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Supplemental Information on Oil and Natural Gas Producing Activities (Unaudited)
 12 Months Ended
Dec. 31, 2025
Extractive Industries [Abstract]  
Supplemental Information on Oil and Natural Gas Producing Activities (Unaudited) Supplemental Information on Oil and Natural Gas Producing Activities (Unaudited)
The supplemental information below includes capitalized costs related to oil and natural gas producing activities; costs incurred in oil and natural gas property acquisition, exploration and development; and the results of operations for oil and natural gas producing activities. Supplemental information is also provided for oil, natural gas and NGL production and average sales prices; the estimated quantities of proved oil, natural gas and NGL reserves; the standardized measure of discounted future net cash flows associated with proved oil, natural gas and NGL reserves; and a summary of the changes in the standardized measure of discounted future net cash flows associated with proved oil, natural gas and NGL reserves.

Capitalized Costs Related to Oil and Natural Gas Producing Activities

The Company’s capitalized costs for oil and natural gas activities consisted of the following (in thousands):
 December 31,
 20252024
Oil and natural gas properties
Proved$1,759,943 $1,689,807 
Unproved27,520 23,504 
Total oil and natural gas properties1,787,463 1,713,311 
Less accumulated depreciation, depletion and impairment(1,446,824)(1,415,110)
Net oil and natural gas properties capitalized costs$340,639 $298,201 
Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development

Costs incurred in oil and natural gas property acquisition, exploration and development activities which have been capitalized are summarized as follows (in thousands):
Year Ended December 31,
202520242023
Acquisitions of properties
Proved$2,331 $126,998 $11,232 
Unproved6,183 2,666 — 
Exploration(1)
5,016 11,246 (46)
Development63,970 15,562 22,478 
Total cost incurred$77,500 $156,472 $33,664 
____________________

(1)    Includes land, geological, geophysical and leasehold costs.

Costs Excluded from Amortization

The following table summarizes the costs, by year incurred, related to unproved properties, which were excluded from oil and natural gas properties subject to amortization at December 31, 2025 (in thousands):

Year Ended December 31,
Total2025202420232022 and Prior
Acquisition, exploration, and other unproved property costs$26,636 $10,589 $4,298 $(270)$12,019 
Capitalized interest884 — — 884 
Total costs incurred(1)
$27,520 $10,589 $4,298 $(270)$12,903 
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(1)    Includes application of fresh start accounting in 2016 and reflects remaining balance at December 31, 2025.

Results of Operations for Oil and Natural Gas Producing Activities

The following table presents the Company’s results of operations from oil and natural gas producing activities (in thousands), which exclude any interest costs or indirect general and administrative costs and, therefore, are not necessarily indicative of the impact the Company’s operations have on actual net earnings.
Year Ended December 31,
202520242023
Revenues$156,357 $125,290 $148,641 
Expenses
Production costs46,629 46,832 53,099 
Depreciation and depletion36,439 25,976 15,657 
Total expenses83,068 72,808 68,756 
Income (loss) before income taxes73,289 52,482 79,885 
Income tax expense (benefit) (1)17,775 12,728 19,374 
Results of operations for oil and natural gas producing activities (excluding corporate overhead and interest costs)$55,514 $39,754 $60,511 
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(1)    Income tax (benefit) expense is hypothetical and is calculated by applying the Company’s statutory tax rate to income (loss) before income taxes attributable to our oil and natural gas producing activities, after giving effect to permanent differences and tax credits.
Oil, Natural Gas and NGL Reserve Quantities

Proved oil, natural gas and NGL reserves are those quantities, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible, based on oil, natural gas and NGL prices used to estimate reserves, from a given date forward from known reservoirs, and under existing economic conditions, operating methods, and government regulation prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain.

The term “reasonable certainty” implies a high degree of confidence that the quantities of oil, natural gas and NGLs actually recovered will equal or exceed the estimate. To achieve reasonable certainty, the Company’s engineers and independent petroleum consultants relied on technologies that have been demonstrated to yield results with consistency and repeatability. The technologies and economic data used to estimate the Company’s proved reserves include, but are not limited to, production data, historical price and cost information, property ownership, well logs, geologic maps and well tests. The accuracy of the reserve estimates is dependent on many factors, including the following:

•the quality and quantity of available data and the engineering and geological interpretation of that data;

•estimates regarding the amount and timing of future costs, which could vary considerably from actual costs;

•the accuracy of mandated economic assumptions; and

•the judgment of the personnel preparing the estimates.

