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Derivatives
 9 Months Ended
Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
Commodity Derivatives 

The Company is exposed to commodity price risk, which impacts the predictability of its cash flows from the sale of oil, natural gas and NGL. On occasion, the Company has attempted to manage this risk on a portion of its forecasted oil, natural gas or NGL production sales through the use of commodity derivative contracts.

Historically, the Company has not designated any of its derivative contracts as hedges for accounting purposes. As applicable, if the Company has open derivative contracts, the Company has recorded such contracts at fair value with changes in derivative contract fair values recognized as a gain or loss on derivative contracts in the condensed consolidated income statements. Commodity derivative contracts were settled on a monthly basis, and the commodity derivative contract valuations were adjusted on a mark-to-market valuation basis quarterly.

The following table summarizes derivative activity for the three and nine-month periods ended September 30, 2024 and 2023 (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(Gain) loss on derivative contracts$(1,866)$— $(1,866)$(1,447)
Settlement gains (losses) on derivative contracts$199 $— $199 $5,876 

Master Netting Agreements and the Right of Offset. As applicable, the Company historically has had master netting agreements with all of its commodity derivative counterparties and has presented its derivative assets and liabilities with the same counterparty on a net basis in the unaudited condensed consolidated balance sheets. As a result of the netting provisions, the Company's maximum amount of loss under commodity derivative transactions due to credit risk was limited to the net amounts due from its counterparties.


Because we did not designate any of our derivative contracts as hedges for accounting purposes, changes in the fair value of our derivative contracts were recognized as gains and losses in the earnings of the relevant period. Changes in fair value were principally measured based on a comparison of future prices to the contract price at the end of the period.
The following table summarizes (i) the Company's commodity derivative contracts on a gross basis, (ii) the effects of netting assets and liabilities for which the right of offset exists based on master netting arrangements and (iii) the Company’s net derivative asset and liability positions as of September 30, 2024 (in thousands):

September 30, 2024

Gross Amounts
Gross Amounts Offset
Amounts Net of Offset
Financial Collateral
Net Amount
Assets
Derivative contracts - current
$1,694 $(410)$1,284 $— $1,284 
Derivative contracts - non-current$496 $(113)$383 $— $383 
Total
$2,190 $(523)$1,667 $— $1,667 

As of September 30, 2024, the Company's open derivative contracts consisted of natural gas and NGL commodity derivative contracts under which we will receive a fixed price for the contract and pay a floating market price to the counterparty over a specified period for a contracted volume. These commodity derivative contracts consisted of the following:

PeriodType of Derivative Instrument
Index(1)
Daily Volume (Bbl)Weighted Average Price Per Barrel
October 2024 - December 2024SwapsMont Belvieu OPIS400$42.76 
October 2024 - December 2024SwapsNYMEX WTI900$74.85 
January 2025 - December 2025SwapsMont Belvieu OPIS300$39.69 
January 2025 - December 2025SwapsNYMEX WTI500$71.60 
January 2026 - June 2026SwapsNYMEX WTI300$68.67 
(1) NGL swaps exclude ethane