v3.25.4
Derivatives
 12 Months Ended
Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
Commodity Derivatives 

The Company is exposed to commodity price risk, which impacts the predictability of its cash flows from the sale of oil, natural gas and NGL. On occasion, the Company has attempted to manage this risk on a portion of its forecasted oil, natural gas or NGL production sales through the use of commodity derivative contracts.

Historically, the Company has not designated any of its derivative contracts as hedges for accounting purposes. As applicable, if the Company has open derivative contracts, the Company has recorded such contracts at fair value with changes in derivative contract fair values recognized as a gain or loss on derivative contracts in the condensed consolidated income statements. Commodity derivative contracts were settled on a monthly basis, and the commodity derivative contract valuations were adjusted on a mark-to-market valuation basis quarterly.

The following table summarizes derivative activity (in thousands):
Year Ended December 31,
202520242023
(Gain) loss on derivative contracts$(7,763)$(748)$(1,447)
Realized settlement gains (losses) on derivative contracts$5,189 $548 $5,876 

Master Netting Agreements and the Right of Offset. As applicable, the Company historically has had master netting agreements with all of its commodity derivative counterparties and has presented its derivative assets and liabilities with the same counterparty on a net basis in the unaudited condensed consolidated balance sheets. As a result of the netting provisions, the Company's maximum amount of loss under commodity derivative transactions due to credit risk was limited to the net amounts due from its counterparties. As of December 31, 2025, the Company’s open commodity derivative contracts were held with one counterparty.
The following tables summarize (i) the Company's commodity derivative contracts on a gross basis, (ii) the effects of netting assets and liabilities for which the right of offset exists based on master netting arrangements and (iii) for the Company’s net derivative asset positions (in thousands):

As of December 31, 2025Gross AmountsGross Amounts OffsetAmounts Net of OffsetFinancial CollateralNet Amount
Assets
Derivative contracts - current
$3,130 $357 $2,773 $— $2,773 
Total$3,130 $357 $2,773 $— $2773 


At December 31, 2024Gross AmountsGross Amounts OffsetAmounts Net of OffsetFinancial CollateralNet Amount
Assets
Derivative contracts - current$744 $630 $114 $— $114 
Derivative contracts - non-current86 — 86 — 86 
Total$830 $630 $200 $— $200 

Because we did not designate any of our derivative contracts as hedges for accounting purposes, changes in the fair value of our derivative contracts were recognized as gains and losses in the earnings of the relevant period. As a result, and as applicable, our current period earnings could have been significantly affected by changes in the fair value of our commodity derivative contracts. Changes in fair value were principally measured based on a comparison of future prices to the contract price at the end of the period.

As of December 31, 2025, the Company's open derivative contracts consisted of oil and natural gas commodity derivative contracts under which we will receive a fixed price for the contract and pay a floating market price to the counterparty over a specified period for a contracted volume. These commodity derivative contracts consisted of the following:

PeriodIndexDaily Volume
Weighted Average Price
Oil (Bbl)
Fixed Price SwapsJanuary 2026 - June 2026NYMEX WTI300$68.67
Natural Gas (MMBtu)
Fixed Price SwapsJanuary 2026 - December 2026NYMEX Henry Hub11,797$4.16
Producer Costless CollarsJanuary 2026 - December 2026NYMEX Henry Hub4,500
$3.35 Put / $5.35 Call

As of December 31, 2024, the Company's open derivative contracts consisted of oil and NGL commodity derivative contracts under which we will receive a fixed price for the contract and pay a floating market price to the counterparty over a specified period for a contracted volume. These commodity derivative contracts consisted of the following:
PeriodIndexDaily VolumeWeighted Average Price
Oil (Bbl)
Fixed Price Swaps
January 2025 - December 2025NYMEX WTI500$71.60
January 2026 - June 2026NYMEX WTI300$68.67
NGL (Bbl)
Fixed Price SwapsJanuary 2025 - December 2025
Mont Belvieu OPIS (1)
300$39.69
(1) NGL swaps exclude ethane


Fair Value of Derivatives 

The following table presents the fair value of the Company’s derivative contracts on a net basis with same counterparty netting (in thousands):
Type of ContractBalance Sheet ClassificationDecember 31, 2025
Oil and natural gas price swaps and collarsCurrent assets - Derivative Contracts$2,773 
Total net derivative contracts$2,773 

Type of ContractBalance Sheet ClassificationDecember 31, 2024
Oil and NGL price swapsCurrent assets - Derivative Contracts$114 
Oil and NGL price swapsNon-current assets - Derivative Contracts86 
Total net derivative contracts$200 

See Note 4 for additional discussion of the fair value measurement of the Company’s derivative contracts.