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Derivative Instruments
 12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
Oil and Natural Gas Contracts
The Company uses commodity based derivative contracts to reduce exposure to fluctuations in oil and natural gas prices. While the use of these contracts limits the downside risk for adverse price changes, their use also limits future revenues from favorable price changes. We have not designated our derivative contracts as hedges for accounting purposes, and therefore changes in the fair value of derivatives are included and recognized in other income (expense) in the consolidated statement of operations.
As of December 31, 2022, the Company's oil and natural gas derivative instruments consisted of the following types:
•Fixed Price Swaps – the Company receives a fixed price for the contract and pays a floating market price to the counterparty over a specified period for a contracted volume.
•Costless collars – the combination of a put option (fixed floor) and call option (fixed ceiling), with the options structured so that the premium paid to purchase the put option is offset by the premium received from the sale of the call option. If the market price exceeds the call strike price or falls below the put strike price, we receive the fixed price and pay the market price. If the market price is between the put and the call strike price, no payments are due from either party.
•Basis Protection Swaps – basis swaps are settled based on differences between a fixed price differential and the differential between the settlement prices of two referenced indexes. We receive the fixed price differential and pay the differential between the referenced indexes.
The following table summarizes the open financial derivative positions as of December 31, 2022, related to oil and natural gas production:
Weighted Average Price
Calendar Quarter / YearNotional VolumeFixedPutCall
($ per unit)
Oil Swaps (Bbl)
Q1 2023225,000 $53.65 $— $— 
Q2 2023195,000 $53.89 $— $— 
Q3 2023126,000 $53.79 $— $— 
Q4 2023114,000 $54.59 $— $— 
Oil Collars (Bbl)
Q1 202330,000 $— $60.00 $109.60 
Q2 202330,000 $— $60.00 $109.60 
Q3 2023— $— $— $— 
Q4 2023— $— $— $— 
20243,000 $— $50.00 $88.00 
The Company entered into additional derivative contracts subsequent to December 31, 2022. See further discussion in Note 15 - Subsequent Events.
Interest Rate Contracts
During the years ended December 31, 2022 and 2021, the Company entered into floating-to-fixed interest rate swaps, in which it received a floating market rate equal to one-month LIBOR or Secured Overnight Financing Rate ("SOFR") and paid a fixed interest rate, to manage interest rate exposure related to the Company's revolving credit facility. In December 2022, the Company settled the remaining open positions for the interest rate swap which resulted in a $1.5 million settlement. The Company recognizes settlements on interest rate swaps in interest expense on the consolidated statements of operations.
Balance Sheet Presentation of Derivatives    
The following tables present the location and fair value of the Company’s derivative contracts included in the consolidated balance sheets as of December 31, 2022 and 2021:
December 31, 2022
Balance Sheet ClassificationGross Fair ValueAmounts NettedNet Fair Value
(In thousands)
Current derivative assets$64 $(44)$20 
Non-current derivative assets9 (9)— 
Current derivative liabilities(16,516)44 (16,472)
Non-current derivative liabilities(21)9 (12)
Total$(16,464)$— $(16,464)
December 31, 2021
Balance Sheet ClassificationGross Fair ValueAmounts NettedNet Fair Value
(In thousands)
Current derivative assets$281 $(198)$83 
Non-current derivative assets267 — 267 
Current derivative liabilities(31,182)198 (30,984)
Non-current derivative liabilities(9,515)— (9,515)
Total$(40,149)$— $(40,149)
The following table presents the components of the Company's gain (loss) on derivatives for the periods presented below:
Year Ended December 31, 2022Three Months Ended December 31, 2021Year Ended September 30, 2021
(In thousands)
Settlements on derivative contracts(1)
$(75,257)$(16,014)$(16,304)
Non-cash gain (loss) on derivatives23,683 10,821 (72,891)
Loss on derivatives$(51,574)$(5,193)$(89,195)
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(1) In December 2022, the Company settled a portion of its 2023 open oil fixed price swap contracts which resulted in a $1.5 million settlement.