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Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Significant Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
The Company evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods the Company considers reasonable in the particular circumstances. Actual results may differ significantly from the Company’s estimates. Any effects on the Company’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to such estimates and assumptions include, but are not limited to, estimates of proved oil and natural gas reserves and related present value estimates of future net cash flows therefrom, the carrying value of oil and natural gas properties, accounts receivable, accrued capital expenditures and operating expenses, ARO, the fair value determination of acquired assets and assumed liabilities, certain tax accruals and the fair value of derivatives.
Accounts Receivable, net
Accounts receivable is summarized below:
September 30, 2024December 31, 2023
(In thousands)
Oil, natural gas and NGL sales$32,097 $31,135 
Joint interest accounts receivable3,990 1,630 
Allowance for credit losses(45)— 
Other accounts receivable4,992 2,361 
Total accounts receivable, net
$41,034 $35,126 
As of December 31, 2022, the Company had accounts receivables, net from oil, natural gas and NGL sales of $24.1 million.
The Company estimates uncollectible amounts based on the length of time that the accounts receivable has been outstanding, historical collection experience and current and future economic and market conditions, to determine if failure to collect is expected to occur. Allowances for credit losses are recorded as reductions to the carrying values of the accounts receivables included in the Company’s condensed consolidated balance sheets and are recorded in administrative costs in the condensed consolidated statements of operations if failure to collect an estimable portion is determined to be probable.
Other Non-Current Assets, net
Other non-current assets consisted of the following:
September 30, 2024December 31, 2023
(In thousands)
Deferred financing costs, net (1)
$2,674 $3,844 
Right of use assets1,686 1,890 
Other2,482 1,241 
Total other non-current assets, net$6,842 $6,975 
_____________________
(1)Deferred financing costs, net reflects costs associated with the Company's Credit Facility which are amortized over the term of the Credit Facility.
Accrued Liabilities
Accrued liabilities consisted of the following:
September 30, 2024December 31, 2023
(In thousands)
Accrued capital expenditures$7,564 $15,851 
Accrued lease operating expenses6,470 6,038 
Accrued general and administrative costs5,491 4,655 
Accrued ad valorem tax3,852 5,269 
Other accrued expenditures2,339 1,346 
Total accrued liabilities$25,716 $33,159 
Other Current Liabilities
Other current liabilities consisted of the following:
September 30, 2024December 31, 2023
(In thousands)
Advances from joint interest owners$8,324 $259 
Income taxes payable1,177 561 
Current ARO liabilities2,996 3,789 
Other1,073 1,667 
Total other current liabilities
$13,570 $6,276 
Asset Retirement Obligations
Components of the changes in ARO for the nine months ended September 30, 2024, and the year ended December 31, 2023, are shown below:
September 30, 2024December 31, 2023
(In thousands)
ARO, beginning balance$23,044 $3,038 
Liabilities incurred27 45 
Liabilities assumed in acquisitions9,727 19,359 
Liability settlements and disposals(416)(1,039)
Accretion2,020 1,641 
ARO, ending balance34,402 23,044 
Less: current ARO (1)
(2,996)(3,789)
ARO, long-term$31,406 $19,255 
_____________________
(1)Current ARO is included within other current liabilities on the accompanying condensed consolidated balance sheets.
Revenue Recognition
The following table presents oil and natural gas sales disaggregated by product:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(In thousands)
Oil and natural gas sales:
Oil$105,303 $104,490 $308,648 $267,293 
Natural gas
(1,170)983 (1,464)1,547 
NGLs
(1,794)2,221 (78)4,578 
Total oil and natural gas sales, net (1)
$102,339 $107,694 $307,106 $273,418 
_____________________
(1) The Company's oil, natural gas and NGL sales are presented net of gathering, processing and transportation costs. The costs, related to natural gas and NGLs, at times exceed the price received and result in negative average realized prices.
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances the disclosures required for operating segments in the Company’s annual and interim consolidated financial statements. This ASU is effective retrospectively for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company does not expect this standard to have a material impact on its disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this standard provide for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid. This ASU is effective for the Company prospectively to all annual periods beginning after December 15, 2024. The Company does not expect this standard to have a material impact on its disclosures.