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Fair Value Measurements
 6 Months Ended
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. Since natural gas and NGL swaps, fixed-price power sales, and fixed price power purchases 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 derivatives7,054 — 7,054 
Natural gas basis swaps9,382 — 9,382 
Power derivatives8,337 13,891 22,228 
Financial liabilities
Derivative instruments
Natural gas derivatives2,818 — 2,818 
Power derivatives6,880 — 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 derivatives13,807 — 13,807 
Natural gas basis swaps17,272 — 17,272 
Power derivatives1,347 771 2,118 
Financial liabilities
Derivative instruments
Natural gas derivatives6,572 — 6,572 
NGL derivatives407 — 407 
Natural gas basis swaps1,328 — 1,328 
Power derivatives3,514 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 TechniqueSignificant Unobservable InputRangeWeighted AverageDescription
Kirk Spread Option ModelPower and natural gas price correlation92.7 %92.7 %Estimated correlation between underlying commodities
Kirk Spread Option ModelPower 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 TechniqueSignificant Unobservable InputRangeWeighted AverageDescription
Kirk Spread Option ModelPower and natural gas price correlation92.7 %92.7 %Estimated correlation between underlying commodities
Kirk Spread Option ModelPower 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)2026202520262025
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.