Oil and Natural Gas Properties

9 Months Ended

Sep. 30, 2025

Oil and natural gas properties, net are summarized below:


	September 30, 2025		December 31, 2024


	(In thousands)
Proved	$	1,163,919	$	1,027,183
Unproved	173,439		100,974
Work-in-progress	14,625		21,318
	$	1,351,983	$	1,149,475
Accumulated depletion, amortization and impairment	(349,366)		(288,678)
Total oil and natural gas properties, net	$	1,002,617	$	860,797

Depletion and amortization expense for proved oil and natural gas properties was $24.2 million and $18.8 million, respectively, for the three months ended September 30, 2025, and 2024 and $59.5 million and $52.3 million, respectively, for the nine months ended September 30, 2025, and 2024.

The cost of proved and unproved oil and natural gas properties are assessed for impairment at least annually or whenever events and circumstances indicate that a decline in the recoverability of their carrying value may have occurred. We compare the undiscounted future cash flows to the carrying amount to determine if the carrying amount is recoverable. If the carrying amount exceeds the estimated undiscounted future cash flows, we adjust the carrying amount to their estimated fair value which is considered a Level 3 measurement.

Impairments

Impairments of Oil and Natural Gas Properties

During the second quarter of 2025, certain oil and natural gas property in New Mexico outside of the Company's acreage in the Red Lake field failed the initial step assessment, which looked at the carrying value compared to undiscounted cash flows for this property. Based on this assessment of our long-lived assets impairment test, the carrying value exceeded the estimated fair market value and we recognized a $1.2 million non-cash impairment on proved properties during the nine months ended September 30, 2025.

Other Impairments

As part of the impairment review during the third quarter 2024, the Company made the decision to discontinue its EOR Project, which was in work-in-process, in favor of redeploying the required future capital and salvaging the assets for use in its conventional vertical and horizontal development programs. As a result of this decision, the remaining fair value for the EOR Project was determined to be zero and the Company recorded a non-cash impairment charge of $28.9 million and a cash impairment charge of $1.3 million. The total $30.2 million impairment is included in other impairments in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2024.