Property, Plant, and Equipment

3 Months Ended

Mar. 31, 2026

Property, Plant and Equipment [Abstract]

Oil and Natural Gas Properties

We utilize the full cost method of accounting for costs related to the exploration, development, and acquisition of oil and natural gas properties. Our capitalized costs of oil and natural gas properties and the related accumulated depreciation, depletion, and amortization as of March 31, 2026 and December 31, 2025 are as follows:


	March 31, 2026		December 31, 2025
(in thousands)
Oil and natural gas properties:
Proved properties	$	1,716,425	$	1,175,523
Unproved properties	126,366		88,689
Gross oil and natural gas properties	1,842,791		1,264,212
Less: accumulated depreciation, depletion, and amortization	(283,221)		(249,296)
Oil and natural gas properties, net	$	1,559,570	$	1,014,916

Under the full cost method of accounting, the Company is required to perform a ceiling test each quarter which determines a limit, or ceiling, on the book value of proved oil and natural gas properties. When the book value is in excess of the ceiling value, an impairment is recognized. No impairment expense was recorded for the three months ended March 31, 2026 based on the results of the quarterly ceiling test.

Capitalized costs of oil and natural gas properties are subject to a ceiling test that limits such pooled costs, net of applicable deferred taxes, to the aggregate of the present value of future net revenues attributable to proved oil, natural gas, and NGL reserves discounted at 10%. Any costs in excess of the ceiling are written off as a non-cash expense. The expense will not be reversed in future periods, despite commodity price increases which subsequently increase the ceiling. Companies using the full cost method are required to use the average quoted price from the first day of each month from the previous 12 months, including the impact of derivatives designated for hedge accounting, if any. Historically, the Company has not designated any of our derivative contracts as cash flow hedges.

Capitalized costs of proved properties are computed on a units-of-production basis based on estimated proved reserves, whereby the depletion rate is determined by dividing the total unamortized cost base plus future development costs by estimated proved reserves on a net equivalent basis at the beginning of the period. The depletion rate is multiplied by total production for the period to compute depletion expense. The following table shows our depletion expense for the three months ended March 31, 2026 and 2025 related to oil and gas properties:


	For the Three Months Ended March 31,
(in thousands, except per Boe amounts)		2026		2025
Depletion of Proved Oil and Natural Gas Properties		33,925		20,577
Average Depletion Rate per Boe		$	7.50	$	8.68

Costs associated with unproved properties are excluded from the amortization base until the properties are evaluated or impairment is indicated. The costs associated with unproved leasehold acreage and related seismic data, wells currently drilling and related capitalized interest are initially excluded from the amortization base. Leasehold costs are either transferred to the amortization base with the costs of drilling a well on the lease or are assessed at least annually for possible impairment or reduction in value.

Our decision to exclude costs from amortization and the timing of the transfer of those costs into the amortization base involves judgment and may be subject to changes over time based on numerous factors, including drilling plans, availability of capital, project economics, and drilling results from adjacent acreage.

Costs of unproved properties excluded from amortization consist of leasehold acreage and relate to properties which are not individually significant for which the evaluation process has not been completed. The timing and amount of

property acquisition and seismic costs included in the amortization computation will depend on the location and timing of drilling wells, results of drilling, and other assessments. Therefore, we are unable to estimate when these costs will be included in the amortization computation.

Other Property and Equipment

Our other property and equipment consists of the following assets that are recorded at cost and depreciated on a straight-line basis over the respective estimated useful lives.




	March 31, 2026		December 31, 2025

Midstream assets	$	338,327	$	53,077
Other property and equipment	4,739		4,039



Gross midstream and other property and equipment	343,066		57,116
Less: accumulated depreciation	(9,014)		(7,416)
Total midstream and other property and equipment, net	$	334,052	$	49,700

The estimated useful lives of other property and equipment depreciated on a straight-line basis are as follows:


Midstream assets			5 – 25 years
Vehicles			5 years
Furniture, fixtures, and office equipment			3 – 10 years
Leasehold improvements			5 years

The carrying value of long-lived assets that are not part of the Company’s full cost pool are evaluated for recoverability whenever events or changes in circumstances indicate that such carrying values may not be recoverable. Should an impairment exist, the impairment loss would be measured as the amount that the asset’s carrying value exceeds its fair value. We did not recognize any impairment during the three months ended March 31, 2026 and 2025. Total depreciation expense for the three months ended March 31, 2026 and 2025 totaled approximately $1.6 million and $0.6 million, respectively.