Proved developed reserves are proved reserves expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared with the cost of a new well. Proved undeveloped reserves are reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively large expenditure is required for recompletion.

Approximately 97.9% of the Company’s proved reserves estimates have been prepared by independent reservoir engineers and geoscience professionals and the remaining 2.1% of proved reserves are estimated internally and are reviewed by members of the Company’s senior management to ensure that the Company consistently applies rigorous professional standards and the reserve definitions prescribed by the SEC.

Cawley, Gillespie & Associates, independent oil and natural gas consultants, prepared the estimates of proved reserves of oil, natural gas and NGLs for approximately 97.9% and 97.5% of the Company’s net interest in oil and natural gas properties as of the years ended December 31, 2025 and 2024, respectively. Cawley, Gillespie & Associates are independent petroleum engineers, geologists, geophysicists and petrophysicists and do not own an interest in the Company or its properties and are not employed on a contingent basis. The remaining proved reserves were based on Company estimates.

The Company believes the geoscience and engineering data examined provides reasonable assurance that the proved reserves are economically producible in future years from known reservoirs, and under recent, past or historical economic conditions, operating methods and governmental regulations. Estimates of proved reserves are subject to change, either positively or negatively, as additional information is available and contractual and economic conditions change.

2025 Activity. Proved reserves increased from 63.1 MMBoe at December 31, 2024 to 69.1 MMBoe at December 31, 2025, due to extensions of 7.3 MMBoe, purchases of 1.7 MMBoe, positive net revisions of 3.2 MMBoe due to an increase in year-end SEC natural gas pricing and price realizations and 4.5 MMBoe associated with other commercial improvements. These were partially offset by a decrease in SEC oil pricing, 6.8 MMBoe from the Company’s production during 2025, and 3.9 MMBoe attributable to performance, well shut-ins and other revisions.

2024 Activity. Proved reserves increased from 55.7 MMBoe at December 31, 2023 to 63.1 MMBoe at December 31, 2024, primarily due to purchases of 16.0 MMBoe, 3.5 MMBoe associated with other commercial improvements, and positive revisions of 2.3 MMBoe related to NGL Yield. These were partially offset by negative revisions including 6.6 MMBoe due to a decrease in year-end SEC commodity prices for oil and natural gas and price realizations, as well as 6.1 MMBoe from the Company’s production during 2024, and 1.7 MMBoe attributable to well performance, well shut-ins and other revisions.
2023 Activity. Proved reserves decreased from 74.3 MMBoe at December 31, 2022 to 55.7 MMBoe at December 31, 2023, primarily due to a decrease in year-end SEC commodity prices for oil and natural gas, price realizations and NGL yield which resulted in a decrease of 17.5 MMBoe, as well as 6.2 MMBoe from the Company's production during 2023, 1.4 MMBoe attributable to well shut-ins and other revisions, and 0.1 MMBoe in sales. The Company also had positive revisions including purchases of 1.8 MMBoe, extensions of 1.2 MMBoe, 1.9 MMBoe associated with well positive performance revisions, and 1.7 MMBoe associated with other commercial improvements.

The summary below presents changes in the Company’s estimated reserves.
OilNGLNatural GasTotal
 (MBbls)(MBbls)(MMcf) (1)MBoe
Proved developed and undeveloped reserves
As of December 31, 20228,421 25,433 242,822 74,324 
Revisions of previous estimates (2)(1,027)(8,200)(36,464)(15,304)
Acquisitions of new reserves453 379 5,474 1,745 
Extensions and discoveries283 357 3,431 1,211 
Sales of reserves in place(26)(49)(427)(147)
Production(1,047)(1,705)(20,403)(6,152)
As of December 31, 20237,057 16,215 194,433 55,677 
Revisions of previous estimates (2)(535)489 (14,754)(2,503)
Acquisitions of new reserves4,131 5,884 35,738 15,971 
Extensions and discoveries10 (6)(21)1 
Sales of reserves in place— — — — 
Production(918)(1,889)(19,488)(6,056)
As of December 31, 20249,745 20,693 195,908 63,090 
Revisions of previous estimates (2)(349)2,929 7,629 3,852 
Acquisitions of new reserves522 575 3,478 1,677 
Extensions and discoveries2,272 2,516 15,063 7,298 
Sales of reserves in place— — — — 
Production(1,214)(2,254)(19,802)(6,768)
As of December 31, 202510,976 24,460 202,276 69,148 
Proved developed reserves
As of December 31, 20228,421 25,433 242,822 74,324 
As of December 31, 20237,057 16,215 194,433 55,677 
As of December 31, 20247,863 18,499 183,647 56,970 
As of December 31, 20258,204 21,428 184,112 60,317
Proved undeveloped reserves
As of December 31, 2022— — — — 
As of December 31, 2023— — — — 
As of December 31, 20241,882 2,194 12,261 6,120 
As of December 31, 20252,771 3,032 18,164 8,831 
Totals may not sum or recalculate due to rounding
_________________

