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Derivatives and Risk Management | 3 Months Ended
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Mar. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives and Risk Management | Derivatives and Risk Management The Company is exposed to volatility in market prices and basis differentials for oil, natural gas, and NGLs, which impacts the predictability of our cash flows related to the sale of those commodities. The overall objective of the Company’s hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices, which we do by using various derivative instruments including fixed price swaps, basis swaps, and collars. As a result of our hedging activities, we may realize prices that are greater or less than the market prices that we would have otherwise received. We typically enter into over the counter (OTC) derivative contracts with financial institutions and regularly monitor the creditworthiness of all counterparties. Certain of our hedging arrangements are with counterparties that are also lenders (or affiliates of lenders) under our revolving credit facility. As of March 31, 2025 and December 31, 2024, we did not have any cash or letters of credit posted as collateral for our derivative financial instruments. The Company does not designate any of its derivative instruments as cash flow hedges; therefore, all changes in fair value of our derivative instruments are recognized in other income within the consolidated statements of operations. We recognize all derivative instruments as either assets or liabilities at fair value within the consolidated balance sheets, subject to netting arrangements with our counterparties that permit net settlement of gross commodity derivative assets against gross commodity derivative liabilities. Contracts that result in physical delivery of a commodity expected to be sold by the Company in the normal course of business are generally designated as normal purchases and normal sales and are exempt from derivative accounting. Contracts that result in the physical receipt or delivery of a commodity but are not designated or do not meet all of the criteria to qualify for the normal purchase and normal sale scope exception are subject to derivative accounting. The following tables provide information about the Company’s derivative financial instruments. The tables present the notional amount, the weighted average contract prices and the fair values by expected maturity dates as of March 31, 2025.
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2025
Oil | (in MBbls) |  | ($ per Bbl) |  | (in thousands)
Fixed price swaps |  |  |  |  |
2025 | 1,425 |  | $ | 71.25 |  | $ | 2,721
2026 | 571 |  | $ | 69.57 |  | 2,079
2027 | 35 |  | $ | 68.04 |  | 116
2028 | — |  | $ | — |  | —
Total | 2,031 |  |  |  | $ | 4,916
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2025
Natural gas | (in MMBtu) |  | ($ per MMBtu) |  | (in thousands)
Fixed price swaps |  |  |  |  |
2025 | 25,262,000 |  | $ | 3.46 |  | $ | (25,434)
2026 | 36,566,500 |  | $ | 3.81 |  | (25,638)
2027 | 14,176,000 |  | $ | 3.79 |  | (2,880)
2028 | 1,070,000 |  | $ | 4.25 |  | 1
Total | 77,074,500 |  |  |  | $ | (53,951)
| Volume |  | Basis Differential |  | Fair Value as of March 31, 2025
Natural gas | (in MMBtu) |  | ($ per MMBtu) |  | (in thousands)
Basis swaps |  |  |  |  |
2025 | 34,535,500 |  | $ | (1.10) |  | $ | (2,347)
2026 | 37,345,000 |  | $ | (1.00) |  | (823)
2027 | 14,005,000 |  | $ | (0.92) |  | 538
2028 | 1,070,000 |  | $ | (0.83) |  | 72
Total | 86,955,500 |  |  |  | $ | (2,560)
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2025
Ethane | (in gallons) |  | ($ per gallon) |  | (in thousands)
Fixed price swaps |  |  |  |  |
2025 | 7,622,000 |  | $ | 0.25 |  | $ | (390)
2026 | 8,290,500 |  | $ | 0.28 |  | (159)
