v3.25.2
Property and equipment
 6 Months Ended
Jun. 30, 2025
Property, Plant and Equipment [Abstract]  
Property and equipment Property and equipment
Full cost ceiling impairment
As discussed in Note 2 in the 2024 Annual Report, the Company uses the full cost method of accounting for its oil and natural gas properties. This accounting method requires a quarterly full cost ceiling test. The full cost ceiling is based principally on the estimated future net revenues from proved oil, NGL and natural gas reserves, which exclude the effect of the Company's commodity derivative transactions, discounted at 10%. The SEC guidelines require companies to use the unweighted arithmetic average first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period before differentials ("Benchmark Prices"). The Benchmark Prices are then adjusted for quality, transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the wellhead ("Realized Prices") without giving effect to the Company's commodity derivative transactions. The Realized Prices are utilized to calculate the estimated future net revenues in the full cost ceiling calculation. Additional significant inputs included in the calculation of discounted cash flows used in the impairment analysis include the Company's estimate of operating and development costs, anticipated production of proved reserves and other relevant data. In the event the unamortized cost of evaluated oil and natural gas properties being depleted exceeds the full cost ceiling, as defined by the SEC, the excess is expensed in the period such excess occurs. Once incurred, a write-down of oil and natural gas properties is not reversible.
The unamortized cost of evaluated oil and natural gas properties being depleted exceeded the full cost ceiling as of June 30, 2025 and March 31, 2025. The following table presents full cost ceiling impairment expense, which is included in "Impairment expense" on the unaudited consolidated statements of operations, for the periods presented:
Three months ended June 30,Six months ended June 30,
(in thousands)2025202420252024
Full cost ceiling impairment expense$427,046 $— $585,287 $— 
If prices remain at or below the current levels, subject to numerous factors and inherent limitations and all other factors remain constant, we could incur additional non-cash full cost ceiling impairments in future quarters, which will have an adverse effect on our statement of operations.
The following table presents the Benchmark Prices and the Realized Prices utilized in the full cost ceiling calculation as of the dates presented:
June 30, 2025March 31, 2025December 31, 2024September 30, 2024June 30, 2024
Benchmark Prices:
Oil ($/Bbl)$70.48 $74.52 $75.48 $78.64 $79.00 
NGL ($/Bbl)(1)
$70.48 $74.52 $75.48 $78.64 $79.00 
Natural gas ($/MMBtu)$2.86 $2.44 $2.13 $2.21 $2.32 
Realized Prices:
Oil ($/Bbl)$71.47 $75.55 $76.76 $79.92 $80.31 
NGL ($/Bbl)$15.65 $13.87 $13.66 $14.06 $14.10 
Natural gas ($/Mcf)$0.98 $1.04 $0.85 $0.81 $0.90 
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(1)    The Company utilizes WTI NYMEX in the calculation of its NGL Benchmark Prices.
Divestiture
In the first quarter of 2025, the Company sold working interests in certain specified oil and natural gas properties for net proceeds of $20.5 million. Pursuant to the rules governing full cost accounting, the net proceeds and removal of $8.4 million in asset retirement obligations were recorded as adjustments to oil and natural gas properties.