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Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
The Company uses derivative financial instruments in connection with its oil and natural gas operations to provide an economic hedge of the Company’s exposure to commodity price risk associated with anticipated future oil and natural gas production. The Company does not hold or issue derivative financial instruments for speculative trading purposes.
The Company does not designate its derivative instruments to qualify for hedge accounting. Accordingly, the Company reflects changes in the fair value of its derivative instruments in its condensed consolidated statements of operations as they occur.
Collar Option Contracts and Swaps
The Company’s derivative financial instruments consist of collar option contracts and swaps.
A collar option is established with the sale of a short call option (ceiling price) and the purchase of a long put option (floor price) set to expire at a predetermined date in the future. The options give the owner the right but not the obligation to exercise the option at the expiration date.
When the settlement price is below the established floor price, the Company receives an amount from its counterparty equal to the difference between the settlement price and the floor price multiplied by the hedged contract volume. When the settlement price is above the established ceiling price, the Company pays its counterparty an amount equal to the difference between the settlement price and the ceiling price multiplied by the hedged contract volume. When the settlement price is between the established floor and the ceiling, no amounts are due to or from the counterparty.
A swap contract allows the Company to receive a fixed price and pay a floating market price to the counterparty for the hedged commodity.
The Company has master netting agreements on individual derivative instruments with its counterparties and therefore certain amounts may be presented on a net basis in the condensed consolidated balance sheets.
Volume of Derivative Activities
The following table sets forth the Company’s outstanding commodity derivative contracts as of June 30, 2025.
Third QuarterFourth QuarterTotal 20252026
Collar (oil)
Volume (Bbl)802,210698,0001,500,2102,104,980
Weighted-average floor price ($/Bbl)$61.95 $60.00 $61.04 $60.00 
Weighted-average ceiling price ($/Bbl)$78.51 $77.13 $77.87 $70.44 
Collar (natural gas)
Volume (Mcf)2,441,7573,820,6156,262,37210,506,446
Weighted-average floor price ($/Mcf)$3.00 $3.43 $3.26 $3.48 
Weighted-average ceiling price ($/Mcf)$3.75 $4.23 $4.04 $4.25 
Swaps (natural gas)
Volume (Mcf)2,762,450831,3503,593,8004,351,400
Weighted-average price ($/Mcf)$3.67 $3.67 $3.67 $3.68 
The following table summarizes the amounts reported as gain (loss) on derivatives - commodity derivatives in the condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2025202420252024
Net cash receipts from (payments on) commodity derivatives
Oil derivatives$708 $(376)$642 $(279)
Natural gas derivatives263 4,327 216 6,938 
   Total net cash receipts from (payments on) commodity derivatives$971 $3,951 $858 $6,659 
Unrealized gain (loss) on commodity derivatives
Oil derivatives$9,519 $1,094 $10,873 $(6,281)
Natural gas derivatives13,435 (5,830)(2,663)(4,324)
   Total unrealized gain (loss) on commodity derivatives$22,954 $(4,736)$8,210 $(10,605)
Total gain (loss) on derivatives - commodity derivatives$23,925 $(785)$9,068 $(3,946)