(1)    Natural gas reserves are computed at 14.65 pounds per square inch absolute and 60 degrees Fahrenheit.
(2)    Revisions include changes due to commodity prices, production costs, previous quantity estimates, and other commercial factors. Primary factor for revisions in years ended 2025, 2024 and 2023 were changes in SEC prices, among other factors. See Proved Reserves discussion in Part I, Item 1 of this Form 10-K for additional detail.
Standardized Measure of Discounted Future Net Cash Flows (Unaudited)

The standardized measure of discounted cash flows and summary of the changes in the standardized measure computation from year to year are prepared in accordance with ASC Topic 932, Extractive Activities—Oil and Gas, ("ASC Topic 932"). The assumptions underlying the computation of the standardized measure of discounted cash flows may be summarized as follows:
•the standardized measure includes the Company’s estimate of proved oil, natural gas and NGL reserves and projected future production volumes based upon economic conditions;
•pricing is applied based upon SEC prices at December 31, 2025, 2024 and 2023, adjusted for fixed or determinable contracts that are in existence at year-end.
The calculated weighted average per unit prices for the Company’s proved reserves and future net revenues were as follows:
 Year Ended December 31,
 202520242023
Oil (per Bbl)$64.15 $74.04 $76.65 
Natural gas (per Mcf)$2.07 $1.02 $1.62 
NGL (per Bbl)$17.13 $19.40 $21.53 
•future development and production costs are determined based on trailing 12 month average cost at year-end;
•the standardized measure includes projections of future abandonment costs based upon actual costs at year-end; and
•a discount factor of 10% per year is applied annually to the future net cash flows.

The summary below presents the Company’s future net cash flows relating to proved oil, natural gas and NGL reserves based on the standardized measure in ASC Topic 932 (in thousands).
Year Ended December 31,
202520242023
Future cash inflows from production$1,542,062 $1,322,371 $1,204,568 
Future production costs (1)(592,532)(584,452)(627,715)
Future development costs (2)(135,268)(108,821)(39,288)
Future income tax expenses (3)— — — 
Undiscounted future net cash flows814,262 629,098 537,565 
10% annual discount(374,694)(266,402)(241,272)
Standardized measure of discounted future net cash flows $439,568 $362,696 $296,293 
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(1)    Consists of severance taxes, ad valorem taxes, and lease operating expenses.
(2)    Includes abandonment costs.
(3)    The future income tax expenses have been computed using statutory tax rates, giving effect to allowable tax deductions and tax credits under current laws, including expected tax benefits to be realized from the utilization of net operating loss carryforwards.
The following table represents the Company’s estimate of changes in the standardized measure of discounted future net cash flows from proved reserves (in thousands):
Year Ended December 31,
202520242023
Beginning present value $362,696 $296,293 $806,865 
Changes during the year
Revenues less production(110,320)(78,497)(95,909)
Net changes in prices, production and other costs28,491 (43,115)(372,897)
Development costs incurred— — 645 
Net changes in future development costs (4,360)(6,991)(1,307)
Extensions and discoveries70,141 137 18,422 
Revisions of previous quantity estimates (1)25,851 (14,213)(171,758)
Previously estimated development costs incurred31,507 — — 
Accretion of discount36,270 29,629 81,066 
Net change in income taxes— — 3,798 
Purchases of reserves in-place22,463 168,590 14,450 
Sales of reserves in-place— — (1,394)
Timing differences and other (2)(23,171)10,863 14,312 
Net change for the year76,872 66,403 (510,572)
Ending present value (3) $439,568 $362,696 $296,293 
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(1)     A significant portion of the revisions of previous quantity estimates is related to pricing, which affects well life and other economic factors. See Proved Reserves discussion.
(2)     The change in timing differences and other are related to revisions in the Company's estimated time of production and development.
(3)    Standardized Measure was determined using SEC prices, and does not reflect actual prices received or current market prices.