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Derivatives | 3 Months Ended
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Mar. 31, 2025
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 months ended March 31, 2025 and 2024 (in thousands):
|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024
(Gain) loss on derivative contracts |  |  |  |  | $ | 2,487 |  |  | $ | — |
Settlement gains (losses) on derivative contracts |  |  |  |  | $ | (159) |  |  | $ | — |
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 and through the Black-Scholes or other similar valuation method in the case of options. 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 March 31, 2025 (in thousands):
|  | Gross Amounts |  | Gross Amounts Offset |  | Amounts Net of Offset |  | Financial Collateral |  | Net Amount
Liabilities |  |  |  |  |  |  |  |  |  |
Derivative contracts - current |  | $ | 3,148 |  |  | $ | (1,487) |  |  | $ | 1,661 |  |  | $ | — |  |  | $ | 1661 |
Derivative contracts - non-current |  | 826 |  |  | (360) |  |  | 466 |  |  | — |  |  | 466 |
Total |  | $ | 3,974 |  |  | $ | (1,847) |  |  | $ | 2,127 |  |  | $ | — |  |  | $ | 2127 |
The following tables 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 positions as of December 31, 2024 (in thousands):
|  | Gross Amounts |  | Gross Amounts Offset |  | Amounts Net of Offset |  | Financial Collateral |  | Net Amount
Assets |  |  |  |  |  |  |  |  |  |
Derivative contracts - current |  | $ | 744 |  |  | $ | 630 |  |  | $ | 114 |  |  | $ | — |  |  | $ | 114 |
Derivative contracts - non-current |  | 86 |  |  | — |  |  | 86 |  |  | — |  |  | 86 |
Total |  | $ | 830 |  |  | $ | 630 |  |  | $ | 200 |  |  | $ | — |  |  | $ | 200 |
As of March 31, 2025, the Company's open derivative contracts consisted of oil, natural gas, and NGL commodity derivative contracts as follows:
|  | Period |  | Index |  | Daily Volume |  | Weighted Average Price
Oil (Bbl) |  |  |  |  |  |  |  |
Fixed Price Swaps |  |  |  |  |  |  |  |
|  | April 2025 - December 2025 |  | NYMEX WTI |  | 500 |  | $71.60
|  | January 2026 - June 2026 |  | NYMEX WTI |  | 300 |  | $68.67
Natural Gas (MMBtu) |  |  |  |  |  |  |  |
Fixed Price Swaps |  |  |  |  |  |  |  |
|  | April 2025 - December 2025 |  | NYMEX Henry Hub |  | 8,500 |  | $4.17
|  | January 2026 - December 2026 |  | NYMEX Henry Hub |  | 4,500 |  | $4.09
Producer Costless Collars |  |  |  |  |  |  |  |
|  | April 2025 - December 2025 |  | NYMEX Henry Hub |  | 8,500 |  | $3.50 Put / $5.50 Call
|  | April 2025 - December 2025 |  | NYMEX Henry Hub |  | 12,000 |  | $4.00 Put / $8.20 Call
|  | January 2026 - December 2026 |  | NYMEX Henry Hub |  | 4,500 |  | $3.35 Put / $5.35 Call
NGL (Bbl) |  |  |  |  |  |  |  |
Fixed Price Swaps |  |  |  |  |  |  |  |
|  | April 2025 - December 2025 |  | Mont Belvieu OPIS - C3+(1) |  | 300 |  | $39.69
|  | April 2025 - December 2025 |  | Mont Belvieu OPIS - Ethane(2) |  | 325 |  | $11.76
____________________ (1) Excludes ethane (2) Ethane only As of December 31, 2024, the Company's open derivative contracts consisted of oil and NGL commodity derivative contracts as follows:
|  | Period |  | Index |  | Daily Volume |  | Weighted Average Price
Oil (Bbl) |  |  |  |  |  |  |  |
Fixed Price Swaps |  |  |  |  |  |  |  |
|  | January 2025 - December 2025 |  | NYMEX WTI |  | 500 |  | $71.60
|  | January 2026 - June 2026 |  | NYMEX WTI |  | 300 |  | $68.67
NGL (Bbl) |  |  |  |  |  |  |  |
Fixed Price Swaps |  |  |  |  |  |  |  |
|  | January 2025 - December 2025 |  | Mont Belvieu OPIS - C3+(1) |  | 300 |  | $39.69
____________________ (1) Excludes ethane

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
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