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Fair Value Measurements
6 Months Ended
Jun. 30, 2023
Fair Value Measurements  
Fair Value Measurements

16. Fair Value Measurements

The methodologies used to determine the fair value of our financial assets and liabilities at June 30, 2023 were the same as those used at December 31, 2022.

Cash and cash equivalents, restricted cash, accounts receivable, and accounts payable are carried at cost, which approximates their fair value because of the short-term maturity of these instruments. The Company’s revolving line of credit has a recorded value that approximates its fair value since its variable interest rate is tied to current market rates and the applicable margins represent market rates. The revolving line of credit is classified within Level 2 of the fair value hierarchy.

The Company has investments in U.S. Treasury Bills, some of which mature over a period greater than 90 days and are classified as short term investments. The U.S. Treasury Bills are carried at fair value. The U.S. Treasury Bills are classified within Level 1 of the fair value hierarchy.

Commodity derivative instruments consist of NYMEX HH swap and basis swap contracts for natural gas. The Company’s derivative contracts are valued based on a marked to market approach. These assumptions are observable in the marketplace throughout the full term of the contract, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace, and are therefore designated as Level 2 within the valuation hierarchy. The Company utilizes its counterparties’ valuations to assess the reasonableness of its own valuations.

    

June 30, 2023

    

Level 1

Level 2

    

Level 3

    

Effect of Netting

    

Net Fair Value

Assets

    

    

    

    

    

Derivative contracts

$

$

1,286,070

$

$

$

1,286,070

Short term investments

$

26,804,482

$

$

$

$

26,804,482

December 31, 2022

Level 1

Level 2

    

Level 3

    

Effect of Netting

    

Net Fair Value

Assets

    

    

    

    

    

Derivative contracts

$

$

1,401,640

$

$

(179,550)

$

1,222,090

Liabilities

Derivative contracts

$

$

(179,550)

$

$

179,550

$