v3.26.1
Derivative Financial Instruments
 3 Months Ended
Mar. 31, 2026
Derivative Financial Instruments [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 4. DERIVATIVE FINANCIAL INSTRUMENTS

 

Set forth below are the summarized amounts, terms and gross fair values of outstanding commodity derivative instruments as of March 31, 2026 (Successor):

 

    Volumes     Weighted
Average
Price		     Fair Value  
Oil Swaps:   (in Bbls)     ($ per Bbl)     (in thousands)  
April - December 2026     828       59.19     $ (17,516 )
January - December 2027     1,041       59.32       (10,003 )
January - December 2028     487       57.80       (4,383 )
January - December 2029     15       64.41     $ (20 )
Total     2,371               (31,922 )

 

    Volumes     Weighted
Average
Price		     Fair Value  
Natural Gas Swaps:   (in MMBtu)     ($ per MMBtu)     (in thousands)  
April - December 2026     18,415       5.85     $ 45,424  
January - December 2027     22,195       4.14       7,795  
January - December 2028     20,358       3.55       (4,316 )
January - December 2029     17,080       3.57       (1,306 )
January - December 2030     15,340       3.55       (799 )
Thereafter     7,314       3.63       98  
Total     100,702             $ 46,896  

 

    Volumes     Basis
Differential		     Fair Value  
Natural Gas Basis Swaps:   (in MMBtu)     ($ per MMBtu)     (in thousands)  
April - December 2026     17,665       (0.49 )   $ 4,854  
January - December 2027     19,053       (0.30 )     4,017  
January - December 2028     4,508       (0.26 )     (24 )
Total     41,226               8,847  

 

 

    Volumes     Weighted
Average
Price		     Fair Value  
Natural Gas Liquids Swaps:   (in Bbls)     ($ per Bbl)     (in thousands)  
April - December 2026     1,611       21.66     $ (15,034 )
January - December 2027     1,861       23.23       (8,291 )
January - December 2028     1,384       25.79       (849 )
Total     4,856             $ (24,174 )

 

Set forth below are the summarized amounts, terms and gross fair values of outstanding commodity derivative instruments as of December 31, 2025 (Predecessor):

 

    Volumes     Weighted
Average
Price		     Fair Value  
Oil Swaps:   (in Bbls)     ($ per Bbl)     (in thousands)  
January - December 2026     990       57.45     $ 395  
January - December 2027     902       58.22       698  
January - December 2028     422       56.67       (662 )
Total     2,314             $ 431  

 

    Volumes     Weighted
Average
Price		     Fair Value  
Natural Gas Swaps:   (in MMBtu)     ($ per MMBTU)     (in thousands)  
January - December 2026     21,071       3.19     $ (11,117 )
January - December 2027     19,133       3.68       (3,676 )
January - December 2028     17,664       3.57       (2,267 )
January - December 2029     16,454       3.55       (899 )
January - December 2030     15,340       3.55       (783 )
Thereafter     7,314       3.63       852  
Total     96,976             $ (17,890 )

 

    Volumes     Basis
Differential		     Fair Value  
Natural Gas Basis Swaps:   (in MMBtu)     ($ per MMBTU)     (in thousands)  
January - December 2026     21,071       (0.32 )   $ 6,807  
January - December 2027     18,944       (0.30 )     741  
Total     40,015             $ 7,548  

 

 

    Volumes     Weighted
Average
Price		     Fair Value  
Natural Gas Liquids Swaps:   (in Bbls)     ($ per Bbl)     (in thousands)  
January - December 2026     1,894       22.10     $ (3,550 )
January - December 2027     1,671       22.69       (2,105 )
January - December 2028     1,295       25.66       1,367  
Total     4,860             $ (4,288 )

 

Below is a reconciliation of the gross open positions by commodity to the net open positions presented on the condensed consolidated balance sheet as of March 31, 2026 (Successor):

 

    Current     Noncurrent  
(in thousands)   Assets     Liabilities     Assets     Liabilities  
Commodity                        
Oil   $ 14     $ (20,249 )   $ —     $ (11,687 )
Gas     61,765       (4,940 )     9,562       (10,644 )
NGL     —       (18,824 )     1,054       (6,404 )
Total   $ 61,779     $ (44,013 )   $ 10,616     $ (28,735 )
Effects of netting arrangements     (8,923 )     8,923       (6,276 )     6,276  
Total   $ 52,856     $ (35,090 )   $ 4,340     $ (22,459 )

 

Below is a reconciliation of the gross open positions by commodity to the net open positions presented on the condensed consolidated balance sheet as of December 31, 2025 (Predecessor):

 

    Current     Noncurrent  
(in thousands)   Assets     Liabilities     Assets     Liabilities  
Commodity                        
Oil   $ 2,056     $ (1,661 )   $ 793     $ (757 )
Gas     7,428       (11,738 )     3,691       (9,723 )
NGL     177       (3,727 )     2,326       (3,064 )
Total   $ 9,661     $ (17,126 )   $ 6,810     $ (13,544 )
Effects of netting arrangements     (9,661 )     9,661       (6,810 )     6,810  
Total   $ —     $ (7,465 )   $ —     $ (6,734 )

 

The Company has entered into derivative contracts with counterparties who the Company believes are creditworthy counterparties. All of the Company’s counterparties are investment grade and no collateral has been required. As of March 31, 2026, the maximum amount of loss due to credit risk that the Company would incur if the counterparties failed to perform according to the terms of the derivative instrument contracts would be zero.

 

For the Successor period from March 4, 2026 through March 31, 2026, the Company incurred a realized loss of $6.2 million and an unrealized loss of $26.9 million on commodity derivatives, resulting in a total net loss of $33.2 million.

 

For the Predecessor period from January 1, 2026 through March 3, 2026, the Company incurred a realized loss of $10.6 million and an unrealized loss of $17.3 million on commodity derivatives, resulting in a total net loss of $27.9 million.

 

For the three months ended March 31, 2025 (Predecessor), the Company incurred a realized loss of $10.2 million and an unrealized loss of $8.3 million on commodity derivatives, resulting in a total net loss of $18.5 million.

 

Derivative Contract Modification

 

Concurrent with the Business Combination, the Company entered into an amendment agreement with a counterparty to modify the strike price of certain natural gas derivative contracts. The Company modified the fixed price of these natural gas swap contracts with a commodity reference price of NYMEX as actively traded at the Closing Date. The Company paid $60.0 million in cash consideration to modify these commodity derivative contracts, which is reflected as a cash outflow from operating activities in the condensed consolidated statement of cash flows in the Successor period from March 4, 2026 through March 31, 2026.