v3.26.1
Derivatives
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
In the normal course of business we are exposed to certain risks, including changes in the prices of oil, natural gas and NGLs which may impact the cash flows associated with the sale of our future oil and natural gas production. We enter into derivative contracts with lenders under our reserves-based revolving credit facility, by and among CEF, as borrower, and Wells Fargo Bank, N.A., as administrative agent for the lenders and letter of credit issuer (as amended, restated or otherwise modified to date, the “Revolving Credit Facility") that consist of either a single derivative instrument or a combination of instruments to manage our exposure to these risks.

As of March 31, 2026, our commodity derivative instruments consisted of fixed price and basis swaps and collars which are described below:

Fixed Price and Basis Swaps: Fixed price swaps receive a fixed price and pay a floating market price to the counterparty on the notional amount. Our basis swaps fix the basis differentials between the index price at which we sell our production as compared to the index price used in the basis swap. Under a swap contract, we will receive payment if the settlement price is less than the fixed price and will be required to make a payment to the counterparty if the settlement price is greater than the fixed price.

Two-Way and Three-Way Collars: Two-way collars provide a minimum (“fixed floor price”) and maximum (“fixed ceiling price”) price on a notional amount of sales volume. Under a two-way collar, we will receive payment if the settlement price is less than the fixed floor price and make a payment to the counterparty if the settlement price is greater than the fixed ceiling price. We would not be required to make a payment or receive payment if the settlement price falls between the fixed floor price and fixed ceiling price. A three-way collar adds a secondary lower price below the fixed floor price (“fixed subfloor price”). In this structure, if the settlement price falls between the fixed floor price and the fixed subfloor price, we receive payment equal to the difference between the fixed floor price and the settlement price. If the settlement price falls below the fixed subfloor price, we receive payment equal to the difference between the fixed floor price and the fixed subfloor price. We still make a payment to the counterparty if the settlement price is greater than the fixed ceiling price, and we would still not be required to make or receive payment if the settlement price falls between the fixed ceiling price and the fixed floor price.
The following table details our net volume positions by commodity as of March 31, 2026:

Production PeriodVolumes
Weighted Average
Fixed Price
(in thousands)
Crude oil swaps – WTI (Bbls):
202616,454 $64.57
2026 (1)
368 $67.03
20275,490 $62.40
2027 (2)
4,563 $73.92
Crude oil two-way collars – WTI (Bbls):
20262,696 $60.27-$70.33
Crude oil three-way collars – WTI (Bbls):
20263,446 $48.00-$60.53-$74.62
20273,991 $47.66-$60.91-$75.21
2027 (3)
460 $45.00-$60.00-$70.00
Crude oil two-way collars – Brent (Bbls):
2026138 $60.00-$82.00
Natural gas swaps (MMBtu):
202668,290 $3.95
20277,300 $4.21
2027 (4)
18,250 $4.19
Natural gas two-way collars (MMBtu):
202631,160 $3.05-$4.78
Crude oil basis swaps (Bbls):
202616,134 $1.33
20272,459 $1.75
Natural gas basis swaps (MMBtu):
202675,160 $(0.43)
202791,250 $(0.42)
Calendar Month Average roll swaps (Bbls):
202618,320 $0.50
Natural gas fixed index swaps – Waha (MMBtu):
202641,800 $2.41
202743,800 $2.69
(1)     Represents outstanding crude oil swap options exercisable by the counterparty until June 2026.
(2)     Represents outstanding crude oil swap options exercisable by the counterparty until December 2026 and June 2027.
(3)     Represents outstanding crude oil three-way collar options exercisable by the counterparty until June 2027.
(4)     Represents outstanding natural gas swap options exercisable by the counterparty until December 2026.
Ridgemar Contingent Consideration: The former owners of Ridgemar are entitled to receive contingent consideration payments from us if the daily average price of NYMEX WTI crude oil exceeds certain thresholds during specified quarterly periods. For each quarterly period in 2026, we will be required to pay $15.0 million if the average WTI price for the quarter is equal to or greater than $70 per barrel, and an additional $15.0 million if the average price equals or exceeds $75 per barrel. For each quarterly period in 2027, we will be required to pay $12.5 million if the average price of NYMEX WTI crude oil for the quarter equals or exceeds $70 per barrel. The fair value of the Ridgemar Contingent Consideration is determined by a third-party valuation specialist using a Monte Carlo simulation. The significant inputs used in the valuation are the NYMEX WTI forward price curve, mean reversion rate, and volatility. We determined these were Level 2 fair value inputs that are substantially observable in active markets or can be derived from observable data. Contingent earn-out consideration is included in Other current liabilities and Other liabilities on the condensed consolidated balance sheets. The average WTI price for the first quarter of 2026 was $71.93 per barrel, and accordingly, we made a payment of $15.0 million in April 2026.

