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FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2025
FAIR VALUE MEASUREMENTS  
FAIR VALUE MEASUREMENTS

NOTE 5—FAIR VALUE MEASUREMENTS

The Partnership measures and reports certain assets and liabilities on a fair value basis and has classified and disclosed its fair value measurements using the levels of the fair value hierarchy noted below. The carrying values of cash, oil, natural gas and NGL receivables, accounts receivable and other current assets and current and long-term liabilities included in the consolidated balance sheets approximated fair value at December 31, 2025 and 2024 due to their short-term duration and variable interest rates that approximate prevailing interest rates as of each reporting period. As a result, these financial assets and liabilities are not discussed below.

●Level 1—Unadjusted quoted market prices for identical assets or liabilities in active markets.
●Level 2—Quoted prices for similar assets or liabilities in non-active markets, or inputs that are observable for the asset or liability either directly or indirectly, for substantially the full term of the asset or liability.
●Level 3— Measurement based on prices or valuations models that require inputs that are both unobservable and significant to the fair value measurement (including the Partnership’s own assumptions in determining fair value).

Assets and liabilities that are measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement. The Partnership’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Partnership recognizes transfers between fair value hierarchy levels as of the end of the reporting period in which the event or change in circumstances causing the transfer occurred. The Partnership did not have any transfers between Level 1, Level 2 or Level 3 fair value measurements during the years ended December 31, 2025 and 2024.

The Partnership’s commodity derivative instruments are classified within Level 2. The fair values of the Partnership’s oil and natural gas fixed price swaps are based upon inputs that are either readily available in the public market, such as oil and natural gas futures prices, volatility factors and discount rates, or can be corroborated from active markets.

The following tables summarize the Partnership’s assets and liabilities measured at fair value on a recurring basis by the fair value hierarchy:

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Fair Value Measurements Using

​

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Level 1

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Level 2

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Level 3

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Effect of
Counterparty Netting

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Total

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​

(In thousands)

December 31, 2025

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​

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Assets

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​

​

​

​

​

​

​

​

​

​

​

​

​

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Commodity derivative contracts

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$

—

​

$

9,686

​

$

—

​

$

(595)

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$

9,091

Liabilities

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commodity derivative contracts

​

$

—

​

$

(623)

​

$

—

​

$

595

​

$

(28)

December 31, 2024

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Assets

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​

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​

​

​

​

​

​

​

​

​

​

​

​

Commodity derivative contracts

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$

—

​

$

4,476

​

$

—

​

$

(1,506)

​

$

2,970

Liabilities

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commodity derivative contracts

​

$

—

​

$

(2,640)

​

$

—

​

$

1,506

​

$

(1,134)

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Asset and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis in certain circumstances. These assets and liabilities can include mineral and royalty interests acquired in asset acquisitions.