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Derivative Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments
Note 6 - Derivative Instruments
The Company may utilize derivative contracts in connection with its natural gas, NGL and power operations to provide an economic hedge of the Company’s exposure to commodity price risk associated with anticipated future natural gas and NGL production, as well as to manage the Company's exposure to delivery risk, optimize physical and contractual assets in the Company's portfolio, and manage working capital requirements.
The derivative contracts outstanding as of June 30, 2026 consisted of commodity swaps, basis swaps, put and call options, producer collar agreements, fixed-price natural gas forwards, fixed-price power forwards, and HRCOs, subject to master netting agreements with each individual counterparty. The following table presents gross commodity derivative balances prior to applying netting adjustments recorded in the condensed consolidated balance sheets:
June 30, 2026
(in thousands)Balance Sheet LocationGross Amounts of Assets and LiabilitiesOffset AdjustmentsNet Amounts of Assets and Liabilities
Current derivative assetsCommodity derivative assets, current$112,440 $(13,052)$99,388 
Noncurrent derivative assetsCommodity derivative assets52,084 (6,335)45,749 
Current derivative liabilitiesCommodity derivative liabilities, current22,750 (13,052)9,698 
Noncurrent derivative liabilitiesCommodity derivative liabilities6,335 (6,335)— 
December 31, 2025
(in thousands)Balance Sheet LocationGross AmountsOffset AdjustmentsNet Amounts of Assets and Liabilities
Current derivative assetsCommodity derivative assets, current$66,787 $(2,887)$63,900 
Noncurrent derivative assetsCommodity derivative assets34,116 (7,684)26,432 
Current derivative liabilitiesCommodity derivative liabilities, current11,356 (2,887)8,469 
Noncurrent derivative liabilitiesCommodity derivative liabilities13,451 (7,684)5,767 
Derivative Contracts
Collar, Commodity Swap, and Basis Swap Contracts
A commodity collar provides for a price floor and a price ceiling. The floating price for the collar contract is traded for a fixed price when the floating price is not between the floor and ceiling. If the floating price is between these contracted prices, no trade occurs. A commodity swap agreement is an agreement whereby a floating price based on the underlying commodity is traded for a fixed price over a specified period. Basis swaps provide a guaranteed price differential for natural gas from two different specified delivery points over a specified period. The fair value of open collar, commodity swap, and basis swap contracts reported in the condensed consolidated balance sheets may differ from that which would be realized in the event the Company terminated its position in the respective contract.
Fixed-Price Power Forwards and HRCOs
For the power generated out of the Temple Plants, the Company enters into fixed-price power sales contracts in which energy is delivered to the ERCOT north hub at a fixed-price per MWh. The contracts contain an agreed upon quantity of total MW and total MWh. The Company enters into fixed-price power purchase contracts to hedge BKV-BPP Retail power purchases for its retail customers.
The Company also enters into bilateral HRCO agreements under which counterparties obtain the right to receive specified quantities of power at the Temple Plants, subject to the contractual terms of each agreement. As of June 30, 2026 and December 31, 2025, the Company had four outstanding HRCO contracts with two counterparties. The contracts become effective on January 1 of each calendar year and, as of both June 30, 2026 and December 31, 2025, represented 600 MW of contracted capacity. Under the agreements, the Company receives fixed monthly capacity premiums from the counterparties. If exercised, the counterparties receive specified quantities of power from the Temple Plants with settlement based on contractually specified prices that incorporate the applicable heat rate, natural gas index pricing, and other contractual charges. Premiums received under the Company’s HRCO agreements are recognized within derivative gains, net as realized gains (losses), net on the condensed consolidated statements of income. Fuel costs incurred to satisfy exercised HRCO obligations are recognized within fuel commodity costs on the condensed consolidated statements of income. Outstanding HRCO agreements are remeasured at fair value, with changes in fair value recognized within derivative gains, net as unrealized gains (losses), net on the condensed consolidated statements of income.