Vital Contingent Consideration: As part of the Vital Energy Merger, we acquired a contingent consideration arrangement in which we are entitled to receive contingent consideration payments from a third party if certain performance conditions are met related to certain assets previously sold by Vital (the “Vital Contingent Consideration”). We are entitled to up to $9.0 million in 2026, and $58.6 million in 2027 if certain performance conditions are met within those periods. The fair value of the Vital Contingent Consideration is determined by a third-party valuation specialist using a Monte Carlo simulation. The significant inputs used in the valuation include Crescent’s internally developed cash flow projections for the underlying assets and a risk-adjusted discount rate, which is developed by the third-party valuation specialist based on market participant assumptions and prevailing market conditions. We determined that these Level 3 fair value inputs are primarily based on unobservable inputs. Contingent earn-out consideration is included in Other assets on the condensed consolidated balance sheets.

We use derivative commodity instruments and enter into swap contracts that are governed by International Swaps and Derivatives Association ("ISDA") master agreements. The following table shows the effects of master netting arrangements on the fair value of our derivative contracts and contingent earn-out consideration as of March 31, 2026 and December 31, 2025:
Gross Fair
Value		Effect of
Counterparty
Netting		Net Carrying
Value
(in thousands)
March 31, 2026
Assets:
Derivative assets – current$199,182 $(187,657)$11,525 
Other assets – current
6,923 — 6,923 
Derivative assets – noncurrent46,884 (31,334)15,550 
Other assets – noncurrent
43,225 — 43,225 
Total assets$296,214 $(218,991)$77,223 
Liabilities:
Derivative liabilities – current$(502,260)$187,657 $(314,603)
Other current liabilities (53,573)— (53,573)
Derivative liabilities – noncurrent(74,018)31,334 (42,684)
Other liabilities (15,125)— (15,125)
Total liabilities$(644,976)$218,991 $(425,985)
December 31, 2025
Assets:
Derivative assets – current$346,849 $(24,065)$322,784 
Derivative assets – noncurrent22,875 (20,046)2,829 
Other assets
17,590 — 17,590 
Total assets$387,314 $(44,111)$343,203 
Liabilities:
Derivative liabilities – current$(24,065)$24,065 $— 
Other current liabilities(16,153)— (16,153)
Derivative liabilities – noncurrent(33,467)20,046 (13,421)
Other liabilities(10,717)— (10,717)
Total liabilities$(84,402)$44,111 $(40,291)

See NOTE 5 – Fair Value Measurements for more information.

The amounts of gain (loss) recognized in gain (loss) on derivatives in our condensed consolidated statements of operations were as follows for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,
20262025
(in thousands)
Derivatives not designated as hedging instruments:
Realized gain (loss) on oil positions$(91,179)$(4,354)
Realized gain (loss) on natural gas positions(9,302)(5,156)
Realized gain (loss) on NGL positions— (1,288)
Realized gain (loss) on contingent earn-out consideration(5,491)— 
Total realized gain (loss) on derivatives(105,972)(10,798)
Unrealized gain (loss) on commodity derivatives(581,840)(80,719)
Unrealized gain (loss) on contingent earn-out consideration(18,779)489 
Total unrealized gain (loss) on derivatives(600,619)(80,230)
Gain (loss) on derivatives$(706,591)$(91,028)