v3.26.1
DERIVATIVES
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES DERIVATIVES
At June 30, 2026, the Company only had commodity derivative contracts outstanding, which are recorded at fair value in the condensed consolidated balance sheet.

Commodity Contracts

The Company has entered into multiple crude oil and natural gas derivatives, indexed to the respective indices as noted in the table below, to reduce price volatility associated with certain of its oil and natural gas sales. The Company has not designated its commodity derivative instruments as hedges for accounting purposes and, as a result, marks its commodity derivative instruments to fair value and recognizes the cash and non-cash changes in fair value in the condensed consolidated statements of operations under the caption “Gain (loss) on derivative instruments, net.”

By using derivative instruments to economically hedge exposure to changes in commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company has entered into commodity derivative instruments only with counterparties that are also lenders under its credit facility and have been deemed an acceptable credit risk. As such, collateral is not required from either the counterparties or the Company on its outstanding commodity derivative contracts.

As of June 30, 2026, the Company had the following outstanding commodity derivative contracts. When aggregating multiple contracts, the weighted average contract price is disclosed.

Swaps
Collars
Settlement MonthSettlement YearType of ContractBbls/MMBtu Per DayIndexWeighted Average DifferentialWeighted Average Floor PriceWeighted Average Ceiling Price
OIL
Jul. - Dec.2026
Basis Swap(1)
85,000Argus WTI Midland$1.09$—$—
Jul. - Dec.2026Roll Swap150,000WTI Cushing$2.89$—$—
Jan.-Jun.2027
Basis Swap(1)
10,000Argus WTI Midland$2.00$—$—
NATURAL GAS
Jul. - Sep.2026
Basis Swap(1)
650,000Waha Hub$(1.87)$—$—
Jul. - Dec.2026
Two-Way Collar
840,000Henry Hub$—$2.87$6.35
Jul. - Dec.2026
Basis Swap(1)
100,000HSC Hub$(0.35)$—$—
Oct. - Dec.
2026
Basis Swap(1)
650,000Waha Hub$(1.75)$—$—
Jan. - Dec.2027
Two-Way Collar
720,000Henry Hub$—$2.88$6.37
Jan. - Dec.
2027
Basis Swap(1)
360,000Waha Hub$(1.26)$—$—
Jan. - Dec.2027
Basis Swap(1)
300,000HSC Hub$(0.31)$—$—
Jan. - Dec.2028
Basis Swap(1)
60,000HSC Hub$(0.37)$—$—
(1)    The Company’s crude oil basis swaps fix the differential between the Argus WTI Midland price and the WTI Cushing price for the notional volumes covered by the contracts. The Company’s natural gas basis swaps fix the differential between the applicable Waha Hub or HSC Hub price and the Henry Hub price for the notional volumes covered by the contracts.
Put Spread
Settlement MonthSettlement YearType of ContractBbls Per DayIndexStrike PriceDeferred Premium
Floor Price
Short Put Price
OIL
Jul. - Sep.2026Put20,000Brent$52.50$1.60$—$—
Jul. - Sep.2026Basis Put290,000WTI - Brent$(42.76)$1.52$—$—
Jul. - Sep.2026Put95,000Argus WTI Houston$50.53$1.43$—$—
Jul. - Sep.2026Put190,000WTI Cushing$52.57$1.30$—$—
Jul. - Sep.2026
Put Spread
15,000WTI Cushing$—$—$50.00$55.00
Oct. - Dec.
2026Put10,000Brent$55.00$1.33$—$—
Oct. - Dec.
2026
Basis Put
290,000
WTI - Brent
$(41.03)$1.44$—$—
Oct. - Dec.
2026Put60,000Argus WTI Houston$50.83$1.33$—$—
Oct. - Dec.
2026Put170,000WTI Cushing$50.59$1.28$—$—
Jan. - Mar.
2027
Put5,000Brent$55.00$1.40$—$—
Jan. - Mar.
2027
Put35,000Argus WTI Houston$50.00$1.29$—$—
Jan. - Mar.
2027
Put90,000WTI Cushing$50.00$1.34$—$—
Apr. - Jun.
2027
Put20,000Argus WTI Houston$50.00$1.33$—$—
Apr. - Jun.
2027
Put60,000WTI Cushing$50.00$1.33$—$—
Jul. - Sep.
2027
Put20,000WTI Cushing$50.00$1.39$—$—

Interest Rate Swaps

The Company had two receive-fixed, pay-variable interest rate swap agreements for notional amounts of $150 million each, which were considered economic hedges of the Company’s 3.500% fixed rate senior notes due 2029. During the first quarter of 2026, the Company fully terminated and settled the remaining aggregate $300 million notional amount of interest rate swaps for cash payments of approximately $27 million. The loss on the termination of interest rate swaps is recognized in the caption “Gain (loss) on derivative instruments, net” on the condensed consolidated statement of operations for the six months ended June 30, 2026.

Balance Sheet Offsetting of Derivative Assets and Liabilities

The fair value of derivative instruments is generally determined using established index prices and other sources which are based upon, among other things, futures prices and time to maturity. These fair values are recorded by netting asset and liability positions, including any deferred premiums, that are with the same counterparty and are subject to contractual terms which provide for net settlement. See Note 13—Fair Value Measurements for further details.
Gains and Losses on Derivative Instruments

The following table summarizes the gains and losses on derivative instruments included in the condensed consolidated statements of operations:

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
(In millions)
Gain (loss) on derivative instruments, net:
Commodity contracts(1)
$49 $(203)$166 $11 
Interest rate swaps
— 7 — 18 
2026 WTI Contingent Liability— (1)— 1 
Treasury locks— — — (1)
Total$49 $(197)$166 $29 
Net cash received (paid) on settlements:
Commodity contracts(1)
$113 $23 $273 $109 
Interest rate swaps
— (60)(27)(60)
Treasury locks— — — (1)
Total$113 $(37)$246 $48 
(1)The three and six months ended June 30, 2026 include cash received on commodity contracts terminated prior to their contractual maturity of $1 million.