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FINANCIAL INSTRUMENTS
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
FINANCIAL INSTRUMENTS
9. FINANCIAL INSTRUMENTS
Fair Value. A summary of the estimated fair value of our debt financial instruments follow:
March 31, 2026December 31, 2025
Carrying
Value (1)
Estimated
fair value
(Level 2)
Carrying
Value (1)
Estimated
fair value
(Level 2)
(In thousands)
2029 Secured Notes
$825,000 $849,063 $825,000 $851,125 
(1) Excludes applicable unamortized debt issuance costs, debt discounts, and debt premiums.

The carrying values on the balance sheets of the Amended and Restated ABL Facility, the New Permian Transmission Facility, and the Legacy Permian Transmission Term Loan represent their fair value due to their floating interest rates. The fair value of the 2029 Secured Notes is based on an average of nonbinding broker quotes as of March 31, 2026 and December 31, 2025. The use of different market assumptions or valuation methodologies may have a material effect on their estimated fair value.
Related Party - Tall Oak Deferred Earn-Out. In connection with the Tall Oak Acquisition in 2024, the Company recognized a deferred earn-out liability to Tall Oak Parent, a related party controlling approximately 39% of the voting power in the Company as of March 31, 2026. On March 31, 2026, the deferred earn-out was settled with Tall Oak Parent in full, with Tall Oak Parent receiving a cash payment of $22.0 million. As of December 31, 2025, the estimated fair value of the deferred earn-out was $21.5 million and was reflected within other current liabilities. During the three months ended March 31, 2026 and 2025, the Company recorded a $0.5 million loss and a $9.0 million gain on the fair value remeasurement of the Tall Oak deferred earn-out, respectively. (See Note 9 - Financial Instruments for additional information.)
The estimated fair value of the Company’s deferred earn-out was remeasured at each reporting period and estimated using discounted cash flow techniques with appropriate discount rates. Given the unobservable nature of the inputs, the fair value measurement of the deferred earn-out was deemed to use Level 3 inputs.
Interest Rate Swaps. For both the New Permian Transmission Facility and the Legacy Permian Transmission Term Loan, the Company entered into amortizing interest rate swap agreements. These interest rate swaps manage exposure to variability in expected cash flows attributable to interest rate risk. Interest rate swaps convert a portion of the Company’s variable rate debt to fixed rate debt, and the Company chooses counterparties for its derivative instruments that it believes are creditworthy at the time the transactions are entered into. However, there can be no assurance that a counterparty will be able to meet its obligations to the Company. The Company presents its derivative positions on a gross basis and does not net the asset and liability positions.
As of March 31, 2026 and December 31, 2025, the outstanding notional amounts of interest rate swaps was $100.0 million and $101.5 million, respectively. As of March 31, 2026, the Company’s interest rate swap agreement is in a liability position and had a fair value of $0.3 million and is recorded within other noncurrent liabilities within the unaudited condensed consolidated balance sheet. As of December 31, 2025, the Company’s interest rate swap agreements had a fair value of $6.6 million and is recorded within other noncurrent assets within the unaudited condensed consolidated balance sheet. The derivative instruments’ fair value are determined using level 2 inputs from the fair value hierarchy.
For the three month period ended March 31, 2026, the Company recorded a loss on interest rate swaps of $0.2 million. In connection with the 2026 refinancing of the Legacy Permian Transmission Term Loan, the Company settled its then outstanding amortizing interest rate swap agreements for $6.7 million in cash.
For the three month period ended March 31, 2025, the Company recorded a loss on interest rate swaps of $1.0 million.