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DERIVATIVES AND HEDGING ACTIVITIES
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES AND HEDGING ACTIVITIES DERIVATIVES AND HEDGING ACTIVITIES
The Company is exposed to certain risks arising from both its business operations and economic conditions, and it enters into certain derivative contracts to manage exposure to these risks. To minimize counterparty credit risk in derivative instruments, the Company enters into transactions with high credit-rating counterparties. The Company did not elect to apply hedge accounting to these derivative contracts and recorded the fair value of the derivatives on the Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025.
Interest Rate Risk
The Company manages market risks, including interest rate, liquidity and credit risk primarily by managing the amount, sources and duration of its debt funding and by using derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from activities that result in the payment of future-known and uncertain cash amounts, the value of which is determined by interest rates.
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract.
As of March 31, 2026, the Company had seven interest rate swap contracts with a notional amount of $1.00 billion that pays a fixed rate ranging from 3.06% to 3.42%. Of the seven interest rate swap contracts, two will reach maturity on December 31, 2026 and the remaining five will reach maturity on December 31, 2027. The fair value or settlement value of the consolidated interest rate swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheets.
The following table presents the fair value of derivative assets and liabilities related to the interest rate swap contracts:
March 31,December 31,
20262025
(In thousands)
Derivative assets - current
$1,573 $4 
Derivative assets - noncurrent1,642 — 
      Total derivative assets$3,215 $4 
Derivative liabilities - current$— $135 
      Total derivative liabilities$— $135 
The Company recorded cash settlements and changes in fair value of the interest rate swap contracts in “Interest expense” in the Condensed Consolidated Statements of Operations. The following table presents interest rate swap derivative activities for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,
20262025
(In thousands)
Realized gain (loss) on interest rate swaps
$342 $(343)
Favorable fair value adjustment
$3,688 $327 
Commodity Price Risk
The results of the Company’s operations may be affected by the market prices of oil, natural gas and NGLs. A portion of the Company’s revenue is directly tied to local natural gas, natural gas liquids and condensate prices in the Permian Basin and the U.S. Gulf Coast. Fluctuations in commodity prices also impact operating cost elements both directly and indirectly. Management regularly reviews the Company’s potential exposure to commodity price risk and manages exposure of such risk through commodity hedge contracts.
During the past twelve months, the Company entered into multiple commodity swap contracts based on the OPIS NGL Mont Belvieu prices for ethane, propane and butane, the Waha Basis index, the HSC index and the NYMEX West Texas Intermediate Crude index. These contracts are for various notional quantities of NGLs, natural gas and crude. Similarly, the Company has entered into various natural gas basis spread swaps. These contracts are effective over the next 1 to 20 months and are used to hedge against location price risk of the respective commodities resulting from supply and demand volatility and protect cash flows against price fluctuations.
The following table presents detailed information of commodity swaps outstanding as of March 31, 2026 (in thousands, except volumes):
March 31, 2026
CommodityUnit
Notional Volume
Net Fair Value
Natural Gas MMBtus6,665,000 $4,258 
NGL Gallons124,985,050 (7,854)
CrudeBbl735,950 (10,114)
Natural Gas Basis Spread Swaps
MMBtus28,500,000 (23,279)
$(36,989)
The fair value or settlement value of the outstanding swaps are presented on a gross basis on the Condensed Consolidated Balance Sheets. The following table presents the fair value of derivative assets and liabilities related to commodity swaps:
March 31,December 31,
20262025
(In thousands)
Derivative assets - current
$5,958 $13,902 
Derivative assets - noncurrent811 1,467 
      Total derivative assets
$6,769 $15,369 
Derivative liabilities - current$42,046 $5,371 
Derivative liabilities - noncurrent
1,712 — 
      Total derivative liabilities
$43,758 $5,371 
The Company recorded cash settlements and fair value adjustments on commodity swap derivatives in “Product revenue” in the Condensed Consolidated Statements of Operations. The following table presents commodity swap derivatives activities for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,
20262025
(In thousands)
Realized loss on commodity swaps
$(484)$(4,371)
Unfavorable fair value adjustment
$(47,471)$(22,498)