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Commodity Derivative Financial Instruments

12 Months Ended

Dec. 31, 2023

Investments, All Other Investments [Abstract]

Commodity Derivative Financial Instruments

Note 6 – Commodity Derivative Financial Instruments

The Company uses derivative financial instruments to manage its exposure to commodity price fluctuations. Commodity derivative instruments are used to reduce the effect of volatility of price changes on the oil and natural gas the Company produces and sells. The Company does not enter into derivative financial instruments for speculative or trading purposes. The Company’s derivative financial instruments consist of swaps and put options.

The Company does not designate its derivative instruments to qualify for hedge accounting. Accordingly, the Company reflects changes in the fair value of its derivative instruments in its Consolidated Statements of Operations as they occur. These contracts are recognized and recorded at fair value as an asset or liability on the Company’s Consolidated Balance Sheets.

The following table summarizes the net realized and unrealized amounts reported in earnings related to the commodity derivative instruments for the years ended December 31, 2023 and 2022:

		For the Year Ended December 31,
		2023				2022
Gain (loss) on derivatives:
Oil derivatives		$	(65,693	)		$	(387,930	)

The following represents the Company’s net cash receipts from (payments on) derivatives for the years ended December, 2023 and 2022:

		For the Year Ended December 31,
		2023				2022

Oil derivatives		$	(353,695	)		$	(260,266	)

The following table sets forth the Company’s outstanding derivative contracts at December 31, 2023:

	1st Quarter 2024		2nd Quarter 2024		3rd Quarter 2024		4th Quarter 2024
2024
WTI Fixed-Price Swaps:
Quarterly volume (MBbls)	38.00		30.00		30.00		30.00
Weighted-average fixed price (Bbl)	$74.01		$72.15		$77.02		$75.57