x16 implied volatilities and shaped for delivery periods (2x16 and 7x8)
December 31, 2025
Valuation Technique |  | Significant Unobservable Input |  | Range |  | Weighted Average |  | Description
Kirk Spread Option Model |  | Power and natural gas price correlation |  | 92.7 | % |  |  |  | 92.7 | % |  | Estimated correlation between underlying commodities
Kirk Spread Option Model |  | Power volatility (non-liquid hours) |  | 42.9 | % |  | 52.4 | % |  | 47.7 | % |  | Extrapolated from observable 5x16 implied volatilities and shaped for delivery periods (2x16 and 7x8)
Realized and unrealized gains and losses related to the Company’s Level 3 HRCOs are recognized in derivative gains, net in the condensed consolidated statements of income. The table below sets forth the changes in the Company's Level 3 fair value measurements:
| Three Months Ended June 30, |  | Six Months Ended June 30,
(in thousands) | 2026 |  | 2025 |  | 2026 |  | 2025
Balance, beginning of period | $ | 25,827 |  |  | $ | (20,678) |  |  | $ | (1,644) |  |  | $ | (3,595) |
Settlements | (30,227) |  |  | (14,936) |  |  | (99,558) |  |  | (30,227) |
Total realized gains | 30,227 |  |  | 14,936 |  |  | 99,558 |  |  | 30,227 |
Total unrealized gains (losses) | (11,936) |  |  | 9,797 |  |  | 15,535 |  |  | (7,286) |
Balance, end of period | $ | 13,891 |  |  | $ | (10,881) |  |  | $ | 13,891 |  |  | $ | (10,881) |
There were no transfers in or out of Level 3 during the three and six months ended June 30, 2026 and 2025. Other Fair Value Measurements The carrying value of cash and cash equivalents, restricted cash, accounts receivable, net, and accounts payable and accrued liabilities approximate their fair values due to the short-term maturities of these instruments. Long-term debt obligations under the RBL Credit Agreement, the Temple I Loan Agreements, and the Temple Credit Facilities also approximate fair value because the variable rates of interest are market-based. The fair value of the 2030 Senior Notes as of June 30, 2026, was approximately $502.0 million based on quoted market prices from banks and are classified Level 2 in the fair value hierarchy. The 2030 Senior Notes are carried on the condensed consolidated balance sheets at their principal amount, net of unamortized debt issuance costs, which are amortized to interest expense over the term of such notes.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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