XML 26 R15.htm IDEA: XBRL DOCUMENT v3.26.1
Note 9 - Fair Value Disclosures
 3 Months Ended
Mar. 31, 2026
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

(9) Fair Value Disclosures:

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company separates the fair value of its financial instruments using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy assigns the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Level 2 measurements are inputs that are observable for assets or liabilities, either directly or indirectly, other than quoted prices included within Level 1. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs.

 

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placements within the fair value hierarchy levels. There were no derivative contracts at December 31, 2025. The following table provides fair value measurement information for the commodity derivatives measured at fair value on a recurring basis as of March 31, 2026 (in thousands):

 

   

March 31, 2026

  
   

Level 1

    

Level 2

    

Level 3

    

Total

  

Assets

                                

Assets from derivative contracts

   $ -     $ -     $ -     $ -  
                                 

Liabilities

                                

Liabilities from derivative contracts

   $ -     $ (1,936 )   $ -     $ (1,936 )

 

Derivative contracts classified as Level 2 include fixed-price swaps that are recorded at fair value. The Level 2 observable data include, but are not limited to, the contractual price of the underlying position, current market prices, and crude oil forward curves. There were no transfers between fair value hierarchy levels for any period presented. See Note 10, “Derivative Instruments,” for additional discussion of derivatives.

 

The Company’s derivative contracts are with major financial institutions with investment grade credit ratings which are believed to have minimal credit risk. As such, the Company is exposed to credit risk to the extent of nonperformance by the counterparties in the derivative contracts; however, the Company does not anticipate such nonperformance.