2027 | 573,000 |  | $ | 0.30 |  | (4)
2028 | — |  | $ | — |  | —
Total | 16,485,500 |  |  |  | $ | (553)
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2025
Propane | (in gallons) |  | ($ per gallon) |  | (in thousands)
Fixed price swaps |  |  |  |  |
2025 | 11,014,000 |  | $ | 0.70 |  | $ | (1,718)
2026 | 12,032,500 |  | $ | 0.71 |  | (922)
2027 | 813,000 |  | $ | 0.71 |  | (37)
2028 | — |  | $ | — |  | —
Total | 23,859,500 |  |  |  | $ | (2,677)
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2025
Isobutane | (in gallons) |  | ($ per gallon) |  | (in thousands)
Fixed price swaps |  |  |  |  |
2025 | 2,658,500 |  | $ | 0.87 |  | $ | (369)
2026 | 2,523,500 |  | $ | 0.85 |  | (242)
2027 | 166,000 |  | $ | 0.83 |  | (13)
2028 | — |  | $ | — |  | —
Total | 5,348,000 |  |  |  | $ | (624)
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2025
Normal butane | (in gallons) |  | ($ per gallon) |  | (in thousands)
Fixed price swaps |  |  |  |  |
2025 | 4,455,000 |  | $ | 0.83 |  | $ | (608)
2026 | 4,245,000 |  | $ | 0.82 |  | (317)
2027 | 280,000 |  | $ | 0.82 |  | (15)
2028 | — |  | $ | — |  | —
Total | 8,980,000 |  |  |  | $ | (940)
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2025
Pentane | (in gallons) |  | ($ per gallon) |  | (in thousands)
Fixed price swaps |  |  |  |  |
2025 | 2,955,500 |  | $ | 1.40 |  | $ | (200)
2026 | 2,790,500 |  | $ | 1.38 |  | 15
2027 | 190,000 |  | $ | 1.34 |  | 3
2028 | — |  | $ | — |  | —
Total | 5,936,000 |  |  |  | $ | (182)
Derivative assets and liabilities are presented below as gross assets and liabilities, without regard to master netting arrangements, which are considered in the presentation of derivative assets and liabilities in the accompanying balance sheets. The following table summarizes the gross fair value of our derivative assets and liabilities and the effect of netting as of March 31, 2025 and December 31, 2024:
| March 31, 2025 |
Balance Sheet Classification |  | Gross Amounts |  | Netting Adjustment |  | Net Amounts Presented on Balance Sheet |
(in thousands) |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |
Commodity derivative assets, short-term |  | $ | 5,828 |  | $ | (5,065) |  | $ | 763 |
Commodity derivative assets, long-term |  | 3,044 |  | (3,044) |  | — |
Total assets |  | $ | 8,872 |  | $ | (8,109) |  | $ | 763 |
Liabilities |  |  |  |  |  |  |
Commodity derivative liabilities, short-term |  | $ | (43,730) |  | $ | 5,066 |  | $ | (38,664) |
Commodity derivative liabilities, long-term |  | (21,713) |  | 3,043 |  | (18,670) |
Total liabilities |  | $ | (65,443) |  | $ | 8,109 |  | $ | (57,334) |
| December 31, 2024
Balance Sheet Classification |  | Gross Amounts |  | Netting Adjustment |  | Net Amounts Presented on Balance Sheet
(in thousands) |  |  |  |  |  |
Assets |  |  |  |  |  |
Commodity derivative assets, short-term |  | $ | 6,089 |  | $ | (6,089) |  | $ | —
Commodity derivative assets, long-term |  | 2,647 |  | (2,647) |  | —
Total assets |  | $ | 8,736 |  | $ | (8,736) |  | $ | —
Liabilities |  |  |  |  |  |
Commodity derivative liabilities, short-term |  | $ | 18,685 |  | $ | (6,089) |  |  | $ | 12,596 |
Commodity derivative liabilities, long-term |  | 12,989 |  |  | (2,647) |  |  | 10,342 |
Total liabilities |  | $ | 31,674 |  |  | $ | (8,736) |  |  | $ | 22,938 |
Our total derivative gains and losses for the three months ended March 31, 2025 and 2024 were as follows:
| For the Three Months Ended March 31,
(in thousands) | 2025 | 2024
Realized gain (loss) on derivative instruments | $ | (3,585) |  | $ | 13,263
Unrealized gain (loss) on derivative instruments | (33,633) |  | (36,718)
Total gain (loss) on derivative instruments | $ | (37,218) |  | $ | (23,455)

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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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