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Derivatives and Risk Management | 3 Months Ended
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Mar. 31, 2026
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 can impact 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. The Company’s oil option positions primarily consist of costless collars, which combine purchased put options and sold call options with offsetting volumes and differing strike prices. The tables below present these component instruments on a gross basis. 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 Credit Facility. As of March 31, 2026 and December 31, 2025, 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, 2026.
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2026 |
Oil | (in MBbls) |  | ($ per Bbl) |  | (in thousands) |
Fixed price swaps |  |  |  |  |  |
2026 | 1,851 |  | 63.58 |  | $ | (32,059) |
2027 | 1,597 |  | 63.22 |  | (10,515) |
2028 | 408 |  | 67.95 |  | 236 |
2029 | 24 |  | 68.37 |  | 51 |
Total | 3,880 |  |  |  | $ | (42,287) |
| Volume |  | Floor / Ceiling |  | Fair Value as of March 31, 2026 |
Oil | (in MBbls) |  | ($ per Bbl) |  | (in thousands) |
Options price |  |  |  |  |  |
2026 | 219 |  | 70.00 - 78.00 |  | (1,255) |  |
2027 | 35 |  | 70.00 - 78.00 |  | 56 |  |
Total | 254 |  |  |  | $ | (1,199) |  |
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2026 |
Natural gas | (in MMBtu) |  | ($ per MMBtu) |  | (in thousands) |
Fixed price swaps |  |  |  |  |  |
2026 | 44,756,000 |  | 3.64 |  | $ | 27,448 |
2027 | 56,419,000 |  | 3.76 |  | 7,039 |
2028 | 36,647,000 |  | 3.77 |  | (1,302) |
2029 | 30,320,000 |  | 3.62 |  | (981) |
2030 | 26,580,000 |  | 3.57 |  | (1,421) |
2031 | 2,120,000 |  | 4.08 |  | (372) |
Total | 196,842,000 |  |  |  | $ | 30,411 |
| Volume |  | Basis Differential |  | Fair Value as of March 31, 2026 |
Natural gas | (in MMBtu) |  | ($ per MMBtu) |  | (in thousands) |
Basis swaps |  |  |  |  |  |
2026 | 40,690,000 |  | (0.93) |  | $ | (3,835) |
2027 | 31,629,000 |  | (0.64) |  | (1,291) |
2028 | 32,603,750 |  | (0.52) |  | 250 |
2029 | 2,607,500 |  | (0.30) |  | 234 |
Total | 107,530,250 |  |  |  | $ | (4,641) |
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2026 |
Ethane | (in gallons) |  | ($ per gallon) |  | (in thousands) |
Fixed price swaps |  |  |  |  |  |
2026 | 6,163,000 |  | 0.28 |  | $ | 213 |
2027 | 7,294,000 |  | 0.25 |  | 61 |
2028 | 530,000 |  | 0.24 |  | 2 |
Total | 13,987,000 |  |  |  | $ | 276 |
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2026 |
Propane | (in gallons) |  | ($ per gallon) |  | (in thousands) |
Fixed price swaps |  |  |  |  |  |
2026 | 28,043,000 |  | 0.74 |  | $ | (1,104) |
2027 | 37,516,000 |  | 0.73 |  | (97) |
2028 | 2,521,000 |  | 0.71 |  | 12 |
Total | 68,080,000 |  |  |  | $ | (1,189) |
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2026 |
Isobutane | (in gallons) |  | ($ per gallon) |  | (in thousands) |
Fixed price swaps |  |  |  |  |  |
2026 | 5,882,000 |  | 0.94 |  | $ | (747) |
2027 | 8,090,000 |  | 0.91 |  | (218) |
2028 | 539,000 |  | 0.88 |  | (2) |
Total | 14,511,000 |  |  |  | $ | (967) |
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2026 |
Normal butane | (in gallons) |  | ($ per gallon) |  | (in thousands) |
Fixed price swaps |  |  |  |  |  |
2026 | 7,841,000 |  | 0.89 |  | $ | (1,189) |
2027 | 10,261,000 |  | 0.87 |  | (420) |
2028 | 703,000 |  | 0.84 |  | (15) |
Total | 18,805,000 |  |  |  | $ | (1,624) |
| Volume |  | Weighted Average Price |  | Fair Value as of March 31, 2026 |
Pentane | (in gallons) |  | ($ per gallon) |  | (in thousands) |
Fixed price swaps |  |  |  |  |  |
2026 | 6,980,000 |  | 1.51 |  | $ | (2,213) |
2027 | 9,477,000 |  | 1.40 |  | (440) |
2028 | 652,000 |  | 1.35 |  | (13) |
Total | 17,109,000 |  |  |  | $ | (2,666) |
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, 2026 and December 31, 2025:
| March 31, 2026
Balance Sheet Classification | Gross Amounts |  | Netting Adjustment |  | Net Amounts Presented on Balance Sheet
(in thousands) |  |  |  |  |
Assets |  |  |  |  |
Commodity derivative assets, short-term | $ | 33,273 |  | $ | (22,459) |  | $ | 10,814
Commodity derivative assets, long-term | 13,824 |  | (11,133) |  | 2,692
Total assets | $ | 47,097 |  | $ | (33,592) |  | $ | 13,506
Liabilities |  |  |  |  |
Commodity derivative liabilities, short-term | $ | (53,391) |  | $ | 22,459 |  | $ | (30,931)
Commodity derivative liabilities, long-term | (17,594) |  | 11,133 |  | (6,461)
Total liabilities | $ | (70,985) |  | $ | 33,592 |  | $ | (37,392)
| December 31, 2025
Balance Sheet Classification | Gross Amounts |  | Netting Adjustment |  | Net Amounts Presented on Balance Sheet
(in thousands) |  |  |  |  |
Assets |  |  |  |  |
Commodity derivative assets, short-term | $ | 32,718 |  |  | $ | (7,880) |  |  | $ | 24,838 |
Commodity derivative assets, long-term | 7,701 |  |  | (4,816) |  |  | 2,885 |
Total assets | $ | 40,419 |  |  | $ | (12,696) |  |  | $ | 27,723 |
Liabilities |  |  |  |  |
Commodity derivative liabilities, short-term | $ | (8,986) |  |  | $ | 7,880 |  |  | $ | (1,106) |
Commodity derivative liabilities, long-term | (8,177) |  |  | 4,816 |  |  | (3,361) |
Total liabilities | $ | (17,163) |  |  | $ | 12,696 |  |  | $ | (4,467) |
Our total derivative gains and losses for the three months ended March 31, 2026 and 2025 were as follows:
|  |  | For the Three Months Ended March 31,
(in thousands) |  |  |  |  | 2026 |  | 2025 |  |
Realized gain (loss) on derivative instruments |  |  |  |  | $ | (17,992) |  | $ | (3,585) |  |
Unrealized loss on derivative instruments |  |  |  |  | (47,142) |  | (33,633) |  |
Total loss on derivative instruments |  |  |  |  | $ | (65,134) |  | $ | (37,218) |  |

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