The following tables present realized and unrealized gains and losses on derivative instruments, including amounts recognized in derivative gains, net and purchased power on the condensed consolidated statements of income:
Income
Statement
Location		Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2026202520262025
Realized gains (losses) on derivatives (natural gas)Derivative gains, net$31,609 $6,689 $2,358 $(3,685)
Realized gains (losses) on derivatives (NGL)Derivative gains, net5,857 (43)8,220 (5,139)
Realized gains on derivatives (power sales)Derivative gains, net60,507 65,939 123,077 133,037 
Realized losses on derivatives (purchased power)Purchased power(11,516)(9,201)(20,973)(16,619)
Total realized gains on derivatives, net$86,457 $63,384 $112,682 $107,594 
Income
Statement
Location		Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2026202520262025
Unrealized gains (losses) on derivatives (natural gas)Derivative gains, net$25,676 $67,218 49,595 (43,178)
Unrealized gains (losses) on derivatives (NGL)Derivative gains, net31,922 17,789 (9,411)9,727 
Unrealized gains (losses) on derivatives (power sales)Derivative gains, net(12,316)29,434 22,525 (2,119)
Unrealized gains (losses) on derivatives (purchased power)Purchased power205 (3,324)(3,366)(348)
Total unrealized gains (losses) on derivatives, net$45,487 $111,117 $59,343 $(35,918)
During the first quarter in 2025, the Company entered into agreements to buy put options and subsequently paid a net premium of $16.2 million for contracts that settle in 2026 and 2027. The put options have an established floor of $3.00 per MMBtu. If at the time of settlement the contracted settlement price falls below the floor, the counterparties pay the Company an amount equal to the difference between the contracted settlement price and the floor multiplied by the contract volumes. The premium paid was recorded as an asset and is subsequently adjusted to the current fair value of the purchased put option. During the fourth quarter of 2025, the Company terminated a portion of the put option contracts scheduled to settle in 2026 in exchange for natural gas fixed-price swap contracts that will settle in 2026. No realized gain or loss was recognized on this transaction.
Derivative Contract Volumes and Fair Values
The following tables summarize the Company’s outstanding derivative positions as of June 30, 2026 by commodity and contract type, including volume, pricing indices, or reference points, and associated fair values.
The following table summarizes the Company's power derivatives:
InstrumentUnitsQuantity
Pricing Index
Fair Value as of
June 30, 2026 (in thousands)
2026
SwapMMBtu3,066,000 HSC Gas Daily$(2,752)
Power forwards - salesMWh438,000 ERCOT North$5,959 
Heat rate call optionMMBtu2,628,000 Various$13,891 
Power forwards - purchasesMWh344,030 Various$(6,145)
2027
SwapMMBtu12,264,000 HSC Gas Daily$507 
Power forwards - salesMWh1,752,000 ERCOT North$2,378 
Power forwards - purchasesMWh87,600 Various$(735)
The following table summarizes the Company's natural gas commodity derivatives indexed to NYMEX Henry Hub pricing:
InstrumentMMBtuWeighted Average Price (USD)Weighted Average Price FloorWeighted Average Price Ceiling
Fair Value as of
June 30, 2026 (in thousands)
2026
Swap75,768,006 $3.88 $34,725 
2027
Swap98,958,854 $3.99 $49,421 
Collars37,662,319 $3.57 $4.00 $9,378 
Call options36,500,000 $5.00 $(6,038)
Put options36,500,000 $3.00 $10,398 
2028
Swap94,085,323 $3.79 $12,469 
2029
Swap35,587,500 $3.60 $(29)
The following table summarizes the Company's natural gas basis derivatives by reference price:
InstrumentBasis Reference PriceMMBtuWeighted Average Basis Differential
Fair Value as of
June 30, 2026
(in thousands)
2026
SwapTransco Leidy Basis25,526,433 $(0.79)$132 
SwapHSC Basis27,600,000 $(0.32)$5,796 
SwapTransco St 85 (Z4) Basis18,400,000 $0.62 $(2,384)
SwapNGPL TXOK Basis23,943,741 $(0.40)$2,463 
2027
SwapTransco Leidy Basis10,950,000 $(0.76)$(1,308)
SwapHSC Basis7,300,000 $(0.25)$1,194 
SwapNGPL TXOK Basis16,965,270 $(0.31)$1,593 
2028
SwapTransco Leidy Basis7,320,000 $(0.76)$(693)
SwapHSC Basis10,980,000 $(0.17)$1,229 
The following table summarizes the Company's natural gas liquids derivatives position by product and reference price:
InstrumentCommodity Reference PriceGallonsWeighted Average Price (USD)
Fair Value as of
June 30, 2026
(in thousands)
2026
SwapOPIS Purity Ethane Mont Belvieu68,220,796 $0.25 $591 
SwapOPIS IsoButane Mont Belvieu Non-TET7,128,934 $0.86 $(497)
SwapOPIS Normal Butane Mont Belvieu Non-TET11,719,147 $0.83 $(938)
SwapOPIS Propane Mont Belvieu Non-TET40,975,148 $0.70 $(586)
SwapOPIS Natural Gasoline Mont Belvieu Non-TET18,268,618 $1.39 $(1,563)
2027
SwapOPIS Purity Ethane Mont Belvieu79,965,970 $0.28 $3,841 
SwapOPIS IsoButane Mont Belvieu Non-TET13,846,327 $0.87 $324 
SwapOPIS Normal Butane Mont Belvieu Non-TET20,203,274 $0.83 $246 
SwapOPIS Propane Mont Belvieu Non-TET76,415,634 $0.70 $1,412 
SwapOPIS Natural Gasoline Mont Belvieu Non-TET34,754,781 $1.39 $1,160